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DECEMBER 17, 2012

Continues on page 18

BY NKIRUKA NNOROM

Tiger Brand’s incursion in Nigeria’sfood industry could create monopoly…SEC urged to monitor anti-trust activities

The recent take-over of majoritystake in two of Nigeria’sleading food manufacturing

companies – UAC Foods and DangoteFlour Mills- by a South Africancompany, Tiger Brands, could createunhealthy monopoly in food industry,industry stakeholders have warned.They said it was time the Securitiesand Exchange Commission, SEC,began to monitor the activities of TigerBrands to guard against capital flightand anti-trust activities that mayemanate from the aggressive takeover

bids by the company.Tiger Brands had in September this

year, announced that it has bought63.35 percent equity stake in DangoteFlourmills, DFM, one of Nigeria’slargest flour and pasta producers. Aspart of the deal, the Dangote Groupwill retain 10 percent strategic stakein DFM, while Aliko Dangote willalso remain chairman of DFM. TigerBrands had also spent whooping N30billion, an equivalent of $190 millionin its acquisition bid in DFM. Lastyear, Tiger Brands made its first twoacquisitions in Nigeria when it boughtbiscuit manufacturer, Deli Foods andsecured a 49 percent stake in UAC of

Nigeria’s food and beveragebusinesses.

According to Wale Oluwo,Managing Director, InvestmentBanking, BGL Securities Limited, theworrisome thing about the acquisitionis Tiger Brands’ preference for takingover already flourishing foodcompanies, instead of setting up andmanaging their own companies fromscratch. He lamented that it wasunbecoming of Securities andExchange Commission, SEC, whoserole it is to monitor anti-trusttransactions not to have taken note ofthe disguised monopoly being createdby the incursion of Tiger Brands into

Nigeria“The acquisition and any inflow of

investment into the nation is a positivedevelopment for the companies, theindustry and the economy as itrepresents foreign investment intoNigeria. However, I would have beenhappier if Tiger Brands had used itscash to either set up their own newfacilities like the telecom operatorsdid or acquire and turn aroundmoribund flour milling and foodprocessing companies in Nigeria.

“Tiger Brand has shown a strongappetite for taking over our biggestand very best. The Securities andExchange Commission, whichregulates anti-trust issues in theeconomy, should start showing interestin the activities of Tiger Brands inorder to prevent the emergence of a

The MD/CEO Bank of Industry, Ms Evelyn Oputu commissioning the Filmhouse Cinema in Surulere, Lagos, flankedfrom right to left, by Mr. Waheed Olagunju Executive Director - Business Development, Bank of Industry, Mr. KeneMkparu, MD/CEO The Filmhouse Limited, Mr. Ladi Balogun, MD/CEO First City Monument Bank Plc, Mrs. OzyMkparu, Head of Human Resources, The Filmhouse and Mrs. Tokunbo Chinedu MD/CEO Compass Consulting. TheFilmhouse Cinema is the first BOI-assisted project in the Creative & Entertainment Industry.

CURRENCY BUYING CENTRAL SELLING

CBN Exchange rate as at 14/12/2012

108.92 +1.01

86.19 +0.30

138.6 -2.55

2,423.00 +1.00

18.65 0.11

DOLLAR 154.77 155.27 155.77

STERLING 249.4892 250.2952 251.1012

EURO 202.5939 203.2484 203.9029

FRANC 167.5363 168.0775 168.6187

YEN 1.8473 1.8533 1.8593

CFA 0.2895 0.2995 0.3095

WAUA 237.0639 237.8297 238.5956

RENMINBI 24.794 24.8746 24.9551

RIYA 41.2676 41.4009 41.5342

KRONA 27.1488 27.2365 27.3242

SDR 237.8196 238.5879 239.3562

Cover Story

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18 — Vanguard, MONDAY, DECEMBER 17, 2012

Continued on page 19

Continued from page 17 ,

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disguised monopoly or arestraint of competition, whichmay happen by the time Tigerstarts to consolidate herinterests in these companiesthey are acquiring,” hewarned.

He observed that effortsshould be made to guardagainst capital flight, saying,“What Nigeria should beconcerned about at this timeis to guard against capitalflight through expatriatequota violation and overinvoicing, particularly whenthese companies areimporting raw materials andrepatriating dividends/investments. If unchecked, ithas the tendency to add to thepressure on the Nairaexchange rate in the short andmedium term.”

He remarked that the optionof establishing their owncompanies as againstacquisition would haveengendered bettercompetition, increasedoutput/export and job creationfor the nation.

Agreeing with him, Mr. TolaOdukoya, an analyst withDunn Loren Merrifield,DLM, said the acquisition willnot have any significantimpact on domestic flourmilling. “This is because theacquisition of Dangote Flourmay be a backward-integrationstrategy for Tiger Brands withthe aim of achieving greatercost efficiency in terms of theiroperations in UAC Foodsgiven that the company’sproducts are largely flour-based.”

Odukoya, however, statedthat in terms of prospects, theacquisition would increasethe visibility of foodmanufacturing in Nigeria asother global brands mayfollow in Tiger’s footstepsgiven the inherentopportunities in Nigeria based

on the sheer size of thedomestic market.

For him, possible significantincrease in output of bothUAC Foods and DangoteFlourmill may lead to anincrease in contribution todomestic output.

For Mr. David Adonri, CEO,Lambeth Trust & InvestmentCo. Limited, Tiger Brand’sacquisition of stakes in UACFoods and Dangote Flourmillis foreign direct investment inNigerian economy whichindicates positivedevelopment for the economyin general. He noted that inaddition to the benefit offinancial inflow, the foreigninvestor – Tiger Brands-would bring its distinctivecompetence in the industry tobear on the Foodmanufacturing sector inNigeria.

Value addition

to shareholders

All the stakeholdersthat spoke toVanguard agreed

that shareholders of thecompanies acquired by TigerBrands are the ultimatebeneficiaries as the dealwould not only impact thefinancial performance, butalso induce interest in theirshares. This, according tothem would result insignificant price appreciation,which, of course, investorswould benefit from. In thewords of Wale Oluwo, “Theacquisition deal ordinarilyshould be beneficial to theshareholders if the valuationand acquisition price favoursthe legacy shareholders in thecompanies.”

Continuing, he said, “Iexpect the value of the sharesto eventually appreciate whenTiger Brands unveils its planfor the acquired companies.”

Adonri explained thatbecause the transactions wereby way of sale of existingshares, the existingshareholders’ holdingsremain undiluted, addingthat additional foreigninvestments wouldstrengthen the value base ofthe domestic companies.

“If the benefits attendant tothese foreign investmenttranslate into positive impacton the fundamentals of thecompanies, the stock marketwill react positively,” theLambeth CEO stated.Shareholders would be theultimate beneficiaries of theadditional value created inthe companies in the yearsahead, said Odukoya and thevalue created would obviouslyhave a positive impact on thecompanies’ financial positionand thereby drive

Tiger Brand’s incursion in Nigeria’s food industrycould create monopoly

TigerBrands-would bringitsdistinctivecompetencein theindustry tobear on theFoodmanufacturingsector inNigeria

From left : Mr. John Ekpikhe, Senior Consultant with Mark-George Consultants and Mr.Jude Anele, Head Retail Banking with Diamond Bank Plc at the Diamond Bank - 26thBusinessXpress Seminar in Lagos.

The words ‘youth’ and‘restiveness’ havebecome so commonly

used together in the lastcouple of years that

it seems to have takenon a life of its own. In thelast decade and more therehas been a proliferation ofcases all over the countryand indeed the world, ofyouth agitations which havetons of people dead andvaluable infrastructure aswell as personal propertieslost and destroyed.

A sustained protestationembarked upon to enforce adesired outcome from aconstituted authority by anorganised body of youths,fits the label of youthrestiveness. It is also acombination of any action orconduct that constitutesunwholesome, sociallyunacceptable activitiesengaged in by the youths inany community.

It is a phenomenon whichin practice has led to a nearbreakdown of law andorder, low productivity dueto disruption of productionactivities, increasing crime

Youth restiveness andunemployment in

Nigeria: The way out

rate, intra-ethnic hostilities,and harassment ofprospective developers andother criminal tendencies.

This scourge has beenaround for a long time andit looks as though it isdefying solutions. Maybethe question that needs tobe asked is what is trulyresponsible for thisexpression of dissatisfactionby the youth? Have theircomplaints over the yearsnot been heard or attendedto? Is there more to thekillings and destructionthan just drawing attentionto the needs they want met?Are the youths trying todraw society’s attention tothemselves more than theissues they appear to befronting? These and moreare the questions we wouldtry to tackle head on today.

In Nigeria for instance, theNiger Delta region which isunarguably the bedrock ofthe oil industry in Nigeriapermeated the news for alengthy period of time asthe youths of that regiontried various means ofgetting government and oilcompanies to pay attentionto their dire conditions ofliving and alleviate theirsufferings since according tothem, the resources which isbuilding the nation isflowing from their land so byvirtue of that they shouldalso be partakers of itsbenefits. This strife led to arise in kidnapping andvandalization of oilpipelines as well as othervices that were beingperpetrated. After a periodof years, the Nigeriangovernment intervened andthe Amnesty program wascreated to help deliver someof the promises whichgovernment had made tothe youths in those areas.

The baton was soonhanded over to the EasternNigeria. Increase in the rateof armed robbery attacks,kidnappings as well asunbridled thuggery becamethe order of the day.

Today the Northern part ofNigeria has literally eruptedwith unrivalled violence.Bomb blasts, kidnaps andkillings of Nigerians andothers have become theprevailing trend. Despitebeefing up of security inthese areas, the problemsstill looms. This situationbegs the questions, ‘’what isthe government of the daywilling to do to put apermanent end to theseproblems.

STATISTICS

The National PopulationCommission (NPC) has saidthe country’s population hasrisen from the 140,431,790 itwas five years ago when thelast national headcount wastaken, to 167,912,561 as atOctober 2011.Thisrepresents an annualpopulation growth rate of5.6 million people.

The Ministry of YouthDevelopment, said recentlythat there are 68 millionunemployed youths inNigeria.

Every year about 300,000graduates enrol in theNYSC scheme. This isdefinitely not the totalnumber of graduates but itis a pointer.

According to thePopulation referenceBureau, the population ofyouth in Nigeria is 43%.

A sustainedprotestationembarked uponto enforce adesired outcomefrom aconstitutedauthority by anorganised bodyof youths, fits thelabel of youthrestiveness

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Vanguard, MONDAY, DECEMBER 17, 2012 — 19

Cover Cont.

appreciation on the stocks’prices, and vice versa.

Reason for theacquisitions

Explaining the reasonfor its quest to takeover Nigeria’s biggest

and best companies, TigerBrads said in an officialstatement that “Nigeria is akey strategic growth market inWest Africa, the second largestAfrican economy and one of

the fastest growing economiesin Sub-Saharan Africa with anestimated population of 160million and projected averagereal GDP growth forecast overthe next three years ofapproximately seven percentper annum.” Tiger Brands alsobelieves that the acquisitionwould add scale to its existingNigerian businesses and allowit to take advantage of themarket opportunities inNigeria’s food sector.

The company said, “DFM isa market leader in both theflour and pasta market

segment of the Nigerianconsumer food sector withstrong branding, productionand distribution capabilities.DFM started its flour millingbusiness in 1999 as a divisionof the Dangote Group. It iscurrently the largest flourmilling company in Nigeriawith a market share of around30 percent; its share in thepasta market is approximately40 percent. Tiger Brands isalso confident that it can useits experience in the foodsector to further develop andgrow DFM.”

Thushen Govender, Head,Business Development, TigerBrands, recently said in aninterview that when decidingwhere to invest, Tiger Brandsfirst performs an analysis ofAfrican countries by assessingthe socio-economicenvironment, consumer-driven factors, GDP, GDP percapita and population amongother things.

He noted that countries likeNigeria feature quite highlygiven their improving macroand socio-economicconditions. “Egypt and

Ethiopia will feature highlybecause of their populations,and this is of importance toc o n s u m e r - d r i v e norganisations over the mediumto long term. If one were toconsider growth alone,Angola, Ethiopia and Nigeriawould all feature highly.”Over the past few years, TigerBrands has increased its footprint in the rest of Africa. Inaddition to Nigeria, it currentlyhas operations in Cameroon,Ethiopia, Kenya andZimbabwe.

Tiger Brand’s incursion in Nigeria’s food industry could create monopoly

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Recently the media wasawash with the newsof the revocation of

the concession grantedto Bi-Courtney to reconstruct

the Lagos/Ibadan road whichhas been in a deplorable state.The decision to revoke theconcession sparked off a lot ofdebate as to the seriousness ofgovernment to the whole ideaof Public Private Partnership.The concession of Lagos/Ibadan road cannot be trulydescribed as a true publicprivate sector partnership. Itdoes not pass the true test of apublic private sectorpartnership that could deliverservice to the people ofNigeria and give value formoney.

The concession did notfollow the due process ofcompetitive bidding; it had noadequate study of traffic flowon which to develop abankable financial flow, andthe parties to it did not resolvethe right of way between thefederal government, the threestates of Lagos, Ogun andOyo. It is not known that thecompany has undertaken aproject of the magnitudeanywhere before now. It hasno experience on road issue.The process that gave thecompany the concession wasfraught with politicalpatronage and the exercisewas doomed to fail right fromthe word go. Bi-Courtney dueto its inexperience in roadmatters and issues of PublicPrivate Partnership took a roaddesign from the federalgovernment that was defectiveand un-bankable so it couldnot source internationalfinancing for the constructionof the road.

The Lagos/Ibadan expresscarriage was designed bygovernment to be a threecarriage way on both side, butfinanciers felt that the trafficfrom Lagos to the Shagamuexchange of the road was tooheavy for a three carriage waythat it should have been five.A five carriage way will allow

Public PrivatePartnership: Thenew way toinfrastructuralprovision

for the high volume of traffic,save the road from the wearand tear a three way carriagewill face and enable thecompany recoup itsinvestment on time. Butbecause the design has beenput in place and the contractsigned, changes were notimmediately forthcoming, sofinanciers backed out.

