financial vanguard july 2nd edition
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Financial Vanguard july 2nd editionTRANSCRIPT
CMYK
JULY 2 , 2012
Continues on page 18
CURRENCY BUYING CENTRAL SELLING
CBN Exchange rate as at 29/06/2012
96.98 +5.62
83.87 +6.18
171.25 +8.20
2,301.00 +71.00
21.01 +0.48
CFA 0.2758 0.2858 0.2958
KRONER 26.0161 26.1001 26.184
EURO 193.4361 194.0605 194.6848
POUNDS 241.9849 242.766 243.547
RIYAL 41.3049 41.4383 41.5716
SDR 234.5802 235.3374 236.0945
FRANC 161.0124 161.5321 162.0518
DOLLAR 154.91 155.41 155.91
WAUA 233.4871 234.2407 234.9943
RENMINBI 24.343 24.4221 24.5011
Crises in telecom sector:
The FDI implications
In the last couple of months, theNigerian telecommunications sectorhas been embroiled in near crisis.
Hardly any week passed within theperiod without a dispute between thetelecommunications operators and oneagency of the government.
First it was the NationalEnvironmental Standards RegulatoryEnforcement Agency, NESREA, goingto seal one of MTN Nigeria’s facilitiesin Abuja, sometime in April, overalleged non-compliance to setstandards. Nigerian CommunicationsCommission, NCC, felt that NESREAwent too far in exercising that functionwithout recourse to it as the telecomsregulator in the country.
Based on that, the regulator, a fewdays after, unsealed the facility warningNESREA not to encroach on telecomsterritories without clearance from it.However, two days after this, NESREAfelt that the onus of setting standardsinvolving the distance an operatorsshould set its BTS from living homesfell within the environmental protectionlaws, called the bluff of the NCC andre-sealed the facility.
This brought a stalemate which lastedfor several weeks in the industry andput a lot of telecoms subscribers out ofservice while the tussle lasted.
Financial Vanguard gathered that ittook the efforts of some committees in
BY PRINCE OSUAGWU
the National Assembly and other topgovernment functionaries to quellthe matter, even though a permanentsolution was not attained.
Barely a week after this incident,another crisis broke out. Theregulator itself fell out with theoperators after discovering in May2012, that the operators did not meetthe agreed Key PerformanceIndicators, KPI, for the months ofMarch and April. The KPI was setto monitor the quality of servicerendered to the Nigerian subscribers.
Four major Operators - MTNNigeria; second nationaloperator, Globacom; Airtel
Nigeria and; Etisalat - fell under thehammer of the regulator whichslammed a collective N1.17 billionfine ($7.3m) on them. The regulatoralso gave a stipulated time of twoweeks for the operators to pay up thefine or risk additional N2.5millionpenalty that would attract everysingle day of default.
The NCC said it had arrived at thedecision on testing the operators onfour parameters – Call Set-up
Success Rate, Call Completion Rate,Drop Call Rate and Traffic ChannelCongestion. The commission said thetelecoms companies have failed tomeet with the minimum standard ofquality of service,
From the breakdown, MTN andEtisalat were fined N360million ($2.2million) each, while Airtel andGlobacom were fined N270million($1.7 million) and N180million ($1.1million) respectively. They weregiven up till May 25 to pay the fineor get additional N2.5million ($15,
New Group Managing Director, NNPC, Mr. AndrewYakubu, briefing journalists after a Presidential briefingon the new Petroleum Industry Bill at the PresidentialVilla, Abuja. Photo by Abayomi Adeshida
18 — Vanguard, MONDAY, JULY 2, 2012
Cover Story
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Continued from page 17
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The Minister of State forEducation, Chief
Nyesom Wike, has said theFederal Government willinvest in technical andvocational education to createabout one million jobsthrough collaboration witheducational institutions inTaiwan, South Korea andUnited Kingdom to createaccess to functional vocationaleducation for Nigerianyouths. He says the focus isto use technical andvocational education to createjobs for Nigerian youths
The World Bank advocatesa “three-lens approach” toyouth empowermentinvolving
• Working for youth asbeneficiaries
• Engaging youth aspartners
• Supporting youth asleaders
According to the WorldBank, policymakers shouldframe correct social as well aseconomic policies based onthese “youth lenses”. To bringthis about requires thefollowing broad initiatives:
Changing the PolicyEnvironment: Thepolicymakers need to expandaccess to and enhance thequality of education andhealth services. Thepolicymakers need to giveyoung people a voice toarticulate the kind of requiredassistance and theopportunity to participate inthe delivery of assistancepolicies.
Develop Youth Capabilities:To help the young people tochoose the best from theseopportunities, policymakersneed to develop the youth’scapabilities. To do this, thepolicymakers first have torecognize the youth of theircountry as a strategicresource and vital decision-making agents. They alsoneed to make sure that theyouth are well-informed,sufficiently resourced andjudicious while making theirdecisions.
Provide Second Chances:The policymakers have toprovide the young peoplewith an effective systemwherein they should grantthe youth with secondchances. For this, they have
Youth restiveness andunemployment in Nigeria:
The way out (part 5)
to implement targetprograms that would providehope to the younger peopleas well as provide themincentives to positivelyreshape their destinies.
Increase Investment inYouth: If done properly,investment in youthespecially during the fivelife transitions of youth willdevelop, safeguard and putin place proper humancapital. As the youthundergo each transition fromlearning, work, health,family and citizenship,public policies andinvestments in youth candetermine their directionsand can prevent the youthfrom going off-trackespecially when there areeconomic crises and markets
do not provide sufficienteconomic opportunities.
Create a ProductiveWorking Life: Once youthobtain the necessary skills, itis important to deploy thoseskills. This should be done byframing policies andimplementing programs thatwould benefit the rich andpoor so that there is fair andeven competition. The stateshave to realize that freeing uptheir economy to foreigninvestment not necessarilyrestricts their role but in factincreases their role in theeconomic affairs. The policiesthat open up the economy willbecome youth friendly only ifthe government is able todirect proper resourcestowards the youth andprovide them access to jobsthat are created due toliberalization of the economy.
To help theyoung peopleto choose thebest fromtheseopportunities,policymakersneed todevelop theyouth’scapabilities.
520) daily as contraventioncharges
While the regulator believedit was keeping the operatorson their toes to comply withthe rules and as well providequality services, theoperators felt victimised,arguing that poor servicequality was due to poorlydeveloped infrastructure inthe country. Some describedthe NCC action as killing thegoose that lay the golden egg.
For as long as the issuelasted, it divided the sectorinto two parts with some onthe part of the regulator and
that the operators have paidthe fine. Confirming thepayment, NCC’s Director ofPublic Affairs, Mr Tony Ojobo,admitted that the operatorshave paid the fine, addingthat it was also resolved thatboth the operators and theregulator would sit togetherand look at the KPI once againto fine tune the prescriptions.
Fears over FDIimpacts
Although the operatorshave paid the fine,indications are that
they paid grudgingly.
together.”
CTO agrees withAdebayo
As if it had readAdebayo's mind,C o m m o n W e a l t h
T e l e c o m m u n i c a t i o n sOrganisations, CTO, agreedno less. Delivering a paper inLagos recently, at an eventorganised by NigerianAcademy of Engineering,CTO’s Chief OperatingOfficer, Mr Bashir Patel,noted that Nigeria does nothave to re-invent the wheelbecause to grow thetechnology, sharpen thecompetitive edge and movefrom economic growth toeconomic development, thedecision makers at federal,state and local governments,industry, academia and thepress need to make afundamental shift in theirthinking.
Patel said that, taking acritical look at the globaldrivers of ICT growth, Africanperspective, Nigerian ICTtoday has its obstacles andchallenges in a lecture titled“ T e l e c o m m u n i c a t i o n sTechnology andInfrastructure: The Pivot ofNational EconomicAdvancement”.
Many other stakeholdersalso believe that this is notthe time for Nigeria to relaxon the pillar of being thefastest growing telecomsmarket in the world at themoment but to brace up tosustain the tempo, especiallyas everything is goingmobile.
Perhaps, their argumentsare based on facts about thegrowth of Nigerian telecomsmarket which has not beendisproved either in Africa orin other global markets.
ECONOMICIMPACTS OF ICTGROWTH
In terms of growth, Nigeriais ranked the largest andfastest growing ICT
market in Africa and amongthe ten fastest telecomsgrowth markets in the world.This is as a result of itsrobustness to return oninvestments.
Obviously, Nigeria’stelecommunications sector,drives the entire ICTindustry. Despite that theI n t e r n a t i o n a lTelecommunications Union(ITU) stated in the InternetWorld Stats that Nigeria hadthe most Internet users per100 people on the continent
Crises in telecom sector
’’others on the part of the
operators.In a recent chat with a
prominent Nigerian ICTstakeholder and CEO ofsystems network company,Signal Alliance, Mr CollinsOnuegbu, he cautioned thatthe issue of service provisionin the country should not betreated as an isolated casesince everything workstogether for a better serviceprovision. “I would not be ina haste to condemn theoperators for poor quality ofservice because I know thatsome of the infrastructurethey need to get their servicesto the optimum are not thereyet. They are complaining ofpoor electricity supply, badroad networks, incessant fibrecuts during road maintenanceand vandalisation of theirfacilities among other things.Unless we can all agree thatthese things are not so,otherwise we need to bepatient with them”
However, a group of ICTmedia professionals, underthe aegis of ICT MagazinePublishes Alliance, did notsee it as just that. The groupfelt that the operators shouldpay whatever fine the NCCimposed on them, arguingthat the regulator had givenenough support and graceperiod for the operators tobrace up their services in thepast ten years The grouparticulated its views in anadvertorial that waspublished in severalnewspapers in the country.
However, penultimateweek, the news came round
Moments before thepayment, Chairman of theAssociation of LicensedTelecom Operators ofNigeria, ALTON, EngrGbenga Adebayo, cried outagainst the impact of thesedisagreements on ForeignDirect Investments in thesector.
For Adebayo, “there is noinstitution that is insulatedagainst failure. No matterhow we feel that the telecomindustry in Nigeria isgrowing, we must alsounderstand that it is fragileand could collapse if notproperly managed. That iswhy I am of the opinion thatno regulator, no authorityshould make a decision andsay it is final. Telecoms itselfis dynamic and we should bedynamic in taking decisionsconcerning it. If the two sidesstick to their guns, theregulator at the worstdecision may withdraw theoperators’ licenses and thatwould kill the nationalnetwork, taking us many yearsbehind.
“What many economies ofthe world are doing today iscollaboration to ensure that nodevelopment in the sector islost on their economies. Thereare so many opportunities inthe Nigerian market, that canattract more Foreign DirectInvestments. But I am afraidthat the way we are going, notonly in Nigeria, but in Africaas a whole, there may besome hesitations beforeinvestors plunge theirinvestments here now, unlesswe quickly address issues
“There is no institution that isinsulated against failure. No matterhow we feel that the telecomsindustry in Nigeria is growing, wemust also understand that it isfragile and could collapse if notproperly managed.
Continues on page 39
Vanguard, MONDAY, JULY 2, 2012 — 19
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The changes at the NNPC last week Tuesday can best bedescribed as cosmetic. Sacking the executivemanagement of NNPC and replacing them with the
same old stock of management amounts to scratching the surfaceof the monumental and colossal fraud in the corporation.President Goodluck Jonathan on Tuesday approved the sack of
Cosmetic changes in NNPC,PIB is the answer
the Group Managing Directorof the Nigerian NationalPetroleum Corporation(NNPC), Austen Oniwon, andthe executive directors of theNNPC. He also approved theappointment of AndrewYakubu as the new helmsmanof the corporation. Thechange of the NNPCmanagement team wasdisclosed as usual in a pressstatement signed by theSpecial Adviser to thePresident on Media andPublicity, Reuben Abati. Thepresident also approved theappointment of Victor Briggsas the new Managing Directorof the Nigerian PetroleumDevelopment Company(NPDC).
According to the statement,the decision to restructure theNNPC was in a bid tostrengthen the on-goingreforms and transformation ofNigeria’s Petroleum sector.Part of the statement reads: “Infurtherance of efforts toachieve greater transparencyand accountability ingovernment, PresidentGoodluck Ebele Jonathan hasapproved the re-compositionof the executive managementteam of the Nigerian NationalPetroleum Corporation(NNPC) as follows: EngineerAndrew Yakubu, GroupManaging Director; Mr.Bernard O.N. Otti, GroupExecutive Director (Financeand Accounts); Engineer AbiyeMembere, Group ExecutiveDirector (Exploration andProduction); Dr. Peter S.Nmadu, Group ExecutiveDirector (Corporate Services);Engineer AnthonyOgbuigwe, Group Executive
Director (Refineries &Petrochemicals); Dr. Attahir B.Yusuf, Group ExecutiveDirector (Commercial &Investments); Dr. David Ige,Group Executive Director (Gas& Power)”
President Jonathancommended the
outgoing directors for theirservice to the nation andurged the new managementteam to be fully committed torapidly implementing thecritical interventions neededto positively transformNigeria’s petroleum industry.
A corporation whichexecutives are due forretirement and have beenasked to leave can not serveas part of the on going reformin the industry. The removalof the executive managementof the NNPC can not qualifyas restructuring of theorganisation as the Presidentwants us to believe.
NNPC, according to KPMGreport, has severely defraudedNigeria in subsidy claims.Auditors found that between2007 and 2009 alone, NNPCover-deducted funds insubsidy claims to the tune ofN28.5 billion. It has not beenable to account for the sumever since. The over-deduction from its remittanceto the federation account for
2010 and 2011, believed to bein several billions of naira, isnot captured in the report. TheFederal Government, throughthe Federal Ministry ofFinance, hired KPMG andanother Nigerian auditingfirm, S.S. Afemikhe & Co., inJuly 2010, to look into the books
of the corporation followingallegations of “ wrongfuldeductions at source by theNNPC to fund its operations”by the 36 state governors.
There were also concerns atthe time that “the proceduresfor managing and reportingthe country’s crude oil and gasrevenues are opaque andcharacterized by gaps,overlaps and inconsistenciesin the role of key partiesresponsible for theassessment, collection andreporting on these revenue
streams.” Officials of thePetroleum Ministry andNNPC, developed cold feetafter the auditors were sent in,and indeed tried hard tofrustrate the representatives ofthe two audit firms by failingto supply evaluation criteriafor commercial bids submittedin respect of petroleumproducts importation. Insteadof seriously addressing theseproblems, government hasalways fired the managementof the corporation without anymeaningful result. NNPC hashad about five GMDs in thelast five years, an average ofone GMD per year.
After only May 18, 2010, 41days in office, Malam ShehuLadan was removed as GMDby President GoodluckJonathan. He was replaced bythen NNPC’s GroupExecutive Director, Refineriesand Petrochemicals, Mr. AustinOniwon, who himself wasretired Tuesday last week.
Jonathan was the one whoordered a comprehensiveaudit of the NNPC. No reasonwas given then for Ladan’sremoval. But after the subsidyprobe revelations, Nigeriansnow know why NNPCmanagement do not last awhile in office. Jonathan hadat the time directed OlusegunAganga, then FinanceMinister, to engage theservices of “a world classauditing firm to carry out anaudit of the NNPC.” The audit
report of KPMG has long beensubmitted. It accused thecorporation of under-handdealing and massivecorruption. So far, nothingserious has come out of it. Ifthe removal of Oniwon and histeam, just like hispredecessors, is meant toplacate Nigerians thatsomething is being done bythis government about theKPMG report and the subsidyprobe findings, theappointment of operators fromwithin the NNPC who havebeen part and parcel of thedeals going on in thecorporation is to say the leastill advised. Nobody isinterested in the sack.
What informed Nigeriansare asking this
government to do is to ensurethe passage of the PetroleumIndustry Bill. In the bill,NNPC will be just any otheroperator in the system. It willbe stripped of its regulatorypowers. For goodness sake,NNPC can not be an operatorand the same time a regulator.No matter the reforms goingon in the petroleum industry,no serious investor will comeinto the sector to compete withits regulator. There must be alevel playing field.Government must remove itsinvincible finger encouragingmassive corruption in NNPC.This government shouldplease get serious about itstransformation agenda. Thecorruption in NNPC will notgo away unless it is privatisedor run as a profit making entitywithout governmentinvolvement.
