CMYK

JUNE 25 , 2012

Continues on page 18

*Partnership that works: From Left: Mr Kehinde Durosinmi-Etti, Managing Director, Skye Bank, Mrs Funke Osibodu,Managing Director, Union Bank, Dr Alex Oti, Managing Director, Diamond Bank, and Mr Michael Spiegel, ManagingDirector/Head, Trade Finance & Corporate Cash Management, Deutsche Bank at a breakfast meeting in Lagos hostedby Deutsche Bank for banks’ chief executive officers.

NAICOM pressurises co-insurersto pay compensation on moralsuasion•As local lead insurer fails to remit premium

National Insurance Commission(NAICOM) has mounted pressure onlocal insurers that co-insured the ill-fated Dana aircraft which crashed atIju-Ishaga on Sunday, June 3, 2012,to pay compensation to families ofthe victims based on moral suasion.

This development, according toFinancial Vanguard’s findings, is

BY FAVOUR NNABUGWUAND ROSEMARY ONUOHA

hinged on the fact that the local leadunderwriter is yet to remit the fullportion of the premium that is dueto the co-insurers. The co-insurersare however being persuaded to payso as to protect the image of theindustry, which had being plaguedwith nagative public perception overthe years

Dana Airline and insurancecompanies, both local and foreign,agreed at a premium of $1,448,206,an equivalent of N225.92 million for

the insurance of Dana fleet of aircraft.The deal which was brokered by AonPlc saw Lloyds of London taking 70per cent of the risk which amounts toN158.14million ($1,013, 745) while30per cent of N67.78million wasretained in the local market. For thelocal market, Prestige Assurance Plcis the lead insurer with 8 per cent ofthe risk. Leadway Assurance got 7 percent, NEM Insurance had 5 per cent,Sterling Assurance got 3 per cent;Continental Reinsurance got 3 per

cent, Aiico had 2 per cent whileStandard Alliance got 2 per cent.

The premium, according toFinancial Vanguard’s investigations,was paid to Prestige Assurance whichremitted the 70 per cent due to Lloydsbut is yet to remit the full 30 per centpremium of N67.78 million to the localco-insurers. This however hasgenerated concerns as to the legalityof honouring the claims made on them

CURRENCY BUYING CENTRAL SELLING

CBN Exchange rate as at 22/06/2012

91.42 +2.19

80.08 +1.88

155.65 -3.15

2,113.00 -34.00

19.75 -1.04

CFA 0.281 0.291 0.301

KRONER 26.1448 26.2292 26.3136

EURO 194.415 195.0426 195.6701

POUNDS 241.6905 242.4707 243.2508

RIYAL 41.3023 41.4356 41.5689

SDR 234.6115 235.3688 236.1261

FRANC 161.8093 162.3316 162.8539

DOLLAR 154.9 155.4 155.9

WAUA 235.3924 236.1522 236.912

YEN 1.9285 1.9348 1.941

RENMINBI 24.3338 24.4128 24.4918

DANA PLANE CRASH:

18 — Vanguard, MONDAY, JUNE 25, 2012

Cover Story

CMYK

Continues from page 17

,

,

as a result of the Dana aircrash.

Prestige AssuranceM a n a g i n gDirector, Dr. Anand PrakashMittal, who spoke toFinancial Vanguard on phoneFriday, said that the Danainsurance account is acombination of many risksand is still an on goingaccount. According to him,“The Dana insurance accountis an on going one and theyear has not ended. But forwhatever it takes, we aregoing to pay compensation toall the victims” No matterwhat anybody says or therumour making the rounds,we are not perturbed. Whatwe are sure of is thatcompensation will be paid”There are so many risks in theDana insurance account andis still an ongoing accountmore so, the insurance yearhas not ended” He declinedto be categorical on theremittance of premium to co-insurers, insisting thatcompensation would be paidno matter what.

Financial Vanguardfindings further revealed thatDana Airline had reached anagreement with all theinsurers involved to pay thetotal premium in fourinstallments as follow: thefirst installment on 13thFebruary, 2012; secondinstallment on 13th of May;third installment on 13th ofAugust and the forth and lastinstallment on 13th ofNovember, 2012. The airlinehad just paid the secondinstallment when calamitystruck. Some of the co-insurers which have theirnames enlisted in the accountare yet to sign the contractagreement with the leadinsurer before the disaster

happened that fateful day.Insurers said that the

Combined Single Limits isestimated at $350 million(N55.3 billion). A combinedSingle Limit, CSL, coverageis a combination of publicliability and passengerliability coverage into a singlecoverage with a single overalllimit per accident. This typeof coverage provides moreflexibility in paying claims forliability, especially ifpassengers are injured, butlittle damage is done to thirdparty property on the ground.

Lloyds of London, havingreceived its premium asagreed, accepted that itwould pay adequatecompensation to the familiesof the victims of the crashedplane. Financial Vanguardlearnt that international lossadjusters who arrived thecountry four days after thecrash had releasedpreliminary report andrecommended initial claimspayment of $7.5million(N1.19 billion) on the Danamishap. Mr. Yomi Oshinkoyaof Lloyds stated at a jointnews conference addressedby officials of the Lagos Stategovernment and Dana Airlinethat compensations would bepaid to the victims’ familiesaccording to aviationstandards, adding thatpeople should not be afraidthat the accident occurred inNigeria. He assured all thefamilies of the victims that theairline was well insured andwould live up to its liabilitybidding in this regard. Hesaid that the compensationwould be for the passengerfamilies and those on theground.

However, the local front isundergoing somecontroversies on the groundthat their own part of the dealhas not been fully met.

Vanguard however gatheredthat the National InsuranceCommission, NAICOM, hasafter its meetings with theseven co-insurers beenmounting pressure on theunderwriters to save theimage of the industry bysettling the claims even whenthe insurance companies areyet to decide on whether topay or not.

NAICOM had summonedthe seven local insurancecompanies to an emergencymeeting to discuss their planson how and when to payclaims to the families of thevictims. NAICOM had eveninitiated collaborative movesbetween it and the NigerianCivil Aviation Authority,NCAA, which gave birth tothe establishment of NCAA/NAICOM Committee onAviation Insurance.

Commissioner forInsurance, Mr. Fola Daniel,said that the committee hadsince been actively serving asa forum for exchange of ideasand for articulating solutionsto overcoming challengesregarding aviation insurancein Nigeria.

Stakeholders react For some stakeholders in

the insurance sector, theimage of the sector is at stakeonce again and all eyes areon insurers to see how theissue is resolved. Although itis agreed that themanagement of Dana Airlinehas some issues to contendwith, these stakeholders areof the opinion that insurersshould rally round to settlethe claims so as not to furtherrubbish the image of thesector.

President of the CharteredInsurance Institute ofNigeria, CIIN, Mr. Wole

DANA PLANE CRASH: NAICOM pressurises local

co-insurers to pay compensation on moral suasion

Continues on page 24

African Business of the Year Category was won by the INNOSON Group.,Nigeria. Presentationwas made at the Grosvenor House,Park Lane,London. June 7,2012 From left to right. Mr.Emeka Ugwu-Oju, Vice Chairman,BusinessinAfrica Events UK Ms Evelyn Oputu,CEO,Bank ofIndustry. Chief Innocent Chukwuma OFR,Chairman Innoson Group of Companies Mr. Jean-Louis Ekra, President,African Export-Import Bank

The Minister of State forEducation, Chief

Nyesom Wike, has said theFederal Government willinvest in technical andvocational education to createabout one million jobsthrough collaboration witheducational institutions inTaiwan, South Korea andUnited Kingdom to createaccess to functional vocationaleducation for Nigerianyouths. He says the focus isto use technical andvocational education to createjobs for Nigerian youths

The World Bank advocatesa “three-lens approach” toyouth empowermentinvolving

• Working for youth asbeneficiaries

• Engaging youth aspartners

• Supporting youth asleaders

According to the WorldBank, policymakers shouldframe correct social as well aseconomic policies based onthese “youth lenses”. To bringthis about requires thefollowing broad initiatives:

Changing the PolicyEnvironment: Thepolicymakers need to expandaccess to and enhance thequality of education andhealth services. Thepolicymakers need to giveyoung people a voice toarticulate the kind of requiredassistance and theopportunity to participate inthe delivery of assistancepolicies.

Develop Youth Capabilities:To help the young people tochoose the best from theseopportunities, policymakersneed to develop the youth’scapabilities. To do this, thepolicymakers first have torecognize the youth of theircountry as a strategicresource and vital decision-making agents. They alsoneed to make sure that theyouth are well-informed,sufficiently resourced andjudicious while making theirdecisions.

Provide Second Chances:The policymakers have toprovide the young peoplewith an effective systemwherein they should grantthe youth with secondchances. For this, they have

Youth restiveness andunemployment in Nigeria:

The way out (part 5)

to implement targetprograms that would providehope to the younger peopleas well as provide themincentives to positivelyreshape their destinies.

Increase Investment inYouth: If done properly,investment in youthespecially during the fivelife transitions of youth willdevelop, safeguard and putin place proper humancapital. As the youthundergo each transition fromlearning, work, health,family and citizenship,public policies andinvestments in youth candetermine their directionsand can prevent the youthfrom going off-trackespecially when there areeconomic crises and markets

do not provide sufficienteconomic opportunities.

Create a ProductiveWorking Life: Once youthobtain the necessary skills, itis important to deploy thoseskills. This should be done byframing policies andimplementing programs thatwould benefit the rich andpoor so that there is fair andeven competition. The stateshave to realize that freeing uptheir economy to foreigninvestment not necessarilyrestricts their role but in factincreases their role in theeconomic affairs. The policiesthat open up the economy willbecome youth friendly only ifthe government is able todirect proper resourcestowards the youth andprovide them access to jobsthat are created due to

To help theyoung peopleto choose thebest fromtheseopportunities,policymakersneed todevelop theyouth’scapabilities.

Vanguard, MONDAY, JUNE 25, 2012 — 19

CMYK

Nigerians are not a corrupt people, not all. Corruption isnot the character of an average Nigerian. Many will attest

to the fact that out there are many with impeccable character,integrity and honour. Men with integrity, who will do everythingto protect their family names, abound in this country. Time itwas when in the community setting, anyone who went to jail

Bankers, legislators: learn a lesson ofmorals from Daibo and others

was ostracized; no one willmarry from that family or haveany transaction with them.Then, family and communityleaders questioned anindividual’s source of wealth.In the immediate past, familymembers will rise in unisonagainst any member suspectedto be a thief. It was a strangething to think of a familymember appearing as a thiefor tagged corrupt ontelevision or on the pages ofnewspapers. Members of thefamily who such act hasbrought shame upon willalmost have heart attack.Many Nigerians who are inthe age bracket of 60 andabove, will understand thisconcept. Massive corruptionin Nigeria is with thisgeneration. Zik, Awolowo,Tafawa Balewa, AhmaduBello, Michael Okpara andYakubu Gowon were leaderswho left office with integrity.They were not millionaires,yet, they are happy whereverthey are.In this generation ofNigerians, nobody raises aneyebrow when members oftheir families are reported onnational newspapers andtelevision as having stolenmoney. How come Nigerianshave become so debased thatindividuals, especially thosein political circle and

government offices, arestealing billions without aprick of conscience? Thedecadence is more in thenation’s body politics andgovernment circles. Check itout, from Farouk to Bankole,Hembe and others who havebeen accused of corruption,are of this generation.Despite the bad news ofcorruption, there are stillNigerians who refuse to jointhe bandwagon. I have heardof an elderly man who went tohis account and found adeposit of about N10 million,he told the bank the depositin his account was not his andthe bank bought him a car. Heis a Nigerian. Last week, ArcoPetrochemical EngineeringCompany honoured ElderSunday AtseruneyioretseDaibo for honesty andcommitment to inspiringyoung men. Seventy-eight-year-old Daibo was a UnionBank staff who 32 years ago,gave Arco PetrochemicalEngineering the seed moneyto begin operation. TheManaging Director of the

company, Alfred Okoigun, at25, had approached him whenhe was manager of one ofUnion Bank’s branches with aproposal for N14, 000.The applicant had nocollateral. He studied theapplication and found that theyoung man had zeal. Daibowent out of his way to look forcollateral for him andsubsequently disbursed theloan to Alfred Okoigun withno strings attached. Theyoung entrepreneur started

the business and today, ArcoPetrochemical Engineering isdoing big time oil servicingbusiness.

Daibo said he was doing hisnormal duty and that workingin the bank then required thatyou be faithful and sincere.Looking at the Nigerianeconomic, banking andpolitical terrain, actors areneither faithful to the Nigerianproject nor sincere to thepeople they claim to beserving or representing.

It is high time societybegan to recognise those whocharacterize positive valuessuch as honesty,responsibil i ty andtrustworthiness in ways thatwould encourage others tolook up to them as rolemodels. Daibo and manyothers l ike him are aconfirmation that not allNigerians are corrupt, hencethe error of labelling Nigeriaand all its citizens as corruptbecause of the nefariousactivities of a negligible fewof its citizens. Nigerians

must always do the rightthing at all times bearing inmind that there is a rewardfor it.

There is the story ofanother 61-year-old Abujataxi driver who returned N18million to the owner. ImehUsua is his name. Usua’s actof honesty and integrity isoutstanding. When he foundthe money, he realisedimmediately that he had toreturn the money. If he hadmade away with the money,nobody will know he did buthe had conscience. Whatbothers Nigerians most isthat, those in power willnever put this act oftrustworthiness into theirrecord in case of nationalawards and people that arenot worthy are those beinggiven.

If Arco PetrochemicalEngineering can rememberDaibo after 32 years, Nigeriashould take a cue andprovide hall of fame forthose found to be honest andtrustworthy no matter whothey are.