It has become publicknowledge that theInfrastructure ConcessionCommission which was set up

by the government hadadvised against theconcession but was ignored.This put a whole questionmark on the sincerity ofgovernment in its desire toprovide infrastructure to theNigerian people.Unfortunately, Nigerians donot hold governmentaccountable for its action andinaction. While the deceptionon the reconstruction ofIbadan Lagos road is ongoing, the Nigerian populaceis the ones that suffer andsome even die on the road ondaily basis. The Minister ofWorks, Mr. MikeOnolememen, was so arrogantabout the whole exercise andwith impunity told the nationthat Julius Berger has beenmobilised to cite.Onolememen, as usual, failedto tell the nation when thecontract for the rehabilitationwas awarded and how muchit will cost to do so.

This government ispretending about the PublicPrivate Partnership. Publicprocurement is the favouredway of this government doingthings. Because of the highlevel of corruption inherent inpublic procurement,ministries, department andagencies of government arefavourably disposed to usingit instead of PPP. Nigeriansshould ask the Minister of

Works why he failed to allowthe open tender for the LagosIbadan road rehabilitation onthe one hand and theconcession of the Lagos/Beninroad which work has longbeen completed. Nigeriansmust ask this government toopen up and direct all MDAsto send all commerciallyviable projects in their controlto the InfrastructureConcession Commission.Nigerians are prepared to payfor service provided it isavailable in qualitative terms.The way the government ispaying lip service toinfrastructure provision,Nigeria may never get therequired services. There isvariety of concession andpartnership arrangements.

Some of the most commonlyused are Private -Concessions, where theprivate party takes over allaspects of facility managementand operation from thegovernment, often on a long-term basis. The private partyresponsibilities includemaintenance and specifiedrehabilitation and capitalinvestment in facilityupgrades and enhancement.The private party is fullyresponsible for raising therequired capital. This maytake the form of Build-Operate-Transfer (BOT),Build-Operate-Own (BOO) orBuild-Own-Operate-Transfer(BOOT), Design-Build-Operate-Transfer (DBOT),Design-Build, Finance andOperate (DBFO). Other lesscommon variants include BRTor BLT (build, rent/lease andtransfer and (BTO) BuildTransfer and Operate.

PPP as it is popularlyreferred to has become themost widely used vehicle forsocio-economic transformation

of society both in thedeveloped and developingeconomies. In Britain, thesystem was introduced in 1992and since then several socialinfrastructure has beendeveloped through it.Incidentally, one of the chiefsuccess factors of the schemein Britain is a Nigeria, Mr.Wale Shonibare, AssociateDirector of KPMG in London.He has traveled to almost allthe continents of the worldconsulting for governments onPPP.

Governments across theglobe have come to terms withthe fact that public sector alonecannot provide the neededinfrastructure and have cometo the conclusion that privatesector participation in theprovision of infrastructure isinevitable. Nigeria cannot bean exception

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The concessiondid not follow thedue process ofcompetitivebidding, it had noadequate study oftraffic flow onwhich to developa bankablefinancial flow,and the parties toit did not resolvethe right of waybetween thefederalgovernment, thethree states ofLagos, Ogun andOyo.

UnfortunatelyNigerians do notholdgovernmentaccountable forits actions andinactions. Whilethe deception onthereconstruction ofIbadan/Lagosroad is on going,the Nigerianpopulace is theones that sufferand some evendie on the roadon daily basis.

20 — Vanguard, MONDAY, DECEMBER 17, 2012

CMYK

Business & Economy

BRIEFS

Policy makers in Europeancountries have said that

in spite of the slow growth inthe advanced economies, theNigerian economy, which hascontinued to grow at aboutseven percent in the last 10years, present hugeopportunities for savvyinvestors to leverage on. Theleaders of some of thestrongest EU countriesagreed after meetings withthe Nigerian Minister ofTrade and Investment, Mr.Olusegun Aganga, that tradeand investment ties betweentheir countries and Nigeriamust be strengthened at thiscritical phase of the Worldeconomic history for thebenefit of Nigeria and theircountries alike.

The President of theRepublic of Finland, Mr. SauliNiinisto, who receivedAganga in Helsinki, Finland,said there was a new worldemerging in favour of Africaneconomies, noting thatNigeria’s indices wereparticularly impressive.

He said Finland would putmachineries in motion toensure that economic tiesbetween Nigeria and Finlandwere strengthened and todirectly or indirectly supportFinnish companies to investin Nigeria. The result of thetrade and investmentcollaboration, he said, couldonly be beneficial to bothcountries. The Minister of

EU countries strengthen trade,investment ties with Nigeria

European Affairs and ForeignTrade, Finland, Mr.Alexander Stubb, whodisclosed that bilateral tradebetween Nigeria and Finlandwas currently 23 million euro,added that the two countriesmust begin to explore theircomparative and competitiveadvantages for a win-wintrade and investmentrelationship.

Stubb said only three EUcountries, including Finland, were rated “triple A” byinternational rating agencies,adding that anyone doingbusiness with Finland had

nothing to fear because “aFinnish handshake issomething you can trust.”

As the first step in the effortstowards strong economic tieswith Nigeria, Stubb said hewould lead a trade delegationto Nigeria as early as possiblein 2013. Aganga, however,said that the 23 million Eurotrade between Nigeria andFinland was poor, urging thebusiness delegation from bothcountries to come up withsound ideas and strategies toincrease activities andenhance inclusive economicgrowth in Nigeria.

“In Nigeria, theadministration of PresidentGoodluck Ebele Jonathan isdoing everything possible tomake the Nigerianenvironment friendlier forbusinesses to thrive. Unlike inthe developed economies,where the situation isgenerally low growth, lowreturns, in Nigeria, the storyare that of high growth, highreturns,” he said. On herpart, the Minister ofEnterprise, Sweden, Ms.Annie Loof, said on Thursdayin Stockholm, during ameeting with her Nigeriancounterpart, OlusegunAganga, that manufacturingcontribution to GDP inSweden was 25% while 80%of global technology inmining was from Swedishcompanies.

Small and MediumEnterprise Development

Agency of Nigeria[SMEDAN] in collaborationwith German Agency forInternational Cooperation[GIZ] is set to release a freshdata of Mico, Small andMedium Enterprises, MSMEsin the country.

The duo at a presentation of Enterprises Baseline Survey[EBS 2012] report conductedin five Pilot states of KwaraNiger, Plateau, Oyo andOgun to the public in Abujarecently, conducted a surveyto complement the datagenerated by the 2010National MSMEs Surveyconducted by SMEDAN incollaboration with theNational Bureau of Statistics[NBS].

Minister of State for Tradeand Investment, Dr. SamuelOrtom, restated the role ofMSMEs globally, describing

SMEDAN partners German agency to release fresh MSMEs data

By FAVOUR NNABUGWU them as incontrovertiblecontributors to job creation,wealth creation and povertyalleviation. Dr. Ortom statedthat the relevance of data forplanning and implementationof development programmesin the MSMEs sub-sector inNigeria cannot be overemphasized. He lamentedthat it had been very difficultto translate the general policyframework into effective andsustainable interventionprogramme for the benefit ofthe MSMEs sub-sector inNigeria. The Minister whowas represented by hisSpecial Assistant onInvestment, Mr. AdyoroughTavershima, also stresseddeliberate effort must be putin place to grow the numberof MSMEs in the country ifNigeria must achieve itsnational vision of beingamong the 20 industrialisednations by 2020. On theEnterprise Baseline Survey,Ortom said the survey came

up with several findings inthe areas of access to finance,improving the businessenvironment promoting valuechain and regional economicintegration within theECOWAS sub region. Heassured that the finding andrecommendations of the EBSreport would be utilized inthe on-going review of theNational Policy on MSMEsand other interventionprogrammes of the federalgovernment aimed at movingthe MSMEs sub sectorforward

SMEDAN Director-General,Muhammed Nadada Umar,noted that credible andreliable data are crucial to anynation’s planning and policyformulation. He said thebaseline survey conducted inthe five states couldn’t havecome at a better time than nowconsidering the fact thatSMEDAN in collaboration withthe National Bureau ofStatistics NBS recently

conducted and released theNational Micro Small andMedium Enterprises survey in36 states of the federation andthe Federal Capital Territory.

Nasada lamented the neglectsuffered by the MSMEs in thecountry since independence,adding if our founding fathershad articulated an MSMEpolicy, we would have beenbetter off by now, adding anation without economicindependence would neverenjoy its politicalindependence. Alhaji Nadadapaid glowing tribute to theGerman Agency forInternational Cooperation(GIZ) for partnering withSMEDAN in the survey projectand re-affirmed the Agency’scontinuous support andcooperation with GIZ on itsdevelopment initiatives,particularly the Pro-PoorGrowth and Promotion ofEmployment in Nigeria SEDINprogramme.

He appealed to GIZ to

CIIN President says‘No premium, nocover’ policy willhelp buildinvestable funds

President of CharteredInsurance Institute of

Nigeria (CIIN), Dr WoleAdetimehin, has said that theenforcement of “No premium,no cover” policy would helpinsurance industry buildinvestable funds. Adetimehintold newsmen that theinsurance industry had beenunable to build enough poolof investable funds becausepremiums were not paidpromptly.

The Nigerian InsurersAssociation (NIA) recentlysaid it would startenforcement of the insurancepolicy on ‘No premium, nocover ’ from January 2013.This means that no insurancepolicy will be written orrenewed without immediatepayment of premium fromJanuary 2013. According toCIIN President, over theyears insurance companieshave not been able to buildenough pool of investablefunds because policy holdersdelay in paying theirpremiums.

Bureau for PublicEnterprisesapproves paymentof salary arrearsfor NITEL workers

The Bureau for PublicEnterprises (BPE) hasapproved the payment of sixmonths out of the 11 monthssalary arrears owed workersof the NigerianTelecommunication Limited(NITEL). The acting Director-General of the bureau, MrBenjamin Diki, announcedthis in Abuja on Thursdaywhen he received adelegation of the Senior StaffAssociation ofCommunication, Transportand Corporation(SSACTAC).

The delegation was led byMr Elais Kazzah, President ofthe association. Diki also toldthem that approval had beensecured for the payment offive months out of the 12months arrears, beingowed workers of M-TEL, themobile arm of NITEL. He said that security menattached to NITEL propertyacross the country would bepaid three months out of 12months arrears owed them.The payment, according tohim, will be made before theend of the week.

From left, Atedo Peterside and Arumah Oteh at a National workshop

CMYK

Vanguard, MONDAY, DECEMBER 17, 2012 — 21

Business & Economy

BY JOHNBOSCOAGBAKWURU

THE Cross River StateGovernment and the

Bank of Agriculture havesigned a Memorandum ofUnderstanding, MoU, toraise the sum of N200 millionto support Agro-Small andMedium Enterprises, SMEs,in the state.

Speaking after signing theMoU, the Acting Governor ofthe state, Mr. Efiok Cobham,said that SMEs was pivotal tothe socio-economicdevelopment of the nation.

Cobham explained that theloan facility which the stategovernment was contributing50 percent as its counterpartfund would go a long way inupgrading the financial statusof young entrepreneurs whohe said were the main targetof the initiative as well ascreating sustainableemployment opportunity forthem.

He commended the bank forits innovation in introducingprogrammes aimed at youth

C-River, Bank of Agriculture signN200m MoU to grow SMEs

and women empowerment inits agenda which will improvetheir economic stands andurged the bank to alsoconsider funding of agro-allied processing industry toadd value to agriculturalproduce, especiallyperishable goods.

The Acting Governor saidthat the state being an

agrarian, there was dire needfor it to re-strategise and bemore proactive in initiatingprogramme to makeagriculture more attractive tothe youths with the view toencouraging them to ventureinto the sector that wasseemingly been neglectedover the years and solicited

the bank’s technical supportin that direction.

Also speaking, therepresentative of theManaging Director of thebank, Mr. Sam Elibe, said theexercise was the actualisationof the bank’s mandate ofgrowing agriculture andcreating a platform for rural

Airtel Nigeria hasannounced the

successful completion of theLong Term Evolution (LTE)trial in Lagos, the commercialnerve centre of Nigeria. LTE,widely accepted as the true4G, is a standard for wirelesscommunication of high-speeddata for mobile phones anddata terminals. It is based onadvanced networktechnologies with a centralfocus of increasing thecapacity and speed using a

Airtel completes 4G LTE trial in Nigeria … Set to lead new phase of telecoms revolution

finance access.Elibe said the facility will

contribute significantly to therural transformation agendaof President GoodluckJonathan that was fashionedout in two programmestargeted at the youths andwomen to actualize theirdream.

He said the Youths inAgricultural Revolution inNigeria, YARN, initiative andGrow and Earn More, GEM,for women were aimed atusing agriculture to createjobs and generate income forboth youths and women, whoare the most vulnerable tounemployment.

He noted that theagricultural sector, which hadsuffered serious neglect fromsuccessive administrations,has the capacity to transformthe economic landscape of thenation, if properly harnessedand in turn check youths’restiveness which hasculminated to insecuritychallenge in some part of thecountry.

The MD promised tostrengthen and grow the newpartnership between the bankand the state government ingrowing the SMEs withadequate micro creditfacilities to empower thecitizenry and expressed hisreadiness to explore otherareas of possiblecollaboration.

different radio interfacetogether with enhanced corenetwork. With the successfulcompletion of the first 4G LTEtrial in Lagos, Airtel said it isready for test in the othermajor cities across the country,including Abuja and PortHarcourt.

The company added that theLagos trial threw up excitingresults as data users couldopen up simultaneous HDVideos on Youtube withoutbuffering. Download speed,

under ideal conditions was 37Megabits per Second(Mbps), while under nonideal conditions, was 32Mbps; Upload speed was -10.6 Mbps. Speaking on thesuccess of the trial, the ChiefExecutive Officer andManaging Director of AirtelNigeria, Rajan Swaroop saidAirtel is committed tostrengthening its position asa true pioneer of innovationin the Nigeriantelecommunications domain.

22 — Vanguard, MONDAY, DECEMBER 17, 2012

CMYK

BRIEF

Banking & Finance

Nigerian ExportImport Bank(NEXIM) and the

Miners’ Association ofNigeria has put in place aframework to better structureand attract sustainableinvestments to the SolidMinerals sector. Theframework was the focus ofdeliberations during ameeting between theManaging Director/CEO,NEXIM Bank, Mr. Roberts U.Orya and the Patrons of theMiners’ Association ofNigeria at the NEXIM Housein Abuja.