Nigerian economy offers opportunities for American investors
The Nigerian economy
has undergonesignificant reforms to attractinvestment, particularly fromthe United States of America,says Central Bank of Nigeria’sDeputy Governor, FinancialSystem Stability, Dr. KingsleyMoghalu.
Speaking at a forum hefacilitated at the WhartonSchool of Business recently,Philadelphia, United States ofAmerica, Dr Moghalu said thatopportunities abound to investin Nigeria’s burgeoningsectors of education, health,manufacturing andagriculture.
While alluding to the multi-billion Naira Small andMedium Enterprises Credit
Guarantee Scheme(SMECGS), NigerianIncentive – based RiskSharing System forAgricultural Lending(NIRSAL), CommercialAgricultural Credit Scheme(CACS) and other initiativesaimed at jump-starting theeconomy, Dr Moghalu notedthat: “There are lots ofopportunities, but theseopportunities are held back byissues of access to finance –and that is why the CentralBank of Nigeria has steppedin very strongly to supportsmall businesses through anumber of interventions in theareas of agriculture and creditguarantees and so, the processis improving.”
Dr Moghalu conceded thatshortage of electrical powersupply, lack of moderntransportation system andother infrastructural deficitcould have added to the costof doing business in Nigeria,
saying that these are beingaddressed by the reforms inother sectors of the economy.He also stated that the countryremained a viable market forentrepreneurs, and remindedhis audience that: “Nigeria
has a huge market of 160million people, and there is agrowing middle class, and sothere is a strong opportunityto invest in Africa andNigeria.”
BUSINESS & ECONOMY
What informedNigerians are askingthis government todo is to ensure the
passage of thePetroleum Industry
Bill. In the bill, NNPCwill be just any other
operator in thesystem
The heads of the WorldBank and other
international lending agencieshave urged countries tosalvage an agreement to helppoor nations increase tradefrom the remains of failedworld trade talks that began in2001. “More than a decadeafter the launch of the DohaRound, this agreement couldbe a down payment on thecommitment WTO (World
Lending agencies urge WTO ‘trade facilitation’ pactTrade Organization) membershave made to linking tradeand development,” WorldBank President RobertZoellick and the heads of fiveregional development bankssaid.
One part of the Doha roundof world trade talks was a“trade facilitation” pact aimedat reducing red tape and otherborder delays that boost thecost of doing business. Despite
disagreements that blocked anoverall Doha round deal, “theoutlines of a new WTO tradefacilitation agreement arealready clear,” the bank chiefssaid. However, developingcountries want a crediblecommitment from richercountries “to supportimplementation costs such astechnical assistance andcapacity building,” they said.
20 — Vanguard, MONDAY, JULY 2, 2012
CMYK
Business & Economy
BRIEFSNet inflow offoreignexchangestands at$1.49bn
The Central Bank ofNigeria (CBN) has said
that the foreign exchange netinflow in April was 1.49 billiondollars (N2.3 trillion). Thebank disclosed this in itsmonthly economic report forApril. It said that foreignexchange inflow and outflowin the month were 3.24 billiondollars (N5.02 trillion) and1.75 billion dollars (N2.71trillion), respectively. TheCBN said that the net inflowof 1.49 billion dollars (N2.3trillion) in April was againstnet inflow of 1.36 billion dollarsrecorded in March. It also saidthat the April figure showedan increase of 29.9 per centabove the level in thecorresponding period in 2011.
Brent oil, U.S.crude hold gain,then rise moreafter data
Brent oil and U.S. crudefutures initially held
and then extended gains. Thesecond rise occurred afterreports showed that U.S. finalfirst-quarter GDP growth wasunchanged from the priorestimate and that initialjobless claims fell, BrentAugust crude was up 15 centsat 93.65 dollars a barrel,having traded from 92.41dollars to 93.85 dollars. U.S.August crude was up 51 centsat $80.72 a barrel, havingtraded from 79.75 to 80.82dollars
Labour leaderwants FG findsolution toNITEL problems
The Senior Staff Associationof Communications, Transportand Corporations (SSACTAC)has urged the FederalGovernment to find a lastingsolution to the problem of theNigerian TelecommunicationsLtd. (NITEL). The SSACTACPresident, Mr AdetunjiAdesunkanmi, made theappeal in Lagos. He wasreacting to the House ofRepresentative’s rejection of amotion which sought toprivatise NITEL. The motionhad desired the House tomandate its committee oncommunications torecommend how the formertelecommunications giantwould be unbundled.
By CHRIS OCHAYI
The Federal Governmenthas signed a Financing
Agreements with EuropeanUnion, EU, for five EuropeanUnion-funded projectsvalued at N43 billion tosupport the federalgovernment’s reform effortsin the areas of justice, watersupply and sanitation,electoral cycle as well as fightagainst drugs and relatedorganised crime.
Minister of NationalPlanning Commission, NPC,Dr. Shamsuddeen Usman,signed the agreement onbehalf of the government,while Ambassador and Headof Delegation of the EuropeanUnion to Nigeria andECOWAS, H.E. Dr. DavidMacRae signed for theEuropean Union.
The signing ceremonyfollowed a similar event on 19March 2012, during which thefinancing agreement for aproject supporting the fightagainst corruption in Nigeriawas signed.
The project on water supplyand sanitation sector reformprogramme phase 11(WSSSRP-11) is valued at 97Million Euros while thesupport to the FederalGovernment ReformProgramme (SUFEGOR) andsupport to electoral cyclehave a contract value of 20million Euros each.
The justice sector projectwhich is worth 27 MillionEuros (about N5.3billion) willcontribute towards improving
FG, EU sign N43bn financing agreementto support reform programmes
the effectiveness, accessibility,accountability, transparencyand fairness of the justicesystem, while 36 millionEuros is dedicated tosupport the fight againstdrugs and organised crime.
Speaking at the signingceremony, NPC Ministerdescribed the two projects asremarkable and also fullyaligned to the Government’svision 20:2020 as well as thepresent administration’sreform agenda in both itsbroad and specific terms.
Dr. Usman also said that thetwo projects are aimed atpromoting good governance,
security, transparency,accountability, curbing drugs,organised crime and reformingthe justice sector.
The Minister stated that theFederal Governmentrecognises the need for a bettercoordination of the entirejustice sector, which involvesthe police, the courts and theprisons.
Speaking, Dr. MacRae notedthat the overall objective of theprojects is to promote goodgovernance and the rule of law,and contribute to Nigeria’sefforts in the reform of thejustice sector and inaddressing drug and related
crime in Nigeria. In bothcases the expected resultsare intended to enhance thedevelopment of Nigeria forthe benefit of its citizens.
The justice sector project istargeted to benefit amongstothers, the Federal Ministryof Justice, the FederalJudiciary, the NationalJudicial Institute, the NigeriaPolice Force, the NigerianPrisons Service and theNational PlanningCommission. Otherimportant stakeholders thatare expected to benefit fromthe project are the NationalHuman Rights Commission,the Legal Aid Council ofNigeria, and selected StateMinistries of Justice andJudiciary.
By NKIRUKA NNOROM
As part of its continuedgrowth strategy in key
developing markets, DuPonthas opened a new office inNigeria to serve as its hub forthe West African region.
The company said it iscurrently working inpartnership with localcompanies, industry leaders,academic institutions andgovernment to produceinnovative solutions in thecountry.
“Over the past several years,we have invested indeveloping markets andleveraged our technology.Our full-year financial resultswere very strong. Sales of$38billion were up 20 per centcompared to 2010, with a 27per cent increase in
Dupont expands frontier, opens new office in Nigeria
developing markets,” said IanHudson, DuPont PresidentEurope, Middle East andAfrica, at the opening of itsLagos office.
He stated that with the newultra-modern office in Lagos,the company has brought itsservices closer to the Nigerianpeople and has solidified itspresence as stakeholders in thecountry’s economy.
Alessandro Raemy, CountryManager DuPont Nigeria,stated that DuPont was eagerto contribute towards upliftingthe local economy by bringingthe products and solutions tothe market and helping toadvance the agriculture, solarenergy, oil & gas,c o m m u n i c a t i o n s ,transportation, as well as safety& protection industries. Within
the medium term, thecompany projects to invest$150 million (N223.7 billion)into Africa.
“Global companies can’tafford to neglect a fast-growing market such asNigeria. The country’scurrent population isestimated at 167 million andit will increase by morethan half within the next 40years. This makes it one ofthe fastest growingpopulations globally,” saidRaemy. ”We must investand partner today with keycustomers and stakeholdersin Nigeria to support whatwe hope will continue to bethe long term sustainedgrowth of the localpopulation and economy inthe coming years”, he said.
CIBN , Meomorandum Understanding ( MOU )With Lagos State Polytechincon ACIB/ HND Linkage Programme held atCIBNHouse Lagos Pix L- R Dr. Adebayo Aboyemi -Cole, Dean School of Management & Business Studes Lagos StatePolytechinc, President / Chairman of Council CIBN and Dr. Uju. M. Ogubunka Registrar CIBN Photo By Diran Oshe
(L-R): Direct-To-Consumer (DTC) Manager, P&G West Africa, Mrs Doro Fatou; a winner ofN100, 000 Always Scholarship and student of Government Secondary School, Gwarinpai,Abuja, Bilikisu Salawudeen with her guardian, during the Always Care Scholarship awardpresentation event held recently in Lagos.
Vanguard, MONDAY, JULY 2, 2012 — 21
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Business & Economy
BRIEFS
SON givesmarketers 2weeksultimatum toremove sub-standardproducts
The StandardsOrganisation of
Nigeria (SON) has warnedtraders in the FCT to removeall sub-standard products inthe market within two weeksor face prosecution. Dr.Joseph Odumodu,its Director General, gavethe warning at a MarketEnlightenment/SensitisationSeminar in Abuja.Odumodu, who wasrepresented by Mr PaulAngya, the Director ofHuman Capital in SON, saidmarketers should alwaysconfirm if products had beentested with evidence of testcertificates. He listed thecountry of origin,manufacturing and expirydates, guaranty/warranty,and label, among others, assome of the things theimporter and purchasershould check beforetransaction. Odumodu saidthat traders should imbibethe tenets of self regulationby removing all thoseproducts that did not conformto standard specificationswithin the next two weeks.
Ethiopia signs$3.2bn deals fornew railway line
Ethiopia has signed twodeals worth $3.2 billion
with Chinese and Turkishcompanies to construct arailway to link the land-locked Horn of Africa nationto Djibouti’s Tadjourah portto export potash, officialssaid. Ethiopia, which hasseen high economic growthover the past five years,hopes to exploit growingbusiness ties with China,India and Turkey to boost itsexpanding economy. Undera five-year development planlaunched in 2010, thegovernment aims to pursuepower projects and boostinfrastructure, includingbuilding several newrailways. Getachew Betru,head of the EthiopianRailways Corporation (ERC),said Turkish firm YapiMerkezi will build a $1.7billion railway line in thenortheast, part of a projectthat stretches to Djibouti’sthird port of Tadjourah,which is under construction.
Policy inconsistency bane ofmanufacturing sector, says Obasanjo...seeks ban of imported goods
BY NKIRUKA NNOROM& NAOMI UZOR
Inconsistency and lack ofcoordination in policyformulation by the
government is one of themajor reasons behindsluggish growth anddevelopment in themanufacturing sector, formerPresident, Chief OlusegunObasanjo, has said.
Delivering a paper,“Strategies for AcceleratedDevelopment of theManufacturing Sector: Theway Forward,” at the 40th
Annual General Meeting ofthe ManufacturersAssociation of Nigeria (MAN)in Lagos, Obasanjo, statedthat lack of cooperationamong different stakeholdersin the industry andunpatriotic attitude towardslocally manufactured goodsare part of the constraints tothe growth of the sector,calling for ban of importedproducts into the country.
He hinted that during hisadministration, he tookvarious steps to ban theimportation of foreignproducts, citing the ban onimportation of Cement andfruit juices as example.
He said, “There have beenlack of vision and sustainedmission in pursuing growthand development in themanufacturing sector. Since
independence, policies,programmes and ideas ofgovernment have beenlopsided. They have not beenconsistent. There must becoordination at all levels.Things must be coordinated.It is not a situation where themanufacturers are going inone way and otherstakeholders are heading inan opposite direction. Vision20:2020 will be a hopelessand unfulfilled dream withoutall actors working together inensuring acceleration of
growth in the manufacturingsector.”
“
Then there is poor
attitude both from thegiving and receiving
end, particularly from theprivate sector. They see thefarmers as those who arecoming to reap from wherethey did not sow. This leadsto lack of support andsustained vision. Then thereis this poor mentality andquick money making
syndrome among Nigerians.Manufacturing takes time;there is gestation period,” headded.
He noted that governmentsat all level- States, localgovernment, leadership atcommunity level and evenfinancial institutions- mustcorporate to effect changes inthe system, saying that asituation where financialservice providers denybudding industries creditfacilities was endemic to thesector.
FG wants states’ export promotion committee upgraded to agencies
The Federal Government(FG) has urged the
various state governments toupgrade their existing ExportPromotion Committees toExport Promotion Agencies inline with its determination toenable states to be moreinvolved in non-oil exportpromotion activities.
The upgrade willcomplement the role of theNigerian Export PromotionCouncil towards improvingvalue addition activities.
This was contained in a 16-Point Communiqué adoptedat the just concluded 5
th
Meeting of the NationalCouncil on Trade andInvestment (NCTI-05) inMinna, Niger State.
The National council is anannual meeting that affords
By NKIRUKANNOROM
all stakeholders theopportunity to interact andformulate policies andprogrammes as they affectTrade, Investment andIndustry in the country as wellas review progress made sofar on the policies formulatedyear-on-year.
The Council also urged theIndustrial Training Fund(ITF) to strengthen liaisonwith agencies involved in theestablishment andadministration of skillsacquisition centres owing tothe importance of skillsacquisition in industrialdevelopment.
It applauded the on-goingcampaign by the FederalMinistry of Trade andInvestment to encourageNigerians to patronizeMade-in-Nigeria Products,advising that the mattershould be referred to the
National Economic council forconsideration andendorsement to fast-track theimplementation of theprogramme.
Council commended theefforts of the Federal Ministryof Trade and Investment(FMTI) in addressing some ofthe challenges of Trade andInvestment through variousInitiatives. It condemned thelack of effective synergyamongst the agencies andurged that related activities beharmonized for more positiveresults.
It also took note of theefforts of the Federal
Ministry of Trade andInvestment in the Africangrowth and Opportunity Act(AGOA) process, particularlywith respect to the activitiesof African Womenentrepreneurship Programme
(AWEP). It however observedthe absence of coordinationbetween the Ministry andsome of her Parastatalsinvolved in the process andurged for harmonization andstreamlining of activities.
The Council noted thedeficiencies (contamination)such as Aflotoxins discoveredrecently in exported MellonSeeds and encouraged Statesand other relevant agencies tocollaborate with NEPC forcapacity building on the valuechain development for Melon;
They also acknowledged thevital role of non-oil export innational development andrecommended the review ofqualifying capital of N5million (Five Million Naira)for Export Expansion Grant(EEG) scheme to capture moresmall scale exporters amongother issues.
22 — Vanguard, MONDAY, JULY 2, 2012
CMYK
BRIEFS
Banking & Finance
Cashless: Banks get $510,000US grant for data recoveryI
n demonstration of itssupport for the CentralBank of Nigeria's (CBN)
cash-less policy, UnitedStates Trade andDevelopment Agency(USTDA) has provided agrant of $510,000 for theestablishment of a DisasterRecovery Centre (DRC) tofortify and protect e-paymenttransactions in the country.
Head Shared Services,Chidi Umeano, who madethis known in Lagos, said thegrant will be used to financequalified US firm to provideexpert consulting services indetermining the technicalrequirements, business andoperational models for theproject.
Already, a vendor has beenevaluated and selected by theCBN, which has also receiveda ‘letter of no objection’ fromUSTDA. Besides, he said thelegal unit of the CBN isalready drafting contractagreement that will bereviewed and binding on bothparties.
Besides, he said the bankingwatchdog is also developingmodalities or work plan forimplementation of sharedtier-three Disaster Recovery Centre infrastructure andservices.
The apex bank is alsoworking on shared powerinfrastructure service to thebanks, as well as developingthe Nigeria Financial servicesnetwork (NFSN) to effectivelyachieve these objectives.