,

,

Nigeriansmust alwaysdo the rightthing at alltimes bearingin mind thatthere is areward for it

20 — Vanguard, MONDAY, JUNE 25, 2012

CMYK

Business & Economy

THE President of NigerianAssociation of Chambers of

Commerce, Industry, Minesand Agriculture, NACCIMA,Dr. Herbert Ajayi, has saidthat the trade volume betweenNigeria and Turkey stood at$1.3 billion (N205.40 billion)as at 2011, an increase of 57per cent compared to 2010.

Ajayi represented by theSecond Deputy NationalPresident, NACCIMA, MrBassey Edem, at the openingceremony of Turkish productssolo exhibition in Lagos, saidthe trade statistics revealedthat the balance of tradebetween the two countries wasin favour of Nigeria.

“The fact remains that theexistence and continuousannual growth in the volumeof trade between bothcountries is a testimony offaith, reliability andconfidence both countrieshave in each other and intheir products and services,”he added

From left Barrister Taiwo Adeoluwa, Secretary to the state government, Ogun State, Man-aging Director, Best Bargain Nigeria Limited, Folake Jamiu and Mojeed Jamiu Deputy Chiefof Staff to Ekiti State governor during the inauguration of Best Bargain in Lagos.

Nigeria-Turkey trade hits $1.3bnBy EBELE ONUORAH

Believing that thismeaningful businessrelationship can still beexplored, he stated: “Globally,there is the general acceptance

and adoption of tradeliberalization policy as ameans of enhancing volumeand free flow among nations,which has made the world

economy to become a globalvillage.

“The need therefore for tradeand product exhibition bynations to continually

showcase their products andservices and improve thevolume of trade cannot beoveremphasized.”

Presently, Nigeria’s mainimports from Turkey areclothing, food, engine andautomobile parts, andpharmaceuticals, amongothers while in returnTurkey’s imports from Nigeriainclude sesame seeds, rawand semi-processed leatherand rubber among others.

Meanwhile, the TurkishAmbassador to Nigeria, MrAlli Kiksal, has emphasizedthe increase on the bilateraltrade volume between the twocountries, saying that “2011figures show that we have 57per cent increase compared to2010, favouring both countriesand with the volume nowexceeding $1.2 billion.”

According to him, Turkeyalso has become an attractivecountry for foreign investors,adding that during the last 8years, the total inflow offoreign direct investments hasreached $94 billion.

Vanguard, MONDAY, JUNE 25, 2012 — 21

CMYK

Business & Economy

BRIEFS

From left Executive Director - Enterprise Bank, Niyi Adebayo; Director - Bank of Beirut (UK)Ltd, Sobhi M. Osman; GMD/CEO - Enterprise Bank, Mallam Ahmed Kuru and Representative- Bank of Beirut in Nigeria, Camille Chidiac when the Bank of Beirut (UK) team paid a cour-tesy call on the GMD/CEO Enterprise Bank recently.

Julius Bergerrecords decreasedturnover

JULIUS Berger Nigeria Plcin Abuja announced a turn-

over of N169.41 billion for2011. Retired AVM. Moham-med Imam, the Chairman ofthe board of the constructioncompany, announced theturnover at the 42nd AnnualGeneral Meeting of thefirm. He said the figure rep-resented a decrease of threeper cent, comparedto last year’s performancewhich stood at N173.69 bil-lion. Imam said that al-though the company record-ed a decreased turnover,its retained profit had in-creased. The chairman saidthe increased profit was a con-firmation that the company’sconsolidated efforts had pos-itively affected its efficiencyand utilisation of resources. He disclosed that the profitattributable to group activitiesamounted to N4.88 billionwhile revenue reserves stoodat N9, 15 billion for the peri-od under review. Imam saidin the light of the company’sincreased profitability in 2011;its board of directors recom-mended an increased divi-dend of N2.40, amountingto N2.88 billion for share-holders. The chairman addedthat the company made sub-stantial contributions to theimprovement of various com-munities in the country.

Committee oneconomicintegration of SouthWest statesinaugurated

A 24-member TechnicalCommittee to drive the

regional integration of theSouth West was inauguratedin Ado-Ekiti, Ekiti on Thurs-day by Gov. Kayode Fayemi.Inaugurating the committeeon behalf of the governors ofthe seven states of old west-ern Nigeria, the governorcharged members to work to-ward achieving greater socio-economic and infrastructuredevelopment of the people ofthe region.

Fayemi described the re-gional integration as an ap-proach to reinvent the pace-setting achievements of thewestern region under the latesage, Chief ObafemiAwolowo. The 24 member-committee comprises threemembers each from the sevensubscribing states and threemembers from the YorubaAcademy Think Tank, produc-ers of the Development Agen-da of Western Nigeria(DAWN) document.

THE country may not beable to sustain the mar-

ginal decline in inflation rateachieved in the month of Mayas a result of the proposed in-crement in electricity tariffs,said a report by analysts fromDunn Loren Merrifeed.

According to data releasedby National Bureau of Statis-tics, the headline inflationeased to 12.70 per cent year-on-year in May 2012, whichis 20 basis points lower thanthe 12.90 per cent recorded inthe previous month.

Increase in electricity tariffwill worsen inflation

By NKIRUKANNOROM

The analysts however, stat-ed in their May review of thecountry’s inflation that de-spite the positive outlook, thehigh inflation levels wouldpersist in the short to medi-um term with the Compositeconsumer Index Price (CPI)expected to peak at 14 percent during the year.

They argued that their pro-jection was based on the im-pact the exchange rate wouldhave on domestic prices fol-lowing severe pressuremounted on the naira due toincreased demand of the dol-lar to fund the nation’s heavyreliance on non-oil imports,

adding that import levels haverisen substantially in recenttime, increasing from US$42billion (N6.64 trillion) in 2010to US$65 billion (N10.27 tril-lion) in 2011.

Though they observed thatthe slight decline in inflationwas largely driven by certainfood items captured by thefood index, they stated that thecontribution of these items tothe overall index is minimalgiven their relatively smallerweights in the index.

The report said, “The highyear-on-year change waspartly attributable to the shortsupply of some farm produce

due to the farming seasonwhich led to persistentincreases in the prices ofthese food items, for examplevegetables. Other notableincreases were in cateringservices as well as the cost ofsome miscellaneous services,such as appliances, articlesand products for personalcare. The monthly compositeCPI was higher by 0.75 percent in May 2012 whencompared with April 2012.

“The index for food washigher year-on-year by 12.9per cent and increased by 1.2per cent on monthly basis. Therise in the food inflation wasmainly due to the rise in foodproducts; particularlyvegetables, bread, cereals,yam and other tubers. Thecore inflation index capturedby the “All items less farmproduce” also rose by 14.9 percent on yearly basis andinched up by 1.1 per cent onmonth-to-month basis.”

They held that in the face ofthe resurging inflationarythreats, there was need forgradual reduction in thebenchmark rate to a single-digit. “Ahead of the meetingof the MPC in July andexisting inflationary threats,we maintain our position ongradual reduction of thebenchmark rate to single-digit levels. Our position isunder pinned by existinggrowth concerns, need toincrease production levelsand strengthen the domesticcurrency. Nigeria’s RealGross Domestic Product(GDP) on an aggregate basisgrew by 6.17 per cent in thefirst quarter, down 47 basispoints from the 6.64 per centrecorded in the correspondingquarter of 2011,” the reportsaid.

A defence witness, MrsAyoola Akande, has said

the transactions of formerManaging Director ofIntercontinental Bank, MrErastus Akingbola, wereregular. Akingbola is standingtrial for an alleged N47.1billion theft. Akande, a formerGroup Head of InternationalOperations of IntercontinentalBank (now Access Bank), wastestifying before JusticeHabeeb Abiru of an Ikeja HighCourt in Lagos.

Akingbola with anassociate, Bayo Dada, is beingprosecuted by the Economicand Financial CrimesCommission (EFCC). Thewitness, who was led in

Intercontinental Bank:

Akingbola’s transactions wereregular, says witness

evidence by Akingbola’s coun-sel, Mr Deji Sasegbon (SAN),faulted the prosecution’sclaim that the former bankchief engaged in irregulartransactions. Akande saidsome of the transactions car-ried out by Akingbola betweenMarch 16, 2009 and July 13,2009, including the transfer of8.5 million pounds from thebank’s ‘nostro account’, wereregular.

She said the 8.5 millionpounds deal was financed byRegal Investment CompanyLimited, which had an accountwith Intercontinental CapitalMarkets Limited (ICML), asubsidiary of the bank. Thewitness said: “The N2.1 billion

was from Regal Investmentwhich was provided throughICML. “We got instructionfrom Regal Investment, ownedby Dr Raymond Obieri, whowas also the Chairman ofIntercontinental Bank, totransfer the money. For thetransfer, the nostro account ofthe bank was credited and adeduction was made by us fromthe bank’s ‘vostro account’.“We would not have transferredthe 8.5 million pounds if thenaira equivalent was not inplace. It was a normal bankingtransaction because we waitedfor the naira value to beavailable before we transferredthe money,” she added.Akande also debunked theclaim by EFCC that Regal

Investment had no sufficientfunds in its current accountwith the bank to warrant thetransaction. She said thecompany had over N4 billionin various accounts with thebank at the time thetransaction was made.

She further claimed that thetransfer of 1.3 million dollarson July 13, 2009, wasfinanced by Tropics FinanceLimited, which was beingmanaged by Dada. Thewitness said the nairaequivalent was provided bythe company and it was usedfor the purchase of dollarsfrom Rockson EngineeringLimited. “The transaction wasapproved by the bank andboth the bank and Tropicsmade profit from it,” Akandesaid. The matter wasadjourned.

22 — Vanguard, MONDAY, JUNE 25, 2012

CMYK

CAPITAL is a coward; ittakes flight at the slight-

est indication of prevalent vio-lence and destruction”. Anon-ymous.

The Vision 20:2020 project; atbest a foolish stunt because itis not based on sound econom-ics, had become increasinglyanother scam foisted on theNigerian nation to siphon mon-ey into private pockets – espe-cially those of its most ardentpromoters in government. Thatis why none of them had daredto answer the simple questions:“by how much must Nigeriagrow annually to reach the top20? Have we ever grown at thatrate? The answer to the firstquestion is 13 to 15% per an-num. The reply to the secondquestion is an emphatic NO!The best we have been able todo is to grow by 7.8% per an-num and that only in the lastthree years. Each year we failto grow at 13 to 15% we placeourselves in a situation inwhich we have to grow 17 to19% in subsequent years in or-der to catch up. Even, a noneeconomist knows that this isimpossible. Yet, PresidentJonathan has allowed himselfto be persuaded to that all thefairy tales were possible.

Unpardonable as that mightbe, it becomes totally unaccept-able to continue to hang on to

Spreading northern violence:wither vision 20:2020?

,

,

this fig-leaf long after the na-tional economy had been “dis-robed” by spreading violencein the Northern parts of thecountry and the collateral dam-age that it will do the rest ofthe economy. For a start, theVision 20:2020 Committee, aself-deceptive lot, should nowbe disbanded. They have trav-elled to Abuja and lodged inchoicest Abuja hotels at ourexpense for no justified reasonlong enough. Incidentally,some of these unpatriotic ele-ments actually knew all alongthat Vision 20:2020 was just afigment of the imagination ofthe Minister for National Plan-ning and Chairman of the Na-tional Planning Commission,Dr Shasudeen Usman. That iswhy the Minister had avoidedanswering the two questionsposed above for years as Min-ister. Now, even the Ministerwill have to admit that an econ-omy cannot grow at 12% perannum when large segments ofit are under 24 hours curfew orwhen all the people live in fearround the clock.

Under the circumstances thefirst group of individuals to fleeare investors or potential inves-tors; those whose capital wouldhave made any GDP growthpossible at all.

The core North has formonths now become a

“no-go” area. With spreadingviolence, which is threateningto escalate and spiral into allout religious conflict, even thosewith investments are alreadydecamping to safer zones. It isa safe bet that, even if peacereturns to the North today, aremote possibility, capital flightwill not stop immediately andthose already withdrawn willnot return soon. The year 2020,

which was dangled in front ofour eyes during the Yar’Aduaadministration – five years ago– is a mere eight and a halfyears away. Meanwhile, atleast five of those eight and ahalf years are certain to be dis-sipated by mindless violenceand destruction – to which gov-ernment has no answer at themoment; and this governmentmight never have.

The 24 hours curfew im-posed on Kaduna and YobeStates provide vivid examplesof what is in store for Nigeri-an agriculture, which in ad-dition to providing jobs foemost people, contributes al-most 40% of our GDP. Kano,Kaduna and Yobe States arepivotal to the success of Ni-gerian agriculture which isover 75% northern based.Kano and Kaduna, apart frombeing major contributors, arevital trans-shipment points forproduce from the Northwest;while Yobe performs the samerole for transport of agricultur-al produce from the Northeast.Even without 24 hour curfew,there has been a sharp dropin the flow of agricultural out-put. Post harvest losses, pre-viously estimated at 40%, hadsoared to more than 50%. Be-cause most farm produce areraw materials, any delay be-tween farm gate and marketsincreases the post harvest lossincrementally with the daysspent on the road. With cur-few, most of what is loaded at

the farm will have to be thrownaway. This was the situationin the 1990s when Kano Statewas rocked by a series of vio-lent demonstrations. The en-tire length of the Kano-ZariaExpressway was littered withrotten tomatoes, peppers andvegetables. We are headed fora wider regional catastropheon account of the tragedy thatBoko Haram insurgency hadbrought about.