In a statement issued by theCorporate CommunicationDepartment of the Bank, themeeting with the Miners’Association was essentially agesture by its patrons todiscuss issues of mutualcooperation with NEXIM asa follow-up to the interactivebusiness dinner organised bythe Association in conjunctionwith the Federal Ministry ofMines & Steel Development.

Presenting the Bank’sstrategic initiative and marketfocus to the Association, Oryareiterated that Solid Mineralsis a cardinal sector for theBank under its MASSAgenda. Till date, the Bankhas committed more thanN2.5b or nine percent of itstotal portfolio since August2009 to the sector.

NEXIM, Miners Association to boostinvestments in solid mineralsSTORIES BYBABAJIDE KOMOLAFE

Orya, however, noted thatthis does not scratch thesurface of the sector ’srequirement if Nigeria is totake advantage and benefitfrom the huge mineraldeposits with which God hasblessed the country. Solidminerals mining is a highcapital intensive area andrequires strong Governmentintervention to unlock itshuge revenue and jobcreation benefits for thecountry.

In his response, thePresident of the Miners’

Association, Mr. Sani Shehu,thanked the NEXIM Bankmanagement for itscommitment and support tothe members in the quest toopen up the solid mineralsector. According to him, "theAssociation is overwhelmedby the passion of the bank forthe growth of mining industryin Nigeria and for supportingthe players in the industry toactualise their aspiration”

He agreed with Orya thatthe slow development of thesolid minerals sector isattributable to a number of

man-made and naturalfactors.Mr. Shehu stressedthat the government needs toquickly harmonise its policieson mining to enable ani n v e s t m e n t - f r i e n d l yenvironment. He alsoidentified paucity of fund asa major impediment to thegrowth of the mining sectorand requested NEXIM Bank,based on the commitedsupport to the Associationmembers thus far, tostrengthen efforts to get thefederal government toprovide much neededfunding to the industry.

Pix From Left; Mr Jubril Aku, Managing Director Ecobank Plc, Mr Adebisi Shonubi, ManagingDirector Nigeria Inter-bank settlement system Plc, Mr Ejori Aror, Group Managing DirectorIPNX Nigeria Limited, and Mr Kingsley Umadia, Country Head Operation Technology EcobankLimited, During the Lunching Nigeria Inter-bank settlement system e-bills payment in lagoson Thursday 13-12-2012. At Wheatbaker Hotel, Victoria Island Lagos PHOTO; KehindeGbadamosi

The Nigeria InterbankSettlement System

(NIBSS) has introduced twoproducts to enhance cashlesspayment of bills in thecountry.

The products namelyNIBSS e-Billspay andAutomated Direct Debit(ADD) were introduced to thebanking public last week inLagos.

Managing Director/ChiefExecutive, NIBSS, Mr. AdeShonubi said that with theintroduction of the twoproducts, customers ofbusinesses can pay their billsfrom any part of the world.

He explained that theNIBSS e-Billspay is anaccount-number based,online real time credit transferproduct that enablescustomers to make paymentsby leveraging the securityprovided by the Banks. “It

Prospective customers ofDiamond Bank will

henceforth enjoy instantaccount opening with thebank, as the bank hassuccessfully implementedBPM (Business ProcessManagement solution) fromNewgen SoftwareTechnologies.

This implementation hasenabled the bank in end-to-end automation of theAccount Opening andAccount Managementprocesses, which in turnwould enable to provideimproved customer servicewithin shortest possible TAT(turnaround time).

On this occasion the bankalso launched its latestinnovation whereby thebank’s sales staff would beable to openaccountsinstantly, using theirTablets. Diamond Bankbecomes the first ever bank inNigeria to provide thisservice.Speaking on theoccasion, Dr.Alex Otti, GroupManaging Director, DiamondBank said,

“This initiative furthersubstantiates our position asa leader in retail banking. Theimplementation of Tabletbased Account Openingreinforces Diamond Bank’sposition as a innovator and atechnology drivenbank.”Speaking on theoccasion also, Mr. PremierOiwoh (Head IT & Operators,Diamond Bank) added “Wechose Newgen based on itsproven track record in theBPM space and its focus onAfrican market. Based on ourdeliberation with varioussolution providers, we feltNewgen products andimplementation pedigree metour needs perfectly.”

Speaking on thesignificance of thisimplementation, Mr. VivekBhatnagar (Vice PresidentNewgen Software) said, “Weare happy to partner withDiamond Bank, in its questfor transformation andachieving operationalexcellence. Newgen’s BPMofferings will help the bankto centralize the back-officeprocesses, in a seamlesslyautomated environment.”

“It will also pave the way forfaster customer acquisitionand excellence in servicedelivery besides helping thebank reduce operating costs,”he added.

Mr. Bhatnagar also said thatthe implementation wasdelivered jointly by Newgenand its local partner FASYLNigeria. He added that “we,at Newgen, put strongemphasis on utilization oflocal resources inimplementation and postimplementation supportphase.”

Diamond Bankunveils instantaccount openingprocess

Cashless: NIBSS unveils products to enhancebills payment

enables Banks to provideelectronic payment servicesthrough payment channelssuch as internet banking,mobile banking, Kiosk, whileleveraging on the securitymeasures provided by thesechannels with a view tomaking payments to signed-up Billers”, he said.

He said that the AutomatedDirect Debit (ADD) is acashless or electronicpayment method ofsettlement of financialobligations and/orindebtedness on a reoccuringbasis through authorisation todebit nominated bankaccounts in any bank asagreed intervals. “Theproduct subsists on dulysigned mandate orauthorisation to debit anominated bank account”.

The two products, he said

are for Banks and customersof Banks, Insurancecompanies (for Premium),Utility companies (for bills),t e l e c o m m u n i c a t i o ncompanies (for post payment)and subscribers, prívatetelevisión subscribers, leasingcompanies (for lease rental),pension companies (fora d d i t i o n a l / v o l u n t a r ycontributions, clubs (forsubscription payments) andothers.

Explaining the rationale forand the benefits of the twoproducts, Niyi Ajao,Executive Director, TechnicalServices, NIBSS, said, “Bothof them are targeted at safepayment. If you look at ourmarket today, it is verydifficult to pay your bills inthis country. If you want to payyour bill, atimes it takes twoor three days before the

company you paid to willrecord your transactions. “Ifyou go to many companiestoday, like Multi Choice,telcoms customer carecentres, you see manycustomers going their toqueue up to pay bills afterqueuing up at their ATMs towithdraw cash.

“What we have done is topackage two products at thesame time to help the publicto pay their bills veryconveniently, and mostimportantly to helpcompanies who are providingservices manage cash inflow.Today, companies safe a lot ofcost because our platformcreates convenience for thosewho are paying bills andmakes life very easy as ithelps companies registertheir incoming cash on time.”

CMYK

Vanguard, MONDAY, DECEMBER 17, 2012 — 23

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24 — Vanguard, MONDAY, DECEMBER 17, 2012

CMYK

Corporate Finance

All-Share Index of theNigeria StockExchange rose to a six

week high last week whiletotal value of shares rose byN234 billion in response tofive days of uninterruptedprofit making on theExchange. Analysts atProshare, an InvestmentCompany, said the outlook inthe last seven days revealedsustained and significantincrease in risk appetite asthey had recently observedgradual and consistentgrowth in cautious and valuetrading towards more active

Minister calls for long term bond, singledigit interest rate to fund agric

Minister forAgriculture, DrA k i n w u n m i

Adesina has called for theissuance of long term bond toprovide loans to farmers atsingle digit interest rate.

He made this call at aworkshop on “Financing theAgricultural Revolution”organised by the Securitiesand Exchange Commission(SEC) held in Lagos onFriday.

Adesina said that the on-going transformation in thenation’ s agricultural sectorhas created huge demand foraffordable funds, whichexceeds what can be providedunder NIRSAL.

“Today there is a positiveinvestment climate forinvestment in agriculture inNigeria. The sector howeverneeds long term finance atsingle digit interest rate but itoffers potential interest rateincome of about N400 millionto investors.

He said for example theMinistry is about to introducea scheme to raise 760,000young commercial farmers inthe next five years, and thefunding requirement for thescheme is about N3 trillion. Hesaid that research studiesshow that the Nigeriaagricultural sector has apotential of $99 billion and thisis expected to increase to $250billion in the next 2020 years.

He said that in recognitionof the potential of the sector,there has been increasedprivate sector participation inrecent times, with over $8billion attracted in the last oneyear, with the World Bankalone offering fundingsupport of $500 million, andthe African Development Bank(ADB) pledging $250 million.

BY BABAJIDE KOMOLAFE

NSE Index records six week high, as shares’ valuerises by N324bn

Similarly, banks’ lending tothe sector has improved fromone per cent of total lendingto three per cent in recenttimes.

He said that despite these,the funding needs of thesector is far from beensatisfied. “This requires thatwe think out of the box. Weneed to raise long term bonds

to support the agriculturalsector. The AssetManagement Company ofNigeria (AMCON) andPension Funds Administrators(PFAs) should invest inagriculture to provide longterm funds at single digitinterest rate.”

He said that the Ministryon its part has commenced

moves to facilitate long termfunds to the sector. TheMinistry, he said, has setaside $3 million to set up aventure capital company tolend to seed companies andas time goes we would addanother $3 million. “And weare also attracting otherinvestors so that we can growthe fund to about $20 million

to provide funding support toseed companies. They don’thave to go to banks to getaccess to financing to getprocessing equipment.”

He disclosed that inaddition to this, the Ministryis working with the TonyElumelu Foundation to set upan apex fund for agriculturein the country.

“Furthermore the President,just two weeks ago, directedthat the Bank of Agriculturebe restructured andrecapitalised to lend at singledigit interest rate.

stocks across the board.Specifically, the key market

indices represented by theAll-share Index and theMarket Capitalisation bothrose by 3.80 per cent eachduring the week.

The Market Capitalisationgained about N324 billion toclose at N8.846 trillion fromN8.522 trillion; while the All-Share Index appreciated by1,013 points to close at27,685.54 from 26,671.72points.

A review of the equity pricemovements indicated thatforty four (44) equitiesrecorded price appreciationwhile twenty-five (25)equities recorded pricedeclines and prices of one

hundred and twenty-nine(129) equities remainedconstant. When comparedwith the preceding week,thirty five (35) equitiesgained while thirty- one (31)equities recorded pricedeclines and prices of onehundred and thirty-two (132)equities remained constant.

Nestle Nigeria Plc led in thegainers chart, appreciatingby N49.95 to close at N710.00per share from N660.05 pershare. It was followed byGuinness Nigeria Plc whichrose by N23.90 to close atN265.00 per share, while theNigeria Breweries Plc gainedN21.45 to close at N165.00 pershare, among others.

On the contrary, PZ

Cussons Nigeria Plc led inthe losers’ chart, depreciatingby N1.95 to close at N27.05per share from N29.00. It wasfollowed by MRS Oil NigeriaPlc, which lost N1.25 to closeat N23.76 per share and DNMeyer Plc which declined byN0.75 to close at N2.05 pershare, among others.

Meanwhile, a turnover of1.929 billion shares valued atN14.640 billion in 22,650deals was recorded last weekin contrast to a total of 1.144billion shares valued atN11.239 billion thatexchanged hands in 18,947deals penultimate week.

The Financial Servicessector (measured by turnovervolume) accounted for 1.573

billion shares valued atN10.547 billion traded in14,207 deals. TheConglomerates sectorfollowed with 131.812 millionshares valued at N180.812million traded in 765 deals.

Linkage Assurance Plc wasthe most active during theweek (measured by turnovervolume); with 218.466 millionshares, followed by ZenithBank Plc and TransnationalCorporation Of Nigeria Plc.The top three equities with atotal volume of 564.997million units of sharescontributed 29.29 per centand 27.99 per centrespectively to the totalturnover and value for theweek.

By CHINEDU IBEABUCHI

CMYK

Vanguard, MONDAY, DECEMBER 17, 2012 — 25

26 — Vanguard, MONDAY, DECEMBER 17, 2012

CMYK

Vanguard, MONDAY, DECEMBER 17, 2012 — 27

Housing Finance

BRIEF

Real Estates DevelopersAssociation of Nigeria

(REDAN) has vowed to resistfurther move by the Ministerof Federal Capital Territory,Senator Bala Mahommed,tocarry on with the ongoingdemolition, stating that furtherdemolition could precipitatehuge crisis in the housing sec-tor. Reacting to the legal tus-sle over the demolition ofN3billion Minanuel HousingEstate, the Minister told theSenate committee on FCT thatthere was no going back onplans by the DevelopmentControl Department of the ad-ministration to demolish 31housing estates, which ac-cording to REDAN, is worthN37.82billion.

A report by REDAN, in-house committee on verifica-tion of Documents submittedby Developers along Lugbe /Airport Road axis of FCT, hasalso put the total number ofhouses under construction at4,961 with over 17,323 sub-scribers. The total area is alsoestimated at 2.990.9hectares.The president ofREDAN, disclosed this inAbuja, called on President

STORIES BY MIKEEFFIONG

The Chairman HouseCommittee on Housing,

Hon Usman Aminu, haslashed out at the NationalHousing Fund saying it is notworking as regards housingdelivery in the country.

“Since I assumed office asthe chairman of thiscommittee, I realised thatNHF is not working .Why isit not working? Let’s team upand collaborate and see howit can work. From what Iunderstand about NHF, anyNigerian can contribute partof his income so that he canreap or access housing in lifetime."

Speaking at the officialcommissioning of Emeraldcourt in Abuja, he noted thatthe essence of fund is toencourage saving to accesshouses much later in life hasso far not been achieved.

Aminu pointed out that itwas pertinent for developersto consider building housesfor the masses, as havingshelter could address theproblem of insecurity andprovide employment.