“The CBN is also setting upIT Standards Board andrequisite governanceframework to oversee theadministration of IT standards
in the industry and drive itsadoption across the players inthe industry. We understandthat payment is the key driverof cost distribution in theindustry and accounts foralmost sixty per cent of theindustry cost base,” he said.
Consequently, Umeanoexplained that the CBN isworking with the banks toensure more efficiency in thepayment system, adding thatcash management constitutesalmost 80 per cent of bankinfrastructure and staff, whichdirectly drive up, the cost ofbanking service.
He said that the CBNhaving monitored the partialimplementation of the cash-less policy and followingstakeholder engagement onthe effective implementation of
the project, decided toreassess its parameters toallow for smooth transitionand adoption.
For instance, the apexbank has givenexemptions to
Ministries, Departments andAgencies (MDAs) of thefederal and stategovernments on lodgmentsfor revenue collections only.
Umeano said the cash-lessinitiative has tremendousbenefits for the people and theeconomy. It would reduce thecost of cash handling and costof funds; with availablestatistics showing that theCentral Bank and the bankswould have spent over N200billion on cash managementby 2012.
This cost he explained, canbe ploughed intoinfrastructure development. Itwould also mean that majorityof Nigerians would stopsubsidizing the cash handlingcost of heavy cash users,” hesaid.
He added that only 10 percent of branch transactions inNigeria are above N150, 000,but they make up about 77 percent of the value of cashtransactions in the country’sfinancial system. Theinitiative will also usher in anera of convenient and securepayment systems, he said.
He explained that the policywas designed to promotefinancial intermediation,financial inclusion, minimiserevenue leakages in theeconomy.
United Bank for Africa,UBA has reviewed
charges associated with ATMcards, significantly loweringthe cost of transactions,particularly for its Verve Debitcard customers. Instead of themonthly charge of N100which is a flat fee charged toall ATM card holders, UBAhas introduced a pay-as-you-go charge structure. In themonth a customer does notwithdraw cash at the ATM butuse PoS and Internet to makepayments the customer willnot be charged the N100 flatfee. This is to encourage theuses of alternate channels.Divisional Head e-banking,UBA, Dr. Yinka Adedeji saidthe move was aimed at
delighting customers,following recent complaintsand feedback as well as fosterthe Cashlite initiative of theCentral Bank of Nigeria to themass market.
He explained that ATMcard holders who
seldom use ATMs will nowpay less. “If you do not usethe ATM to do cashtransaction you do not pay”.He was quick to point out thatfrequent ATM users are notdisadvantaged as a result ofthe new pricing regime. “Assuming as a frequent userand you visited the ATM morethan 10 times during themonth, you will not becharged more than the
monthly cap of N100” hestated.
He explained that Pay-as-U-Go type of charges is onlyapplicable with the bank’slocal Verve Debit card thoughUBA has kept open the optionof Visa and MasterCardsingle currency cards that stillattract N100 per month feewith unlimited ATM access.“Customers are free to choosethe N100/month or the Pay-as-you-go option” saidAdedeji. United Bank forAfrica (UBA) is a leading PanAfrican Bank with presencein 19 African countries, NewYork, London and Paris thusbeing able to effectivelyarbitrage Africa an Africanrelated business globally.
UBA reviews ATM charges for customers
FROM LEFT: Mr. Asue Ighodalo, Vice Chairman, SBL Council; His Excellency Senator Liyel Imoke, Special Guest, Governor,Cross RiverState; George Etomi, former Chairman, Section on Business Law and Mr. Gbenga Oyebode, Chairman NBA Section on Business Law duringthe Section on Business Law Chairman’s Dinner in Lagos.
Bank rate riggingscandal widens;Diamond fights on
A scandal over the riggingof key interest rates could
create a legal morass that mayhamper the global bankingindustry for years, analystssaid, as the head of Barclaysfought to hold onto his job.
With the Times newspapernaming RBS as the next bankfacing a fine for its allegedinvolvement in manipulatingthe key lending rate betweenbanks, the head of the Bankof England said there neededto be “real change” in theindustry’s culture.
“That will require twothings. One is leadership ofan unusually high order andchanges to the structure of theindustry,” Mervyn King tolda news conference, adding hehoped that the UK parliamentwould legislate as soon aspossible.
U.S. and British authoritiesfined Barclays $453 million onWednesday for manipulatingthe London interbank offeredrate (Libor), which underpinssome $360 trillion of loans andfinancial contracts around theworld - and analysts forecastmore banks would soon benamed for collusion.
IRS steps upscrutiny oftax-exemptpolitical groups
The U.S. Internal RevenueService is signaling that it
will increase its scrutiny oftax-exempt politicalorganizations, which arebecoming a force in electionsby raising tens of millions ofdollars from undiscloseddonors.
The IRS has beencorresponding with suchgroups and is preparingquestions to ask them as partof effort to determine whethertheir fundraising oradvertising work runs afoul oftax law. IRS spokesman TerryLemons said on Thursday thescrutiny will affect a range oftax-exempt groups.
The move comes as suchtax-exempt groups - many ofwhich have better-knownsister organizations known as“Super PACs,” or politicalaction committees - are undercriticism from Democrats andsome Republicans for usingmoney from anonymoussources to try to influenceelections.
Vanguard, MONDAY, JULY 2, 2012 — 23
CMYK
24 — Vanguard, MONDAY, JULY 2, 2012
CMYK
Corporate Finance
BRIEF
From, left: Dr. Adebayo Aboyemi –Cole, Dean, School of Management & Business StudiesLagos State Polytechinc; Mr. Joseph Jaiyeola, President /Chairman of Council, CharteredInstitute of Bankers of Nigeria, CIBN and Dr. Uju Ogubunka Registrar CIBN at the signing ofa Memorandum of Understanding with the Lagos State Polytechnic on ACIB/HND LinkageProgramme, in Lagos. Photo By Diran Oshe
BY MICHAEL EBOH
The recent ratings ofNigerian banks by both
local and international ratingagencies has raised thequestions of how the ratingswill affect and be translatedto improved profitability of theaffected banks and howeffectively they will meet theexpectation of shareholdersand other stakeholders.
Stakeholders are however,optimistic that the ratings willhave a positive effect onreturn on investment, boostthe banks’ top and bottom lineand also impact positively onthe banking sector, ingeneral.
Fitch, in a commentarytitled, ‘Nigerian Banks: KeyRating Drivers for the Sector,’said that Nigerian banks’long-term ratings areconstrained by an extremelychallenging operatingenvironment, concentratedcredit risk and weak albeitimproving corporategovernance and transparencyrequirements.According to Fitch, the driversfor the ratings of the variousNigerian banks are eitherbased on the banks’individual credit strength orthe perceived probability ofsupport from the state orinstitutional parent. It said,“Inefficient operations remaina characteristic of the marketthat Nigerian banks will needto address in order to ensuretheir long-term-sustainability.”
Earlier in the year, in anapparent affirmation of thefinancial strength and thesolidity of the Nigerian
Banks’ ratings:Whatimpact onprofitability, return for investors?
financial services sector,Standard & Poor ’s, S&P,Rating Servicesrevised theoutlook on three Nigerianbanks — First Bank of NigeriaPlc, Zenith Bank Plc andGuaranty Trust Bank Plc — topositive, from stable.
In its rating of the banks,S&P said the positive outlooklargely reflected the banks’stand-alone credit profilesand the outlook on thesovereign.
diversification and a largerbranch network and depositfranchise. It added, however,“Our opinion of FCMB’sbusiness position wouldimprove if the bank continuedto increase its market shareand improve itscompetitiveness, therebycreating a sustainable trackrecord of revenue stability. Weexpect better risk managementand a stable economic climateto lead to signs of
the loan book and AccessBank’s liquidity ratio stood at74 per cent as at December31, 2011, well above theregulatory minimum of 30 percent”.
Similar to S&P’s opinion,analysts say Access Bank’simproved rating is attributableto its strong liquidity andfunding position, which is aclear affirmation of its positionas one of Nigeria’s tier oneBanks and corroborated by itsenhanced capacity to executelarger transactions as well asaccess long-term fundingfrom foreign multilateralagencies and institutions.
According to the analysts,the current ratings assignedAccess Bank is not materiallydifferent from other Tier 1Banks – First Bank, Zenith,GT Bank, Access Bank andUBA. Analysts are optimisticthat the rating will createexpectation about the futureof the bank and its re-articulated corporate visionand mission which hasresulted in novel approach tobanking operations. While allthe banks rated, with theexception of FCMB, recordedimpressive financialperformance in their 2011results, the banks assured ofa significant improvement intheir 2012 financialperformance and beyond.
For instance, First Bankgross earnings grew by 42.5per cent to N92.3 billion in itsfirst quarter ended, March 31,2012, financial statement,from N64.8 billion recorded inthe same period in 2011;operating income rose by 50.2per cent to N74.2 billion fromN49.4 billion in first quarter2011, while its profit beforetax grew by 101.6 pecent toN28.9 billion from N14.3billion in 2011.
GTBank in its first quarter2012 financial performance,recorded profit after tax ofN19.312 billion, rising by 35per cent from N14.328 billionrecorded in similar period in2011; Zenith Bank declareda profit after tax of N19.2billion for the quarter,representing an increase of26 per cent from N15.3 billionrecorded in the same periodin 2011.The rating agenciesare of the view that capital isbecoming increasingly tightin the sector, with littleappetite for fresh equityissuances.
According to Fitch, thismeans that current levels ofcapital are unlikely to besufficient to support anymaterial asset growth in theindustry. As the secondquarter results of the banksare been expected,shareholders and otherstakeholders await the impactthe ratings will have on thebanks’ performance in the2012 financial year andbeyond.
Nestle in talksfor 7bn euroacquisition loan
Nestle , the world’sbiggest food group,
has been talking to banksabout raising a new 7 billioneuro ($8.7 billion) syndicatedloan to help fund its $11.85billion takeover of PfizerNutrition, banking sourcessaid .
Nestle said in late April theacquisition would be fullydebt-financed throughinternal cash resources,existing facilities and thebond markets.
The new loan would give thecompany enough liquidityuntil the deal is approved,which is expected to be in thefirst quarter of 2013, if theacquisition goes ahead,bankers said.
Nestle was not immediatelyavailable for comment.
The new loan is expected tohave a short-term maturity ofone year, with a one-yearextension option, which couldlead to a quick bond marketrefinancing, they added.
The loan could be raised asan undrawn revolving creditwhich would support thecompany’s short-term moneymarket Commercial Paperprogram - a borrowing routethat Nestle has taken before.
Bankers are confident thatthe company will be able toraise the money after holdingextensive discussions for thelast couple of months, but areless confident about makingmoney on the deal.
“Nestle has been talking tobanks for the last two or threemonths and could round thisup in 24 hours if needed.There is not a single concernthat it could raise the money,it’s just timing and whetherthey want to do the M&Adeal,” a senior banker said.
Nestle is one of the mostaggressive borrowers in theloan market and hashistorically been able to raisefunds at the cheapest rates.
Nestle last tapped the loanmarket in October 2011 for a4.5 billion euro revolvingcredit facility which paid aninitial margin of just 10 basispoints (bps), the lowestmargin for a European loanin 2011. Undrawncommitments on that dealpaid just 1 bp.
While the size of the newloan and the fact that it isadditional borrowing or ‘newmoney’ for Nestle mean thatthe company is likely to beunable to replicate those lows,it will still be an unprofitablepiece of business on a stand-alone basis.
It added that the raising ofthe Nigeria national scalelong-term ratings was basedon its expectations thatimprovement in the economicenvironment would have apositive effect on the banks’financial performance,translating into lower cost ofrisk and continued focus onbad debt recovery. Also, S&P,last week, upgraded First CityMonument Bank, FCMB,rating to stable, while F, S&Pand Agusto all upgraded theirrating on Access Bank Plc.
In rating FCMB, S&P saidit reflects its expectation thatthat the next two years will seestable economic growth, withminor currency fluctuations. Italso expressed optimism thatthe merger with Finbank Plcis expected to improveFCMB’s business positionthrough local market
improvement in the riskposition during the next twoyears.”
In an analysis of AccessBank’s rating, the agenciesrevealed major upgradeswhich are attributable to thebank’s improved marketposition, strong capitalizationand strong liquidity profile;enhanced distributionnetwork and expanded clientbase. According to opinionsexpressed on Access Bank byone of the rating agencies,“Access Bank’s funding hasbeen strengthened by anenlarged branch networkfollowing consolidation,which has availed the Bank avast pool of low-cost deposit”.It stated further that, “In theyear under review, localcurrency deposits grew by114 per cent to N871 billion.Deposits adequately funded
,,
As the second quarter results ofthe banks are been expected,shareholders and otherstakeholders await the impact theratings will have on the banks’performance in the 2012financial year and beyond
Vanguard, MONDAY, JULY 2, 2012 — 25
CMYK
26 —Vanguard, MONDAY, JULY 2, 2012
CMYK
Corporate Finance
BRIEFS
A significant improvementwas recorded in
transactions on the NigerianStock Exchange, NSE, lastweek, as the value of listedequities and value of sharestraded both appreciated byN65.377 billion and 477.98per cent respectively.
In particular, equities’value, represented by themarket capitalization and All-share index, rose by 0.96 percent. The capitalization closedthe week at N6.895 trillion, upfrom N6.829 trillion at whichit opened the week.
The index rose by 204.8basis points to close the weekat 21,599.57 points from21,394.77 points.
Equity trading, driven bytransactions in the shares ofUnion Bank Nigeria Plc,appreciated by 477.98 per centas investors’ exchanged 5.381billion shares valued atN22.467 billion was recordedin 17,019 deals, compared tothe previous week’s turnoverof 930.677 million sharesvalued at N6.327 billion in17,744 deals.
The Financial Services
Equities’ value rises by N55bn,trading up by 478%BY MICHAEL EBOH,CHINEDU IBEABUCHI &WILLIAMS JIMOH
recorded the highesttransaction in the week underreview, accounting for 91.04per cent of the marketturnover, with 4.899 billionshares valued at N18.920billion in 9,520 deals.
The Banking sub-sectorrecorded the highestpatronage in the Financial
Services sector, accounting for97.51 per cent of the sector’sturnover and 88.78 per cent ofthe total market turnover, with4.777 billion shares valued atN18.812 billion in 8,778 deals.
Union Bank NigeriaPlc emerged the mostactive in the sub-
sector, trading 4.329 billion
shares valued at N15.847billion in 234 deals; DiamondBank Plc followed with aturnover of 69.83 millionshares valued at N150.247million in 220 deals andUnited Bank for Africa Plcrecorded 49.499 million sharesvalued at N181.961 million in715 deals.
The Conglomerates sub-
Shareholders of R.T BriscoeNigeria Plc unanimously
endorsed the 10 kobodividend and a scrip issue ofone for five sharesrecommended by its Board ofDirectors for the financial yearended December 31, 2011.
The shareholders at thecompany’s Annual GeneralMeeting (AGM) held lastweekend, in Lagoscommended the Board for theimpressive performancedespite the harshenvironment it operated uponduring the year under review.
The shareholders furtherlamented on the deplorablecondition of infrastructure inthe country and called on thecompany’s chairman to use itsinfluence to notify thegovernment on the need totackle these inadequacies.
Speaking at the AGM, AlhajiGbadebo Olatokunbo, said,
From left: Dr.,Muhammad Ali Pate, Hon minister of state for health; Mrs, Fola Laoye,Chairman Hygeia group, and Mr, Afolabi Ogunlesi, managing partner, Vesta Healthcare,at the Inaugural Nigeria Private Health Summit, titled, “unlocking the market potential ofNigeria’s private health sector in Lagos . Photo by Folake Odebiyi
RT Briscoe shareholders approve 10 kobodividend, scrip issue
BY PETER EGWUATU“We commend yourperformance, the dividendand bonus shares proposed forshareholders. We still requireyou to outperform better thanthis. I advise that a taxconsultant be engage for thecompany so that we can payappropriate tax to thegovernment as a goodcorporate citizen. To pay taxis a task that must be done.There seems to be somemisrepresentation in thefigure contained in the annualreport. I will also suggest thatwe look at our generators thatwe sell; whether it can easilybe converted to gas because itis cheaper to use gas thanpetrol.”