The problems we face aremulti-dimensional. First, thereis already the threat of loweroutput as farmers flee the tosafer territories. That meansthat large tracts of farmlandwill not be cultivated this yearand may be not for a long timeto come. Second, those whostill brave the odds to go farm-ing (mainly because they haveno other means of livelihoodand no place to go), might findit difficult to evacuate theirfarm produce now that trans-porters are reluctant to go tothe North. This writer went toIddo, and Apapa in search oftransporters to move goods toMaiduguri, only one out of 35was willing to go; and that wasbecause the company’s head-quarters is in Maiduguri.Even, that “willing” driver setconditions that would havebeen considered insane onlytwo years ago. Apart fromcharging three times the nor-mal rate for the trip, he couldnot guarantee reaching Mai-duguri in less than two weeks(it was five days before); andat the sign of great trouble, hewill abandon the consignmentand run for dear life.

“

MAJOR emergingeconomies may set up

a joint anti-crisis fund if theydo not receive enough say indecision making at theInternational Monetary Fundunder proposed votingreforms, a senior Russianofficial said. The leaders ofBRICS nations - Brazil,Russia, India, China andSouth Africa - pledged at theGroup of 20 summit in Mexicoto chip in $75 billion to boostthe IMF’s lending power buthad sought to tie the loans tovoting reforms. At the sametime BRICS finance ministersand central bank governorswere instructed to studypossible currency swapsarrangements and report tonext year ’s BRICS leaders’summit in South Africa.

“It is clear that BRICScountries have entered thestage when they can demandto be reckoned with (in thecourse of the IMF reform),”Deputy Finance MinisterSergei Storchak told reporters.The issue of currency swaps,

Russia says BRICS eye joint anti-crisis fund

or maybe at some point a jointanti-crisis fund, should beviewed from this perspective,”he said. “It will be a parallelmechanism in addition to theIMF.” The five BRICS nationsrepresent 43 percent of theworld’s population and about18 percent of global economicoutput. They have about $4

trillion in combined reserves,with the lion’s share held byexport powerhouse China.

“We want emergingcountries to be treated fairly.The demonstration of ourdesire is our statement on thecurrency swaps mechanism,”Storchak said. Russia and itspartners in an ex-Soviet

customs union, Kazakhstanand Belarus, have already setup an anti-crisis fund whichhas lent money to crisis-hitBelarus. The emergingnations are set to raise theirclout in the IMF throughincreasing their voting powerin the IMF known as quotas.Russia wants the quotas to be

calculated based on the sizeof the GDP and forex reserves.Storchak said that a newformula for the IMF quotasdistribution should be agreedthis year before Russiaassumes the G20 presidency.

Storchak said the BRICScountries understood that thefunds will be used to deal withthe eurozone crisis and saidthere was no aggressivecriticism of the Europeans atthe G20 summit in Los Cabos,Mexico.

“The task the Europeans faceis very concrete; to break thelink between the situation inthe banking sector andsovereign debt as quickly aspossible, the sooner they breakthis link, the higher thechances of them returning tothe path of growth.” Storchaksaid Europe’s move towards anintegrated banking system wasviewed by the emergingeconomies as more significantthan the EFSF (EuropeanFinancial Stability Facility)bonds or a fiscal union.Storchak said that Russia’sindebted companies were muchbetter positioned to weather thecrisis than in 2008 when manysuffered from margin calls andcame close to default.

NIGERIAN flour millers,key buyers of U.S. wheat,

continue to need more U.S.supplies despite efforts by theNigerian government to reducereliance on foreign wheatimports, top Nigerian millingexecutives have told Reuters.

Benson OsaretinEvbuomwan, Director ofHoneywell Flour Mills, whichhas an annual milling capacityof 600,000 tonnes was quotedby Reuters as saying “We arenot expecting a drop in theamount of U.S. wheat we need.In all, the wheat we are inneed of should be increasing.”

Nigerian millers plan more import of U.S. wheat

Honeywell is a large user ofhard red winter wheat, the topU.S. class of wheat.Evbuomwan is one of sevenrepresentatives from the topmilling and food companies inNigeria who visited key U.S.wheat growing states this week,including top winter wheatproducer Kansas. The team issurveying the current year’shard red winter and hard whitewheat crops.

James Ogunyemi, QualityControl Manager at FlourMills of Nigeria, the largestin the country and the world’ssecond-largest miller, also

made the trip. He said he wasimpressed with the quality ofthe wheat in this year’s crop,which is being harvested now.

“What we’ve seen so far willbe suitable,” he said.Ogunyemi estimated thatNigeria’s wheat imports willrise to 4.5 million tonnes thisyear. For the 2011/12marketing year, whichconcluded May 31, Nigeriaimported 3.35 million tonnesfrom the United States, makingNigeria the third-largestwheat buyer, behind Japanand Mexico, according to U.S.

The 24 hourscurfew imposedon Kaduna andYobe States pro-vide vivid exam-ples of what is instore for Nigeriana g r i c u l t u r e ,which in addi-tion to providingjobs for most peo-ple, contributesalmost 40% of ourGDP

BUSINESS & ECONOMY

Vanguard, MONDAY, JUNE 25, 2012 — 23

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24 — Vanguard, MONDAY, JUNE 25, 2012

Business & Economy

ABUCCIMA wantsNigeria to emulateeconomic progressin D-8 countries

NIGERIA shouldemulate the economic

achievements of the group ofEight Developing Countries(D-8) to move its economyforward, Dr Solomon Nyagbasaid. The D-8 is the group ofeight developing countriesfounded in 1997 to foster eco-nomic cooperation.

They are Nigeria, Iran, Tur-key, Indonesia, Pakistan,Bangladesh, Malaysia andEgypt. Nyagba, who is thePresident of AbujaChamber ofCommerce, Industry, Minesand Agriculture (ABUCCI-MA), made the call in Abuja.

He said the D-8 countrieshad left Nigeria behind interms ofdevelopment, pointing outthose countries, such as Iran,Turkey and Malaysia hadmade huge progress with Iranacquiring nuclear capability.

DPR clamp downillegal jetty in Lagos

THE Department of Petroleum Resources (DPR)

says it has closed down oneillegal jetty in Lagos. This wascontained in a statement is-sued by Mrs Bilema Osibodu,the DPR Deputy Director(Public Affairs), in Lagos.“Our attention has beendrawn to the nefarious activi-ties of some unscrupulous el-ements of the society who en-gage in deliberate contamina-tion of petroleum products,purportedly being sold as die-sel,” she said.

Osibodu said that a raidwas carried out on the jetty atMarina, Lagos Island, wheremany barges and vessels lad-en with about two million li-tres of off-specification dieselwere discovered. She saidthat the suspects were arrest-ed and handed over to thepolice for prosecution.

World oil prices

BRENT crude fell to its lowest in 18 months at around

$92 a barrel on demandgrowth concerns as China’sfactory sector slowed and asthe U.S. Fed’s stimulus plandashed hopes for more ag-gressive steps to boost theworld’s top economy.

An unexpected rise in U.S.crude inventories last weekalso hit Brent, which has slid28 percent from this year’speak above $128 touched inMarch.

BRIEFAdetimehin, told FinancialVanguard that insuranceoperators should rally roundone another to quickly pay outthe compensation to familiesof the victims of the Dana aircrash. Adetimehin said thatthe move is necessary toensure that all hopes are notlost to the families of thevictims of the disaster.

Adetimehin, however,stated that the lead insurerinvolved is fully responsiblefor 100 per cent of the riskwhether premium wastransferred to co-insurers ornot and is liable to paycompensation.

Adetimehin said “I want toallay the fears of the Nigerianpublic because the issueraised is highly technical. 70per cent of the premium hasbeen sorted out remaining the30 per cent payable by localunderwriters. The leadinsurer is wholly responsiblefor 100 per cent of the risksand as such they are liable topay.”

Managing Director ofCrystalife Assurance Plc, Mrs.Oluseyi Ifaturoti, said thatwith the developmentsemanating from the Danacrash, the importance ofpaying premium promptlybecomes imperative.

She said “How do youexplain it, a man sitting in hisown house and did not go tothe airport or anywhere oreven plan to enter an aircraftand he suffered loss as a resultof an air crash. So it just goesto show that you cannot sitdown and totally imaginewhere a disaster can happenfrom. We believe that we area praying nation, and wecontinue to pray, but weshould also make sure that wehave the adequate insuranceto take care of the financialstress even if you cannothandle the emotional aspectbecause when the financialstress is taken care of, it alsoreduces the emotional stress.”

For Commissioner forInsurance the challenges inthe aviation insuranceinclude inadequate insurancefor ground handlingequipments, insufficient thirdparty insurance, absence ofcomprehensive list of aircraftoperated by commercial andnon-commercial operators,dearth of personnel withsufficient expertise forensuring compliance andgeneral lack of publicawareness for insurance.

Daniel expressed hope thatthe need for a legal frameworkfor aviation insurance, how toensure full insurancecoverage for aviation risk, roleof NAICOM and NCAA inenforcement, case ofcompulsory third partyliability and aviation claims

would be clearly laid out withthe collaboration of the tworegulators.

According to him, no singleinsurer has the resources toretain a risk the size of amajor airline or even asubstantial proportion of suchrisk, adding that thecatastrophic nature ofaviation insurance can bemeasured in the number oflosses that have cost insurershundreds of millions ofdollars.

He stated that it issaddening that when thereare accidents' losses, itbecomes contentious asdependants of victims of aircrashes do not getcompensated as a result ofinadequate cover.

He admitted that travelersin Nigeria today only fly withfaith; hoping that they willarrive at their destinationssafely and where they do not,some good Samaritans wouldtake good care of theirdependants.

“It is most appalling thatinsurance and aviation hasbeen cast in bad light andthis should not continue. It ishigh time we ask our selfwhether we did what wasethical to avoid thosecrashes.”

He confessed to the fact thatthe commission is aware ofthe constraints for large riskslike aviation risks, addingthat the laws allow insurancecompanies to form consortiaand where this is stillinadequate, the uninsuredportion of the risks is cededabroad.

“An insurer’s capacity foraviation insurance policiesshall be the net retention forthat insurer plus itsreinsurance treaty capacityand where reinsurancecapacity is provided by a

foreign reinsurer, it shall bewith a company having aminimum financial strengthratings (FSR) of “A-”Standard and Poor’s (S&P) or“A” A.M.Best.”

On the way forward, hestated that NAICOM asregulator of insuranceinstitutions in Nigeria isensuring that insurancebusinesses are conductedwith sound principles andhas placed a very highpremium on corporategovernance within theindustry.

More so, Director ofAirworthiness, Nigerian CivilAviation Authority, Mr.Patrick Ekunwe, stated at aseminar that the importanceof insurance must beemphasised, considering theair crashes that haveoccurred in the past.

“Compensation of thevictims’ relatives became aserious issue as some of theairlines could not settle thefamilies of the victims on timewith the mandatory liabilitylimit of $100,000 ascompensation as stipulatedin Chapter III of theSchedule to the CivilAviation Act of 2006, whichdomesticated the MontrealConvention.”

“The Montreal Conventionof 1999; the Convention forthe unification of CertainRules for InternationalCarriage by Air, whichspecifies a liability limit of$100,000 Special DrawingRights supersedes theWarsaw Convention of 1929that stipulates acompensation of $10,000.

“Part XV, Section 74, subsection 1-4 of the CivilAviation Act of 2006 givesNCAA the responsibility ofensuring that any carrieroperating air transport

services to and from or withinNigeria or aerodromeoperator, aviation fuelsupplier, or any provider ofground handling,meteorological, air trafficcontrol, aircraft maintenanceservices and other alliedservices maintain adequateinsurance covering its liabilityunder the Act.”

Ekunwe further noted thatNCAA in a bid to find a lastingsolution to the delayassociated with the settlementof claims and compensation byairlines, has put in placeprocedures to ensure thatdomestic airlines insurancecover and certificates are notonly adequate, but valid forthe Combined Single LimitCoverage and that therequired insurance premiumis paid as and when due toensure safety.

Chairman of AviationRoundtable Captain Dele Ore,said it would have been idealfor the country if local insurersare able to take full liability ofpassengers on board anaircraft should there be an airaccident. The aviation expertsaid all local insurancecompanies put togethercannot take liability of a bigaircraft if it goes down with alarge number of passengerson board.

“They are expected to spreadthe risk by reinsuring thecapacity, such that when anaircraft goes down with 200passengers, they can paycompensation to the familiesof the deceased without anyproblem, he said.

“There is no local insurancecompany that has the capacityto insure 200 passengers onboard a flight, but what theyhad to do is to reinsurethrough reputableorganisations like LIoyds ofLondon and those who havedone that have no problem.”

Continues from page 18

DANA PLANE CRASH:NAICOM presurises local co-insurers topay compensation on moral suasion

L-R: Guillaume Schoebel , outgoing VP, Africa, Anne Ezeh, Communications manager, Mar-cel Hochet, Country President and Mohammed Saad, New VP, Africa (all of Schneider Elec-tric), at the cultural event held at Sheraton Hotels, Lagos, to welcome the latter.

CMYK

Vanguard, MONDAY, JUNE 25, 2012 — 25

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26 —Vanguard, MONDAY, JUNE 25, 2012

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Banking & Finance

By ELIZABETH AMIHOR

Ecobank Plc has launchedthe Ecobank mobile

money, an e-money channel,to support the cashlesseconomy in Nigeria.

Speaking at the launching ofthe product in Lagos, theManaging Director of thebank, Mr Jibril Aku said it is aspecial product designed todeepen financial inclusion forall classes of Nigerian citizens,especially those in the ruraland semi-urban areas

He said it is design to reducecash dependency level in theday to day transactions ofNigerians, adding that it is thefulcrum on which the cashlesspolicy of the Central Bank ofNigeria stands.

He said, “Ecobank MobileMoney delivers convenience,

BRIEF

ACCA Councilholds biennialmeeting in Africa

The 36 member Council ofAssociation of Chartered

Certified Accountants (ACCA)converged in Nairobi, Kenyanfor its biennial meeting lastweek to discuss economicgrowth and the businessopportunities and challengesfaced in Africa and globally

The meeting was followed bya visit to Ethiopia, Tanzaniaand Uganda by the President,Vice President and DeputyPresident of the Association.