“But the participants,especially most of you frombanks are not doing their jobs.That is why the fund is notoptimum and it needs to be

Law maker blasts NHF over poor housingdelivery

optimum so that at level ofsocial housing, we will be ableto do something”, he said,

He emphasised that most ofthe houses being built bydevelopers are accessible byhigh income earners, whilelow income earners find itdifficult to access the houses,saying that in every society,the middle-class makepossible for the society to beat peace with itself but inNigeria, we are yet toappreciate that. "Please let’s

come together and collaborateand see what can be done.”He stressed that thecommittee had passed a billon building collapse, whichhe hoped would see the lightof the day and thatprofessionals would submitthe code.

Also the Minister of FederalCapital Territory, Senator BalaMohammed, stated thatproviding result orientedhouses could curtail risingcases of youth restiveness,

insecurity amongst other.Mohammed who was

represented by the Perm Sec,Engineer Anthony Ozodinobistated that “ In order to arrestthe increasing gap on thedemand and supply ofhousing for the teamingpopulation of Abuja inparticular and Nigeria ingeneral, the government andall its agencies, private andpublic organisation must stepup on all machinery that ismeant to deliver the goal”

Estate developers vow to resist Abuja estates' demolitionGoodluck Jonathan to stop theMinister from going aheadwith the planned demolition,adding that the moves wouldhave serious effect not only inthe Nigeria economy, but alsothe nation’s security.Afolayan

stated “the closure of Dangotecement factory in Gboko,Benue State may have been asa result of the directive byREDAN that developersshould stop further construc-tion.”

He called on the federal gov-ernment to act fast in order toprevent the kind Mortgagecrisis that ravaged the UnitedState of America, emphasiz-ing, that the whole world isstill feeling the effect.

Jubilee-Life Savings andLoans has began

operation as PrimaryMortgage bank in Lagos andFederal Capital Territory.

This was disclosed by theChief Executive Officer of thecompany; Mr.WaleOsissanya. He said thatmoney spent on propertydevelopment has producedthe best result, even as thecompany has begunoperating as National PrimaryMortgage bank in Lagos andFederal Capital Territory.

“We leveraged on the robustincome on propertydevelopment to achieve theresults all theseyears.Howerve, with the newregulation of Central Bank of

Jubilee-life Savings begins operation as primarymortgage bank

Nigeria (CBN) to capitalize tothe tone of N5billion, we areunder some kind of restraintcontinuing with the wonderfulstrategy, but we are workingrelentlessly to ensure smoothtransaction in order to complywith the directive of CBN witheffect from 2013” he said.

He added “The outlook inthe year ahead would be quitechallenging for Nigeria bankindustry after capitalizationdirective by CBN.He pointedout that the roadmap tobecome a benchmark foroperating Primary MortgageBanks in the country entailseffective service deliverythrough development andefficient loan and capital topenetrate and strengtheningtheir position corporate in the

market place. Osisanya, noted that the

company has achieved amodest profit before tax ofN252.610, 034 againstN252.032.148, recorded in theprofit.

Speaking at 8th

AnnualGeneral meeting of thecompany, Chairman of thecompany, Mr. Felix Ohiwerei,explained that despite thefunding challengesconfronting the sector overthe year, the company hasbeen able to forge ahead.

He said that constructionworks in its whispering PalmsEstate, Port Harcourt hadbeen sold out works are atadvanced stages on itsGloryland Estate in PortHarcourt and another

Company warnsagainst sandscooping, erectionof structures underelectricity

The TransmissionCompany of Nigeria has

warned residents againsterecting illegal structures andscooping sand undertransmission towers andelectric poles. Mr OlusholaAkinniranye, its ChiefExecutive, gave the advice inan interview with the NewsAgency of Nigeria (NAN) onThursday in Lagos. He saidthat the company wouldprosecute anybody foundengaging in such acts. Hesaid that continuous scoopingof sand under PHCN’stransmission towers couldcause collapse of the towers.The company executive urgedperpetrators to stop scoopingfor sand around electric polesor trading under electriccables as they wereendangering their lives bysuch acts. He said thatdemolition of illegal structuresunder transmission towersand electric poles would soonbegin across the country.

Guaranty Trust BankPlc has launched itspartnership with

Selfridges, UK to projectdesigns by African fashiondesigners. The collaborationtagged “Guaranty Trust Bankpresents Ndani”, stems fromthe Bank’s commitment to theprojection of African Art toglobal audiences.

Ndani represents the beautyof Africa and this is clearlydemonstrated at a distinctpop-up shop in Selfridges’departmental store on OxfordStreet in the UK. The designson display at the shopexpress the deep creativity,ingenuity and originality ofAfrican designers, attributeswhich the designers sharewith the GTBank brand.

The exhibition has alreadyattracted several reviews andvisits by fashionistas from allover the world and is set tobe a high point at the storethroughout December 2012and January, 2013.Participating designers arefrom Nigeria and include:Agu, House of Silk, DOTHandbags, Odio Mimonet,Lanre Da Silva Ajayi, Jewelby Lisa, Eki Orleans, ItuenBasi and Tiffany Amber. Thesedesigners are showcasingtheir Christmas/Cruisecollection exclusively at theNigerian world pop-up storeduring the project.

GTBank,Selfridges boostAfricandesigners

From right Mr Sunday Sopitan, Human Resource Manager, Honeywell Superfine Foods Ltd;Mr Leye Adegboyega, Unit Commander RS 2.17, Ojota; Mr Lanre Jaiyeola, Commercial Direc-tor, Honeywell Superfine Foods Ltd and Regina Peter, Unit Head of Education RS 2.17, Ojotaat the HSFL-sponsored FRSC 2012 ember months road show campaign in Lagos on Thursday.Photo by Lamidi Bamidele.

CMYK

28 —Vanguard, MONDAY, DECEMBER 17, 2012

Interview

,,

By NKIRUKA NNOROM

Mr. JohnsonChukwu, is theM a n a g i n g

Director/CEO, Cowry AssetsManagement Limited, anInvestment Bank and keyplayer in the capital marketwith specialisation in Oil andGas, Bonds and Equity andother financial instruments.In this interview withFinancial Vanguard,Chukwu stated that reductionin recurrent expenditure willtake a gradual process. He

assrted that cutting down onpeople’s salaries withoutrationalisation of agencies ofgovernment with overlappingfunctions will be difficult.

What is your take on the2013 budget being debatedby the National Assemblyand the federal governmentand how detailed do youthink the 2013 budget is inrelation to that of 2012?

Well, I will I say that thebudget is quite detailedenough and it is in tandemwith the medium termexpenditure framework of thecountry, and it actuallyrecognises the peculiaritiesand needs for the economy togrow, while at the same timemaintaining some level offiscal stability. If you look atthe budget, you see a revenuegrowth of 39 percent andexpenditure of about fivepercent. that shows that thegovernment revenue isactually growing faster thanthe federal governmentexpenditure. You also saw thestructure of the recurrentexpenditure to capitalexpenditure now movingtowards a higher level ofcapital expenditure. We aremoving from a capitalexpenditure of about 28.7percent to 31.3 percent capitalexpenditure as againstrecurrent expenditure of thecountry. We are also seeing areduction in borrowing fromN744 billion to N727 billionfor the 2013 budget. If youlook at the revenue side, yousee that revenue is actuallypredicated on oil benchmarkof 25 dollars, oil productionof 2.53 million barrels perday. If you compare that toabout 2.48 million barrels perday which was the benchmarkfor 2012, that gives us amarginal increase in terms ofproduction volume. If youalso compare it with 75 dollarper barrel to the 82 dollars wehad for 2012, which was alsoa marginal increase. So, ifyou look at the revenueprojection, one will say thatthe projections are quiteconservative, but quiterealistic. If you look at thestructure on which bulk of thecapital expenditure is based,you see some improvement.

Major focbudget isof public/good —Jo

So, give and take, I think thebudget looks reasonably welldesigned.

Looking at the allocation tosome of the basic sectors, doyou think the implementationwill deliver the neededdevelopment in the country?

Well, you have to look at thebudget in terms of changes invalue chain of some of thesectors of the economy. Takefor instance, the agriculturaland power sector, you see theagricultural sector has movedaway from a governmentdriven, fertilizer distributionsystem to a private sectorbusiness oriented value chain.So, that simply means that theamount of money that will gointo government funding ofagriculture also will bereduced because the privatesector actually taken the rolethat government used to playand is actually playing iteffectively. So, you don’texpect the government toreally throw in so much moneyinto the agricultural sector;what they have really done isto redefine and redesign the

value chain and make itprivate sector driven. If youlook at the power sector whichhas a budget of about N78billion, you also recognisethat come the end of October,both the distributioncompanies and generationcompanies would have beensold to the private sector. So,further investment fromfederal government to thatsector will largely berestricted to the transmissiongrids, so you are not going tosee a lot of governmentresources being thrown intothat sector, what governmentis going to do is to drive thosesectors through policies andregulations. The same thingapply to a lot of other sectorsthat are actually major drainin the public resources but ifyou look at those socialinfrastructure, which is whatthe government should do,what we call common good orpublic good, you see that theirshare of the budget is quietsubstantial. If you look ateducation, education has thehighest share of the budget. Ithink about four hundred and

eighty something billion nairafollowed by the Armed Forcesand the Police which issecurity. Between the ArmedForces and the Police we haveabout N670 billion. You findout that those are the publicgoods which the governmentwants to invest in. If you lookat the educational sector, wehave a huge youngpopulation and you see thecomplaint of the quality ofeducation. I think what thegovernment wants to do is tostrengthen the quality ofinstruction within theeducational system and alsostrengthen the level ofinfrastructure in the tertiaryinstitutions, so that Nigeriangraduates will begin tocompete with theircontemporaries in othercountries. It does not makesense for Nigerians to besending their children toGhana to go to higherinstitution. So, I think thefederal government wants toactually turn around theeducational sector if youjudge that based on theamount that was voted for theeducational sector. The othermajor thing is the financialsector, of course, that cannotbe understated. Like I said,these are socialinfrastructures, social servicesthat the government is puttingmore resources into. Thosesectors that can besuccessfully driven by theprivate sector the governmentis slowing down or reducingthe amount of vote going intothose sectors. So, if you askme, I will say in terms ofallocation, the budget makesa reasonable sense.

So for you the allocationmade to the agriculturalsector is good enough?

Yes, that is why I said thatthe value chain hascompletely changed. In thepast the government willpurchase fertilizer anddistribute, that alone thegovernment is concerned willnever get to the farmers. Nowthe management has changedto the private sector operators;government is ratherencouraging commercialagriculture through thecommercial agriculture creditscheme. Government isencouraging small holderfarmers through electronicdistribution of fertilizer, so thegovernment does notnecessarily need to buy orsubsidize those products andsupply free to the farmersbecause eventually , thoseproducts will not get to thefarmers they are subsidizingit for. So the amount of moneywe needed to put in drivingagriculture has drasticallybeen reduced because of thefact that the agriculturalproduction are now beingdriven by the private sector

operators unlike what used tohappen in the past, and that is whythe amount of vote is sufficient. Wealso need to also recognise thatthere have been a lot of changes interms of the environmental factorsover the past couples of weeks,particularly due to heavy rain andflooding in some part of the country,which may adversely affectagricultural production. That mayas well entail additional resourcesgoing in to support farmers, but thegovernment has also said that theresources required to support or toreverse the damage done by the highlevel of flooding is beyond thegovernment capability, and thegovernment is also seeking theprivate sector and even internationaldonor agencies to support inaddressing the damages or lossessuffered in the agricultural sector,including the housing and othersectors as a result of the flood. I thinkthe Dangote team said they are goingto raise about N100 billion to supportthose who are affected by theflooding. I believe a large part of thefund will also go into helping themto restart their life, and also helpingthem to re-plan their course. TheMinister of Agriculture has alsocome up to say that, they are goingto distribute to them cereals that havevery short life cycle and those cerealswill include maize and those thingsthat have maturity period of aboutsix months. So hopefully, with theseinitiatives I think that will moderatethe impact of the flooding and that

It does not make sense forNigerians to be sending theirchildren to Ghana to go to higherinstitution. So, I think the federalgovernment wants to actuallyturn around the educationalsector if you judge that based onthe amount that was voted for theeducational sector.

Johnson Chukwu, MD/CEO, Cowry Assets

Johnson Chukwu ...is the governm

CMYK

Vanguard, MONDAY,DECEMBER 17, 2012 — 29

,

,

Interview

ocus of 2013is promotionc/common

—Johnson Chukwu

will not necessarily require so muchfunds from the government. Give andtake, I think that is what thegovernment is recognising that, andgovernment has also set up committeeto raise additional fund. To date, Ithink the government has raised upto about N17.9 billion for the affectedstates and communities and if theDangote committee is able to raise upto N100 billion as they promised, Ithink we should have enoughresources without necessarilyworrying the government to come upwith a supplementary budget tosupport agricultural production.

Some people still believe that fivepercent reduction in recurrentexpenditure is not enough, they stillbelieve that government should cutdown on its expenditure. What isyour take on that?

The way I will look at it is that thegovernment will have to improve oninfrastructure; there are infrastructuralproblems and structures are noterected over night. The governmenthas said that come 2013, they will startrationalising agencies and ministrieswith overlapping functions. Thatsimply means that until therationalization is done, you cannotdrastically cut off the salaries of thosewho are being paid. You can’t cut offtheir running cost; you don’t justeliminate costs that are borne by thespecific structures. So, it will takesome time. You need to reverse thosestructures, you need to amend, and

you need to eliminate thoseimbalances before you can seea drastic reduction in therecurrent expenditure. Wehave to realise that it cannothappen over night; it is agradual process. We aremoving from 28 percentcapital expenditure share to31.3 percent share. Hopefullyby next year, we are going tobe talking about 40 percent, ormay be 38 percent or more, buta lot of other things will haveto precede drastic changes inour expenditure profile andthose conditions will includeeliminating duplications ingovernment agencies andministries. Until that one isdone, we cannot just cut

salaries of workers, you willnot just cut power supply fromministries and departments,you will not cut off theirtelephone bills, their fuellingallowances/expenses and allthe rest. Those things willcontinue to run until thoseministries, agencies anddepartments are eliminated.So for m e, my expectation isthat it will be a gradualprocess. Once the heads thatare consuming thoseoverheads are eliminated, theoverheads will go down.