Mr. Michael Cole, a memberof Independent ShareholdersAssociation of Nigeria (ISAN),said, “We commend theperformance of the companyand congratulate it for clocking55 years. We also commendmanagement for increasing itsworkforce, thus helping in
reducing unemployment. Wewill support the companywhen it decides to float publicoffering and advised that strictmeasures be taking to recoverdebts owed the company. Wethank the company forpublishing the list ofunclaimed dividend butadvised that theirbeneficiaries be included insubsequent period.”
Mr. Udoh Edem,another shareholder,
said, “Our company has donewell considering thechallenges it faced during theyear under review. I advisethe company to consider theissue of InternationalFinancial Reporting Standardand make frantic effort towardsits adoption. It is better tocomply and avoid paying fineto the regulators.
Meanwhile, the Chairman,R.T Briscoe, Mr. ClementOlowokande, commended theshareholders for their support
and useful contribution to thegrowth of the company.
He said, “Various measureshad been taken that will beginto bear fruits in the nearestfuture. The turnover and profitafter tax of the companyincreased by 30 per cent and42 per cent respectively in2011 from N15.1billion andN40.3million in 2010 to N19.6billion and N215 million in2011.”
He further explained that 95per cent of the debts owed thecompany had been recoveredas its provisions for doubtfuldebt declined.
According to him, “Infurtherance of the company’sstrategic objectives ofimproving contribution of ournon motor business, itincreased its shareholdings inBriscoe Property Limited, ofwhich the benefits will beginto manifest in the years ahead.We hope to see improvedperformance in our nextaccounting year.”
Capital MarketAcademy to holdtraining
Capital Markets Academy,the London’s global
financial markets andprofessionals’ developmenttraining academy hasconcluded plan to holdexecutive developmentprogramme.
According to its localpartners, Proshare, Nigeria, afinancial informationcommunication, investorsrelations and Analystfirm,”This full suitedevelopment programme hasbeen in the works for a whilenow, undergoing preparationsfor an appropriate time toexpose to the Nigerian capitalmarket stakeholders. It bringson board global best practiceavailable backed with real liferealities of the Nigerianenvironment to develop a setof programmes that help ustransit into the post crisisoperating environment”
The objective of thisengagement is strategic, as itaims, through the TrainingProgramme, to: Facilitategreater understanding of thekey products within theNigerian Capital Marketstoday.; Equip staff withpractical learning that they canapply immediately in theirroles and disciplines; Enableattendees to benefit from ahighly interactive learningapproach.
GSK furtherextends $2.6bnHuman Genomeoffer
Gl a x o S m i t h K l i n e
has again extended its$2.6 billion offer to buy long-time partner Human GenomeSciences in a hostile stand-off with the U.S. biotech.
The offer - now extendeduntil July 20 - remains pitchedat $13 per share.
The decision by Britain’sbiggest drug maker to pushback the closing date comes asno surprise, since HumanGenome effectively extendedthe battle two weeks ago bysetting a July 16 deadline fordefinitive takeover offers.
In the wake of the GSKextension, Human Genomerepeated its rejection of theoffer as not reflecting theinherent value of the company.
Buying Human Genomewould give GSK the full rightsto drugs on which the twocompanies collaborate.
Vanguard, MONDAY, JULY 2, 2012 — 27
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28 — Vanguard, MONDAY, JULY 2, 2012
CMYK
Geographicalmappingkey fordisastermanagement- Sambo
The federalgovernment is
committed to mapping thenation’s geographicallandscape in a bid toeffectively address disastermanagement in thecountry.
Vice PresidentMuhammad NamadiSambo who stated thisduring the th AnnualGeneral Meeting of theInstitution of Surveyorsrecently held Ilorin, KwaraState capital, said that theof the Surveyor-General ofthe Federation has been toaccomplishthe task.
Represented by Prof.Peter Nwilo,General of theFederation,the vicepresident called on stategovernments to also followsuit. “government ofNigeria will do everythingpossible to ensure that ourgeographical space isproperly andc o m p r e h e n s i v e l ymapped,”he said.
According to him, thethemeof the meeting,“Climate Change andDisaster Management”,apt and timelyasit strikesthe core of the challengefacing the worldtoday.expressed the hopethat the idea from themeeting would help totackle global warming andenvironmental disasters itrelates to the country.
In his remarks, Presidentof the Institute, YakubuMaikano, said Nigerianeeds a National MappingPolicy that would sustainthe production of maps inthe country.”The mustproduce accurate mapsthroughout the length andbreadth of the country.
When government cameup with the l, surveyorsadvised government to
embark on the mapping ofthe entire country for thesuccessful delivery of theland reform dividend,especially to Nigerians inthe rural areas”, he said.
Homes & Housing Finance
BRIEF
Stories byYINKA KOLAWOLE
•A mansion in Asokoro
Abbey Mortgage Bank Plc,formerly Abbey Building
society, recorded a drop inprofit before tax for itsoperations in the 2011financial year from N1.69billion recorded in 2010 toN1.58 billion in 2011,representing a reduction of39.47 percent. Gross earningsalso dropped by 6.51 per centfrom N1.69 billion in 2010 toN1.58 billion in 2011.
Chairman of the mortgagebank, Chief IfeanyichukwuOchonogor, who gave thefinancial scorecard at the 20thannual general meeting of thebank, attributed the lowperformance to the vagaries inthe property marketthroughout 2011. “Whereasthe upper end propertiescontinued a downward slidein both sales and rentals, lowand medium incomeproperties were quite active,”he stated.
Ochonogor howeverrevealed that total asset of thebank grew by 7.34 per cent
The federal governmenthas been called upon to
initiate implementationstrategy that will lead to the
FG tasked on implementationstrategy for housing delivery
actualisation of its policy tobuild one million housesyearly.
Two experts in the housingsector who spoke to the NewsAgency of Nigeria (NAN) inLagoslauded the policy, butnoted that government needto
fashion outan implementationstrategy for the policy to work.
Mr. Bunmi Ajayi, a TownPlanner and a formerPresident of the Association ofProfessional Bodies ofNigeria, said the idea wasgood, considering the huge
housing deficit in the country.He however called on orofficials spell outtheimplementation strategyensure itsworkability.According to him,implementation strategyshould be carefully workedout with the efforts of allstakeholders.
On his part, Mr. KayodeOmotoso, Executive Secretaryof Mortgage BankingAssociation (MBAN), saidthat the one million housesyearly would clear thehousing deficit in six years.
He however noted thattheimplementation strategy wasnecessary because thegovernment would encounterchallenges, includingfinance, land andprofessionals, in itsimplementation.
Omotoso said ordertoovercome the challenges,government requirethe effortsof the federal and state , theOrganised Private Sector(OPS), commercial andmortgage banks.”Meeting thefeasibility for the realisationof the one million housesyearly is the work ofeverybody.pronouncementmeans that the work of theministerial team on affordablehousing will escalate,”headded.
According to him, as amember of the ministerialteam, participate actively inall deliberations to ensurethat the proposed of wererealised.
Abbey renames, records 39.47% dip in profit
from N11.44 billion within thesame period to N12.28 billionwhile deposit liabilitiesincreased by 7.51 per centfrom N3.46 billion to N3.72billion, also within the period.
Meanwhile, shareholders ofthe mortgage bank haveendorsed operational changesof the bank to conform withthe reform agenda of CentralBank of Nigeria (CBN) formortgage banks and in linewith international bestpractices. Among suchchanges is the renaming ofthe bank from Abbey BuildingSociety Plc to AbbeyMortgage Bank Plc andapproval of a National PMBstatus for the bank inaccordance with new CBNguidelines, released in March2012 with retrospective effectfrom November 2011.
In her remarks, ManagingDirector of the bank, Mrs.Rose Okwechime, said inorder to firm up its operations,the bank has engaged a risk
management consultant to doan organisation wide review,development of risk policies,parameters, monitoring/execution plan andsubsequently set up a riskmanagement department forthe bank. In addition, shesaid new mortgage software- Finnone lending - wasacquired from India toaddress the bank’s growingloan portfolio and reportingrequirements of both CBNand international investors.
Okwechime disclosed thatAbbey signed a $15 millionjoint financing agreement ofthe Agbara Phase III projectwith FMO for thedevelopment of 220 middleincome housing units for thefirst phase of the project,adding that the project isexpected to commence in the2012 financial year.
She further noted thatAbbey is also supporting thedevelopment of Citigateproject through a joint
financing with FMO to thetune of $17.5 million aimed atdelivering 1,000 housingunits in Ibadan. “We drewdown on the second trancheof the $10 million FMOconvertible loan in March,2011 thereby resulting in along term loan portfolio ofN2.43 billion as at the end ofthe 2011 financial year,” shesaid.
According to hermanagement’s priority in2011 was to reposition thebank for the challenges of thenext five years, for whichconsiderable time wasdedicated to restructuringtheir portfolios of assets,adding that they alsocommitted funds for therelocation of their head officeto Victoria Island in Lagos.She also noted that the bankhas a good workingrelationship with two foreigninvestors - Shelter Afriqueand Afric-Invest.
CMYK
Vanguard, MONDAY, JULY 2, 2012 — 29
BRIEF
Homes & Housing Finance
Stories byYINKA KOLAWOLE
Daniel Ford & CoLimited, managed by
a Nigerian, Mr. Yemi Edunhas clinched the ‘BestProperty ManagementAgency’ at Lettings Agencyof the Year Awards 2012organised in association withThe Sunday Times and TheTimes of London, andsponsored by Zoopla.co.uk
The London-based firmwon in the Silver-BestProperty ManagementAgency category. The firmspecialises in overseaslandlords, giving it an edgein the highly-competitivelettings market, said Edun,the Chief Executive Officerof the firm.
Judges praised “theagency’s highly compliantsystems and processes,which are managed by a
River State government iscollaborating with the
Nigerian Army to construct 50blocks of housing units at theSecond Brigade Headquartersin Port Harcourt.
The five blocks of 10flats, comprising onebedroom flat each, are beinghandled by an indigenouscontractor and expected to becompleted before the end ofthis year.
At the foundation layingceremony of the project,Governor Chibuike Amaechisaid the construction of thehousing units is aimed atboosting the peacefulatmosphere in the state,noting that soldiers dischargetheir duties better when theyare comfortable. “When thesoldiers are comfortable theywill do greater works, so webelieve this project wouldimprove the security situationin the state. This is to ensurepeaceful flow in our state andit is only in a peacefulatmosphere that developmentcan thrive,” he said.
The governor, who wasrepresented at the event bySecretary to the StateGovernment (SSG), Mr.George Feyii, howeverappealed to the officers tomake good use of the propertywhen completed and urgedthe contractor handling the
Rivers partners army on housing projectproject to execute itjudiciously. He assured theNigerian Army and othersecurity agencies ofgovernment’s readiness toassist them in the dischargeof their duties for the benefitand protection of the peopleof the state.
In his remarks, GeneralOfficer Commanding (GOC),
82 Division, Nigerian Army,Major General OlayinkaAkinyemi Oshinowo, said oncompletion, project wouldalleviate the problem ofaccommodation beingexperienced by soldiers andtheir families in the gardencity. He urged other stategovernments in the country toemulate the Rivers State
government.The Commander, 2nd
Brigade, Headquarters, PortHarcourt, Brigadier-GeneralTanko Buratai, had earliernoted that apart from thehousing units, the stategovernment was also buildingthree model primary schoolswithin the barracks.
From left: Sir Mathew Pinsent, a former Olympic champion; Stacey Hounslow; Yemi Edun,MD, Daniel Ford; and a representative of Zoopla
Firm set tocompleteN750mestate inAbeokuta
Rockview HousingEstate comprising
100 housing units beingdeveloped by real estatedevelopment firm,Sparklight PropertyDevelopment CompanyLimited, in Abeokuta,Ogun State capital, isnearing completion, at anestimated cost of N750.
On completion, thedevelopment will boost thestock of residentialaccommodation inAbeokuta. It covers sixhectares of land locatedwithin the Obasanjo hilltopcomplex, Oke Mosan inAbeokuta. Construction ofthe estate commenced inFebruary 2011 and wouldgulp about N750 million atcompletion in January2013.
The estate beingdeveloped under publicprivate partnership (PPP)arrangement with theFederal Ministry ofHousing and UrbanDevelopment is targeted atmedium income earners.The houses are mostlybungalows consisting oftwo and three bedroomhouses, with price rangingbetween N6 million to N11million per unit.
The project is beingjointly funded by FederalMortgage Bank of Nigeria(FMBN) and SparklightProperty, with prospectivebuyers encouraged toaccess the NationalHousing Fund (NHF) loanthrough Stallion HomesSaving and Loan Limited,which is the primarymortgage bank (PMB)responsible for packagingNHF Loans for prospectiveapplicants.
Facilities provided in theestate include perimeterfencing with well laid outroad network and provisionfor water treatment plant.Other amenities includewell designed drainagesystem, electricity, gatedand manned security post,landscaped environmentand neigbourhood centre.
Speaking at a five-dayopen house event to createawareness for the estate,Chairman, SparklightG r o u p ,Chief Toyin Adeyinka,stated: “It is a strategy tocreate awarenessparticularly for theFMBN’s NHF loan.Individuals can own ahouse with just a downpayment of between 10 to20 per cent of the cost of theunit.”
Nigerian wins best property agencyaward in UK
dedicated complianceprofessional,” a role theybelieve clearly demonstratesthe team’s awareness of theincreased responsibility ofmanaging property foroverseas clients.
Over 450 leading lettingsagents from across the UKattended a glitteringceremony on Friday May 25,at The Lancaster LondonHotel opposite Hyde Parkwhere the winners of onlydedicated awards for thelettings agency industry wererevealed.
The awards ceremony wasthe culminating event of arigorous and thoroughjudging process carried outover a four-month period bya panel of industry expertswho assessed initial entrysubmissions before
conducting an extensivereview of the entrants, whichincluded hundreds oftelephone interviews andmystery shopping exercises.The whole of the judgingprocess was overseen by TheProperty Ombudsman,Christopher Hamer.
The Sunday Times and TheTimes awards now in its thirdyear as a dedicatedcompetition have becomewidely recognised as the mostsought-after and difficult towin. This year’s competitionhad more entrants than everbefore with over 5,000 officeswere represented but only thevery best of the best werecrowned as winners.
In his acceptance speech,Edun said, “ we arepleasantly surprised at thisrecognition; this is a reward
to our commitment to bestpractice.” He said customerservice is clearly crucial to theagency, with “response timesfor client and tenant queriesswift and communication withboth consistent. Regular stafftraining ensures the team iskept up-to-date with industrychanges, so they can offerclients a comprehensiveproperty management service,which clearly outshines awhole host of its competitors.”
According to him, the firmrepresents a few Premiershipfootballers in buying andmanaging their portfolio. Oneof them, Nwankwo Kanu said,“When Daniel Ford isinvolved with your propertyyou can go tosleep, Ford helped grow myLondon property investmentdespite my tight schedule.”
30 — Vanguard, MONDAY, JULY 2, 2012
CMYK
Insurance
BRIEFS
Commissioner forInsurance, Mr. FolaDaniel said that the
Nigerian Insurance IndustryDatabase, NIID, wouldprotect Nigeriangovernments, individuals andcorporations from thedangerous activities offraudsters racketeering fakeinsurance certificates.
Daniel said this during thelaunch of the database inLagos last week.
He said, “The NIID is ofgreat benefit to allstakeholders in the insuranceindustry. These include butnot limited to the variousgovernment at all levels,policyholders, shareholdersof insurance firms and wouldbe investors.”
Highlighting other benefitsof the database, Daniel saidthe database is an instrumentthat would become veryhandy in the control of or fighttowards the eradication offake insurances in Nigeria.
It is expected to facilitateeasy collation anddissemination of statisticalinformation relating to allclasses of insurance inNigerian and also serve as aplatform for easyidentification of genuineinsurances by securityagencies and other relevantauthorities, the commissioneradded.
Daniel also noted that theNIID is coming on the heelsof continued effort by theNational InsuranceCommission, NAICOM, torid the nation of fake insurersand insurances in furtherancewith its Market Developmentand Restructuring Initiative,MDRI.
NAICOM endorses NIID as protectionagainst fraudsters
“Eradication of fakeinsurances and thesanitisation of the insuranceindustry is one of the cardinalobjectives of the MDRI. Weare of the belief that thelaunching of the NIID todaywill go a long way in assistingthe commission in thiscampaign,” he said.