Helen Brand, ACCA’s chiefexecutive, says: “I amdelighted that this year’sCouncil meeting is takingplace in Africa. As ourgoverning body, Council iselected and consists ofvoluntary members whopossess a global outlook thatcan only benefit further bymeeting together in Kenya. Iam sure we will learn a greatdeal during this visit.”

Jamil Ampomah, ACCAdirector of sub-Saharan Africasays: “Our Council has a wideranging remit, geared toproviding strategic directionfor ACCA. Council membersexamine issues of broad andlong-term importance toACCA, and establish ACCA’sposition on global industrydevelopments as they arise.So this is why it is importantCouncil members from all overthe world come to Africa andunderstand the issues theirCouncil colleagues face herein this continent.

“The aim of this meeting isto see how ACCA members arecontributing to the nationaleconomy and their nationalprofession, to connect withpartners, the profession andpolicy makers, and to showhow ACCA’s work is bringingvalue to employment markets.This is an important part ofCouncil’s ongoing work, andsenior members along withACCA staff will be visitingKenya, Ethiopia, Uganda andTanzania.”

Dean Westcott, ACCA’sPresident and a member ofCouncil, says: “ACCA’sCouncil wants to have a betterunderstanding of the rapidand exciting economic andbusiness developmentshappening in this continentand to see at first-hand howprofessional accountantsworking here create publicvalue, how they supportsustainable economic growthand, importantly, what ACCAcan do to support them. I knowthat I and my fellow memberswill gain a lot from thismeeting.”

L – R: Prof. Ajibefun Igbekele, Rector, Rufus Giwa Polytechnic, Owo, Ondo State; Mr. Segun Aina, President/Chairman ofCouncil, CIBN,and Dr. Segun Ajibola, 2nd Vice President, CIBN; during the signing of MOU on ACIB/HND Linkage betweenthe Chartered Institute of Bankers of Nigeria and four Polytechnics including Yaba College of Technology, Lagos and IbadanPolytechnic, Oyo State, today at the Bankers’ House, Victoria Island, Lagos.

BY BABAJIDEKOMOLAFE

Scarcity of funds in theinterbank money market

grew worse last week as theamount of funds that left themarket surpassed those thatcame in by N234.6 billion.

The interbank money marketis the market where bankslend and borrow money fromeach other, mostly to meetshort term need of money.

During the week, moneycame into the market throughmatured treasury bills(N45.73 billion) and paymentfor Joint Venture Cash call.On the other hand, theNigeria National PetroleumCorporation (NNPC)withdrew N133.65 billion,while N118.09 billion wasspent to fund foreignexchange purchase at the bi-weekly foreign exchangeauction conducted by theCentral Bank of Nigeria(CBN).

To fund the net outflow ofN234 billion, banks borrowedN132. 6 billion from the CBNthrough its Standing LendingFacility (SLF) hence theliquidity (cash) position of themarket further deteriorated toa deficit of N76.4 billion fromdeficit of N43.6 billion theprevious week.

As a result of the netoutflow, cost of funds, whichdropped on Thursday, rose onFriday in response to thewithdrawal by NNPC.Interest rate on Call lendingrose to 15.5 per cent from

N234bn net outflow aggravatesscarcity of funds in interbank

N14.5 on Thursday, whileinterest rate on 7-Days lendingrose to 15.6 from 14.96 percent.

But despite the scarcity offunds in the market,government securities(treasury bills) recorded 50 percent over subscription. TheCBN offered N100.63 billionworth of fresh bills while publicsubscription, which representsdemand, stood at N152.7billion. The CBN sold N100.63

billion at interest rate of 14.05and 15.32 per cent.

In the foreign exchange,market, the exchange rate ofthe naira remained stable atthe official segment as theCBN increased foreignexchange supply by $50million at the bi-weeklyforeign exchange auctions aswell as sold an undisclosedamount to banks in theinterbank segment.

At the bi-weekly auction the

CBN sold $750 million, asagainst $700 million sold theprevious week. This helpedstabilized the official exchangerate at N155.9 per cent.

The special foreignexchange sale by the apexbank in the interbank marketcaused the interbankexchange rate to drop toN162.95 per dollar fromN163.21 per dollar theprevious week, translating to26 kobo appreciation for thenaira during the week.

Ecobank launches mobile money tosupport cashless drive

accessibility and reliability tocustomers in line with thebank’s mission. Nigerians,irrespective of their locationwill now be able to use theircell phones to conduct basicfinancial transactions – evenif they don’t have a bankaccount. The Ecobank MobileMoney now gives citizens thepower to achieve their bankingneeds conveniently”.

Speaking about the producthe said, “As we all know,mobile money services havehuge potential in marketswhere mobile penetrationvastly outpaces the number ofpeople with bank account.This is the clear case inNigeria today as we haveavailable over 90 million cellphone users, both the bankedand unbanked. There istherefore an urgent need to

offer an affordable, butconvenient, solution to moneytransfer services”

In other for the bank torealize this objective ofproviding financial services tothe unbanked, Mr Jibril saidthe bank has commencedfocused expansion of its retailagent network reaching intothe communities wherecustomers live.

“Agents main role is toprovide cash in/out serviceswithin easy reach of theircustomers. Agents arecontinuously being trained tooffer increased customersupport and on the groundeducation to our subscribers”.

He said, “Those that can usethe product are Subscribers ofany participating GSMnetwork with any make ofhandset; GSM networksubscriber not registered onEcobank Mobile can receivefunds”.

Vanguard, MONDAY, JUNE 25, 2012 — 27

Banking & Finance

In its resolve to bolsterwealth creation through

specialized products, FBNCapital, the Investment andAsset Management businessof the FirstBank Group haslaunched two funds - the FBNMoney Market Fund andFBN Fixed Income Fund.

The Funds have beencreated to cater to the specificneeds of retail and institutionalclients in Nigeria, and giveinvestors a platform fordiversifying and growing theirinvestments for optimalreturns.

FBN Capital introduces two special fundsThe FBN Money Market

Fund which has a minimuminvestment of N5,000 (fivethousand naira) only, is anopen-ended mutual fundwhich will emphasize incomepayment on a quarterly basisto its various investors, holdvarious Money MarketInstruments, invest in low-risksecurities, and pay out returnsthat reflect short term interestrates.

The FBN Capital FixedIncome on the other hand isfor the more affluent investor,requiring an minimum

amount of N100,000 (onehundred thousand naira). It isalso open-ended, but will payincome on a semi-annualbasis, hold a variety ofgovernment and corporatedebt obligations and othermoney market instruments.The Fund will be activelymanaged to maximize its totalreturn potential whileminimizing any increase inrisk relative to its marketbenchmark.

Commenting on the launchof the Funds, the MD/CEO ofthe FBN Capital, Mr. Kayode

Akinkugbe, said “the launchof both funds simultaneouslyby FBN Capital is in line withthe strategic objectives of thebusiness as well as theregulators to deepen themarket by offering collectiveinvestment products on abroad platform”.

The Director and Head ofAsset Management of thecompany, Mr. MichaelOyebola further buttressedthis point, stating “With theminimum investment amountsset for each fund, there’s afund for everyone at FBN

Capital - regardless of incomelevel. We hope to leverage onFBN Capital’s strong fixedincome franchise andstrengthen relationships withour customers across theFirstBank Group to takeadvantage of the open andready market of the mutualfunds segment.”

FBN Capital is a leadingplayer in deal origination,execution and distribution. Amarket leader in debtstructuring, arranging andsyndication, the firm has wonseveral awards.

28 — Vanguard, MONDAY, JUNE 25, 2012

CMYK

Corporate Finance

professionals or investment ve-hicle as being proposed. TheNSE management should bevery careful with the kind of pol-icy they want to initiate. Theyshould make use of their sens-es. They want to create funds forbig players so that they will con-tinue to ride exotic cars and livein big houses. Even in America,they still have retail investorswho trade directly from theirhouses.

The proposed plan to stop re-tail investors from investing di-rectly in the market is counterproductive, illegal and will leadto severe extortion.”

Also, the Chairman, NigerianShareholders Solidarity Associ-ation (NSSA), Chief TimothyAdesinya, said, “The NSE man-agement don’t know what to doto restore investors’ confidence.The calibre of people they wantus to go through before we in-vest in the market are those peo-ple that contributed to the crashof the market.

It will be re called that the

NSE boss said, “The capitalmarket boom of 2004-2008 trig-gered an increase in retail par-ticipation. With little-to-no ex-perience, first-time investorspoured into the market, unawareof the innate risks of investingin the capital market. Duringthis time (January 2, 2004 toMarch 5, 2008 – the peak of themarket), the All Share Index(ASI) surged 225.37% and the

As a result of this develop-ment, he noted there was needto improve the capacity of localinstitutional investors."

Continuing Onyema said,“Following the near-collapse ofthe Nigerian capital market atthe heels of the market down-turn, it is important to imple-ment changes to better manageinvestors’ exposure to marketrisk. The NSE suggests thatthe minimum subscriptionamount for both debt (non-sov-ereign) and equity transactionsbe significantly raised, suchthat only qualified institution-al investors, market makersand High Net worth Investors( HNIs) can directly access themarket.

“This would prevent vulner-able retail investors lacking in-depth understanding of therisks associated with the mar-ket from directly exposingthemselves without the guid-ance of licensed Asset Manag-ers. The investment strategyfor such investors should bethrough managed funds,whereby individual stock selec-tion is done by professionalswho understand the risks in-herent to the capital market.The NSE currently has 26 man-aged funds listed on the DailyOfficial List. These funds pro-vide exposure to various assetclasses and investment strate-gies that meet investors’ differ-ent needs. For the successfulimplementation of this initia-tive, the NSE would look to theSEC to further develop the as-set management industry, be-ginning with the strengthen-ing of licensing requirementsfor asset managers. The NSEhas also introduced the ETF as-set class (which provides ex-posure to a basket of underly-ing securities or commoditieswhile been traded like a stock)as a cost-effective way of pro-viding diversification.”

BRIEF

SHAREHOLDERS havecriticized the proposed

plan by the Nigerian Stock Ex-change (NSE) to stop retail in-vestors from investing directlyin the stock market.

The Chief Executive Officerof the NSE, Mr. Oscar Onye-ma, had stated during the re-cently concluded probe on thenear collapse of the Nigeriancapital market by the ad hoccommittee of the House of Rep-resentatives, that one of themajor causes of the marketmeltdown was the ignorance ofretail investors who participat-ed without the knowledge ofthe market.

H o w e v e r , s h a r e h o l ders faulted such proposed plan,saying it tantamount to disen-franchising them from invest-ing in the market.

Speaking exclusively to Van-guard, the Chairman, Progres-sive Shareholders Associationof Nigeria (PSAN), Mr. Boni-face Okezie, said, “The plancannot work because the mar-ket is dominated by retail in-vestors. It is the retail investorsthat sustained the market whenforeign investors left the mar-ket during the downturn. It willbe an abuse of human right ifthis move is executed. Theywant to disenfranchise us frominvesting in the market.

What are the stockbrokersdoing? Most of us are invest-ing through the stockbrokers.The management of the NSEdon’t know what to do to re-store investors’ confidence. Itis the business of stockbrokersto buy and sell shares for andon behalf of retail investors. Sohow is the move going to work?It seems the current manage-ment of the NSE lacks ideasthat will move the market for-ward, they should resign andleave those that can do thework to continue. Also, whatwill happen to our investmentif this move is carried out” Wellwe are going to resist it .”

In the same vein, Mr. Ade-bayo Adeleke, National Secre-tary, Independent Sharehold-ers Association (ISAN), said, “Itwill be an infringement on ourfundamental human right if theNSE stops retail investors frominvesting directly on the stockmarket. We have freedom of as-sociation and to disassociate. Itis not compulsory that retail in-vestor should invest through

Shareholders condemnNSE's plan to bar retailinvestors from directinvestment

By PETER EGWUATU

,,

market capitalization for list-ed equities grew 841.46%. In-vestment decisions were driv-en mostly by speculation, andeasy access to loan facilitiesusurped the need for properfinancial planning. Low fi-nancial literacy made it easyfor some financial institutionsto take advantage of inexpe-rienced investors and con-sumers, and as a result, mar-ket discipline was almost non-existent. While many bank-ing institutions had risk man-agement processes in place,these were often overlooked inanticipation of higher returnson their investments andloans. This led to an unprece-dented level of bank over-ex-posure and high rates of mar-gin lending.

Under the weight of the2008 market downturn,

these practices triggered un-seen rates of default. This wasfurther compounded by thelack of an adequate consum-er protection framework toeducate investment consum-ers on their rights. The resultwas retail investors takingflight, foreign investors sell-ing off to mitigate losses, andinstitutional investors gettingjittery and exiting. Thiscaused illiquidity in both thefinancial and capital markets,and the near collapse of thestock market itself.

•Mr. Oscar Onyema

It seems the current man-agement of the NSE lacksideas that will move themarket forward, theyshould resign and leavethose that can do the workto continue.