From the body language ofthis administration, do youforsee the governmentcollapsing some of these

require the governmenteliminating jobs. Having saidthat, you will also recognizethat it will be difficult decisiongranted that if this is doneproperly, and the economystimulated to grow, those whowill lose their job ingovernment agencies willlikely get better job in theprivate sector as long as theyare competent. If you ask me,the question should be, is thegovernment having the willpower to eliminate jobs orrationalize agencies andministries? I will say it is leftfor us so see. I want to believethat having said this, that theywill start that in 2013 and thatwe should wait till 2014 to seea manifestation in thereduction of our currentexpenditure. I think we shouldrather give them the benefit ofdoubt and watch them do that.

What is your take on theargument that ensued betweenthe National Assembly andExecutive on the issue ofcrude oil benchmark?

My take on this is that thetwo sides had strong argument,but I will rather support thegovernment against theNational Assembly for certainreasons. One is that we are amonolithic economy; we exportonly one product and

unfortunately for us, theproduct we export has a lot ofvolatility in its price. Oil pricehas dropped sometime in 2008to as low as $38 US dollarsfrom $147 dollars per barrel.We have seen oil pricedropped to $10 dollars in thepast; there is nothing that canstop the oil price from fallingat any point in time, butbeyond that, let us evenagreed that the oil price do notdrop. We have two factors thatmake it imperative that weadopt a conservative approachin estimating the price atwhich we convert the oilproduction. One of thesefactors is the need to save andto build our foreign reserve.The higher our foreign reserveis the stronger our economybecomes attractive to foreigninvestors, the more inflow wewill have, and if we addressthe other structural challengesof power supply and security,you will find out that with apopulation of about 160 millionpeople, this country willbecome a natural environmentand point of attraction tocompanies that are into themanufacturing of consumergoods. Also, they will beencouraged to do that if wehave strong foreign exchangereserve. So your foreignreserve will help us to alsostrengthen the value of thenaira vis-a-viz othercurrencies. Another factor isthis, because of the structurein the economy, which is suchthat we export products thathave very low local productioncost and convert the profits intolocal currency; the ability ofour economy to absorb hugefiscal government expenditurewill be highly limited. So, theimplication of this is that if weconvert all oil sales to naira,as the crude price theNational Assembly is takingabout $80 dollar per-barrel, wemay actually have to contendwith the issue of inflation,because the production ofthose goods we tend to exportare very low in terms of localcost of production. So, you willbe exporting something thatcost almost nothing and youare importing the proceedsand converting to the localcurrency, so, we have a lot oflocal currencies that will bepursuing few goods.

agencies thath a v eo v e r l a p p i n gfunctions?

This is more ofa politicalquestion, butthe way I willlook at it is thatthe governmenthas said theywill do it; it isnow left for us towatch them doit. In ad e m o c r a t i cdispensation,t h egovernment’sjob is to createe m p l o y m e n tand not to driveunemployment.S o ,rationalizingand eliminatingministries andagencies will

,

,

The government has said thatcome 2013, they will startrationalising agencies andministries with overlappingfunctions. That simply meansthat until the rationalisation isdone, you cannot drasticallycut off the salaries of thosewho are being paid.

We are a monolithiceconomy; we export only oneproduct and unfortunately forus, the product we export hasa lot of volatility in its price.Oil price has droppedsometime in 2008 to as low as$38 US dollars from $147dollars per barrel. We haveseen oil price dropped to $10dollars in the past;

vernment having the will power for jobs or to rationalize agencies

30 — Vanguard, MONDAY,DECEMBER 17, 2012

CMYK

Vanguard, MONDAY,DECEMBER 17, 2012 — 31

CMYK

32 — Vanguard, MONDAY, DECEMBER 17, 2012

Insurance

BRIEFS

Pix captionL-R, Kenny Borisade, ChiefBusiness Analyst NorthWaterloo Farmers Mutual,Insurance Co. Canada, NWFM,and spouse, Dolly with Mrs.Lana Rodrigues & Mr. CarlosRodrigues, President & CEONWFM at the company’s Xmasparty/dinner in Ontario, Canada.

Insurers to lobby governmenton bail-out optionsBy ROSEMARY ONUOHAInsurance companies under theauspices of the NigerianInsurers Association, NIA, areset to lobby the federalgovernment to put machinery inplace for possible bail-outoptions for distressed insurancecompanies.The newly inauguratedChairman of NIA, Mr. RemiOlowude, who stated this inLagos said that government hasalways ignored insurancecompanies even when they arein trouble.Olowude said “Insurancecompanies are institutionalinvestors which invest inequities and securities. Whenthese entities fail, insurancecompanies are faced with thechallenges of honouring theirobligations to their customers,but unfortunately, there isnothing in place on the part ofthe government to bail out theinsurers in times of trouble. Thisis food for thought.”Olowude said that efforts wouldbe made to ensure therestructuring and strengtheningof the association’s secretariatfor effective public sector liaisonand monitoring of the politicaland legal environment as itaffects insurance, adding thatthis has become necessary asrecent events in the financialsector have shown that noinsurance company was too bigto fail or too small not to matter.To this end, Olowude said thatthe NIA hopes to seek anaudience with the Presidency totable issues such as the keyroles of insurance to the socio-economic growth anddevelopment of the nation.Olowude said in line with theassociation’s determination toachieve its mission andobjectives, it has becomeimperative to take deliberatesteps towards closer interactionand strategic partnership with allstakeholders, particularly themajor arms of government -Executive, Legislature and theJudiciary.He noted that towards this end,the Governing Council of theassociation will considerseeking an audience with thePresidency to table issues suchas the key roles of insurance tothe socio-economic growth anddevelopment of the nation.He said insurance industry andthe government can collaboratein areas of poverty alleviation,to give the industry theopportunity to contribute to theformulation of certaingovernment policies andrepresentation in appropriate

By ROSEMARY ONUOHA

Insurance companiesunder the auspices ofthe Nigerian Insurers

Association, NIA, are set tolobby the federal governmentto put machinery in place forpossible bail-out options fordistressed insurancecompanies.

The newly inauguratedChairman of NIA, Mr. RemiOlowude, who stated this inLagos said that governmenthas always ignored insurancecompanies even when theyare in trouble.

Olowude said “Insurancecompanies are institutionalinvestors which invest inequities and securities. Whenthese entities fail, insurancecompanies are faced with thechallenges of honouring theirobligations to their customers,but unfortunately, there isnothing in place on the partof the government to bail outthe insurers in times oftrouble. This is food forthought.”

Olowude said that effortswould be made to ensure therestructuring andstrengthening of theassociation’s secretariat foreffective public sector liaisonand monitoring of the politicaland legal environment as itaffects insurance, adding thatthis has become necessary asrecent events in the financialsector have shown that noinsurance company was toobig to fail or too small not tomatter.

To this end, Olowude saidthat the NIA hopes to seek anaudience with the Presidency

Insurers to lobby government onbail-out options

to table issues such as the keyroles of insurance to the socio-economic growth anddevelopment of the nation.

Olowude said in line withthe association’sdetermination to achieve itsmission and objectives, it hasbecome imperative to takedeliberate steps towards

closer interaction andstrategic partnership with allstakeholders, particularly themajor arms of government -Executive, Legislature andthe Judiciary.

He noted that towards thisend, the Governing Councilof the association will considerseeking an audience with thePresidency to table issuessuch as the key roles of

insurance to the socio-economic growth anddevelopment of the nation.

He said insurance industryand the government cancollaborate in areas of povertyalleviation, to give theindustry the opportunity tocontribute to the formulationof certain government policiesand representation inappropriate governmentcommittees; among others.

“Similarly, we intend toinitiate interactive sessionswith the appropriatecommittees or organs of thetwo chambers of the NationalAssembly to discuss issuessuch as restrictive laws oninsurance practice, multipletaxation, insurance awarenessand penetration, developmentof oil and gas industry.

“The NIA will equallystrengthen relationships withthe different organs of theJudiciary by organisingannual or bi-annual insuranceseminars for judges and theleadership of the NigerianBar Association.

“The seminars will focus ondevelopments in insurancelaw in Nigeria, and ensurethat the judiciary, legalprofession, the regulators,and practitioners in theinsurance industry as well asthe media have a mutualunderstanding of insurancelaw and practice. The morepeople understand the law,the less the courts areinundated with avoidablesuits.”

Chartered InsuranceInstitute of Nigeria,

CIIN, has boosted its humancapital development with theinauguration of 150 associatemembers.

Mr. Wale Adetimehin,President , CIIN, in hisaddress during the Institutes’2012 Graduation andFellowship awards ceremonyheld in Lagos, said theinstitute demonstrated itscommitment to theactualisation of its three-tierexamination structure whichallows qualifiers at each levelof the examination to obtain acertificate of completion.

He said that this no doubt,is a flexible and learner-friendly examination structuregeared at motivating greaterinterest in the attainment ofprofessional qualification inorder to address the industryhuman capital needs.

He said the Institute isconscious of the Industry postconsolidation challengeswhich came with new and

CIIN inducts 150 members

complex human capitalneeds.

According to Adetimehin,the challenges facing theindustry today not onlyrequire a fresh impetus inhuman capital developmentbut also a renewed vigour andapproach to skills recreationin order to equip practitionersfor the huge tasks ofmanaging the current realitiesin the business landscape.

He maintained that theInstitute will continuallystrengthen the examinationsystem through regularreview of the syllabus andexamination structure, as it isconscious of the Industry postconsolidation challengeswhich came with new andcomplex human capital needs

He added that theattainment of professionalqualification should not beseen as an end in itself but asa means to an end, as ittherefore behooves all holdersof professional qualificationsto be mindful of the efficacy

of Continuous ProfessionalDevelopment (CPD).

He further stated that theCPD has becomeinstitutionalized with varyingdegrees of enforcement bymost profession, which in itscase, it engenders a schemewhich requires all members tolocate themselves in the pointscoring index.

He said “Hence it isreferred to by our Institute asthe Mandatory ContinuousProfessional Development(MCPD) programme, noprofessional should exemptthemselves from this schemeunder any guise,the MCPDis, unarguably, an inalienablepart of our professionaldevelopment and should betreated as such.”

He disclosed that theInstitute’s College ofInsurance project hascontinued to progress asplanned, the College will beflagged off officially duringthe first quarter of 2013.

L-R, Kenny Borisade, Chief Business Analyst North Waterloo Farmers Mutual, Insurance Co.Canada, NWFM, and spouse, Dolly with Mrs. Lana Rodrigues & Mr. Carlos Rodrigues, President& CEO NWFM at the company’s Xmas party/dinner in Ontario, Canada.

Vanguard, MONDAY, DECEMBER 17, 2012 — 33

Business & Economy

“Things are not alwayswhat they seem”.Anonymous Russian JewishWriter.

Ask any Nigerian if wehave airlines in Nigeria

and he would probablyanswer “yes”. And for goodmeasure, he will list thenames of existing airlines –Arik, Aero Contractor, IRS,DANA (it is still in businessand we need DANA morethan it needs us; believe me),Overland, Medview (whichstarted operations inNovember this year) and thatis almost the entire list – fora nation of 167 million peopleand suffering from delusionsof grandeur by aspiring tobecome one of the top twentyeconomies in the world bythe year 2020. Incidentally,the second largest domesticairline is “PresidentialAirways”, owned andmanaged by the President ofNigeria and ourOgapatapata, GoodluckJonathan, CGFR. That airlinehas a fleet of ten crafts to itscredit and has never, and willnever make a profit for itsowner. In fact “PresidentialAirways” demonstrates allthat is wrong with theNigerian aviation sector andmostly explains why we aremissing out in the Age ofAviation. Because it hasnever, and will never besubjected to the discipline ofadequate profit, thecalculation of returns oninvestment, as well as otherparameters governinginvestments in the privatesector, globally, it can onlyend up being a loss leader.

Procurement, operationand maintenance of anairline, even if it has only oneplane in its fleet, is a top leveleconomic decision calling forall the skills required byentrepreneurs wishing to

Is Nigeria missing the age of aviation?succeed in the business.Anyone who has opened hiseyes, while at our nation’sairports, would readilyobserve the carcasses ofplanes once flown by hastilyand ill-advised Nigerianentrepreneurs since thederegulation of the sector wasundertaken by PresidentIbrahim BadamosiBabangida, IBB, in the 1980s.Among the first airlines to beair-borne by those with anymemory was OKADA Airlines.Today, the existence of thatcarrier is a distant memoryeven to its owner. Since, thenthe aviation landscape inNigeria had been strewedwith the corpses of what wereonce promising carriers.There is no need to list themseriatim; but the demise of AirNigeria can serve as ametaphor for our increasinglyfailing attempt to join the Ageof Aviation. One could easilyhave picked Belleview, ADCor Sosoliso. But, few peoplewould remember thosecorporate corpses. For some,one crash was all it took tosend them packing; for ADCit took two. Some did noteven need a plane to crashbefore they closed the bookingoffices. Air Nigeria was oneof them; and that was whatmakes its exit, among othersso remarkable.

No regular watcher of CNNNews could have missed theAir Nigeria advertisements. Itmade me proud that aNigerian airline could affordto pay the steep price ofadvertising on CNNalongside the Qartar Airwaysand South Africa’s maincarrier. But, just as we weregetting ready to start takingthe Air Nigeria serious, it wasgrounded for reasons stillvery obscure. That by itselfexplains why we are stilllargely fringe players in the

sector which is almost 120years old. Airlines in Nigeriaare run like a secret society;few people actually knowwhat is going on in thecompanies; their financialstatements are not publishedand few people know those incharge. The other side of thatcoin is that few people trustthe airlines. As a result thereis very little brand loyalty; nowidespread support andwhen troubles come they godown, sometimes literally,without anybody missingthem because the ownershave operated the airlines toplease themselves andnobody else. That is thefundamental flaw; forNigerian airlines customersatisfaction is a theoreticalidea not central to thebusiness.

A comparative illustrationwill help to demonstrate whatis at stake here. Most airtravelers globally, includingNigeria, seek to save time andto avoid the discomfortassociated with road travel –given the atrocious conditionof our roads. For those

reasons they first of all travellong distances; endure traffichold-ups and end at airportsat least one hour beforedeparture time. Invariably, inNigeria, all that sacrifice is invain. The flights never take offon time; delays andcancellations remain the rule;even for those who booked inadvance. And when, the flightfinally takes off, hours behindschedule, not every pilot, orCaptain as they callthemselves, has the goodmanners to apologise to the“captives” on board theaircraft.