Meanwhile, AssistantCorps Marshal, Federal RoadSafety Commission (FRSC)Mr. Ademola Lawal gaveassurance that the FRSCwould support the industry inall possible ways to ensurethat the database achieves thepurposes for which it wasdesigned and set up andmake it the envy of othersectors.
According to him, beforenow the commission haswondered when it would be
possible to get a database ofall insurance companies in thecountry, noting that with thelaunch of the NIID, thisproblem has been finally laidto rest.
He said “At some of ourmanagement meetings inAbuja, we have wonderedwhen there will be a databasefor insurance companies in thecountry. We have our owndatabase and now that theinsurance industry has adatabase, it will be easy for usto harmonise them.”
He added “The databasewill assist us to enrich ourown database. One of the firstthings to be captured in thedatabase is motor insuranceand when you talk aboutmotor, you are automaticallytalking about FRSC.”
“We are endorsing this
database and we will doeverything in our powers toensure that the database ofNIA becomes an envy of allother industries,” Lawalpromised.
In his welcome address, theChairman of NIA, Mr.Olusola Ladipo-Ajayi statedhis conviction that thedatabase, which he describedas a milestone by the industrywould help to eradicate fakeinsurance.
He noted that fake insuranceis worse than fake drug,reasoning that fake drugaffects only one person, theconsumer while fakeinsurance affects both theconsumer and other thirdparties who may be affectedby the absence of genuineinsurance protection in caseof accidents.
Sonoma Countyhealth officialsapplaud USSupreme Courtdecision
At least 60,000 SonomaCounty residents who
currently have no healthinsurance could soon benefitfrom the U.S. Supreme Court’sdecision to uphold the bulk ofPresident Obama’s healthcare law, local health officialssaid.
Even as critics of the lawvow to turn the court’s rulinginto an election yearreferendum on Obama, localhealth care officialsresoundingly approved thedecision.
“Fewer people will die, fallill, or lose their homesbecause of the lack of healthinsurance,” said SonomaCounty Health Officer LynnSilver-Chalfin. “Preventionwill continue to besupported.”
Jerry Dunn, interim directorof the Sonoma County HumanServices Department, said thedecision ensures medicalinsurance access to 60,000previously uninsuredresidents, more than 10 percent of the county’spopulation.
Operator urgesinsurancepractitioners tosupport NAICOMin fixing ofcommission
All the various arms of theinsurance industry have
been urged to support theNational InsuranceCommission, NAICOM, inthe fixing of commission forinsurance intermediaries.
The various arms whichmake up the insurance sectorare the Nigerian InsurersAssociation, NIA, NigerianCouncil of RegisteredInsurance Brokers, NCRIB,Chartered Insurance Instituteof Nigeria, CIIN, Institute ofLoss Adjusters of Nigeria,NLAN as well as theinsurance agents.
Managing Director of FBNLife Assurance Life Ltd, Mr.Val Ojumah who called for thecollaboration amongst thesevarious arms stated that theNCRIB, CIIN or NIA do notfix commission but rathercommissions are fixed by theregulator NAICOM.
Sovereign Trust Insuranceplc has carried out training
on some of its non-executivedirectors that are non-insurance professionals.
In a statement available toVanguard, the company saidthe move is to demonstrate itsresolve to upholdprofessionalism andcontinually develop thehuman capital resources in theinsurance industry in Nigeria.
In his flag-off speech,Managing Director of thecompany, Mr. Wale Onaolapourged the directors to see theprogramme as an eye-opener
STI commits to human capital developmentto the dynamics of theinsurance business both at thelocal and international levels.The participants included theChairman of the company,Chief Ephraim Faloughi, Mrs.Adefemi Taire and Mr.Kolapo Lawson. Others areProfessor Steve Azaiki, andCol. Musa Shehu, (Rtd.) anindependent director.
Speaking on behalf of theparticipants, Chief EphraimFaloughi, OON, lauded theinitiative behind the training.He said “The importance ofinsurance appreciation fornon-insurance practitioners,
especially stakeholders of thebusiness, cannot be over-emphasised considering theever-evolving operatingstandards and principles ofthe underwriting business inthe country at the moment”.
He further stated thatother insurance
companies in the countryshould emulate such initiativein deepening the quality ofthe human capital base bothat the operational andstakeholders’ level.
Apart from providinginsights to the participants onthe business of insurance, the
one-day seminar alsoexposed them to the specialnature of insurance contracts,principles and concepts whileat the same time, make theDirectors aware of the extentof their oversightresponsibilities and liabilitiesassociated with insurancebusiness. Another majorhighlight of the seminar wasto ensure that the participantsare able to formulate policiesthat are based on soundinsurance principles andother provisions of theinsurance law for the smoothday-to-day running of thebusiness by management.
L-R; The immediate past Chairman Of Nigerian Insurers Association (NIA), Mr. OlusolaLadipo-Ajayi; Chairman, NIA, Mr. Remi Olowude; Director General/CE, NIA, Mr.Olorundare Thomas and Principal Counsel, Funmi Adeyemi and co, Prof. Moses Adeyemi,during the 41st Annual General Meeting and handing over to the new Chairman, in Lagos.
STORIES BYROSMARY ONUOHA
Vanguard, MONDAY, JULY 2, 2012 — 31
CMYK
BRIEFS
Insurance
Mr. Remi Olowudehas said that he willrefocus the
Nigerian Insurers AssociatingNIA to win support andrespect from all stakeholdersin the Nigerian economy,particularly the Executiveand Legislative arms ofgovernment, the Judiciary aswell as the Nigerian BarAssociation (NBA).
Olowude who was electedthe new Chairman of the NIAat the annual general meetingof the association last weeksaid during his acceptancespeech that he will improvethe quality of insuranceeducation and practice in thecountry.
He said “I will focus onbuilding better platforms ofcommunication between NIAand all NIA-membercompanies; working with mypredecessors in office to moveNIA to the next level;improving relationshipbetween NIA and itsregulatory agencies,including NAICOM, CentralBank of Nigeria (CBN),Securities and ExchangeCommission (SEC) and theNational PensionCommission (PENCOM);collaborating with otherbodies in the trade industryto deepen insurancepenetration in Nigeria as wellas promoting ethicalstandards amongst NIA-member companies and thelarger insurance industry toearn the respect that wehonestly deserve.”
Olowude said that allaround us, we see challengesand opportunities thatabound in our industry andthe nation’s economy such as
BY ROSMARYONUOHA
New NIA Chairman pledgesto refocus associationrestrictive laws on insurancepractice; issues of multipletaxation; inefficiency of thepower sector; as well asNigeria Content Policy on Oiland Gas.
Other challenges, accordingto him, are ensuring theworkability of the MarketAgreement; ensuring greaterinsurance awareness andpenetration as well asmigration to IFRS and, inparticular, the new EnterpriseRisk Management Systemwhich is meant to engendergood corporate governance,and promote stability andgrowth of the industry.
Olowude said “We shalllook more inwards to takeadvantage of the untapped
potential demand forinsurance in Nigeria, for thisis a major step to engenderthe relevance of our businessto the growth of our nation.”
Towards achieving thisgoal, Olowude said“We shall take
deliberate steps to encouragegreater collaboration amongour members and allinsurance practitioners. Weshould see one another ascollaborators even as weencourage healthycompetition.
To actualize this laudableand desirable goal, we hopeto institute ‘Insurance JointSessions’, which will bringtogether all insurance sector
Health Care RulingSends InsuranceStocks Down,Hospital SharesUp
Equities analysts atGoldman Sachs, an
investment bank, sayhospitals are “winners” in theU.S. Supreme Court ruling onPresident Obama’s healthcare plan.
A commentary published bythe firm predicts that the year2014, when many provisionsof the health care law are inplace, should be a good onefor hospital companies.Goldman says hospital stockprices will probably rise.
Equity analysts at othercompanies say the new lawwill make health insurancemore widespread and thatwill cut the financial burdenon hospitals from treatingindigent patients.
Goldman says the overallimpact on healthcarecompanies will be “modest.”
However, stocks of healthcare insurance companiesdeclined shortly afterThursday’s ruling. Whileinsurance companies will begetting many new customers,investors may expect that onbalance, new regulationscould hurt insurance industryprofits.
AIG to revive AIGname; dropChartis,SunAmerica names
Bailed-out insurerAmerican International
Group Inc. will resume usingits brand name in public in amove to recognise thecompany’s turnaround, ChiefExecutive Bob Benmoschesaid last weeek.
AIG, which received $182billion in governmentbailouts during the financialcrisis, has all but shunned itsown name for years.
Not only did various AIGunits reorganise underrebranded holdingcompanies, at one timeemployee ID badges did noteven identify the company byname — a measure,Benmosche has said, toprotect employee safety.
But with recent advertisingtests showing higherresponse rates and lowercustomer acquisition costs forAIG-branded products, thecompany said it was time fora change.
groups. The forum will serveas a platform for deliberationson critical industry issues. Itis proposed that the sessionsbe chaired by respectedelders of the insuranceindustry, either jointly or ona rotational basis.”
He stated that the NIA, asa trade group, has theprimary responsibility ofprotecting the interest of itsmembers, adding “To thisend, we shall utilize ourcollective knowledge,strength and willpower tofulfill this mandate. Inaddition, we shallunrelentingly promoteawareness and education ofinsurance among thepopulace.
L-R; Company Secretary, Mrs. Sarah Osedo; Chairman, Chief Samuel Adegbite andManaging Director, Mr. Tunde Oshadiya all of Oasis Insurance Plc at the 19th AnnualGeneral Meeting of the company held in Oyo State.
Management of AIICOPension Managers Ltd
has said that the company isundergoing a rebrandingprocess aimed at bringing itcloser to its customers.
Managing Director of thecompany, Mr. EguarekhideLonge, who made theassertion during a chat withmedia men in Lagos, saidthat the company iscommitted to deliveringimproved services to its widerange of customers, ensuringits resources are adequatelydeployed in meeting theneeds of aspirations of thecustomers.
Longe said, “You influencetheir right of choice bydelivering what is importantto them. As a responsible
Aiico Pensions undergoes rebrandingBY RITAOBODOECHINA
organisation, we know thatthere are key things thatretirement savings accountholders look up to. They wantgood service, good investmentreturns, and they want to beable to reach their pensionmanagers anytime as well asbeing able to have access totheir accounts whenever it isrequired.”
Longe said that as amanager of a business, thebest they can do is to makesure they address all these,adding “All we can control isthe service we render topeople and they will be thejudge of how they decide,either to stay or move on. Butwe are reasonably assuredthat with the kind of platformwe have built, andaccelerating onto, we willmake positive impact everystep of the way.”
While assuring of thestrength of the company,Longe said that it has noplans to merge with any otherpension fund administratorbecause the company has astrong heritage, is adequatelycapitalised and would remaina stand-alone company for along time to come.
He said, “We are going tobe here for the long haul, weare not going to merge. Weare going to stand alone. Itwill be absolutely naïve for usto say we are not ambitious;we have a very strongheritage. As for as legacyfund is concerned, AIICOPensions fund managers isnot dependent on legacy fund.We are a strong player in thatsegment of the market.”
Speaking on rebranding ofthe company, Longe said thatthe objective of the
transformation is that theindustry wants individuals tobe able to identify an AIICOpension managers role in theindustry, as this is the cost ofhow and the extreme in whichcustomers are being held.
He said “You will see someinnovation soon. It isenlightened self interest thatyou get more peopleemployed, we are not goingto go out to get more peopleemployed but we will supportthe initiative that ensures thatthere are more jobshappening in this country inour own little way.”
“We are fund managersand we can’t tell you whatinvestors are looking for, wecan’t put money yet, but wecan be with you, because weare there in some kind oflistening or advisorycapacity.”
32 —Vanguard, MONDAY, JULY 2, 2012
CMYK
Vanguard, MONDAY, JULY 2, 2012 — 33
CMYK
Interview
Mr. Romeo Itima ist h e M a n a g i n g
Director of Global West VesselSpecialist Limited, a companyresponsible for maritimesecurity and surveillance inNigeria. Anexperienced United Statestrained Master Mariner, hehas garnered over 30 yearsexperience in many aspectsof marine operations,especially intelligencegathering, surveillance,maritime security and vesseloperations, having beenactively involved in similaroperations in the UnitedStates. He has also wonseveral laurels in maritime/marine security, safety andvessel operations bothnationally andinternationally. In thisinterview with MICHAELEBOH & DAPOAKINREFON, he declaresthat the input of privateexperts is required in themaritime industry for Nigeriato fully harness its maritimepotentials..
Excerpts: How did you get involved
in Nigerian maritimeindustry?
Maybe I should start fromthe beginning. I grew up inEscravos where five of myuncles were pilots. I was stillyoung when I learnt tonavigate a ship. I laterbecame a seaman and fromthere moved on to foreigncountries. I grew up in amaritime environment. WhenI went to the United States, itwas to further my educationand come back to join myfather’s job. That was myintention, but for somereasons, I stayed behind andjoined the US Master marine.In 2002, I came for a visit toNigeria, and at that time twoof my cousins were involvedin the maritime industry andI said, ‘let me go out with youguys and see.’ When I wentout there, it was wide open –nobody was in control and Iasked who is in control? I wasquite surprised that thiscountry was left open likethat. I said what ishappening? Nobody knewwhat was going on, I meananybody could just dowhatever he or she wanted.At that time I met SenatorDiffa, so I told him we have aproblem in Nigeria, and heasked me what the problemwas? So I told him. I said thisis the problem. I explainedeverything to him. I saidNigeria is left open andanything can happen eitherto this country, or somebodymay hide explosives or bombsand take to any other countrythat could cause large scaledisaster. This could be hungon Nigeria. He did not quiteunderstand my explanation.So I took him straight to thecompany I was working for in
Nigeria needsexperts tostandardisemaritime practice– Captain Itima
the United States. I took himfrom point to point. He said hedidn’t know that we had suchthings, and I said, ‘don’tworry, I am coming back toNigeria, and I will take you toplaces where we have almostidentical things as we havehere.’ So, when I came, I tookDiffa and travelled round thecountry. Now he saw the otherside of the story. It is very hardto understand it if you are notpart of it, that’s what I amsaying. Now, Diffa helped –the first human being that evertook the case to OBJ wasformer Minister of Transport,Abiye Sekibo. Diffa took me tohim and when I was talking,he was just looking. I saidthere are ships out there thatNPA doesn’t have records of,NIMASA doesn’t have recordsof – nobody has records ofthem. He said this is not true,I said yes, it is true. He said,‘go and bring four names andbe sure the ships were inNigeria.’ In two days, we wentback with hundred names,from the time they arrived tothe time they departed. WhenI showed him, he was sosurprised and said I should
give him one week for him todo his own findings. He foundout that NPA did not evenunderstand what he wastalking about. It then he knewwe really had a problem. Hewas the man that took ourproposal to OBJ, and OBJ wasthe first person to put hissignature on that project.Only God knows if we canrepair the things that havegone wrong.
What and what are thethings you said have gonewrong in the maritimeindustry.
Take, for example, thecrime of illegal bunkering.What they’re doing now is notillegal bunkering; it is theft ofcrude oil. They hijack andsteal oil from ship. The wordbunkering came in 1984, inIdiagbon’s time – when Icame home briefly, I hadworked with the then NSO,training them how to searchship, what to look for. That wasthe time of illegal bunkering.What happened at that timewas that people could usecanoes to load whatever kindof oil and bunker all the shipsinside the port. Idiagbon was
about to stop that. That wasthe world of illegal bunkering.At that time it was the rightword, but now it is not. A shipmust have bunker; if youdrive from here (Lagos) toCotonou you cannot comeback without refueling yourcar. All ships that come toNigeria must bunk, butthough there were licensedpeople at that time, theunlicensed people weremore, and the licensed onesthat were doing it right faceddifficulties because theunlicensed ones were sellingmore cheaply. That was theproblem at that time; that wasfar back in ’84. It was a littlecrime then, but slowly thecountry was bleeding andthese people graduated intowhat they are today. Now itis hard to stop, but it has tobefore Nigeria turns intosomething else. Now, oil theftis the major problem for thecountry, financially. It is anorganised crime; there arelittle guys, medium and thetop. The JTF has beenreported to have set fire on anapprehended boat and somepeople may have thought thatit was jungle justice, but thetruth is that these people areso powerful that goingthrough the traditionalchannel of the court toprosecute them is very hard.So that could be the kind ofmessage that maybe theywould listen to. They areusually considered a source of
hazard to the environment,because they cause erosion,oil spill and all kinds ofproblems. So something hasto be done. Where we are bynow with the NIMASA, if thesupport we need is beinggiven, I think we would beable to solve this problem.