FMBN introduces e-collection platform forNational HousingFund

Federal Mortgage Bank ofNigeria (FMBN) has launched

an electronic platform forcollection of National HousingFund (NHF) deductions fromemployers of labour. Simplycalled the NHF e-collectionplatform, the device makes itpossible for NHF deduction,collection and remittance to bedone electronically by alldesignated commercial banksin Nigeria through their existinginformation technologystructures.Mr. Gimba Ya’u Kumo, managingdirector/CEO, FMBN, disclosed inAbuja that once a designated NHFcollection bank is issuedinstructions by an employer topay monthly salaries to itsemployees’ bank accounts, thecorresponding NHF componentsof the salaries will beautomatically deducted andinstantly channelled into adedicated NHF collectionaccount. A payment scheduleindicating the identity of eachemployee and amount contributedby the employee is alsoautomatically generated andFMBN immediately credits eachcontributor’s NHF contributionaccount with the correspondingamount remitted for that month,the FMBN boss explained.Kumo said the e-collectionplatform will address a number ofproblems facing the NHF scheme,such as refusal of some employersto deduct their employees’ NHFcontributions, failure of someemployers to remit NHFcontributions after deductingsuch contributions from theiremployees and failure of someemployers to provide remittanceschedules to FMBN. All thesesharp practices enable someunscrupulous employers oflabour to misappropriate NHFmonies or even embezzle suchfunds.Essentially, the NHF e-collectionplatform will help promotetransparency and accountabilityin the collection of NHF and makeit possible for more eligibleNigerians to access NHF loansfor building, renovation orpurchase of residential houses.For example, the platform willmake it easy for NHF contributorsto check their NHF contributionsusing the NHF e-cards on anyATM machines nationwide, theamount of money they havecontributed to the NHF schemeand thus be in a position to knowif their employers are making theappropriate NHF remittances asand when due.The NHF e-collection platform isembedded with features thatsecure contributors’contributions and indeed thesystem instantaneously sends anSMS alert to the contributor’smobile phone once the NHFdeduction hits the NHF

CMYK

Vanguard, MONDAY, JUNE 25, 2012 — 29

BRIEF

Stock Market last week

A significantimprovement was

recorded on the NigerianStock Exchange, NSE, lastweek, as the value of listedequities appreciated byN67.099 billion.

Driven by gains on theshare prices of majority of theblue chips, equities’ value,represented by the marketcapitalization, rose by 0.99 percent to close the week atN6.829 trillion, from N6.763trillion at which it opened theweek.

Another key indicator formeasuring equities’ value,the All-share index, also roseby 0.99 per cent or 210.19basis points to close the weekat 21,394.77 points from21,184.58 points at which itopened.

Nigerian Breweries Plc led32 other companies on theprice gainers’ table, with ashare price appreciation of4.12 per cent or N4 to close atN101 per share, PZ CussonsNigeria Plc followed with again of N2.38 to close at N27per share and GlaxoSmithKline Consumer Plcgarnered N1.50 to close atN22.50.

Other share price gainersinclude: Presco Plc N1.29,Unilever Nigeria Plc N1.20,UAC Nigeria Plc N1.01,Cement Company ofNorthern Nigeria Plc N0.74,Eterna Plc N0.67, ZenithBank Plc N0.65 and First BankNigeria Plc N0.33 amongothers.

On the contrary, Guinness

Equities’ value appreciatesby N67bn on NSEBY MICHAEL EBOH &WILLIAM JIMOH

Nigeria Plc led 36 othercompanies on the pricelosers’ category, dropping byN7.08 or 3.12 per cent to closeat N220 per share, Seven-UpBottling Company Plcfollowed with a loss of N3.69to close at N38.31 per shareand Conoil Plc dipped byN2.05 to close at N19.61 pershare.

Other share price losersinclude: Arbico Plc N1.30,Lafarge WAPCO Cement PlcN1.00, MRS Oil Nigeria PlcN0.70, Avon Crowncaps andContainers Plc N0.69, UACNProperty Development

Company Plc N0.50, CadburyNigeria Plc N0.42 andMorison Industries Plc N0.38among others.

However, a decline wasrecorded in equities tradingin the week under review, asa turnover of 930.68 millionshares valued N6.33 billion in17,744 deals, in contrast to theprevious week’s turnover of2.76 billion shares valued atN7.99 billion in 16,961 deals.

The Financial Servicessector dominated trading inthe sectorial analysis, with658.92 million shares valuedat N3.75 billion in 10,381

deals, followed by Servicessector with 55.76 millionshares valued at N145.17million traded in 547 deals.

The Banking sub-sectorrecorded the highestpatronage, trading 493.17million shares valued atN3.64 billion in 9,880 deals.Transaction in the sub-sectorwas driven by Diamond BankPlc, Zenith Bank and FirstBank Plc. Trading in theshares of the three companiesaccounted for 228.65 millionshares, representing 46.36per cent, 34.70 per cent and24.57 per cent of the turnoverrecorded by the sector, sub-sector and total equitiesturnover for the week,respectively.

Private placement: How Starcommscontravened ISA, SEC rule

BY PETER EGWUATU

Investors have continued tolament over Starcomms

Plc’s private placement,saying it was fair for thecompany to have collectedmoney from more than 50investors, in contravention ofthe Securities and ExchangeCommission (SEC)’s rule onprivate placement..

Some of the investors whosemoney were trapped in theprivate placement had statedthat collecting money frommore than 50 people meansthat it was a public offering.

Meanwhile, it is alleged

that Maan Lababidi, theChairman of Starcomms Plcwas squizzed last weekTuesday by officials of theEconomic & Financial CrimeCommission (EFCC) in itsLagos office .

The questioning is comingon the heels of petitions bytop Nigerian investors inrespect of the company’s year2008 Private Placement (PP)handled by Stanbic IBTCChapel Hill Denham asIssuing Houses.

It was gathered thatStanbic IBTC and ChapelHill have began to makemoves to stop further interestin the matter; by refunding

key players in the NigerianCapital Market (NCM)involved in the matter thatwere not allotted shares theirmoney.

Vanguard gathered manyother Nigerians investedvarious sums of money in thesaid private placement andare not on the list of 43persons approved byNigeria’s Securities &Exchange Commission (SEC)for the Private Placementtransaction.

The SEC approvedallotment showed that only43 investors participated inthe Private Placement.

It was also gathered that

many Nigerian investors paidmonies into the offer Proceedsaccounts, but statutoryrequirement allows for 50investors to have beenoffered or allowed to pay intothese accounts (SEC Rule90(i), yet only 43 investors gotallotted.

Meanwhile, one of thepetitioners, Mr. Ayoleke Adu,Managing Director/CEO,MorganCapital SecuritiesLimited had said thatStarcomms’ private statementwas not transparent.

According to him, “Most ofthe investors that depositedmoney into the offer proceedsaccount but who were notamong the 43 investors on theSEC-cleared allotment list,did not get refund.

StandardCharteredpartners CDCon diversity,inclusion

By CHINEDUIBEABUCHI & WILLIAMJIMOH

Standard CharteredBank Nigeria, through

its Diversity & InclusionCouncil, D&I, has enteredinto a partnership with theChildren’s DevelopmentalCentre, CDC, as parts ofmeasures aimed towardscreating an enabling workenvironment for people withspecial needs.

The bank, in a statementsigned by Mr. Diran Olojo,Head, Corporate Affairs, saidthe partnership will see thecompany organising aworkshop designed toensuring fair and equaltreatment for candidates andemployees with disabilities,helping individuals fulfiltheir potential within aprofessional and fair workingenvironment.

He said the workshop’smotto was: “In order tounderstand the world ofpeople with disabilities wemust enter their normalworld”

Olojo said the bank aims toprovide an inclusive andaccessible environment forall employees and customersby proactively identifyingand monitoring progress toaccommodate and serve allpersons with disabilities.

He said, “StandardChartered takes aprogressive approach todiversity and inclusion in thework place. We employpeople based on merit,regardless of age, physicalability or disability, genderor ethnicity. Through thispartnership with CDC andthe workshop, we were ableto understand some of thechallenges people livingwith disabilities face on adaily basis”

“The bank appoints trains,develops, rewards andpromotes employees on thebasis of merit and ability. TheGroup places great value indiversity and strives toensure its approach torecruitment attractscandidates with disabilitiesthrough appropriate events,marketing and inclusiveprocesses.

“To accommodate disabledapplicants and staff withdisabilities, the bank willalso provide the necessarytools and equipment tosupport employees withdisabilities perform theirroles sufficiently.”

Chairman of the Occasion/key facilitator Senator Olorunnimbe Mamora (second left), Pre-senting a certificate to one of the Participants in a three days workshop on Leadership andGrass root governance for Ogun State’s twenty LGA officials, in Abeokuta. With them are: theState Commissioner for Local Government and Chieftaincy Affairs, Muyiwa Oladipo (secondright) and President/CEO, Murenge Group, Olawuni Ogunsola, organiser of the workshop.

30 — Vanguard, MONDAY, JUNE 25, 2012

Micro-Finance

BRIEFS

DURING the National Association of Microfinance

Banks (NAMB) Annual Gen-eral Meeting (AGM), Gener-al Manager and Head of List-ings, Sales and Retention atthe Nigerian Stock ExchangeNSE, Mrs. Taba Peterside,presented a paper calling onMicro Finance Banks (MFBs)to consider listing on the Ex-change as the rigour of list-ing will address the variousshortcomings of Micro Fi-nance Banks in the country.

As a result, the NSE listedby Introduction 1,630,091,000Ordinary Shares of 50 kobo

Microfinance bank answers

call to list on NSE

Stories ByPROVIDENCE OBUH

each of Fortis MicrofinanceBank at N5.00 per share lastweek. The listing added N8.15billion to the Market Capital-ization of the Exchange, in-creasing the visibility of theMFB and differentiating it asone with a high corporate gov-ernance standards, havingmet NSE listing criteria, saysMr. Oscar Onyema, Chief Ex-ecutive Officer of the NSE.

Onyema said “Some of thedifficulties MicrofinanceBanks currently face include:lack of adequate skills set byoperators for effective servicedelivery, lack of proper corpo-rate governance and manage-ment structure, inefficient in-ternal controls, poor creditadministration and lack of ad-

equate capital base leading toinsufficient loanable funds.

“It is no mean feat that Fort-isMFB has taken a strategicstep to join the prestigiousclub of quoted companies inNigeria and I once again com-mend them for this bold step.I will use this opportunity tocall on other MFBs who areundecided on whether to listtheir shares on the Exchangeto make up their minds asthere are significant benefitsto be derived from being a list-ed company.”

Managing Director of thebank, Mr. Kunle Oketikun,said that the bank planned togrow its business by provid-ing access to funding needsof various middle and lower-

end entrepreneurs in diversevocations, adding that it is aleading player in the sector,positioned to take advantageof available opportunities.

Oketikun said the bank list-ed in order to bring bankingservices to majority of Nigeri-ans that are vastly unders-erved, create more wealth forinvestors who will partner withthe bank to establish a pres-ence in the 774 Local govern-ments in Nigeria over time.

He stated, “Microfinancingis the future and holds the acefor rejuvenation of the Niger-ia economy”

He disclosed that Fortis willundertake a secondary equityoffering to raise N2 billion andalso sell five-year bonds toraise N5 billion.

“The funds will be used toincrease working capital andacquiring a national licence.He said the target investorsfor the bond sale will be insti-tutional investors especiallythe pension fund administra-tors,”.

ACCION MicrofinanceBank has further in-

creased the number of itsbranches to 13 as it opensanother branch in Agege.

The bank has grown from itsflagship branch in Okearin toIdi-Oro, Ladipo, Trade FairComplex, Oyingbo, Ogba,Idumagbo, Pen Cinema, IsaleOja, Ikotun, Ketu, and Su-rulere. Its new branch is situ-ated at Ashake house, No.223, old Abeokuta Road,Agege, Lagos.

Managing Director of thebank, Mrs. Bunmi Lawsonexplained that, opening abranch in Agege is in line withthe banks focus to make thefuture of the people brighter,by giving micro entrepre-neurs and low income earn-ers easy and reliable accessto loans to grow their busi-nesses.

Lawson added that the newbranch will enable small busi-nesses in the area to grow, aswell as improve the economicconditions of the businessowners.

She said that the bank willbe expanding to Bariga,Akowonjo, Alaba, Ajah andIkeja before the end of 2012.

According to her, “In its fiveyears of operations, AccionMFB has successfully dis-bursed over N12 billion asloans to micro entrepreneurs.Currently, the bank has over12,000 active clients with aportfolio of over N1.5 billionand 70,000 active savings ac-counts amounting to overN450 million. With a total as-set of N2.2 billion, sharehold-ers funds of N1.5 billion, aPBT of N306 million.

Continuing she noted thatthe bank remains a leading

Accion MFB opens new branch in AgegeMFI in Nigeria, positioned todeliver excellent performancein many years to come, with acommitment to making thefuture of its clients and other

stakeholders brighter. Shesaid, “AMFB has started itsATM and POS pilot projectfor its client to be able to with-draw at anytime of the day.”

•Cross section of women selling roasted plantain, popularly known as boli

GLOBALLY, Micro, Smalland Medium Enterprises

(MSMEs) are known to con-tribute to poverty alleviationthrough their employmentgenerating potentials.

Hair salon operator, Mrs.Comfort Batholomew, whospoke to Financial Vanguard,said that micro businessesesin Nigeria, deserves more at-tention than they are getting.

Narrating her experiencewith one of the MFBs,Batholomew said, “I was in-troduced to one micro financebank, (name withheld) when

Micro businesses deserve more, says operator

I needed to purchase goods tofill my shop.

“One of their representativesadvised me to have accountwith the bank, which I did andfortunately enough, I wasloaned N400, 000 to pay backwithin three months.

Asked if there was any col-lateral attached to the agree-ment, she said, my husbandused his car document as col-lateral. Unfortunately, Icouldn’t meet up with the pay-ment because there was verylow patronage, I developedhigh blood pressure because

my husband’s car will be tak-en by the bank.

But as God would have it andthe timely intervention of myyounger sister, I was savedfrom the embarrassment ofseizing my husband’s car.

Therefore, I think microfi-nance is only meant for thosewho are financially buoyantand not for the poor or the lessprivilege. The circumstancesattached with the money youare borrowing are not conven-ient at all, once you collectedthe money, there is no peaceor rest of mind.

Bank of Ghanacautions publicof unlicensedmicro-financeinstitutions

THE Bank of Ghana (BoG)has cautioned petty trad-

ers, market women and thegeneral public to desist fromdealing with unlicensed fi-nancial institutions especial-ly that of microfinance busi-nesses.