Elsewhere in the world, inplaces where the countrieshave fully joined the Age ofAviation, a passenger startingfrom Eket, Akwa Ibom State;travelling first to Lagos andfrom there to Abuja; andfinally wanting to catch aflight to London, can checkhis luggage through toLondon carrying only hiscarry-on luggage. Not inNigeria; the luggage checkedwill never arrive in London.More serious, the passengerwho expects to catchconnecting flights at Lagosand Abuja might discover thathis flight to London haddeparted a long time ago –leaving him/her stranded inLagos or Abuja. Obviously, allthe advantages of air travelover any other means havebeen eroded by Nigerianairlines leaving only one – thelack of good alternativemeans of getting to ourdestinations.

THEIR OWN GRAVEDIGGERS

Unknown to the fewNigerian airlines still

in operation today, they havebecome their own gravediggers. For instance airlinesservicing Lagos-Benin;Lagos-Warri; Lagos-Ilorin

continue to enjoy patronageonly because two major roadshave been allowed to becomedeath traps. The two roadsstill saving them are theLagos-Ibadan and theS h a g a m u - B e n i nExpressways. Once theFederal government ofNigeria becomes responsibleand restores those two roadsto their former status, nobodywill again accept the insult ofhaving to wake up in themorning; head for Ikejaairport only to wait until 3.00pm before the Benin or Warrior Ilorin flight takes off. Infact, any customer,specifically, those residing atVictoria Island, Ikoyi, Lekki,Ajah, etc, will need to havehis/her head examined fordriving two hours to theairport; wait three or fourhours for a flight to Beninwhen the journey would havebeen completed in three hoursby road. When that timecomes, as it inevitably mustcome, the only thing that willsave the airlines from totalextinction is good customerservice – an idea which, atthe moment is totally alien tothem.

Let me provide an examplefrom a recent personalexperience with two Nigerianairlines – Arik and AeroContractors. I was travellingto Uyo in the last week ofNovember. To ensure a seatwas available, the bookingwas made two days inadvance on Arik. The flightwas scheduled for 13.30initially. Not wanting to takechances with traffic, I lefthome at 11.00 a.m. It was justas well. The hold-up fromMaryland was terrible. Justas the taxi conveying me tothe airport was descendingthe fly-over near the GeneralHospital, a text message camethrough informing me thatthat the flight had beenshifted to 14.40. I had nochoice but to proceed to theairport.

Since, then theaviationlandscape inNigeria hadbeen strewedwith the corpsesof what wereonce promisingcarriers. There isno need to listthem seriatim;but the demise ofAir Nigeria canserve as ametaphor for ourincreasinglyfailing attempt tojoin the Age ofAviation.

BY PETER EGWUATU

THE Nigerian StockExchange (NSE) has

warned investors not tomiscomprehend the InvestorsProtection Fund (IPF) forinsurance scheme.

The warning is coming afterthe Federal Governmentgranted forbearance packageto the stockbrokers followingthe margin saga with banks.

The shareholders arguedthat the government, via AssetManagement Corporation ofNigeria (AMCON) took overtheir investment withoutcompensating them whilestockbrokers were considered

NSE warns investors not to misconstrue IPF for

insurance scheme

for debt forgiveness.Some of the shareholders

said, “ We equally lost ourmoney through the shares webought so government shouldconsider us and instructingthe NSE to compensate usthrough Investors ProtectionFund.”

The Executive Director,Market Operation andTechnology of the NSE, Mr. Adeolu Bajomo,said, “ IPF isnot insurance policy where

investors can make claim for.The IPF is meant for investorswho genuinely madetransaction with stockbrokersbut such deal was notexecuted or was somehowdefrauded by thestockbrokers.”

Bajomo, noted that margintransaction betweenstockbrokers and banks weregenuine transactions but werenot previously regulated.

According to him,

“Shareholders should notethat whatever investment theymade was risk taken by them. Investment in the capitalmarket is risk bearing and theshareholders are risk takers,but for depositors governmentneeded to protect thembecause they are not risktakers and in any systemicfailure they must beprotected.”

He declared that theprimary responsibility of the

NSE like other exchanges isto provide investors, issuers,and intermediaries withefficient, transparent, andwell regulated market wherecapital is raised.

Continuing, Bajomo,informed that the NSE isoverhauling its trade platformto make transaction on thestock market verytransparent, with variousmarket surveillancemechanism.

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34 — Vanguard, MONDAY, DECEMBER 17, 2012

Appointmentsvicahiyoung@yahoo.com 08033348923

PROMASIDOR Nigeria

Limited, makers of cowbellmilk and other consum-

ables, has named its MarketingDirector, Mr. OnyekachiOnubogu, Commercial Director.

The appointment takes effectfrom January 1, 2013.

Prior to this elevation, he hadbeen the Marketing Director sinceFebruary 2012. Onubogu is anexperienced marketing andbusiness development managerwith cross functional and multi-national living and workingexperience across Africa. Hiscareer has spanned over 18yearsin the sales, marketing, finance

Promasidor names OnuboguCommercial Director and general management

functions.He joined Promasidor in

September 2010 as GeneralManager Marketing. Beforejoining Promasidor, he was anassociate director with Prosperi-ty Capital Management, Nairobiin Kenya from September 2008 toSeptember 2010 as well asmarketing manager with FamilyCare, Kimberly Clark South Africafrom January 2008 to August 2008.

The new Commercial Director,also worked with GuinnessNigeria Plc, as marketing managerfor two years and with Procter &Gamble in Nigeria and SouthAfrica for Ten years.

Onubogu is an Alumnus of theWharton Business School, wherehe studied Advanced Manage-ment Programme in 2012.

UGEP DevelopmentCouncil, UDC, has

appointed Dr. EmmanuelEjukwas, President.

Ugep is a community in YakurrLocal Government Area ofCross River State of Nigeria.

The Lagos wing of UDC,comprising four wards with 80units, elected Ejukwas President,

UDC elects Ejukwas Presidentsaid he is an Obol title holder andan indigene of Ukpankom inIjiman Ward, Ugep in Yakurr.

The new UDC President hasa Certificate of Competency inMarine Engineering at MANOron, Postgraduate Diploma,PGD, in Transport ManagementLadoke Akintola University ofTechnology, LAUTECHOgbomosho, Master inTransport Management, MTM,LAUTECH and Master inBusiness Administration, MBA,Human Resource, LAUTECH.He also possess a PHD inBusiness Administration, USA,Diploma in Law, Criminal Justiceand Administration, University ofLagos, UNILAG,

UniLag Ikeja, Presently 300level student in law, LLB in-viewat the National Open Universityof NOUN, Lagos, he is also afellow of over five charteredinstitutes, a former Chairman ofMaritime Workers Union,

MWUN, Nigerian PortsAuthority, NPA, branch andfounder of the Emmaneh EbriEjukwas EducationalEmpowerment foundation.

Determined to ensure qualityeducation among the Ugeppeople, Ejukwas said that a fundwould be set aside to assistindigent Ugep youths in Lagosin their quest for educationaladvancement. “We havedecided therefore to make acommitment for the sponsorshipof eight WASC/GCE students,two youths from each wardwithin UDC Lagos. By February2013, we would have paid up thetotal sponsorship package foreight SSS 3 Ugep youths withinUDC Lagos,” he said.

The new President waselected along side, Ofem Nkanu,Vice President, Ikpi UjongGeneral Secretary, Kingsley Ubi,Assistant Financial Secretaryand Iquo Oden, Treasurer.

HONEYWELL FlourmillsPlc, has graduated 14

fresh bakers from its trainingschool.

The graduation marked the20th certification ceremony ofthe school, which has so fartrained over 270 master bak-ers in 20 Regular Courses and1 Executive Course since itbecame fully operational in2006. According to Honey-well’s Executive Vice Chair-man, Mr. Folaranmi BabatundeOdunayo, the school was

established to produce welltrained and professional bakersexposed to the latest bakingtechniques and committed tothe highest quality.

They are also to increasebrand loyalty by exposing bak-ers to Honeywell’s finest flourproducts. Represented byMarketing Director, Mr. Ben-son Evbuomwan, Odunayo,assured the graduands that thecompany had remainedfocused on achieving the ob-jective of using the baking

Honeywell graduates bakersschool as a tool to empowerbakers with basic and modernbaking skills.

He noted that beyond thetraining, Honeywell’s foreign-trained bakers also regularlyinteracts with graduands andprovide them with tips andlatest trends on how to improvetheir product offerings andbottom line. A graduand, Mr.Napoleon Ameh, said comingto the Baking School “is not amistake we have been exposedto modern trend and modernbaking technology.”

SEARGENT SundayBadang, a late Police

bomb disposal officer, has re-ceived post humour awardalongside five other officersfor outstanding gallantry.The other five Felix Odogu;Joshua Yusuf; AyubaUsman;Saliu Jibril and PaulNukis.They were honoured by Puz-zles Group in appreciation oftheir dedication and commit-ment to duties.Badang award was receivedby his widow Mrs Badang inAbuja.Late Badang was killed whileusing a bomb scanner toascertain an object suspectedto be Improvised ExplosiveDevice, IED, bomb allegedlyplanted by the Boko Haramsect near the Sultan BelloMosque, Kaduna.Chairman of the company, MrBayo Adeyemo in a briefingto mark the company’s 5th an-niversary said Puzzles grouphad set the pace for othercorporate organisations in thecountry to begin to encourage

Badang, five other policeofficers get award

4,500 staff of Pfizer Nutritionjoin Nestlé Group

Mr. Onyekachi Onubogu

and motivate the police ratherthan castigate them.He said, “We want to set to thepace for corporate orgnisation tomotivate and support theNigerian police, it will be a verygood yardstick for others toemulate”.For Felix Odogu (F/No. 477657),the Puzzles Group chairman saidthe Constable who serves withthe Swift Operation Squad(SOS), exhibited an unparalleledact of gallantry on 23rd October2012 during a police raid on a mil-itant camp in Khana LGA of Riv-errs State. Odogu was the firstperson to scale the wall into themilitant’s stronghold where hecame under a hail of bullets.He was undaunted and defend-ed himself even as othermembers of his team offeredhim cover and reinforcement.The militants’ attack and resis-tance was eventually repelled.After the gun battle, 14 of themilitants were shot dead and 6AK 47 rifles, 444 rounds of liveammunitions and magazineswere recovered.

FOLLOWING thesuccessful conclusion of

the regulatory process in mostm a r k e t s ,Nestlé completed the acqui-sition of Pfizer Nutrition on 30November 2012.

Consequently, the integra-tion process of Pfizer Nutri-tion into Nestlé Nutrition, thatwill see 4,500 employees ofPfizer Nutrition join theNestlé Group, is underway.

Pfizer Nutrition’s strongbrands and product portfolio,together with its geographicpresence, complementsNestlé’s Infant Nutritionbusiness.

85% of its sales are inemerging markets, many ofthem with large, fast-growing

populations. Building on ourgrowth-focused strategy, globalpresence and pioneering re-search and development, thenewly enlarged business willenhance our ability to becomeparents’ trusted partner, offeringthem a wider choice of nutritiousfood to ensure their childrenmake a healthy start to a healthylife.

In Australia, Nestlé’s remedycommitments, which are notmaterial in the overall context ofthe transaction, have satisfied theregulators. The regulatory ap-proval process is still underwayin Kenya, South Africa and fiveLatin American countries. Wecontinue to review our strategicoptions in those countries.

Dr. Emmanuel Ejukwas

Pix l -r; Alex Otti Group Managing Director Diamond Bank Plc ,DrDora Akunyili former information Minister and Pince Nicholas OkoyePresident Founder Anabel Group at the day 2 annual NigeriaLeadership Summit organized by Anabel Group in lagos.Photo;kehinde gbadamosi.

Vanguard, MONDAY, DECEMBER 17, 2012 — 35

“

36 — Vanguard, MONDAY, DECEMBER 17, 2012

Tax Matters

The opportunity for acitizen to know hisown environment, a

deeper awareness of nationalidentity and a sense ofbelonging to a culture are allmajor reasons for developingdomestic and internationaltourism.

Taxation as a Catalyst toTourism Development

Taxation has been found tobe a potent tool for speedingup the process of tourismdevelopment in Nigeria andby other nations all over theworld. Aside from taxationserving as a source ofrevenue for executingdevelopment projects in thetourism industry bygovernment, favourable taxincentives introduced by thegovernment have proven tobe a strong means ofstimulating the activities ofoperators in the tourismindustry.

The federal and stategovernments of Nigeria, intheir effort to develop tourism,have created TourismDevelopment Authoritiescharged with theresponsibility of planning andcontrolling the process oftourism development.

Examples of such projectsare: Development of thecoastline of Lagos Bar Beach,Badagry Beach and LekkiBeach by Lagos StateGovernment; Development ofthe Osun shrine village andthe hosting of the Osun-Oshogbo Festival by OsunState Government;Development of the ArgunguFestival village and hosting ofthe Argungu Festival by KebbiState Government;Development of the ObuduCattle Ranch and the TinapaProject by the Cross RiverState Government etc Allthese projects are beingsubstantially funded withrevenue from governmentrevenue. The Nigeriangovernment has also beensupporting tourismdevelopment through taxincentives. Due to lack ofawareness, full advantage isnot being taken of theincentives. This is why efforthas been made to bring themout in this paper.

Incentives existing inthe tax laws

(1) Creation of a TourismIndustry Development Fundto be listed in the 5

th

Imperatives of taxation on tourismdevelopment in Nigeria (1)

,

,

Schedule to the CompaniesIncome Tax Act (CITA), CapC 21, LFN 2004 as amended.The statutory basis for theabove lies under Section 25 ofCITA 2004 as amended. (2)Investment Tax Credit: Theapplicable statute on thisincentive is Section 26(3) of

CITA 2004 as amended.Section 26 (3): “Companiesand other organisationsengaged in research anddevelopment activities forcommercialisation shall be

allowed 20% investment taxcredit on their qualifyingcapital expenditure for thatpurpose.” A lot of companiesin different sectors of theeconomy have been enjoyingthis benefit. The incentive isalso available for tourismindustry operators to enjoy.