What is the support that youneed?
We need support from themilitary, journalists like you,politicians, and oilcompanies. If they support ourproject the present problemwould be easily taken care of.Now, all of you probably knowthat NIMASA has awardedcoastal security contract toTompolo, and that Tompolo isan ex-militant, and all that.That is not support; it is apropaganda tool to discreditthe intention that we have. Ifyou look at the CAC, I meanthese people that are writingthis have people almosteverywhere. If you want toknow who are theshareholders of Global Westand you’re asking me you’redoing injustice to yourself; goto the CAC and see who arethe people behind thiscompany. People like SenatorDiffa, nobody is mentioningthem; somebody like RearAdmiral Omu, nobody ismentioning them. Let’s lookat this positively. For themagnitude of this kind of job,you would wonder if theseguys can do it. The other thingis that on the application wewere asked how much moneywe were going to invest tojustify what percentage wewere to receive. That is whyyou saw we’ve invested asmuch as N120m. At the endof the day it would come outin the news that the FederalGovernment is going to awardcontract for this much money,but where do they get thesefacts from? These are some ofthe things we want to set right.We don’t have to amendthings; tell it as it is; there’snothing to hide when we’retalking about the nation. Weshould report the things thatwould promote our nation; so,let’s take our nation beforeourselves. Since we (GlobalWest) started some personsare owing NIMASA almostabout $200m, and if they’reowing NIMASA $200m thenthey would be owing NPAthree times that amount.
What they’re doingnow is not illegalbunkering; it is theft ofcrude oil. They hijackand steal oil from ship
•Capt. Romeo Itima
•Capt. Romeo Itima
,
,
BRIEFS
Micro-Finance
Microfinance Banks(MFBs) arebasically known to
perform financialintermediation, that is,servicing or financing theDeficit Economic Unitthrough the resources derivedfrom the Surplus EconomicUnit and at reduced interestrate.
Unlike the commercialbanks, they provide financialservices such as credits andfinancial advisory to the activepoor who ordinarily would nothave access to such servicesdue to its perceivedcharacteristic risks level.
A financial analyst whospoke with FinancialVanguard said that the recentpast experiences ofmicrofinance banks has led tothe loss of confidence in thebank, placing them on a tightspot.
According to the analyst,Manager at NovelMicrofinance bank Mr.Princewill Uruakpa, “MFBsare still facing the problem ofinability of customers to payback loans, coupled with thebias created by the closure ofseveral microfinance bank.”
Uruakpa explained thatcustomers are bias aboutMFBs, consequence to theCentral Bank of Nigeria’srevocation of licences ofmajority of the banks as aresult of their inability to meetcapital base.
In addition, he pointedfurther saying “given that ourenvironment is so dishonestgenerally, even when you are
Past experience placesMFBs on tight spottelling the truth becausesomebody has liedsomewhere nobody wants tobelieve you.
“When you talk ofmicrofinance, people see us asthrift homes or corporativehomes where you go to makeloan application and they willgrant you loan for a period oftwo weeks. But actually thewhole idea behindMicrofinance is for thelicenced bank to be able tomop up all the money whichwe call micro money from thesystem, mostly from marketwomen.”
Speaking on NovelMicrofiance Bank, he
said “The idea behind ourown arrangement as a bank,is to encourage the lessliterate, we have variousaccounts, you can even openan account with N100, thenyou can encourage a pepperseller or tomato seller to besaving N100 everyday whichwill amount to N3000 permonth.
“By the time the womantrade for three years you knowhow much she would havemade,
So that is the idea behindmicro finance, the ability tomop micro funds from marketplaces.
“However, some customershave sense interest to save
and not to borrow, so we cansend our marketers to theirshops to do daily collectionfrom them. And then themarketer will pay the moneyinto the banks accounts and
BY PROVIDENCE OBUH
5,000 SMEs to yield 8m jobs by 2015 — SON
return the teller the next day.They have a pass book theonly time they come to thebank is when they want towithdraw,” he said.
BY PROVIDENCE OBUH
The Standard Organisationof Nigeria (SON) has
announced plans to involve5,000 Small and MediumEnterprises SMEs throughcapacity building by 2015, aninitiative to create about eightmillion jobs in the country,from the sector, says theDirector General of theorganisation, Dr. JosephOdumodu.
Odumodu made thedisclosure while addressingpressmen at an eventorganized by stkeholders toseek way forward on how toboost trade among Africancountries.
He said, “In the next threeyears, our target is to workwith 5,000 SMEs in Nigeria,this is because in Nigeriatoday, there are over 17million SMEs and if we areable to get a critical mass
involved, by building theircapacities on ISO 90001 andISO 22000 Food SafetyManagement, we would havecontributed significantly to jobcreation.
“Imagine if half of thoseSMEs are able to employ oneperson per company, we
would have created anadditional eight million jobsin Nigeria.” Based oncollaborations, he said that theorganization has startedworking with theCommonwealth Secretariaton 250 SMEs.
According to him, “we are
aware that SMEs are theengine of growth in Asianeconomies, especially in theChinese economy. So if weare able to mainstream ourSMEs to be the driver ofchange, then we would be onthe right track to developingour economy.
One of the Micro financebanks in the South-South
zone with its headquarters inCalabar, Cross River State,Ekondo MFB has introducede-payment in the bank.
Chairman and ChiefExecutive Officer of the bank,Dr Asuquo Ekpenyong whodisclosed at the launch of e-payment system by the banksaid the measure was to make
their services available to thepeople at the grassroots.
Ekpenyong said the e-payment system introducedby the bank was the first of itskind by any micro financebank in Nigeria.
He explained that it wasmeant to provide enablingenvironment for the bank’scustomers across the state toenjoy the services offered bybigger banks.
We want our customers toenjoy the same measure ofservices offered by other
Ekondo MFB introduces e-paymentBY JOHNBOSCOAGBAKWURU, CALABAR
banks anywhere they are,” hestated, adding that the newsystem was one of theexpansionist schemes of thebank aimed at providingefficient services to itscustomers.
Ekpenyong said that beforethe end of the year, sevenadditional branches of thebank would be opened at thecentral senatorial district ofthe state to make theirservices available to thepeople at the grassroot.
Nam Micro-LoansReach ‘Alarming’Proportions
BY the end of last year,Namibians owed
registered micro-lenders inthe country in excess of N$1.5billion, about 34 per cent morethan they owed them at theend of 2010.
The latest figures releasedby the Namibia FinancialInstitutions SupervisoryAuthority (Namfisa) are acause for concern, economistssaid.
“Micro-lending is growingfaster than short-termborrowing at banks and Iwould suspect that this moneyis used to financeconsumption expenditure,”Namene Kalili, FNBNamibia’s research andcompetitor intelligencemanager, said yesterday.
Simonis Storm Securitiesanalyst Rudolf Kuschke saidtotal micro-lending at the endof 2011 represented about 3,4per cent of total creditadvanced by commercialbanks. As such, the amount isrelatively small.
Senegalesegovernment urgedto subsidisemicrofinanceinstitutions
Former Senegalesemicrofinance minister,
Mrs. Soukeyna Ndiaye Ba,urged the government tosubsidise microfinanceinstitutions to supportdeprived populations,especially women.
Mrs. Ba, who is thechairperson of Women,Development and Enterprisein Africa (FDEA), said at aconference on microfinanceand development in Dakarthat microfinance was aimedat enabling the poorest to earna living in a dignified manneron the basis of human rightsand having the right andpossibility of accessing foodsecurity.
“The capacities and know-how of the deprivedpopulations must bestrengthened to enable themto take their own destiny intotheir hands, to reduce theirlevel of poverty andvulnerability by facilitatingaccess to financial servicesand to enable the poorest tobring about real changes intheir lives,” she said.
34 — Vanguard, MONDAY, JULY 2, 2012
CMYK
Man who sells roasted fish at Agege.Photo by Folake Odebiyi.
BUSINESS & ECONOMY
“The time is a quarter tomid-night”. Dr Burlough, thefather of the GreenRevolution.
In one corner of Cross RiverState, raw rubber production,which should be at its highestduring the rainy season, isdropping. Reason; aparamount chief in the areadied recently and ten humanheads are needed before hecan be buried. Two headlessbodies in one farm had sentall the farm labourers, formiles around, refusing toharvest rubber. It is quitepossible that by the time theremaining eight scalps arecollected, the rubber seasonwill be over and Nigeriawould have lost millions ofdollars in foreign exchange.A farmer with large plantationof both rubber and palmproducts is now in a dilemmaabout how to get help whichis now unavailable at anyprice; meanwhile the localpolice look the other way.Unfortunately, it is not justrubber production which issuffering from inadequateattention, farmers arereluctant to go to any farm inthe area – irrespective of thecrop involved.. While thedeath of paramount chief is arare occurrence, whathappens to millions offarmers routinely suffer frombanks in ways that are simplypathetic. Presented below arethe details of what started asan agricultural loan, urgentlyrequired to save a catfish cropfrom perishing. The bankrefused the application foragricultural loan and insteadoffered a personal loan –
The hypocrisy of ouragricultural policy -1
(A case study)which carries higher interestrates. Read and cry for ourbeloved country because thisis real.
Facility type: Term LoanFacility Amount: N750,000
(Seven hundred and fiftythousand naira only)
Purpose: To support workingcapital requirement forventure into a new fishfarming project. RepaymentSource: Repayment shall befrom your business inflows.
Repayment Terms: Monthlyrepayment of interest thereonwhile principal repayment willbe included in the monthlyrepayment after themoratorium of 3 months.
Pricing:Interest rate: 27% p.a (Please
know that interest rate isvariable; depending onprevailing
market conditions).Processing fee: 0.25% flatManagement fee: 0.75% perquarter
Commitment: 1.00% C O T:N5.00 per mile.
Security:Lien on original Deal Slip of
N3 million only with theBranch. Personal Guaranteeof a Third Party supportedwith notarized statement ofnet worth. It requires no PhDin mathematics to calculatethat the lender is paying about36% for an agricultural loan.
That makes Nigeria the worstcountry in the world to investin agriculture. Thus, whenthe current Minster forAgriculture came into officeexclaiming about the N1.2trillion we spend annuallyimporting food, one is forcedto ask him if he has lookedaround Abuja where thesaboteurs of Nigeria’sagriculture reside and work –including Aso Rock.
First, the readers, and I hopethey include the Governor ofCentral Bank, the Federal
So, the risk of default, whichbanks use as an excuse fordenying agricultural loan,was virtually nil. Yet, the fishfarmer was forced to take anagricultural loan at theseShylock rates. Furthermore,the bank sent a representativeto the site who saw that thefish farmer had invested overten times the amount of loanrequested. He had fish pondsalready stocked with fish, fivegiant water tanks, threegenerators, bags of fish meal;and staff. Above all, he lived
fish farm. Third, everycondition known to honestbankers for granting a loan –including adequate collateralshad been met by the lender.These are the same bankswhich allow the “high andmighty” to collect loans andrelease the collaterals beforethe loan is paid up.
Finally, the farmer had beena customer of the bank andhad previously taken a biggerloan to purchase a personalcar and he had serviced theloan without blemishcompletely. So his record withthe bank had been exemplary.Suddenly, he is being takento the cleaners because thistime it is a request for anagricultural loan. Yet, this isnot an isolated case. Millionsof farmers are placed in thisuntenable position whichmakes nonsense of officialclaim of support foragriculture. If the truth mustbe told, government doeseverything, in collusion withbankers, to discouragefarmers. It is a fact that, nosingle bank, in Nigeria, hadgiven out, in any year, all theagricultural loans for whichprovisions were made.Instead of providingagricultural loans, theyannually pay the penalty fordepriving the agriculturalsector the funds required toincrease the land broughtunder cultivation and theaggregate yield of food itemsnationwide. The Central Bankhad been in almost criminalconspiracy with the banks todeprive farmers of fundsrequired for more than threedecades.
Minister for Agriculture, theCoordinating Minister for theEconomy, the Senate andHouse Committee members onAgriculture, and, if he hastime to read, PresidentJonathan, will notice that thelender had more collateralwith the bank than the facilityfor which request was made.
on the premises and he is apublic figure – not one toabscond because of N750,000.
Second, the bank did noteven pretend not to know thatthis loan was sought for anagricultural project, since itacknowledged that thepurpose of the loan was forworking capital to promote a
Top shareholderJPMorgan is reluctant
to vote in favor of a 1.4-billion-pound offer for theLondon Metal Exchangefrom the Hong Kong stockexchange, sources familiarwith the matter said, and thedeal could fail if smallermembers also hold out.Many smaller shareholdershave voiced objections to thetakeover of the LME, theworld’s largest marketplacefor metals like copper andaluminum. If the deal fallsthrough, the potential valueof the exchange could fallbelow 1 billion pounds.
Three separate sourcesassociated with the deal saidthat the bank was keeping themetal exchange communityguessing on its stance in thevoting due by the end of July.None wished to be quoted byname.
JP Morgan, which has kept
JPMorgan keeps up suspense over metal exchange salepublicly silent on its votingintentions while many othershareholders have declaredtheir position, declined tocomment. The LME alsodeclined comment.
Sources said JPMorgan hadpreferred U.S. commoditiesgiant InterContinentalExchange , which lost out toHong Kong Exchanges andClearing in the final stage ofan auction that started lastSeptember.
“They fell strongly behindthe ICE bid, they felt it wasbetter suited to their ownbusiness model,” a seniorexecutive close to the mattersaid. If the deal with HKEx isscuppered, ICE could re-enterthe fray but would probablyoffer less than the currentHong Kong proposal,equivalent to around $2.2billion. “Everyone has a PlanB,” said one source at ashareholding company. “But if
this sale fails it will destroythe LME’s value. 1.4 billionpounds is extracting themaximum value from theLME, and it will be worth lessthan one billion if the saledoesn’t go through.”
HKEx investors have voicedconcern the exchange is over-paying for the LME, whichmade a net profit of just 7.7
million pounds last year dueto its policy of restrictingprofits to keep fees low for itsmember-owners. Manyshareholder members whoown and use the 135-year oldexchange fear a sale mightalter its unique, complexstructure of futures tradingand end the low fees system.
Due to a voting structure
designed to preserve theinfluence of smallershareholders - often industrialusers and producers of metal- the deal could fail if many ofthem oppose the bid, whichhas to be approved by 75percent of shares and 50percent of shareholders.
The largest shareholders arebanks.
The Minister ofC o m m u n i c a t i o n s
Technology, Mrs OmobolaJohnson, has urgedtelecommunications serviceproviders to ensure smoothimplementation of MobileNumber Portability (MNP) inNigeria. Johnson made theplea in Abuja at the openingof the international forum onMobile Number Portability
FG urges service providers to ensure smoothimplementation of Number Portability
(MNP) implementation andmanagement. The ministerwas represented by the DeputyDirector, Telecom and Postal,in the ministry, Alhaji AhmedGumel, at the forum,organised by BSP MediaGroup in conjunction withNigerian CommunicationsCommission (NCC). She saidthat the introduction of MNPin the Nigerian market was a
welcome development andurged the organisers of theforum to adequately educatestakeholders on therequirements for theimplementation and theirroles. Johnson said that thebenefits and code of practiceshould be clearly defined toenshrine confidence in thetelecoms sector.
A farmer with large plantationof both rubber and palm productsis now in a dilemma about howto get help which is nowunavailable at any price;meanwhile the local police lookthe other way. ,,
Vanguard, MONDAY, JULY 2, 2012 — 35
CMYK
36 — Vanguard, MONDAY, JULY 2, 2012
CMYK
Agric
BRIEF BY JIMOH BABATUNDE
Shonga FarmsHoldings,Austravia tocommence exportof cassava chipsto China.
Kwara State’s emphasis onvalue chain management
in agriculture has paid off asIreti Farms, under theauspices of Shonga FarmsHoldings, in partnership withAustravia of Australia, is tocommence export of cassavachips to China.