The BoG warned that trad-ers and all those who patron-ize unlicensed financial insti-tutions do so at their own risk.

Mr. Yaw Gyima Larbi, Headof Micro Finance Unit of theBoG, who gave the advice,raised concerns about the rateat which micro finance insti-tutions were springing up inthe country.

He was speaking at a pub-lic forum on the third nation-al financial literacy week inSunyani. The forum was un-der the theme “financial lit-eracy-creating wealth and fi-nancial stability”.

It was attended by more than500 people from the tailorsand dressmakers associations,credit unions, hair dressersand beauticians associations,micro finance institutions andGhana Cooperative UnionsAssociations.

SBP facilitatesmicrofinanceproviders

KARACHI: The State Bankof Pakistan (SBP) has al-

lowed microfinance providers(MFPs) to mobilize fundingfrom non-bank sources/capi-tal market under the Microfi-nance Credit Guarantee Fa-cility (MCGF) by issuing re-vised guidelines on MCGFThursday, to all banks/ Devel-opment Finance Institutions(DFIs)/Microfinance Banks(MFBs).

The revised guidelines onMCGF stressed upon theMFBs/MFIs to explore otherlocal currency funding oppor-tunities such as raising capi-tal by issuance of redeemablecapital from capital market,thereby increasing fundingavailability and diversifica-tion of sources.

SBP has been encouragingthe viable microfinance pro-viders, both the MicrofinanceBanks (MFBs) and Microfi-nance Institutions (MFIs), tomobilize local currency fund-ing from banks/ DevelopmentFinance Institutions (DFIs)for lending to microfinanceborrowers to enhance micro-finance outreach.

CMYK

Vanguard, MONDAY, JUNE 25, 2012 — 31

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2012

32 —Vanguard, MONDAY, JUNE 25, 2012

CMYK

Vanguard, MONDAY, JUNE 25, 2012 — 33

CMYK

34 — Vanguard, MONDAY, JUNE 25, 2012

CMYK

BRIEFS

Insurance

L-R Managing Director/CEO of Consolidated Hallmark Insurance Plc, Mr. Eddie Efekoha;Chairman of the company, Ugo (Dr.) Obi Ralph Ekezie and Mr. Adedoyin Adeloye of FoundationChambers (Company Secretaries) during the 17th Annual General Meeting held at the MUSONCentre in Lagos on 20th June 2012.

FBN Lifeeyesgeneralbusiness

Managing Director ofFBN Life Assurance

Ltd, Mr. Val Ojumah has saidthat the company plansentering into generalinsurance business beforethe end of this year.

Ojumah who made therevelation in Lagos said thatthe company has concludedplans to approach theNational InsuranceCommission, NAICOM, forsuch license.

He said, “Typically let metell you our long term plan.Today, we are a specialist lifecompany. We believe that wehave resources that we canuse to go beyond lifeinsurance. So this is our plan;before the end of the year,we hope to acquire a generalinsurance license.”

Ojumah also said that hiscompany hopes to startannuity business before theend of the year as well.

In his words “A typicalinsurance company shoulduse the resources it has tocreate income for thestakeholders and that isessentially what we will do.When we were licensed byNAICOM, we were licensedto be a life insurancecompany only. Please bear itin mind we will be goingback to NAICOM to say wewant a general insurancelicense. We have thebusiness plan that says wecan start with life business,progress into general andother areas of insurance.”

Lloyd’sunderwritingsurplus falls

Lloyd’s underwritersmade a surplus of

$323.09 million in calendar2011, according to the latestgeneral insurance figuresfrom the AustralianPrudential RegulationAuthority.

The result compares with a$392 million surplusreported in 2010.

The surplus was made onpremium income of $897.59million and after totalexpenses of $574.5 million.Lloyd’s paid claims of $52.31million last year, but held$293.64 million in reserve forexisting claims.

Its expenses included$154.67 million incommission, fire servicelevies and stamp duties.

By RITAOBODOECHINA

Consolidated Hallmarkinsurance has recorded

a 36 per cent increase in itsgross premium income for the2011 financial year.

According to its annualreport for the year endDecember 31st 2011, thecompany recorded grosspremium income of N3.8billion from N2.8 billionrecorded in its 2010 financialyear.

Chairman of the company,Mr. Ralph Ekezie, whileaddressing shareholders at

Consolidated Hallmark growspremium income by 36%

the company’s annual generalmeeting in Lagos last weekstated that shareholders’ fundgrew from N4.1 billion in 2010to N4.2 billion in 2011.

He said that as a result ofthe success recorded, thecompany recommended adividend of two kobo pershare totaling N129 million.

He attributed the company’sperformance to theunflinching support of itscustomers and theunwavering determinationand commitment ofmanagement and staff ’sagenda of the federal

government especially inagriculture.

The Chief Executive Officerof the company, Mr. EddieEfekoha added that thecompany has continued toleverage new opportunitiesemerging from thetransformation agenda of thefederal government especiallyin agriculture. According tohim, the company shallcontinue to be proactive inresponding to changes notonly in the insurance industrybut the economy at large.

Efekoha also disclosed thata comprehensive learning

and development programmehas been designed to equipthe industry’s technical staffwith modern skills. Accordingto him, the company isleveraging on its robust ICTplatform to maintain its marketshare and deliver cuttingedge services to its customers.

He said “Your Company hasreinvigorated its credit controldrive in line with the resolveto ensure significant recoveryof outstanding premiumwhile ensuring that age ofdebts for new transactions isreduced to the barestminimum, in some cases notexceeding three months.”

On technology, Efekohasaid that the company hascontinued to leverage on itsrobust ICT platform tomaintain its market share anddeliver cutting edge servicesto its customers, adding“Since our last meeting wehave upgraded our ICTplatform to the latest versionof global insurance businesssolutions software andimproved upon thetrailblazing motor insurancetransaction platform for thesale of motor insurance policyonline which your companypioneered in the industry.”

Also, the enforcement driveby the industry regulator ofthe compulsory insurance,according to Efekoha, isexpected to grow premium.“New opportunities emergingfrom the transformationagenda of the federalgovernment especially inagriculture would be exploredby your company to grow thebottom line .we shall continueto be proactive in respondingto changes not only in theinsurance industry but theeconomy at large,” Efekohasaid.

By RITAOBODOECHINA

Sovereign Trust InsurancePlc has recorded a profit

before tax of N798 million forits 2011 financial year.

The company’s pre-tax profitfigure for 2011 represents a 92per cent appreciation fromN415 million recorded in2010.

The company also recordedprofit after tax of N704 million,rising by 128 per cent fromN308 million recorded in2010.

Addressing shareholders atthe company’s 17th annualgeneral meeting in Lagos lastweek, Chairman of thecompany, Mr. EphraimFaloughi, in a statement toshareholders at its annualgeneral meeting, in Lagos,said the improvement in itsafter-tax profit represents the

STI records 92% growth in PBTlargest single profit jump inthe company’s history.

He declared that the totalassets of the company rose byN1.6 billion to close the yearat N7.3 billion.

He noted that thecomposition of the assets waswell structured to position thecompany for better futureperformances

He attributed the company’sfinancial performance to thecommitment of itsmanagement.

He said, “This performancecould not have been achievedwithout the effort of theunified Sovereign Trust teamand our commitment tostructured businessstrategies.

“On the back of greateroperational efficiency andproductivity, we ended fiscalyear 2011 revenue and ourbest earnings per shareperformance in five years.

Our focus on successfullyexecuting a growth strategypaid off as revenue grew by36 per cent to N6.5billionasagainst N4.7Billion recordedin the previous year.

On developments in theinsurance sector, Faloughisaid the National InsuranceCommission, NAICOM, istaking initiatives aimed atensuring stricter compliancewith existing laws andcreating new rules tostrengthen supervisions in theindustry.

He added that theregulation is becoming severein the wake of NAICOM’sshift towards risk-basedregulatory framework to checkcompanies’ exposure tofinancial and operationalrisks.

He said, “Part of thisinitiative includes newregulations on premiumreceivables, solvency,

margins, and guidelines foroil and gas insurance andultimate union towardsinternational financialreporting standards, IFRS.”

Faloughi reiterated that theLocal Content Act as passedby the federal governmentholds significant potential forthe growth of the Nigerianinsurance industry, adding“The policy placesresponsibilities on foreign oilcompanies to retain asubstantial portion ofoperations in the localeconomy. Aside fromaddressing the capital flight,the regulation providesNigerians with anappreciable level of exposureto complex oil and gasunderwriting risk that couldrub off positively on humancapital development andunderwriting expertise in theindustry.”

Vanguard, MONDAY, JUNE 25, 2012 — 35

BRIEFS

Insurance

L- R Company Secretary, Olumide Adeyinka-Fusika; Chairman, Chief Ephraim F. Faloughi;and Managing Director/CEO Mr. Wale Onaolapo of Sovereign Trust Insurance Plc at thecompany’s AGM in Lagos last week

By ROSEMARY ONUOHA

Managing Director andCEO of Aiico Pension

Managers Limited, APML,Mr. Eguarekhide Longe, hassaid that his company isrecapitalised enough to remainin the pensions business for along time to come.

Longe who disclosed thisduring a media parley at thecompany ’s head office inLagos last week said that atpresent the company isadequately capitalised to beatthe recapitalisation deadlinegiving to Pension FundOperators.

It will be recalled theNational Pension Commission,PenCom mandated PensionFund Administrators, PFAs, tobeef up their capital base to thetune of N1 billion before theend June.

Longe said “There is no waywe can be participant in thisindustry if we are notadequately capitalised. We arehere for the long haul.”

According to him, for PFAsto remain in the sector theyshould have a minimumshareholders fundunimpaired by losses of N1billion and that position wouldbe checked after every yearend “such that if you havegone below one billion nairain your balance sheet, youhave ninety days to correctthat.”

Aiico Pension ManagersLimited (APML) wasincorporated in February 2005and in April 2006 as a PensionFund Administrator (PFA) byPen COM under the pension

Flood definition

becomes law

The standard definition offlood is now law, after

the Federal Government ofAustralia enacted theregulations to give effect tothe definition.

Financial Services MinisterBill Shorten says theregulations provide for a two-year transition period, which“will provide insurers with asufficient lead time to updatethe content of productdisclosure statements retrainstaff and implement anynecessary system changes”.

The standard definition wasfinalised last November andhas since been awaitingministerial approval. Itapplies to home building andcontents, small business andstrata title insurance contractsacross Australia.

Mr. Shorten says under theregulations the word “flood”in an insurance contract willmean, “The covering ofnormally dry land by waterthat has escaped or beenreleased from the normalconfines of: any lake, or anyriver, creek or other naturalwatercourse, whether or notaltered or modified, or anyreservoir, canal or dam.”

He says the standarddefinition makes it easier forpeople to know what they arecovered for, and what is notcovered.

Reinsurance

covered almost half

of insurers’ 2011

losses

The latest insurancecompany statistics from

the Australian PrudentialRegulation Authority (APRA)show just how muchreinsurers took a beating fromlast year’s disasters.

General insurance companystatistics for the year toDecember show reinsurancerecoveries picked up morethan $15 billion of the $36billion in gross claims.

APRA gathers theinformation under companylicences, so the data differsfrom profits reported byparent companies. Thestatistics also cover companyfinancial years ending at June30, September 30 andDecember 31. For example,Suncorp Insurance reportedgross earned premium of$1.15 billion and incurred netclaims (after reinsurance) of$652.75 million to list a profitof $345 million for the year toJune 30, while its nationallyfocused sister company Veroreported gross earnedpremium of $1.27 billion, netclaims of $700.3 million anda profit of $613.29 million.

Aiico Pensions consolidates holdon pension sector

reform act 2004.The company commenced

business in May 2006 with avision to be the efficient,customer centric PFA and amission to provide superiorinvestment performance andquality customer relationship,ensuring customers retire incomfort with peace of mind.

With corporate values ofintegrity, professionalism,discipline, prudence,excellence as well asinnovation, APLM productand service offering includesopening and managingretirement savings accounts;additional voluntarycontributions; managingexisting pension; as well as

design and management ofgratuity schemes.

Others are design andmanagement of endowmentschemes as well asmanagement of retireescheme/fund.

According to Longe, APLMis a well focused fundadministrator (PFA), managedby seasoned and well testedexecutives with vastexperience in pensionadministration, riskmanagement, banking,capital market and assetmanagement. The companywas formed to provide firstclass pension administrationservices by a consortium fivereputable companies whichare AIICO, OASIS ANDUNIC which have a longhistory of efficient operations

in pension administrationwhile WEMASEC andMAGNARTIS havecompetence and expertise ininvestment, fundmanagement and stockbroking activities.

He said that Aiico PensionManagers Limited wasincorporated with authorisedshare capital of N400milliondivided into N 400millionordinary shares of N1each.The company’s authorizedshare capital was increased inApril 2007 to N800million bythe creation of additionalN400million ordinary sharesranking parri passu in allrespects with the existingshares of the company. Theauthorised share capital ofN800million is issued andfully paid as at may 2007.

NARTO launches first Corpers’ insurance scheme

BY YINKA LATONA

The leadership of theNigeria Association of

Road Transport Owners(NARTO) has launched theever first corps members’insurance scheme for GroupPersonal Accident (GPA) aspart of their corporate socialresponsibility to the society inLagos.

Addressing a pressconference to announce thebirth of the scheme, NationalPresident of the association,Alhaji Kasim Ibrahim Matayadisclosed that “the schemewhich is in partnership withNEM Insurance PLC is tocover all form of accidents onyour way to camp and

throughout the service year.”The President, who was

represented by the ExecutiveSecretary of the Association,Mr. Emmanuel H. Gowonsaid “The decision tointroduce the scheme is borneout of the recent experiencein our national life wherebymembers of the NYSC havebeen exposed to various lifethreatening hazards in thecourse of observing theirmandatory service year.”