(3) Deduction of reservemade out profit for researchand development Thestatutory ground for thisincentive lies under Section26 of CITA 2004 as amended.This is a good incentive fortourism industry operators toenjoy.

(4) Incentive for Reservemade out of profit for tourismdevelopment

25 % of incomes derivedfrom tourists by hotels inconvertible currencies areexempted from tax providedsuch income are put in areserve fund to be utilised

within five (5) years forexpansion or construction ofnew hotels or facilities usedfor development of tourism.

(5) Low Tax TreatyConcession Rate of 7.5percent for foreign investorsfrom treaty Nations.

This incentive wasintroduced as part of the 1999Fiscal Policy. It is applicableto investment income such asroyalty, interest, rent anddividend earned by Non-residents who are citizens oftreaty nations (i.e. countrieshaving Double TaxationAgreements with Nigeria)which are to liable to

withholding tax deduction at7.5 (%) percent. A rate of 10(%) percent is applicable tonon-residents who arecitizens of Non-Treaty nations.Foreign investors in thetourism industry from treatynations can enjoy this.

(6) Accelerated CapitalAllowance Scheme

Schedule 2 to the CITA givesthe details on this. Tourismcompanies which incurqualifying capital expenditurein doing their business areentitled to enjoy capitalallowances. Unrelievedcapital allowances areallowed to be carried forwardindefinitely. This is availableto be enjoyed by both foreignand local investors in theTourism industry.

(7) Loss Relief : Theapplicable statute on this isSection 31 (2) of CITA 2004.The loss relief is subject to four(4) year carry forward limit.This is also available for alllocal and foreign Tourismindustry operators to enjoy.

(8) Repatriation of NetEarnings Outside Nigeria by

Foreign InvestorsSection 101 Subsection 5 of

CITA is the relevant provisionon this. There is opportunityfor foreign investors in theTourism industry and otherindustries to repatriate theirnet earnings outside Nigeriaimmediately the tax obligationon the income has beenfulfilled. This is part of whatthe International Tax Units ofthe Large Taxpayers Offices of

Federal Inland RevenueService handle. Foreigninvestors in the Tourismindustry are free to takeadvantage of this.

(9) National Tax Policy andTourism Industry

It is pertinent to mentionthat with the approvedNational Tax Policy, it isconsidered imperative toaddress the issue of multipletaxation and introduce moresector focused but time boundincentives to support thetourism industry and otherindustries in Nigeria.Government will be motivatedto give more incentives if theoperators in the Tourismindustry are prepared to betax compliant by filing theirtax returns and paying theirtaxes as and when due.

ConclusionIt is obvious from the

foregoing that taxation is anessential catalyst to thedevelopment of tourism inNigeria. The relationshipbetween the two should be amutual one. If governmentsupports tourism developmentwith favourable tax regimewhich will lead to greateroutput and income, thetourism industry will in turnsupport government withmore revenue throughpayment of more income tax,personal income tax, valueadded tax etc. This type ofsymbiotic relationship whereone reinforces the other isgood for the nation.

Calabar Festival

The federaland stategovernments ofNigeria, intheir effort todeveloptourism, havecreated TourismDevelopmentAuthoritiescharged withtheresponsibility ofplanning andcontrolling theprocess oftourismdevelopment

CMYK

Vanguard, MONDAY, DECEMBER 17, 2012 — 37

Aviation

Managing Director ofthe Nigerian Airspace

Management Agency(NAMA), Engineer MaziNnamdi Udoh, hasdebunked the claim by AirTraffic Controllers that theNigeria Airspace is unsafe forpilots flying within thecountry.

Speaking at the agencyheadquarters in Lagos,Engineer Udoh reassuredNigerians, all the airspaceusers, pilots and otherstakeholders that the Nigeriaairspace is safe for flightoperations. He said “forrecord purposes, NAMAwants to use this opportunityand this platform to reassureNigerians and all ourairspace users, pilots andother stakeholders that theairspace is safe and willalways be safe”

Earlier, there was a mediareport,not Vanguard, that theNigerian airspace isgradually becoming a

Unsafe Airspace: NAMA debunks claim by Air Traffic Controllers

...says Nigeria airspace is safe for flight operationsnightmare for pilots flyingwithin the country asindications shows that theradio communications onsome routes may havecollapsed.

Engineer Udoh furthersaid that if the claim that thecountry’s airspace was unsafewas from any of the Air TrafficControllers, then it meansthat such Air Traffic Controllerhad not been working in thelast three months, stressing

that he wonders howaeroplanes could have beenflying in the last three monthsyet they say, the airspace wasunsafe.

“If they are quoting AirTraffic Controller, it meansthat, the Air TrafficControllers has done no workin the last three months andhe is not supposed to be paidand how do aeroplanes fly inthe last three months” heasked.

Engineer Udoh howeverpointed out that the onlychallenge that wasconfronting the agency at themoment was its long rangefrequency of communicationthat it has just introducedaffirming that there was nocontrol tower that has a singlechallenge in the country atthe moment.

“Now the simpleexplanation is this, you willnot say that you have total

In a bid to ease the normalpassengers’ rush

experience every Christmasand New year seasons at thevarious airports across thecountry, the Federal AirportAuthority of Nigeria ,FAAN,has appealed to Nigerianpassengers to make adequatepreparation for the season.

General Manager

DHF today, what were youdoing before, we talk toLagos, we talk to Benin, wetalk to Asaba, we talk to Port-Harcourt or Enugu .We calledit point to pointcommunication now in Lagoswith one frequency you cancommunicate until you aretransferred to Port-Harcourtthat is just the meaning ofthat but because of congestionyou have to separate East andWest of that sector.

FAAN appeals to passengers against rush at festive seasonCorporate Communications ofFAAN, Mr. Yakubu Dati whomade the appeal said that airtravellers should make earlypreparations for their travel toavoid the rush that usuallytake place during theseperiods.

Mr. Dati further noted thatduring the festive seasonsairports across the country

usually witness a hugevolume of passenger trafficdue to the increase in localmovements of passengerstravelling for the holidays aswell as those returning fromdifferent countries overseasfor the same purpose.

He said “passengers shouldleave home early during these

festive periods in order toconfirm their tickets andcomplete other pre-boardingformalities in good timebecause of the heavyvehicular movements onaccess roads close to theterminals that may causesome passengers to miss theirflights”

Stories by LAWANI MIKAIRU& DANIEL ETEGHE

Stories byPRINCE OSUAGWU

38 — Vanguard, MONDAY, DECEMBER 17, 2012

BRIEFS

ICT

Blame game:N20 billion interconnectdebt pitches telcos againsteach other

A Nigerian CommunicationsCommission, NCC,organised regulatory forumon high incidence ofInterconnection debts in thetelecom sector, at theweekend, stirred the hornetsnest in the perceived N20billion debt, with operatorstrading blames on why thedebt rose so high. There were also strongarguments over how much,the operators owe eachother, as well as means ofsettling the debts since manyoperators in the CodeDivision Multiple Access(CDMA) segment who areheavily indebted to theirGlobal System for Mobilecommunication (GSM)

L-R: Chief Risk Officer FirstBank - Mrs. Remi Odunlami; Former Minister of Foreign Affairsand Chairman of Bestman Games - Mr. Odein Ajumogobia, Honorable Minister of ForeignAffairs - Gbenga Ashiru, CEO of Bestman Games - Mrs. Nimi Akinkugbe, His Excellency,Governor of Lagos State - Babatunde Fashola and his wife at the Official launch of the City ofLagos Edition of Monopoly at the City Hall, Lagos recently.

A NigerianCommunicat ionsCommission, NCC,

organised regulatory forumon high incidence ofInterconnection debts in thetelecom sector, at theweekend, stirred the hornetsnest in the perceived N20billion debt, with operatorstrading blames on why thedebt rose so high.

There were also strongarguments over how much,the operators owe each other,as well as means of settlingthe debts since manyoperators in the CodeDivision Multiple Access(CDMA) segment who areheavily indebted to theirGlobal System for Mobilecommunication (GSM)counterparts are almostalready extinguished.

The debts which are alreadyaffecting the growth of thetelecom industry have beensubject of discussion atdifferent levels ofengagements between theoperators and government butthe regulator had decided tomake it a public discussionwith the forum. Vanguardleant that majordisagreements at some ofthose meetings have beenallegations of falsification ofbills and imbalance in theinterconnection ratio betweenthe CDMA operators and theirGSM counterparts.

This has most times resultedin arbitrary disconnectionswhich worsen the ailingservice quality of telecomofferings in the country.However, one of resolutionsat the forum by both Industryanalysts and legal experts thatmediation and arbitrationshould be explored before anetwork is disconnected.

It was also suggested thatmigration of traffic and debt

Blame game:N20 billion interconnect debtpitches telcos against each other

settlement through aninterconnect clearingexchange, was verynecessary.

Speaking on the solution tothe problem in paper titled“What is the solution tointerconnection indebtednessin Nigeria”, Partner, Banwoand Ighodalo, Mrs AbimbolaAkeredolu said thatinterconnect indebtedness inthe Nigeria’s telecoms sectoris currently put at about N20billion. However, she alsoadmitted that approximately

60 percent of these debts aredisputed as many operatorsalleged that the figures wereinflated by competitors’ faultybilling systems. Akeredolusaid the large volume of thedebts was often linked tosharp difference in revenuesharing ratios between mobileoperators and fixed wirelessoperators.

According to her, “thefeeling in the industry is thatif the situation persistswhereby GSM firms are betterfavoured than the fixed andwireless operators, such asituation will continue to leadto interconnectivity debt, orbreakage. “In practice, the

revenue sharing ratiobetween mobile and fixednetwork is 14/6 and 12/8depending on which networkis termination or originatingthe call. Fixed and landlineoperators are asking thatparity be introduced withgrowing argument that allnetwork face equalchallenges ”, she stated.

Meanwhile, Globacom’sRegulatory Affairs Manager,Tunde Aremu admitted that aN20 billion interconnect debtwas possible, urging the NCCto give urgent intervention tothe issue of interconnectiondebt. Also, senior manager,regulatory affairs, MTN,Oyeronke Oyetunde,corroborated the claim,adding that huge interconnectdebts running into billions ofNaira was currently plaguingthe sector. She also urged theregulator to intervene beforethe issue gets out ofhand. Other telecomsanalysts and legal luminaries,who spoke at the forum,agreed that mediation andarbitration should be exploredbefore a network isdisconnected as well asmigration of traffic and debtsettlement through anInterconnect clearingexchange. They agreed thatNigerian CommunicationsCommission (NCC) has amajor role to play in ensuringthe stability of the industry.

Executive Vice Chairman,NCC, Eugene Juwah, hadearlier admitted that the issueof interconnectionindebtedness has emerged asa major source of conflict andchallenge, which has thepotential of destabilizing thesuccesses recorded in theindustry.

NigComSat kicks off e-voting campaign with NSE elections

the Nigeria’s telecoms sectoris currently put at about N20billion. However, she alsoadmitted that approximately60 percent of these debts aredisputed as many operatorsalleged that the figures wereinflated by competitors’faulty billingsystems. Akeredolu said thelarge volume of the debtswas often linked to sharpdifference in revenue sharingratios between mobileoperators and fixed wirelessoperators.According to her, “the feelingin the industry is that if thesituation persists wherebyGSM firms are betterfavoured than the fixed andwireless operators, such a

counterparts are almostalready extinguished. The debts which are alreadyaffecting the growth of thetelecom industry have beensubject of discussion atdifferent levels ofengagements between theoperators and governmentbut the regulator had decidedto make it a public discussionwith the forum. Vanguardleant that majordisagreements at some ofthose meetings have beenallegations of falsification ofbills and imbalance in theinterconnection ratiobetween the CDMAoperators and their GSMcounterparts.This has most times resultedin arbitrary disconnections

which worsen the ailingservice quality of telecomofferings in the country.However, one of resolutionsat the forum by both Industryanalysts and legal expertsthat mediation and arbitrationshould be explored before anetwork is disconnected.It was also suggested thatmigration of traffic and debtsettlement through aninterconnect clearingexchange, was verynecessary. Speaking on the solution tothe problem in paper titled“What is the solution tointerconnection indebtednessin Nigeria”, Partner, Banwoand Ighodalo, Mrs AbimbolaAkeredolu said thatinterconnect indebtedness in

First Bank of Nigeria,FBN is making massive

investment in inculcatingfinancial literacy in youthsthrough the sponsorship ofLagos city Monopoly gamewith Bestman games.

The games according to thepartners will give the youths ahead start in the quest for afulfilled future and facilitate theemergence of astute managersof Nigeria’s economy in future.

Speaking at the City of LagosEdition of the Monopoly BoardGame, Mrs. Head, Marketingand CorporateCommunications, First Bank ofNigeria Limited, Folake Ani-Mumuney, said that the Bankbelieved in the project as a vitalplatform for instilling financialliteracy and personal financediscipline in youths.

For her, “FirstBank supportsthe Lagos Monopoly projectwhich Lagos State Governmenthas adopted as a tool to teachfinancial literacy to students inall public secondary schools.We believe that it presents ahuge platform for exposing ouryouths to the rudiments offinancial education therebylaying a sound foundation foreconomic prosperity inNigeria,”.

She said the Bank washappy to work with BestmanGames on the initiative that alsopromises to be a powerful toolfor promoting family values andenhancing the nation’s culturalheritage as youths can relateto the familiar streets,neighbourhoods and leadingbrands captured on the boardgame.

FirstBank partnersBestman games inLagos cityMonopoly

CMYK

Vanguard, MONDAY, DECEMBER 17, 2012 — 39

Advertising, Media & Marketing

BRIEFS

Earlier days childrenwere taught the habitof saving by their

parents. Gifts in form ofmoney from uncles, brothers,during birthdays, familyfriends are usually droppedin piggy banks which are keptat home, with time all thatvanished with the advent ofcontemporary bankingsystem.

For this reason, Access Banklaunched the ‘Back to School’campaign to encourage andpromote savings cultureamongst its target audienceby asking that a minimumbalance of N50,000 ismaintained on the Accountduring the duration of thecampaign that ends onJanuary 31, 2013. With this,account holders immediatelyqualify for ‘Dora brandedLunch Box’. This scheme isneither a raffle draw nor apromotion, but a reward forcustomer loyalty.