The first batch of 6000 tonnesis expected to go out in thenext two weeks with ShongaFarms, in which Kwara was a25 per cent stake givenadditional power to source for additional cassava fromoutgrowers in the state ascoordinating body .
This was disclosed at aninteractive session betweenthe State Governor, AlhajiAbdulfatah Ahmed and adelegation of Austravia,Exporters of Dried CassavaChips, led by its ChiefFinancial Officer Mr. SamPopilko, representative ofHon. Minister of Agriculture,Chief James Awoniyi and theChairman of Shonga FarmsHoldings, Mr. Tope Daramolaat the Government House inIlorin.
Speaking on the initiative,Mr. Sam Popilko said as attoday there is more than amillion tonnes per dayrequirement of cassava inChina ready to be explored.According to him, “the glut ofthe produce in the ShongaFarms necessitated the newdeal. The first batch of 6, 000tonnes will be exported in thenext two weeks”.
Speaking on the successof the Shonga farm
initiative, the Minister ofAgriculture, Dr. AkinwumiAdesina, represented by hisconsultant, Chief JamesAwoniyi, said “Kwara State isvery strategic to the federalgovernment initiative oncassava export.
“ Kwara has the foresightwith the creation of theShonga farms Holdings. Itwas not very clear to manypeople at that time whenKwara started this andprobably a lot of Nigerianssaw it as a wasted effort. Butsir, cassava will surelybecome the foundation for theeconomic development of thisState and Nigeria is waiting.”With this initiative, theMinister added, Kwara ispoised to taking over fromThailand as a major exporterof cassava.
As Abia state sets aside
N1 billion loans for itsfarmers, it has been
revealed that 121,000farmers in the state will bebenefitting from the Federalgovernment’s GrowthEnhancement SupportScheme (GESS) this year.
Minister of Agriculture, Dr.Akinwumi Adesina, whomade this known at the flag-off of the GESS in Umuahia last week , said about5million farmers are targetedthis year under the program.
While commending the AbiaState government for payingup its counterpart funding,the minister recognised thechallenge of creating incomesand increasing “benefits for allour farmers.”
The amount of incentives forfarmers in the states, he said,is such that “each farmer willpay 50 per cent of N88,000 foreach package of inputs.”
Recognising that Abia Stateproduces the best cocoafarmer, the ministerannounced the release ofeight new varieties of cocoahybrids which will be yielding2 tonnes per hectare asopposed to the 0.04 tonnesper hectare, a difference hesaid was more than fivefold.“We are distributing 25,000pods of these hybrids forfarmers in Abia State for free,”he promised.
Dr. Adesina disclosed that$136 billion would be earnedthis year from cassava chips’export. One of those poisedto be involved, he indicated,was Eze Philip Ajomiwe. Theconversion of residential
Abia sets aside N1bn for loans to farmers...121,000 to benefit from FG’s input supplyhouses to commercial or theearnings and wages, hereasoned, are inadequate inmeeting our agriculturalexpectations.
Chukwu Wachukwu, aconsultant on the loan andchairman of the occasion,wants prospectivebeneficiaries to “identify
agricultural opportunities inevery local government area,”using the input supply systemin applying the funds and theoff-takers’ system toadminister the funds.Wachukwu said Abia Stateaims at over 62,000 tons ofcassava tubers processing aswell as 1,750 tons of rice and2,250 crates of eggs daily.
The state’scommissioner, IkeOnyenweaku, was
expecting agribusinessbreakthroughs, stressing that“our extension services will bere-integrated to offer usefulservices to our farmers.”Onyenweaku noted that ahuge investment is cominginto agriculture in Abia andthis is just about to begin asthe state would become ofthose to reckon with inagricultural productivity.
Governor Theodore Orji ofAbia State gave reasons forsigning an MoU with theFederal Ministry ofAgriculture, saying the “MoUwill guarantee thecollaboration of the federalgovernment and Abia Statethat will ensure theimplementation of theAgricultural TransformationAgenda in Abia.” He stressedself-sufficiency in foodproduction as “a panacea forsustainable democracy andeconomic growth.”
Gov. Theodore Orji of Abia State with Dr. Akinwumi Adesina, Honorable Minister of Agriculture andRural Development during the flagging off of the One Billion Naira Commercial Agricultural EmpowermentScheme in Umuahia. Pix 0006, L-R Chukwu Wachukwu, Chairman of the occasion, Gov. Theodore Orji ofAbia State and Dr. Akinwumi Adesina, Honorable Minister of Agriculture and Rural Development, observingthe National Anthem during the flagging off of the One Billion Naira Commercial AgriculturalEmpowerment Scheme in Umuahia. Pix 0107, Gov. Theodore Orji of Abia State (right) with ChukwuWachukwu, Chairman of the occasion (middle) and Chief Ike Onyenweaku, Commissioner for Agriculture,Abia State (left) during the flagging off of the One Billion Naira Commercial Agricultural EmpowermentScheme in Umuahia.
FG signs MoU to increasecotton yield per yearBY VICTORIA OJEME
ABUJA: The FederalGovernment has signed
a Memorandum ofUnderstanding (MOU) withan Indian company, WestAfrican Cotton CompanyLimited (WACOT) to increasecotton yield by 400, 000 metrictons per year.
The MOU also provides forincrease in the export ofcotton lint by 100,000 over aperiod of four years.
According to the terms of theMOU exclusively obtained byVanguard in Abuja, WACOTis mandated to supplycertified cotton seeds to cottonfarmers through the NationalCotton Association of Nigeria(NACOTAN).
Details of the MOU signedbetween WACOT and theFederal Ministry ofAgriculture and NaturalResources, provides for,“increase seed cotton
production to at least 400,000metric tons over a period offour years with the use ofGood Agricultural Practices,Certified Seeds,recommended dosage ofFertilizers, Bio-Fertilizersand Crop ProtectionChemicals etc.
“The Client and Investorwill produce adequatequantity of Breeder,Foundation Stage 1,Foundation Stage 11 andCertified Cotton Seed toachieve the seed cottonproduction of at least 400,000metric tons over a period offour years”
“Increase the Export ofCotton lint by 100,000 metrictons over four years; Providebest practices /processingtechniques and market accessfor Nigerian cotton”
“The development of therequired minimum quantitiesof Breeder and FoundationStage 1 Seeds for the
successful implementation ofthe Project along with, theInvestor and Researchinstitutes as per below” theMOU added.
As part of its obligationunder the MOU, WACOT hasunveiled a new set ofguidelines to Nigerian cottonfarmers, which wouldsignificantly advance theachievement of set targets.
The guidelines covers, landpreparation, planting,fertilizer application, weedmanagement, pestmanagement and harvesting.
Confirming thisdevelopment, Chairman ofNACOTAN, Alhaji HammaKwajaffa said cotton farmersunder this umbrella of theAssociation are alreadybenefiting from this initiative.
He informed Vanguard in achat that, under the MOU, theFederal Ministry ofAgriculture and NaturalResources through WACOTdistributes free cotton seed tofarmers, while WACOT offersfree technical and extensionservices to farmers to achievethe desired goal of increasingcotton production in Nigeria.
Vanguard, MONDAY, JULY 2, 2012 — 37
Apointment & Promotions
BRIEFS
Book on business,national issues forlaunch
VALUE Investing Ltd, VIL,has published a book
which discusses evolvingissues in Nigeria’s businesssector as well as othernational issues.
The book titled ‘Mindset’ isa compendium of structuredthoughts on the capitalmarket, banking & financeand integrated nationalissues; and historical essaysand other publishedcontemporary articles, writtenbetween 1986 and 2012 byOkan Seye Adetunmbi.
According to SeyeAdetunmbi, the ChiefResponsibility Officer of theCompany and Convener ofCapital Market Roundtable inNigeria, the book will beformally presented to thepublic on Saturday July 21st,2012 in Lagos.
GENERAL Secretary ofthe National Union ofTextile, Garment and
Tailoring Workers of Nigeria,NUTGTWN, and a VicePresident of Nigeria Labour.Congress, NLC, Mr. IssaAremu, has been elected intothe executive council of thenewly formed global
Aremu elected into IndustrialALL
executive councilmanufacturing workersunion, known asIndustrialALL.
The newly formed 50million member-trade unionmovement named;IndustrialALL, is a newGlobal union Federation(GUF) that represents allmanufacturing workers in the
world.It is a new merger
federation of three hithertoworkers’ federations in minesand metal, textile andgarment as well as chemicalmanufacturing sectors world-wide.
The historic mergerconference of the three
federations, namelyInternational Chemical,Energy and Mines WorkersFederation (ICEM),International Textile Garmentand Leather WorkersFederation (ITGLWF) andInternational Metal WorkersFederation (IMF) and theinaugural conference of thenew Global Union Federationtook place on Tuesday June19th 2012 in Copenhagen,Denmark.
With his election by1400 delegatesdrawn from over
1,200 affiliate unions ofIndustriaLL in 140 countries,Comrade Aremu togetherwith five other electedexecutives from South Africa,Ghana, Zimbabwe andTanzania represent over onemillion Africanmanufacturing workers in thenew global union.
Aremu brings toIndustriaLL his over twodecades of activist experiencein organizing, collectivebargaining, grievancehandling, representation andpolicy advocacy.
MINISTER of Labour andProductivity, Chief
Emeka Wogu, has set up anInvestigative Panel to beheaded by the PermanentSecretary, Ministry of Labourand Productivity, Dr. TunjiOlaopa, to look into all theissues raised by the NigerianEconomic Summit Group(NESG) especially on thecases of unfair labourpractices in the Beveragesector.
Chief Wogu announced thisdevelopment during a visit ofthe Group led by the formerMinister of Information, Mr.Frank Nweke Jr, who is alsothe Director General of the(NESG).
According to him, “It isreprehensible that people canviolate the right of propertyowner because the propertybelong to the company and inspite of what we know are theInternational best practices,picketing is allowed but lock-up of Companys’ propertywould amount to impunity.The major mantra of thisadministration is adherenceto the Rule of Law which hastouched every aspect of thisadministration, I hereby setup an Investigative Panel tolook into your allegation, thePanel which has one week tosubmit its report will beheaded by the PermanentSecretary Ministry of Labourand Productivity, Dr. TunjiOlaopa. The term of reference
Olaopa heads unfair labour practicepanel in beverage sector
of the Panel is to look at theimmediate and remote causesof what happen and come upwith solution.”
The Minister argued thatrecent happenings in thelabour sector had given force
to the need for a paradigmshift in the labour/government relationship fromadversarial to a friendly anddialogue orientedrelationship.
In view of this
development, the Ministeradded that status quo-anteshould be maintained by boththe Labour Unions and theBeverages Companiesalleged as the Ministry ofLabour and Productivity hadintervened on the issuesraised.
Fom left: Vice Chairperson NLC, National Women Commission, Comrade Funmi Elesho;General-Secretary, National Union Of Textile Garment & Tailoring Workers of Nigeria(NUTGTWN) and Vice President NLC, Comrade Issa Aremu and National Treasurer,NUTGTWN, Comrade John Adaji at a press conference on the state of the nation.
THE Katampe Chiefdom inthe Bwari Area Council of
the Federal Capital Territory,FCT, in Abuja, has honouredthe former Chairman of theBayelsa State Peace andConflict ResolutionCommittee, Chief JamesJephthah with the traditionaltitle of Sardauna Katampe 1.
Speaking through theSecretary of the KatampeTraditional Council, Mr.Ismaila Jikoko, theTraditional Ruler of Katampe,His Royal Highness, AlhajiAdamu Diger said thedecision to honour ChiefJephthah was in recognitionof his immense contributionto the socio-economicdevelopment of KatampeCommunity.
He said as a communityand Council of Chiefs, thepeople deemed it fit to honourhim because he has been of
Abuja community honours Jephthah
Former Chairman of the Bayelsa State Conflict andResolution Committee, Chief James Jephthah, his wifeand others after being turbaned as Sardauna Katampe 1 bythe Kamtape Community in Abuja.
great help to our communityincluding the non-indigene inthe area.
The Paramount Ruler ofKatampe explained that thetitled bestowed on ChiefJames Jephthah “SarduanaKatampe 1” means he is thePeace Maker of theCommunity, “He deserves thehonour because he has
connected the communitysinglehandedly with lightfrom the National grid,provided water, createdemployment for our peopleand has promised to constructa link road from Mpape roadto our community. We are stillexpecting more from him asfar as socio-economicdevelopment is concerned.”
CIPM to hold
44th annual
confab in
October
The Chartered Institute ofPersonnel Management
of Nigeria (CIPM) hasannounced plans to hold its44th Annual NationalConference from October 3 -5 this year in Abuja.
A statement from theInstitute, signed by theConference OrganizingCommittee Chairperson,Mrs. Banwo Adeosun, saidthe theme of the 3-dayconference is "Restoration ofValues for NationalDevelopment". President andChairman of Council ofCIPM, Mr. Abiola Popoola,according to the statement,expressed satisfaction overthe enhancement in the valueHR practitioners continue toadd in their respectiveorganizations as a result ofparticipation in the robustdiscussions that are thrownup annually at the annualconference. "The learningbenefits derived from thisparticipation have made itpossible for HR practitionersto enhance their contributionand make the right calls at thedecision table", he adds.
The Institute's Registrar/Chief Executive Officer, Mr.Sunday Adeyemi, noted thatbesides providing avenue forHR practitioners to shareideas, broaden their horizon,network and learn about thelatest developments inprofessional HRmanagement, the conferencewill also provide a veritableplatform for organisations toexpose and exhibit theirofferings.
38 — Vanguard, MONDAY, JULY 2, 2012
Aviation
Cargo clearing agents stop work at Lagos airport
L-R, Chairman, Arik Air, Engr. Sir. Joseph AkinolaArumemi-Ikhide receiving his certificate after his Inductionas new fellow from the New President, Nigerian Academy ofEngineering, Engr. Prof. Ayodele Francis Ogunye duringthe Nigerian Academy of Engineering's Investiture of theNew President held at UNILAG Akoka, Lagos.
Associated Airlines acquires 4 more aircrafts
STORIES BY LAWANIMIKAIRU & DANIELETEGHE
Members of theAssociation ofNigerian Licensed
Customs Agents,ANCLA, atthe Muritala MuhammedInternational Airport, Lagos,have stopped clearingcargoes at the airport. This isto avoid a face off with thesecurity agents, who thePresident of the Associationsaid have been mandated byFederal Airport Authority ofNigeria, FAAN,to throw themout of the Cargo village of theAirport where they currentlyoperate.
To avoid possible loss of life,the National President ofAssociation of NigerianLicense Custom Agents,ANCLA, Prince OlayinwolaShittu told newsmen thatmembers of his Associationhave been asked to stay outof the cargo village for nowuntil the problem of forcefulejection by FAAN is resolved.
According to Prince Shittu‘’Like you have heard, therewas a directive to Nacho thatthey should evacuate everybody present at the cargo area
including license customagents who are legitimatelycarrying out their official duty,from past precedence ofviolence that occurred whensimilar issue happen here,our members decided not tocome to the area to avoid thethreat of mass arrest, massattack and whatever, it is very
important to note that ourpeople did that in order toavert violence and violentreaction.’’
Prince Shittu said membersbelieve that FAANmanagement may have beenmisled by his operationalpeople to give the blanketdirective. The airport
community, Shittu said, doesnot comprise of only licencedcustom agents, there are alsoother people including foodvendors, concessionaires thatare at the Airport who couldbe victims of the directives ife n f o r c e d .
The custom agents bemoanthe revenue government isloosing by their notworking,because theygenerate revenue forgovernment.,
Associated airline hasincreased its fleet with
four additional new aircraft,Embraer ERJ 145 worth aboutUS$30,000,000 million.Disclosing this developmentduring an interactive sessionwith newsmen at the MuritalaMuhammed Airport Lagos,the Managing Director of theairline Mrs Cordelia.Ekwueme said that the aim ofacquiring the four additionalnewer aircraft was to renderqualitative services to itsnumerous passengersstressing that the newEmbraer ERJ 145 were farmore comfortable and reliableto the Nigerian flying public.According to her, the aircraftswill be arriving the countrywithin the next 120 daysadding that at present two ofthe aircrafts are undergoingroutine and comprehensivechecks by the Nigerian Civil
Aviation Authority ,NCAA, andthe US Federal AviationAdministration ,FAA, abroad.She said ”We are enlargingour fleet by adding four newpassenger aircraft , we expectthese aircraft to arrive thecountry in the next 120 daysand we are also currentlyevaluating the whole of ourpassenger fleet and at presenttwo of the aircraft are inNCAA, IATA, FAA approvedmaintenance facilitiesundergoing comprehensivechecks abroad”“The whole purpose ofpurchasing these aircraft is toensure that passenger safetyis of most paramount to us andthat is why we have taken thisstep to make sure that weaccomplish this on behalf ofthe aviation industry and thetravelling public” shea d d e d .