According to him, thescheme, which he describedas voluntary was not withinthe purview of the NYSCauthorities, stating howeverthat “The scheme has beenacknowledged by the NYSCmanagement based on its lofty

philosophy and goals.”The insurance benefits, he

explained “is highlysubsidized by NARTO infurtherance of its corporatesocial responsibilities,”adding that “the insurancepremium payable by eachsubscribing corps member isjust N5,000 per service year.”

While breaking down thescheme’s areas of coverage,the NARTO boss revealed thataccidental death would attractN5m, treatment for injuriesN.5m, permanent disability asa result of accident N5mamong others.

He therefore enjoinedgovernment across the threetiers to buy into the vision ofthe scheme by taking policies

for corps members who weretheir indigenes and thoseserving within their statesand local governments just ashe urged corporate bodiesalso to extend the scope oftheir social responsibilities bytaking the advantage of thepolicy for corps members onprimary assignments in theirvarious organisations.

Present at the conferencewere representatives of theFederal Road Safety Corps(FRSC), NEM InsuranceGeneral Manager(Operations) Mr. AlaniOlojede and the ManagingDirector, Securetechnik, Mr.Tunji Olaosun, who is theClaims Administrator for thescheme among otherdignitaries.

By ROSEMARY ONUOHA

CMYK

36 — Vanguard, MONDAY, JUNE 25, 2012

Homes & Housing Finance

BRIEFS

THE ability of majority ofNigerians to have access

to affordable housing can goa long way in reducing the in-cidence of corruption in thecountry, especially amongpublic officials.

Minister of Finance and Co-ordinating Minister of theEconomy, Dr. Ngozi Okonjo-Iweala, made this assertion ata recent Mortgage FinanceRoundtable, organised by Fed-eral Ministry of Lands, Hous-ing and Urban Development toaddress critical areas of hous-ing finance in Nigeria.

She lamented that because-owning a home which is a fun-damental human need hasgone unfulfilled for millions ofNigerians, people do all sortsof things to ensure that theyhave a roof over their head.“Several studies highlight theclose correlation between ac-cess to decent housing andstability, security and educa-tion. I strongly believe that ifthe majority of Nigeriansowned their homes, this wouldconsiderably reduce the levelof corruption in our country.

“The ability of people to ob-tain mortgage will also reducethe incident of corruption be-cause most people will havehonest ways to actualise theirdreams of owning their ownhomes. A strong mortgage fi-nance system is very crucialto achieving sustainablegrowth in Nigeria’s housingsector towards ensuring se-cure and decent housing,” she

•Gated estate in Asokoro, Abuja

Affordable housing crucial to curbingcorruption — Okonjo-Iweala

remarked.The minister asserted that

the housing sector is crucialin the federal government’stransformation agenda due tothe recognition of the sector’sgreat potentials in creatingjobs for millions of Nigerians.

In her remarks, Minister ofLands, Housing and UrbanDevelopment, Ms. Ama Pep-ple, noted that problem ofland acquisition, cost ofbuilding materials, and thetheory of supply and de-mands are major impedi-ments to providing quality

and affordable housing in thecountry. She said the housingministry is liaising with gov-ernment at all levels to acquireland at reasonable cost formass housing projects andalso with manufacturers likeDangote, among others, to re-duce prices of building mate-rials. She added that the min-istry is exploring possibilty ofembracing alternative technol-ogies to ensure reduction inprices of delivering houses.

Pepple further disclosed thatthe ministry is currently part-nering with 89 private firms to

develop mass housing thatwould ensure that supply ex-ceeds demands, adding “inspite of the growing mortgagemarket in Nigeria, the mort-gage to debt ratio, which is afactor of mortgage penetrationis less than 4 percent

She called for concerted ef-forts on ways to improve ac-cessibility to mortgage financein order to stem the presenttrend whereby most home own-ers in the country rely on theirpersonal savings to build theirhomes.

FEDERAL Mortgage Bankof Nigeria (FMBN) has of-

fered an estate developmentloan (EDL) facility of N2 billionto Enugu State government fordevelopment of mass housingin the state.

Managing Director/CEO,FMBN, Mr. Gimba Ya’u Kumo,announced the loan offer dur-ing a courtesy call on GovernorSullivan Chime in Enugu, thestate capital, recently. He dis-closed that the loan facilitycould be drawn down by estatedevelopers nominated by thestate government, providedsuch developers meet the lend-ing conditions of the bank.

Prior to this offer, the FMBNhad approved cumulative N5.2billion loans to various estatedevelopers in Enugu State forconstruction of 2,027 housingunits in the state. Currently theBank is processing additionalN3.7 billion EDL applications

FMBN offers N2bn EDL facility to Enugu State

for development of 760 housingunits in the state. Ya’u Kumoalso revealed that FMBN hasmobilised a cumulative Nation-al Housing Fund (NHF) collec-tion of N888 million from work-ers in the state. The FMBN bossenjoined the state governmentto provide the requisite infra-structure in the estates fundedby the bank to help reduce thecost of housing delivery and thusmake such houses affordable tothe citizens of the state.

He implored the governor tohelp facilitate timely issuance oftitle documents and subsidisedcost of perfecting property trans-actions with regard to housingestates funded by FMBN in thestate. Ya’u Kumo assured thegovernor that the bank couldarrange a mortgage facility forcivil servants in the state to buyup houses already constructedby the state government.

In his response, Governor

Chime promised to provideland for estates funded byFMBN provided the housingunits to be built will follow thehousing models preferred bythe state government. He saidthat the state prefers buildingestates in blocks of flats of notmore than four (4) floors to con-struction of houses in bungalowstyle, adding that the state gov-ernment has already built somehouses using the housing mod-el. Chime appealed to FMBNto make more funds available tothe state for housing deliverypurposes.

The FMBN delegation includ-ed Mr. Mike Nwogbo, Execu-tive Director (Organisation Re-sourcing Department); Mr.Newman Ordia, Executive Di-rector (Policy and Strategy/Loans Setup and Payoff Depart-ments); and Mr. Ogugua Oka-for, FMBN Zonal Coordinator,Eastern Zone.

80% Nigerianslive in rentedhomes, Ghana22% - Report

EIGHTY percent of Nigerians are living in

ren ted apa r tmen t s o rhomes, according to a re-port by Financial Deriva-t i ve s Company , a r e -s e a r c h - o r i e n t e d n o n -banking financial institu-tion.

In its March 2012 eco-nomic report, FDC notedthat the percentage of ten-ants in Nigeria is hugewhen compared to 19 percent in South Africa and22 per cent in Ghana. Thef irm also reported thatover 85 per cent of thehousing stock in the coun-try is provided by the pri-vate and informal sectorsof the economy.

In order to increase thecountry’s housing stock,FDC observed that key re-forms would need to beimplemented in the mort-gage sub-sector , whi legreater government in-volvement and supportwill be needed in the con-struction of mass housingunits.

The company added thatthe introduction of hous-ing subsidies would alsohelp, noting that in SouthAfrica no tax is levied onhousing.

UK propertymarket reboundsin May

MORTGAGE lendingand home sales in

the UK rebounded in Mayafter a fall in April. TheCounc i l o f Mor tgageLenders said total lendingjumped by 24 percent to£12.2bn last month.

Meanwhile HM Revenue& Customs said completedsales rose from 64,000 inApril to 71,000 in May. InApril property market ac-tivity slumped, after 1 per-cent stamp duty was re-introduced on home pur-chases by first-time buy-ers, following a two-yearexemption.

The CML warned thatmore big fluctuations inlending were likely to ap-pear this year.

Stories byYINKA KOLAWOLE

CMYK

Vanguard, MONDAY, JUNE 25, 2012 — 37

BRIEFS

Homes & Housing Finance

By YINKA KOLAWOLE

EXPERTS in real estatesector have expressed dif-

ferent opinions on the possi-ble impact of local technologyon the development of afford-able housing in Nigeria.

Some realtors are canvass-ing that traditional method ofusing mortals and bricks forbuildings be continued, withthe use of artisans, while oth-ers are calling for the use ofalternative methods of build-ing in construction of houses.

In his opinion, President,Nigeria Chapter of Interna-tional Real Estate Federation(FIABCI), Mr. Kola Ako-molede, said that the conven-tional method of buildinghouses should be maintained.He noted that adopting alter-native technology in housingprovision in the country maybe counter-productive, in thatit might render many en-gaged skilled and unskilledlabour within the sector job-less.

“I believe that more policy-makers, specifically the min-isters, should be at conferenc-es like this to listen to inter-national and professional so-lutions to our housing andreal estate chagrin. Theyshould not just send repre-sentatives who end up givingsecond hand reports. The so-lution to our problem is rightunder our noses we just needto take the right que,” he stat-ed.

For Afolabi Imoukhuede,Nigeria’s representative toUK’s Department For Interna-tional Development, (DFID)Support Programme for theConstruction and Real EstateSector, it is high time seriousconsideration be given to theadoption of alternative tech-nology in mass housingschemes in the country.

He asserted that contrary tothe view held by some, the useof alternative technologywould not cause job loss, butwill actually lead to job boomin the sector. He however,noted that many of the con-ventional technicians wouldhave to improve on theirknowledge to keep abreast ofdevelopment in the sector tobe relevant globally.

According to Imoukhuede,“lots of solutions abound, how-ever, the problem has beenhow to turn these solutionsinto action, which is one of thereasons why this conferenceis important. This conferencecrystallise with DFID’s objec-

Experts differ on effect oftechnology on mass housing

Stories byYINKA KOLAWOLE

tive to significantly addressthe affordable housing quag-mire. We believe that with thevast array of speakers all is-sues in the real estate sectorwill be covered.”

In her opening address,Ruth Obih, Managing Direc-tor/Chief Executive Officer,3Invest Limited, organisers ofthe conference, said the ob-jective of staging the event isto integrate all aspects thereal estate development cycleunder one pavilion as it rec-ognises the integral status of

real estate in economic devel-opment.

She noted that though realtors have been coming

together at different fora to dis-cuss the challenges in thehousing sector and proffersolutions, the challenges haveremained. “Our focus is tobring in Nigerian experts do-ing well outside the countryand some within the countryto come and split open thesedialectics. This approach hasbeen adopted because in our

view, the real estate industryis an interdependent systemwhere no particular sectioncan function well without in-tegrating with the other.

“We found that individualdiscussions and solutions asit has been the tradition overthe years, has recorded mar-ginal success and will stillcontinue to be insufficientuntil concerted efforts, like theReal Estate Unite, are madeto interlink the issues andforge a common front,” shestated.

•Luxury apartments in Ikoyi

HEAD of Service of theFederation, Alhaji Isa

Sali Bello, has declared thatprovision of affordable hous-ing is a critical element ofgood governance.

Bello said this during thecommissioning ceremonies of246 housing units for civilservants located in two estatesin Abuja recently, as part ofthe celebration of the CivilService Week. The two es-tates are named after the twopast female Heads of Service,Ms. Ama Pepple, who is thecurrent Minister of Land,Housing and Urban Develop-ment; and Mrs. Ebele Okeke.

The Head of Service saidhousing challenges are notpeculiar to Nigeria, noting

Housing a function of goodgovernance — HoS*Commissions 246 houses for civil servants

that developing countrieshave over the years facedchallenges of housing deliv-ery for the greater majority oftheir citizens especially thoseon the low income level.“Housing remains one of thebasic necessities for all hu-man beings and its provisionsat affordable rate remain acritical element of good gov-ernance which this adminis-tration has resolved to imple-ment through the transforma-tion agenda. Implementingthis critical componentthrough PPP is another hallmark of this administration.

“Given the critical role thatpublic servants play in theimplementation of policiesand programmes of govern-

ment, the creation of an ena-bling environment for them toown their homes is a commit-ment by government towardsthe promotion of their welfare.I have been informed thatprices of these houses are tru-ly affordable as they are thecheapest houses availableanywhere in the FCT. I amconvinced that the prices ofthese houses and others be-ing constructed for publicservants in the FCT can befurther reduced if the Minis-ter of FCT provides land forthe public private partnershipthat has started between in-digenous private developersand the Federal GovernmentStaff Housing Loans Board,”he stated.

NAFcommissions200 housingunits

NIGERIAN Air Force(NAF) has commis-

sioned its pioneer housingestate comprising 200 unitsin Abuja, in a bid to improvestaff welfare access to afford-able decent and affordableaccommodation.

At the inauguration of theNAF Unity Estate in Lugbearea of the FCT, Chief of AirStaff (CAS), Air MarshalMohammed Dikko Umar, as-sured the staff that provisionof decent and affordable ac-commodation for both serv-ing and retired NAF person-nel is a major focus of theirreform efforts.

He promised that in addi-tion to the 200 housing unitsjust commissioned on 98hectares of land, about 110hectares had already beenpurchased to ensure thatmost of their staff housingneeds are met.

US mortgagerate falls torecord low

THE average rate on a 30-year fixed mortgage fell

this week to a record low forthe seventh time in eightweeks.

Cheap mortgages havehelped drive a modest re-covery in the weak housingmarket this year.

Mortgage buyer FreddieMac said Thursday that theaverage on the 30-year loandropped to 3.66 percent from3.71 percent last week. It’sthe lowest rate since long-term mortgages began in the1950s.

The average rate on the 15-year mortgage, a popular re-financing option, declined to2.95 percent. That’s downfrom 2.98 percent last weekand just above the record2.94 percent of two weeksago.

The rate on the 30-yearloan has been below 4 per-cent since December.

Mortgage rates have beendropping because they tendto track the yield on the 10-year Treasury note. Uncer-tainty about how Europe willresolve its debt crisis has ledinvestors to buy more Treas-ury securities, which are con-sidered safe investments. Asdemand for Treasuries in-crease, the yield falls.