*To replace existing decoders

Given the significanceof the fundamentalhuman rights of

Nigerians, the over 44 millionTelevision viewers and partlyPay TV subscribers are bynow supposed to be fullyaware of the global reality thatin the next 2 years theircurrent analogue Pay TVdecoder and television setswould no longer be relevantunless they have undergonetransition to the digitalplatform.

But all that will be a ruse,because experts have said itwill not happen to decodersand television sets asinsinuated in some quarters,but that analogue decodersmay not be able to catchcertain station on the digitalplatform.

Before now, Nigeria had set2012 for its digital terrestrialTV, DDT switch over, but thiswas not realised as a result ofthe country ’s shoddypreparation, thus the countryis looking up to 2015.

Ahead of the date, however,and switch over, DigitalTerrestrial Technology (DTT)service provider in Africa,StarTimes/NTA launched theDVB-T2 technology, the latestmodern Pay TV decoder inNigeria.

The company at a pressbriefing unveiling theequipment before newsmensaid the major advantages ofthe DVB-T2 is its ability tooffer more educative, newsand entertainment because itcontains more channels as onefrequency on DVB-T2 has thecapacity for 25 channels andcan be expanded further, with

STORIES BYPRINCEWILL EKWUJURU DIGITAL BROADCASTING:

StarTimes deploys DVB- T2technology

lagos presently having threefrequencies.

With this, Nigeria hastherefore joined othercountries like Kenya, Uganda,Mozambique, and Tanzaniawhere the StarTimesintroduced the technology.

Speaking,Mr. BayoAdebayo, Senior Adviser toStarTimes, said StarTimesmission is to ensure that everyhome in Nigeria enjoysaffordable digital

entertainment backed by itscollaboration with NTA, astrategic partnership that willhelp Nigeria in actualising its2015 digital transitiondeadline. “StarTimes willleverage on the existingplatform on NTA to providequality digital service to everyhome in Nigeria,” he said.

He said that havingStarTimes DVB-T2 decoderwith up to 75 channels ofgreat sport, music, movies,

news and lots more is a visioncoming to reality, as Nigerianscan now confidently migrateinto digital space withStarTimes as it provides themwith the latest technology inDTT operation that can giveup to 75 channels and qualitydigital entertainment.

For customers who have theold technology, Adebayo saidcustomers who recharge fortwo months can have accessto the new technology.

From Left: Ejike Izejiobi, TM, Product & Channels Mgt; Gbubemi Babanto, Team Lead, Product& Channels Mgt; the winner, Miss Moriola Olatunji in company of classmates; Mr Olatunjiand Oluyemisi Vese, Retail Sales, Ikota Branch.

Children! Which bank takes care of yourfuture? * As Access Bank target kid customers

Interest rate of Access EarlySavers, product of Accessbank has competitive interestrate. It offers exclusivemonthly Dora the Explorermerchandise when theaccount is opened with aminimum of N5,000 andsubsequently, minimummonthly deposits of N10,000,opportunity to attendexclusive Access Early Saversparties and exclusivemembership of Access EarlySavers Club.

The bank said theintroduction of Access BankEarly Savers Account hadsignificantly transformedchildren financial productoffering in Nigeria with theinclusion of fun andexcitement in the total offeringfor children.

The partnership withNickelodeon, a global familyentertainment brand, to driveits financial inclusion strategyfor kids, parents and

educators has createdimpressive experience forNigerian children throughinteractions with Dora, theExplorer and Boots, its friendat several parties facilitated byAccess Bank andNickelodeon.

On the initiative, theDivisional Director, RetailBanking Division, AccessBank, Mr. Obinna Nwosu,had said, “Account holderswith a minimum balance ofN50, 000 on their account for30 days during the campaignautomatically qualify toreceive the co-branded giftitems.”

“The campaign is part ofAccess Bank’s resolve topromote continued financialresponsibility andindependence amongst theyounger generation and atactic for ensuring thatchildren, parents andguardians do not relent intheir efforts towards achievingfinancial independence.”

A parent, Mrs. JosephineNwanne, said, “It’s not just toopen account for your kids butto do so with a bank that canoffer you the best interest rateon your deposit.Apart fromhigh interest rate, there is theneed for you to explore otherfeatures or benefits that thebanks offer before you canopen account for your wards.”

Vanguard investigationshows that nine banks offerkids accounts products. Bankssuch as Union bank launchedthe Union Kiddies, GTB SmartKids Save (SKS) is designedto create banking awarenessin children and encourage asavings culture from an earlyage.

Diamond Kiddies Accountfrom Diamond bank isanother product whichenables customer to startsaving on behalf of theirchildren aged under 18 years.

Skye Rainbow account is achildren savings accountproduct of Skye Bank.

Jonnie Walker, analcoholic beverage from

the stable of Guinness NigeriaPlc said it laid its weightbehind 5

th edition of Mode

Men Award to keep the awardgoing and to increase thebrand’s equity in the market.

Speaking at the event, Mr.Seni Adetu, ManagingDirector and Chief Executive,Guinness Nigeria Plc said thatJohnnie Walker and ModeMen have a lot in common.“Johnnie Walker identifieswith Mode Men magazine’sMen of the Year Awardsbecause of shared values theyboth recognize and celebrate.Here this evening, respect isbeing shown to men who arecommitted to a cause – thecelebration of theirachievements so far issomething that is done toencourage them further in thecontinued journey ofachievements.”

Clinching “The StridingMan” award, which is solelysponsored by Johnnie Walker,was Jason Njoku, the founderof iROKO TV. Njoku becameThe Striding Man of 2012 byvirtue of his approach to life’smany challenges.

Jonnie WalkersponsorsMode Awardto raise equity

Promasidor Nigeria,makers of Loya milk has

chosen Michael CollinsAjereh (aka Don Jazzy) as theface of its Loya Milk brand,as it begins promo

At the unveiling ceremony,the company also commencedan online based promo to giveconsumers an opportunity tofeature in a Loya TVcommercial with Don Jazzy.

The Commercial Director,Promasidor Nigeria, Mr.Kachi Onubogu whiledisclosing reasons forselecting Don Jazzy as brandambassador for Loya Milk,said a brand ambassador willhelp the brand further reachits target audience.

“Our choice of Don Jazzy asbrand ambassador is drivenby the essence of the brandand its proposition to its targetaudience. Loya PremiumMilk is a brand with class andtaste; it is a brand withdistinction and excellence, abrand that constantly rewardsits loyal consumers. “

Don Jazzy nowface of Loyamilk

BY ADABA OLANIYI

40 — Vanguard, MONDAY, DECEMBER 17, 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 CorrespondentMichael Eboh - Capital Market ReporterYemi Adeoye - Capital Market ReporterOscarline Onwuemenyi - Energy ReporterFranklin Alli - Industry/Agric. ReporterAmaka Abayomi - Money market ReporterEbele Orakpo - Energy ReporterIfeyinwa Obi - Maritime Reporter

CONTRIBUTORSPrincewill Ekwujuru - Media/MarketingNaomi Uzor - IndustryProvidence Obuh - Micro FinanceLAYOUT - Graphics Department

Email:lesleba@lesleba.com, lesleba@gmail.comBlog page:www.lesleba.com/blog2Website: www.lesleba.com

Tel:0817 002 3569

Business Economy

,

,

The other day, a friendnarrated a story, whichI found stranger than

fiction; the story related to thetravails of a family who lost asuccessful and illustriousbreadwinner, who,incidentally, died without aWill. The family’s elderswere consequently entrustedwith the responsibility ofefficiently managing theestate of the deceased.

In spite of the huge credit

balances, lucrative estatesand other profitable incomegenerating businesses, theElders’ Council thought itwise to consolidate theincomes from theseinvestments as savings forfuture generations! Consequently, rather thanspend from the robust incomestreams available, the Elders’Council, in their wisdom,gleefully funded theirexpenditure by borrowing atover 15% interest rate fromtheir bankers, while theirsavings earned paltry yields,often below 5%.

Predictably, the oppressive

interest charges rapidlygulped up the erstwhileflourishing income streamsuntil the mortgaged estateswere systematically acquiredby the banks as repayment formounting debts. Within a fewyears, the once prosperousbusiness became bankruptand the family was reducedto penury.

I wondered aloud to my

friend, whether this storyrelated to a family made upof stark illiterates, but I wassurprised when he confirmedthat the Elders’ Councilcomprised a team of reputedprofessionals, who wereeducated in some of the best

A Fool and hisMoney…

universities in the world! When my friend took his

leave, I quietly wondered ifthe story I had heard couldever be true; however, laterthat evening, it occurred to methat as outrageous as it mayseem, in reality, the story ofthis tragic family appearscongruent with the story ofour country, Nigeria!

Nigeria is, undoubtedly,

abundantly blessed withresources; for example, crudeoil revenue alone oftenexceeds projected annualspending. Curiously,managers of our economyannually deliberatelyunderstate projected revenuewith very conservativebenchmarks for crude oilprice and output. Government subsequentlyproceeds to finance theanticipated ghost deficits byborrowing at oppressive ratesoften above 15%, whilesimultaneously consolidatingrevenue ‘surpluses’ assavings deposits with yieldswell below 5%, particularlyfor dollar or euro denominateddeposits!

It appears to be of no

consequence that the samebanks that receive ourincomes and deposits for littleor no yield are predominantly

the same sources, which fundour government’sborrowings. Pray, whyborrow back your own moneyat excruciating costs?

These banks, which

currently post hundreds of

billions of naira profits, arethe same banks, who werealso beneficiaries of over N5tngovernment funding in thelast three years, according torecent reports from AMCON;meanwhile, revitalization ofthe real sector has remainedjust a promise!

Despite the huge

borrowings to fund budgetghost deficits, the ‘surplus’income is regularly houndedinto a so-called Excess Crude

Account or alternativelyconsolidated in a savingsaccount designated as aSovereign Wealth Fund; theyield from either account isprobably below 3%. Incidentally, the constitutiondoes not recognise either ofthese accounts, which aredefinitely discordant in a trulyfederal constitution.

Instructively, the funds

consolidated in both accountsmay ultimately becomeinadequate for the liquidationof the rising debts, whichwere unnecessary in the firstplace, as we generatedadequate income to haveforestalled these humongous

government borrowings! So, as it is with the

misguided recklessness of theElders’ Council in our earlierstory, so it is with themanagement of the Nigerianeconomy. In spite of ourfortuitous resourceendowments generating moreincome than projected in ourannual budgets, governmentremains committed to astrategy of borrowing atexcruciating rates of interestto fund budget ghost deficits,

which are deliberatelyinstigated by understatingprojected revenuesannually. It is no wonder,therefore, that despite theseincreasing ‘surplus’ savings,there is deepening povertyand very little on the ground,nationwide, to show for ourbourgeoning debt profile. Meanwhile, the managers ofour economy would grabevery available opportunity toextol the wisdom of a fiscalstrategy, which will take usnowhere!

Nevertheless fortunately,

all is not lost, as the NationalAssembly constitutes asuperior authority over thepowers of the economicteam. Indeed, in May 2008,in an article titled “NationalAssembly Fiddles as DebtBurden Cripples”, this writerwarned the NationalAssembly to arrest the rapidlyincreasing debt accumulationby the Debt ManagementOffice and the Central Bank;regrettably, the NationalAssembly remained reticent.

However, now that the

cancerous impact of recklessdebt accumulation hasbecome very glaring, thecurrent legislature wouldhave failed our nationwoefully if they do notimmediately stop allgovernment borrowings. It isnecessary that we firstdetermine the reason foraccumulating an oppressivedebt burden, which would beavoidable if current incomestreams are used to fundghost deficits instigated bydeliberate understatement ofannual projected revenues.

SAVE THE NAIRA, SAVE

NIGERIANS!!

Predictably, the oppressiveinterest charges rapidlygulped up the erstwhileflourishing income streamsuntil the mortgaged estateswere systematically acquiredby the banks as repayment formounting debts

Delta said it will buy almosthalf of Virgin Atlantic for

$360 million as it seeks abigger share of the lucrativeNew York-to-London travelmarket.Delta plans to form a jointventure with Virgin Atlantic,where the two airlines wouldshare money from the flightsoperated under thepartnership. In order tocoordinate the schedules ofthe two airlines, they’ll needantitrust approval from U.S.and European regulators.Landing rights at London’sHeathrow Airport are limited.So buying part of VirginAtlantic is a way for Delta toget a bigger piece of the travelmarket between Heathrowand the U.S. Currently, Deltahas fewer flights from theNew York area to Heathrowthan either American orUnited, its main U.S.competitors. If the plan is

Delta buys 49% stake in Virgin AtlanticBY PRINCE OSUAGWU

approved, Delta and VirginAtlantic would continue to flybetween the U.S. and theU.K., as they do now.However, they would marketthe flights together and sharethe costs and profits.Delta said it expects to have31 round-trip flights betweenthe U.K. and North Americaon the busiest days, includingnine round-trips a daybetween Heathrow and JohnF. Kennedy InternationalAirport in New York andNewark Liberty InternationalAirport in New Jersey.Heathrow is dominated byBritish Airways, which worksclosely with AmericanAirlines. They have a total of14 flights a day in eachdirection between JFK andNewark and Heathrow.“Our new partnership with

Virgin Atlantic willstrengthen both airlines andprovide a more effectivecompetitor between NorthAmerica and the U.K.,particularly on the New York-London route, which is thelargest airline route betweenthe U.S. and Europe,” DeltaCEO Richard Anderson saidin a prepared statement.Delta is aiming to have thejoint operation running by theend of 2013.Sir Richard Branson will stillown more than half of VirginAtlantic, which will continueto fly as a separate airlineunder its own name. In 2000,Branson sold a stake toSingapore Airlines for 600.3million pounds, or about $960million at the time.That’s the share that Deltaintends to buy. Virgin

Atlantic has struggled withlosses and said in 2010 that itmight be interested in some

kind of tie-up with anotherairline. British media reportsat that time said that Deltawas interested. Shares ofAtlanta-based Delta Air LinesInc. rose 16 cents to $10.30in premarket trading.