Cover
BRIEFS
CMYK
MDA season 6:NB’s Maltinaoffers N7.5m towinners
Nigerian Breweries (NB ) Plcsaid it has reviewed the prizemoney for this year’s MaltinaDance All (MDA) familyreality television show whichenters its sixth season with anoffer of N7.5million.
According to the newarrangement, the winningfamily will now take home N6million in addition to a brandnew car, while the first andsecond runners up will takehome N1 million and N500,000 respectively. The MDA isthe consumer engagementand experiential marketingplatform that the branddeploys to resonate withconsumers and the society ingeneral.
Speaking, Mr. Ageni Yusuf,Corporate Affairs Adviser, NBPlc at the Press briefing heldat its Lagos breweriesheadquarters, said theMaltina brand is renowned forpromoting togetherness withfriends and loved ones. Hetook members of the pressthrough a robust history of theunique consumerengagement platform:
“In 2007, Maltina Dance All,the foremost experiential andsponsorship platform of thebrand was introduced.
The family TV show has no
Sports brands,individuals,others bagawards
In appreciating theircontributions to the
development of sports inNigeria, Sports BrandsNigeria, has put in motionplans to honour notablebrands and individuals,whose contributions in theworld of sports have enhancedthe growth and developmentof the game in Nigeria.
The Awards, scheduled tohold in Lagos July 15, 2012,according to the organisers,have been designed tocelebrate companies andindividuals, such as FirstBank of Nigeria Plc,immediate past governor ofKwara State, Senator OlusolaSaraki and Publisher,Complete Sports, Dr. SunnyObazu-Ojeagbase, amongothers that had enhanced thenation’s sportsdevelopment in the past andstill remained rather unsung.
Vanguard, MONDAY, JULY 2, 2012 — 39
From Left: Executive Director, Corporate Services, Mr. Joe Dada; Chief Finance Officer,UACN, Mr. Abdul Bello; Managing Director, CAP Plc, Mrs. Omolara Elemide; ChairmanCAP Plc, Mr. Larry Ettah; and Branch Chairman, Nigerian Red Cross, Mr. OnibudoMobolaji, at the Dulux Let’s Colour Programme of repainting Red Cross Lagos StateMotherless and Abandoned Babies Home in Lagos.
Continued from page 18
of Africa in 2009 havinggrown by 17% in 2008 and23% in 2009, the penetrationis, however, mainly throughmobile phones. Althoughthere are about four computerOriginal EquipmentManufacturers (OEMs)inNigeria ( Zinox, Omatek,Beta and Brian computers),only the first two are in activeproduction. However, theyalso do not have the capacityto service even a quarter ofthe Nigerian market.
These are mainly why thereare no clear cut distinctionbetween telecommunicationand Information Technologyin the country.
In a chat with technologyreporters in Lagos recently,Executive Vice Chairman,(EVC) of NCC, Dr EugeneJuwah, noted that from aprivate sector investment ofabout US$50 Million in 1999,the telecommunicationsindustry by end of 2009,attracted more than US$18billion in private sectorinvestments, including DirectForeign Investment.
He also revealed that morethan N300 billion wascontributed to the coffers ofthe federal governmentwithin that time frame,through frequency spectrumsales, enabling government toplough back revenues earnedfrom the sector for provisionof development infrastructureat the various levels ofgovernment.
CONTRIBUTION TO GDPThe impact of this on the
economic growth has becomei m p r e s s i v e .Telecommunications sectornow contributes significantlyto the Gross Domestic Product(GDP), which was hithertodominated by the oil sector.According to Juwah, thepercentage share of GDP fromthe sector rose from 0.06percent in 1999 to 2.39percent by 2007. However, itmoved up to 2.90 percent in2008, and 3.66 in 2009. By2010, ICT had contributed 8.2percent to the nation’s GDP
Meanwhile, estimates byPyramid Research in a 2010report, pitched the annualrevenue from mobile servicesbetween 2% and 7% of Africancountries’ Nominal GDPwhile in Nigeria the ratio isclose to 4%.
Also the Nigeriatelecommunications fact sheetreleased by the United StatesEmbassy in Nigeria inOctober 2011, noted that “theICT sector is the fastest andmost robust sector of theNigerian economy,contributing more than themanufacturing, banking andsolid minerals sectors
Crises in telecom sectorcombined”. The fact sheetalso revealed a Service Sectorcontribution to GDP 2010chart,showing that ICTcontributed 25 percent, whileUtilities, 17 %; Finance andInsurance, 20%; Transport15%; Real Estate andBusiness services, 10%; Hotelsand Restaurants, 3% andothers, 10%.
Meanwhile, if statistics onthe fact sheet are anything togo by, ICT investment spiked700% in 2001 and receiveddouble-digit growth everysubsequent year. A factor thatsaw investment rising by 31%
to $18 billion in 2009.
GROWTH IMPACT ONOTHER SECTORS
Growth in the ICT sector hashad significant impact in theother sectors of the economy.The financial sector isperhaps, the one whichactivities of ICT haveimpacted positively muchmore than any other sector inrecent times. In commercialbanking services, thequantum of transactions iscatalysed by ICT, mainlythrough telecommunicationsservices. It is doubtful if any
bank in Nigeria is not a majorbeneficiary of thet e l e c o m m u n i c a t i o n srevolution.
In facilitating bankingtransactional services, thetelecommunications industryhas provided the bedrock forthe finance industry.Electronic banking facilitiessuch as ATM services, onlinefinancial transactions,international credit and debitcard facilities, airline ticketingand reservations, are some ofthe numerous ways that theindustry has aided the growth,sophistication, security andquick transactions in theNigerian financial sector.
Every year, all over theworld, Colouring
Festival holds, here in Nigeriathe festival had goneuncelebrated. And in parts ofthe world its been sponsoredby Dulux paint, a brand fromthe stable of Chemical andAllied Products (CAP) Plc.
The celebration of theFestival in countries likeIndia, London, France tomention but few and itsreplication in Nigeria as acampaign to give facelift tomonumental buildings is aclear example of the brand’squest to achieve top of themind awareness in the paintmarket.
Even though brands alignsto a connecting tool,particularly, marketingcommunications activities thathelp push sales andconsolidate brand position inits core market segment, thepainting of historicalbuildings as part of thebrand’s campaign strategy isa new norm in the field of
marketing.This year, the brand as part
its Corporate SocialResponsibility (CSR)repainted the Nigerian RedCross Orphanage formotherless and abandonedbabies home in Lagos in acampaign programme tagged;Let’s Colour Nigeria, givingit a face lift, whilst stating thatthe campaign is going to bean annual event, a brandpromise that will definitelystir competition in the paintmarket, as Dulux hadpromised repainting othermonumental buildings inNigeria.
However, other knownbrands may take tosponsorship as its connectingtool cultural activities, footballcompetitions and the likes,but overtime, sponsorshipinfused in campaigns andplace branding have becomemajor tool bar to reach abrand’s target.
In Nigeria today, companies see various
campaigns as a mechanism todrive their brands. The storyof MTN, GLO and Coca-colaas the officialtelecommunication companyand drink for the 2010 worldcup and the Nigeria premierleague respectively explainsthe rational behindsponsorships.
Like Mrs. OmolaraElemide, Managing Director,Cap Plc, puts it when he gaveinsights on the reasons for thecampaign. She said: “Let’sColour is an Iconic event forDulux to paint monumentalbuildings. We are showingthat we care for the lessprivileged in the society; thatis one of the reasons we chosethis option.”
According to her, “Thiscampaign has been activatedin a number of countries since2010, as partners ofAkzonobel in Nigeria wedecided to activate it in thecountry in 2012. And wedecided to use our CSRplatform.”
Dulux’s Let’s Colour campaign replicatescolouring festival in Nigeria
40— Vanguard, MONDAY, JULY 2, 2012
CMYK
Omoh Gabriel - Group Business EditorBabajide Komolafe - Acting Finance EditorClara Nwachukwu - Energy EditorPeter Egwuatu - Head, Capital MarketYinka Kolawole - Snr Bus. CorrespondentFavour Nnabugwu - Insurance CorrespondentGodwin Oritse - Maritime CorrespondentGodfrey Bivbere - Maritime CorrespondentYemi Adeoye - Energy CorrespondentOscarline Onwuemenyi - Energy CorrespondentFranklin Alli - Industry ReporterMichael Eboh - Capital Market ReporterAmaka Abayomi - Money market ReporterEbele Orakpo - Energy ReporterIfeyinwa Obi - Maritime Reporter
CONTRIBUTORSPrincewill Ekwujuru - Media/MarketingNaomi Uzor - IndustryProvidence Obuh - Capital MarketLAYOUT - Graphics Department
0817 002 3569
BUSINESS & ECONOMY
HOW TO REVIVE OUR FAILED ECONOMYThis week, we willprovide answers tosome frequently askedquestions regardinginflation, interest rates,and naira depreciation. Kindly read on.
Would the adoptionof a differentmonetary policy
framework stem theinflationary spiral?
Inflation is a silent plague,which gradually erodes thepurchasing power of allincome earners, particularlythat of the poor. In thecontext of our economy, theuncomfortable rate of inflationis the consequence of adefective monetary policymodel.
There has been an averageannual rise of 10% in thegeneral price index in the last20 or so years. Thiscompares unfavourably withmaximum of 3% in successfuleconomies elsewhere. Regrettably, the CBN, whohas the prime responsibilityfor establishing price stability,has in reality become theinstigator of inflation.
CBN has failed to reduceinflation and foster a benignrate of cost of funds so thatindustries, particularly SMEscan borrow at between 5 and7% and thereby stimulate risein employment, create
demand and grow theeconomy.
Why has CBN’s monetaryPolicy Rate remained sohigh?
The extremely highcurrent monetary policy rateof 12% and cost of funds toindustry at over 20% andinflation targeted by the sameCBN Governor at 15% are allglaring indicators of thefailure of a monetary policymodel, which is eternallyfighting the flood of excessliquidity induced by CBN’ssubstitution of naira fordistributable export dollarrevenue.
While it simultaneouslycontinues to decry theinability of banks to lend tothe real sector, because ofscarce funds, the currentmonetary policy model,whereby CBN suffocates themarket with its injection ofnaira allocations for dollarrevenue, will inevitablynecessitate eternal excessliquidity mop up, The CBNwill be constrained to pay asmuch as 15% for its risk-freeborrowings with treasury billsin order to reduce the amountof spendable money in thesystem; no economy has beenknown to grow with inflationand cost of funds at almost15% and over 20%respectively.
,
,
How can CBN halt nairadepreciation in spite ofhealthy reserves?
It will be impossible forCBN to stop the unyieldingpressure and continuousdepreciation of the nairaunder its current monetarypolicy model; this is because,whether we earn more or lessdollars, the naira will remainunder downward pressure. For example, whenever weearn more dollars, the
substitution of larger nairaallocations for distributabledollar revenue willprovide additional cashinjections/money creation,which the banks will leverageon to engender a specter ofexcess liquidity, which canover-subscribe many timesover the actual value ofdollars offered for sale by theCBN, who controls over 80%of dollar supplies in themarket.
Consequently, there willalways be too much nairachasing limited dollars. Thus, market equilibrium will
only result in a lower pricenaira whenever we earnincreasing dollars. On theother hand, the naira is alsounder similar pressure whenwe earn less dollars, as thegovernment may have noother alternative than tofurther officially devalue thenaira, in order to keep theirnaira revenue projectionsstable in nominal terms. Once again, the result is toomuch naira chasing fewer
dollars. The only plausibleway that the CBN can stemthis tide and break the jinx ofnaira depreciation will be toturn the table of supply anddemand against the dollar;this can simply be done whenwe break CBN’s monopoly ofthe foreign exchange market,so that distributable exportdollar revenue is notunilaterally ‘monetised’(substituted with naira)before sharing to the threetiers of government. If theinstrument of dollar certificateis adopted for this purpose,the naira rate of exchange
would be positivelyfavoured.
The erstwhile eternalburden of excess liquiditywould be lifted, as therewould be no new nairaprinting/creation for thebanks to leverage on;consequently, there wouldalways be more dollarschasing stable naira sums inthe system. The naira willbecome stronger, cost of fundswill fall to single middle digit,price of fuel and electricitytariff will plummetsignificantly, even withoutsubsidy component in theirpricing! Transport costswould fall and inflation wouldrecede to lower single digits. The government would saveclose to N500bn annually fromthe funds, usually set asidefor debt servicing and equallysave over N1 trillion formerlypaid for fuel subsidy. Thegovernment can in fact alsoearn between 5 and 10% salestax per litre from the 35million litres of fuel soldevery day (an income ofN350m/day.)
So far, there is no betterplausible argument onground that would redesignour monetary policy modeland rescue our people fromthe grip of poverty than theone proposed above.
SAVE THE NAIRA, SAVE
NIGERIANS!
It will be impossible for CBN to stop theunyielding pressure and continuous
depreciation of the naira under its currentmonetary policy model; this is because,
whether we earn more or less dollars, the nairawill remain under downward pressure
Court dismisses suit against cashless policyThe Federal High Courtsitting in Abuja has
dismissed a suit institutedagainst the cash-less policyinitiative of the Central Bankof Nigeria. In a suit filed onbehalf of eleven RiverineCommunities namely,Akpakpa, Ogidigben,Madagho, Ijalla, Kantu,Omadino, Ogheye, Dhege,Ajudaibo, Obaghoro and
Ikoghoro, all in the DeltaState, challenging the policywhich restricted cashwithdrawals and lodgmentsto a daily limit, the judge,Honourable Justice BalkisuBello Aliyu held that “thepolicy directive issued by the
respondents, the CentralBank of Nigeria and itsGovernor does not contravenethe fundamental right of theapplicant under section 44(1)of the Constitution of Nigeriaas amended or under anysection in chapter IV of thesaid constitution.”
Justice Aliyu also stated that“the applicant is not obligedto transact banking businesswith any bank at all. Butwhere he decides to do so, hemust comply with anyregulations the respondentsissued for the regulation ofthat sector.” The judgetherefore, declared that shefound no merit on this suitand it was dismissedaccordingly. The judgefurther ruled “that in as muchas the Government will grantlicences for the establishmentof banks and other financialinstitutions for the benefit ofits people, the choice ofwhether or not to make use ofsuch institutions is entirelythe discretion of the people inother words, it is up to anyperson (corporate or
individual) citizen or notliving in Nigeria to decide tolodge his money in any bankor financial institutions.
The individual or corporatetransaction with their banks isa civil contract or agreementbetween the customers andtheir banks or financialinstitution. Right to bankingor right to transact bankingbusiness is not one of thefundamental rights protectedby chapter IV of the Nigeria’sconstitution of the AfricanCharter on Human andPeoples Rights.”
It would be recalled thatfollowing the introduction
of the cash-less policy by theCBN, one Barrister AyiriEmami, acting on behalf ofhimself and indigenes ofeleven Riverine Communitiesof Delta State approached thecourt to challenge the policypraying that: 1) the limitimposed by the Bank was aninfringement of theirfundamental human rights; 2)the policy directive issued bythe Bank and its Governor to
all financial institutions inNigeria to charge N100.00 forevery N1000.00 withdrawnwas excessive, punitive, anda breach of the fundamentalrights of the applicantsguaranteed under theconstitution and; a perpetualinjunction restraining theBank from implementing thepolicy.
The CBN, in response to theprayers, affirmed that itissued policy directives to allfinancial institutions limitingthe withdrawals andlodgements as claimed by theapplicants but however statedthat banks and other financialinstitutions were alsodirected to advise theircustomer to use alternativepayments channels availableto them, such as theautomated teller machines(ATMS), cheques clearanceand cards, among others. Andthat no one was expressivelyor impliedly deprived of theright to own or use moneydeposited in any bank orfinancial institution.