38 — Vanguard, MONDAY, JUNE 25, 2012

Tax Platform

BRIEFS

personal income tax returns doso on the thirty-first of Marcheach year. The Federal InlandRevenue Service in its efforts tomake compliance easier for tax-payers and make tax paymentsconvenient for them and forease of administration, integrat-ed its tax offices from 2005 andsegmented them to date as fol-lows: Large taxpayer offices, oil/gas and non-oil); for companieswith 1billion turnover andabove; Medium taxpayer offic-es; for companies with 200 mil-lion to 999million turnover; Mi-cro and small taxpayers offices;for companies with less than 200million turnover, and Individu-al and enterprise offices. For;Residents of FCT. Armed Forc-es, Nigeria Police and Foreignresidents Taxpayer segmenta-tion guide the taxpayers toidentify the relevant offices tofile their respective tax returnsand for the Tax Authority to tai-lor taxpayer education accord-ing to the needs of the specifictaxpayer groups.

The various tax laws which theTax Authorities operate for var-ious tax types being adminis-tered all contained provisionsfor the Self Assessment Tax Sys-tem. Hence, all taxpayer seg-ments file their tax returns inline with self-assessment sys-tem requirements.

A summary of the legislationguiding the implementation ofthe self assessment system inNigeria are summarised as fol-lows: Constitution of the Feder-al Republic of Nigeria 201;, Fed-eral Inland Revenue Service(establishment) Act 2007; TaxAdministration (Self Assess-

THE Constitution of theFederal Republic of Niger-

ia has provided a leeway forimplementation of self assess-ment, in section 24 (f), it wasstated as follows:-”that it shallbe the duty of every citizen todeclare his income honestly toappropriate and lawful agen-cies and pay his tax prompt-ly”

The self-assessment tax sys-tem was introduced in the Ni-gerian tax laws in 1991 withoperational effect in 1992 andinitially restricted to a thresh-old of taxpayers and extendedto the rest in 1998. However itwas not until 2011 that its im-plementation became effective,through a Project based sys-tem. The Nigerian self assess-ment system requires that:-The taxpayer accurately calcu-late his tax liability, pay the taxdue at designated bank to col-lect e-ticket and file self-assess-ment return on or before thestatutory(due) date for filingsuch tax return; Tax returns areaccepted, by the tax authority,as filed, subject to on-the-spotsimple checks to ensure that taxreturn forms are correctly com-pleted. The returns are latersubjected to further administra-tive processing including riskassessment of all tax returnsand audit, where necessary,determined by risk-based caseselection; Where the taxpayerfails to meet his obligations, latereturns penalty and interestimposed, as the case may be.The tax authority exercises itsright under the law by issuingadministrative assessments ontaxpayers who fail to file taxreturns on due date. Informa-tion for such assessments areobtained by an on the spot au-dit of the taxpayer’s records andfrom third-party sources.

It is noted that ahead of duedates for filing tax returns,

taxpayers are reminded abouttheir obligation to file and paytaxes due.

The Tax Authority relies heav-ily on post-filing controls suchas risk-based audits, collectionenforcement measures, et cete-ra to elicit compliance. The fil-ing and payment requirementsof the different tax types are dis-cussed as follows;- Taxpayersfiling petroleum profits tax re-turns are expected to do so notlater than five months after ac-counting year end; In the caseof companies income tax, re-turns are due within six monthsof accounting year end; Tax re-turns for value added tax aredue for filing within twenty-onedays following the month inwhich the transaction wasmade; and Individuals filing

Self-Assessment Practice in Nigeria

By CHRISTIAN N.ONYEGBULE

,

,ment) Regulations, 2011; Com-pany Income Tax Act 2007 (Sec-tions 52 (2)and 53); PersonalIncome Tax Act 2011(Sections41 and 44); Petroleum ProfitTax Act 2007(Section 30); Val-ue Added Tax Act 2007 (Sec-tions 15 and 16).

The Laws listed above arecontained in the Laws of

Federation Nigeria (LFN) Re-vised Edition (Laws of the Fed-eration of Nigeria) Act 2004Updated to 31

st Day of Decem-

ber 2010. The implementationof self-assessment tax system asre-invigorated since 2011 hasbrought about changes that re-sulted from a re-designed work-flow processes, which gave thetaxpayer his full right to assesshimself/herself, eliminated the100% examination of tax returnsthat was hither-to in practicenow replaced by risk based caseselection for audit, the self as-sessment Regulations gazettedon December, 2011 hasstrengthened and clarified ex-isting provision in the tax laws.These efforts have positively im-pacted on tax administration inthe following ways:

Man-hours spent on issuanceof assessment notices and as-

sociated human activities whichculminated in misplacement offiles, challenges of whether as-sessment notices were issued ornot , delays in service of noticesof assessment have reduced;Disputes arising from issuanceof inappropriate notices and itsassociated cost of litigation havereduced; Taxpayers now seethemselves as key stakeholdersin the determination of their taxliabilities; Imposition of frivolousbest-of-judgment assessmentswithout recourse to taxpayer’sbooks has reduced tax arrears;Tax authority now focuses moreon tax returns that will yield op-timum revenue.

There are adequate provisionsfor sanctions in the extant taxlaws to address any form ofbreach of laws or non compli-ance with the provisions of thelaw; particularly false declara-tions or deliberate attempts toreduce liability to tax under theSelf-Assessment System. Thesanctions include: rejection oftax returns and recourse to ad-ministrative assessment andimposition of additional tax. The

additional tax is imposed on thebasis of information derived fromtaxpayer’s records and thirdparties; Fine or imprisonment orboth fine and imprisonment; In-terest shall be charged for theamount of tax under-declaredwith effect from the date whenthe liability became due; andPrincipal Officers of the compa-ny stand the risk of being im-prisoned as individuals for fail-ure to ensure compliance.

Self assessment implementa-tion has greatly increased col-lection due to the fact that re-turns are filed with evidence ofpayment, while filing of returnshas also greatly increased be-cause of enablement given totaxpayers by the tax authority.

Conclussion:The self-assessment system

guarantees payment of taxesdue on due date in concurrencewith filing of tax returns thusending the era of bogus ‘’bestof judgment assessments”, re-duced the accumulation of un-collectable arrears and buildsmutual trust/ effective partner-ship of taxpayers and tax offic-ers.

•Christian N. Onyegbule isProject Manager Self Assess-ment Project FIRS.

•Ag Executive Chairman, FIRS Alhaji Kabir Muhammad Mashi

Illegal refineries:NNPC strengthenssynergy withsecurity agencies

THE NNPC says i t isstrengthening its partner-

ship with security agencies torid the country of illegal re-fineries, Mr Fidel Pepple, theNNPC Acting Group GeneralManager, Public Affairs Divi-sion, said in Abuja. Pepple,who decried the menace of il-legal refineries and oil theftas well as its negative effecton the nation’s economy,urged all stakeholders to jointhe fight against the menace.He appealed to host commu-nities to volunteer informationto security operativesabout the hideoutof miscreants so as to arrestand destroy their warehouse.

SAHCOL dismisses15 for stealing,other offences

THE Managing Director,Skyway Aviation Han-

dling Company Ltd (SAH-COL), Mr Olu Owolabi, saidthat 15 of his workers hadbeen dismissed in the past sixmonths for stealing and otheroffences. He told aviation cor-respondents in his office inIkeja that the affected employ-ees were sacked to drive homethe point that the companyhad no place for those who in-dulged in nefarious activities.Owolabi said that SAHCOLwas working to improve serv-ice delivery, with the construc-tion of an ultra-modern bond-ed warehouse which wouldbe inaugurated next March.

NPA says nation’scargo throughputup by 100 per cent

THE Nigerian Ports Authority (NPA) says the na-

tion’s cargo throughput hasincreased by almost 100 percent in the last six years.Chief Michael Ajayi, NPAGeneral Manager (Public Af-fairs) said in Lagos that thecargo throughput increasedfrom 42 million tonnes in 2006to 82 million tonnes in 2012.

He said that the tremen-dous improvement was due tothe transformation programmeof President GoodluckJonathan. Ajayi said that re-ports that cargoes were beingdiverted to neighbouringcountries due to inefficiencyand high cost of doing busi-ness in Nigeria were diver-sionary.

The various tax laws which the Tax Au-thorities operate for various tax types beingadministered all contained provisions forthe Self Assessment Tax System. Hence,all taxpayer segments file their tax returnsin line with self-assessment system re-quirements

Vanguard, MONDAY, JUNE 25, 2012 — 39

Aviation

BRIEF

(R-L) Technical Stores Manager, Arik Air, Mr. Ian Carfield and Communications Manager,Mr. Banji Ola look on while Vice President, Operations, Mr. Rob Thomas speaking to Journal-ists during the Media tour to Arik Air Facility ((Maintenance Hanger and Operations ControlCentre) at the Murtala Muhammed Airport, Ikeja, Lagos.

ARIK Airline has

maintained its safety recordsince inception because ofattention to safety details of itsfleet of aircraft. At inception,Arik Air signed a contract withLufthansa Technik andLufthansa CityLine for thetechnical support of thecarrier’s new Boeing 737-300and Bombardier CRJ200 andCRJ900 fleet.The contract has since grownto a Total Technical Support,TTS, contract that covers Linemaintenance at Arik’s hub inLagos as well as componentrepair and overhaul,component spare pooling andMaintenance ManagementServices.

Lufthansa Technik providesthe Total Component Support,TCS, for the airline and this iscomplemented by LufthansaCityLine which provides linemaintenance support as well asengineering services.

A visit to the airline hangarreveals the fact the airlinemaintenance of its aircraft isdone by Lufthansa Technickengineers who are veryexperience and meticulous.They demonstrated theseattributes when they tookaviation reporters round Arik’shanger and explained themaintenance schedules andprocedures of the airline. Daily,weekly and routinemaintenance are done at thehangar. Lufthansa technik alsocarry out A and B Checks onArik planes at the Lagoshangar. C Checks and otherheavy maintenance ,like gearchange, are taking to countrieslike Malta, Dakar, etc that havebigger maintenance facilities.

Aircraft maintenance areperiodic inspections that haveto be done on allcommercial,civil and militaryaircrafts, after a certain amountof time or usage.

The time frame formaintenance procedures

is based on a combination of thenumber of hours the aircraftflies, the number of take-offsand landings, referred to as“cycles”, it makes, plus the ageof the aircraft.

Arik Airline planes are givenPeriodic Service ,”PS”, DailyChecks by Lufthansa Technikengineers. Each aircraft in thefleet is visually inspected andits maintenance log book ischecked for entries andmaintenance needs. The “PS”check can be performedovernight or during the flightday. It averages approximately

Arik Airline fleet maintenancepatterned after Lufthansa

By LAWANI MIKAIRU

’

’

two man-hours. “A” Checksdone by the engineers on Arikfleet is more detailed than the“PS” check. “A” checks areperformed roughly once aweek at approximately 60flight hours.Ariks planes also undergo the“B” check in the Lagos hangarof the airline as the facilitiesin the hangar can handle this.The ‘’ B’’ check is a morethorough maintenance check.

The “B” check is doneapproximately once a month,roughly 300 - 500 flight hours.Besides specific serviceperformed on the aircraft, adetailed series of systems andoperational checks areperformed. A “B” checkaccording to experts ‘’requiresapproximately 100 man-hourson narrow body aircraft ,thosewith only one aisle, andapproximately 200 - 300 man-hours on wide body aircraft,those with two aisles.

Presently, Arik Air carriesout heavy maintenance

and “C” checks of the fleetoutside Nigeria. The planesare sometime taking toSenegal, Egypt, South -Africawhere there are heavymaintenance and engineeringcentres . The “C” check is athorough type of maintenancework . The airframe , virtuallythe entire aircraft , goesthrough an exhaustive seriesof checks, inspections andoverhaul work. There aredifferent levels of “C” checksdepending on the type ofaircraft.

These technical details were

explained during the facilitytour conducted by the variousheads of technical departments.These technical heads includeCapt. Ado Sanusi, Arik Air VicePresident for Flight Operations,Capt. Rob Thomas, SeniorVice-President for Operationsof the airline,LufthansaTechnik team leader Mr MikeRonnerberger and the spareparts warehouse manager.

The facility tour started fromthe airline Operation ControlCentre where aviationreporters saw first hand how the

schedule and movement of theArik planes are planned andflights scheduled. The ControlCentre enables Arik to knowthe position and movements ofits plane at every point in time.The Control Centre hasweather forecast monitor where48 hours weather forecast canbe made to enable the airlineplan its flight schedule. Arik

planes have modernequipment like GPRS, whichis satellite based. Though Arikplanes have capabilities to flyat even extreme weather andmake pin point landing,theairline still subject its flightschedules to NigerianMeteorological Agency,NIMET, weather forecast andNigerian AirspaceManagement Agency, NAMA,control tower directives.

The vision to build a safe andreliable airline was clearlystated by the then ManagingDirector of Arik Air, Alex vanElk , when during the signingof the technical agreementwith Lufthansa Technik, hesaid

“Building an airline that willset new standards in Nigeria,we are relying on a partner,which knows its business formany decades. LufthansaTechnik is our natural choiceto ensure the highest reliabilityfrom the first take-off,”

.The commitment to makingArik Air one of the safest airlinein Africa was emphasized atthe occasion by Walter Heerdt,Senior Vice PresidentMarketing & Sales, LufthansaTechnik. He said “Today we arecommitting ourselves togetherwith Lufthansa CityLine tosupport Arik Air’s vision for anew travel experience inNigeria. From this minute ArikAir will take advantage of thescale effects and savings ofmore than 1,200 aircraft undertotal support contracts with us.”

“Today we arecommittingourselvestogether withLufthansaCityLine tosupport ArikAir’s vision fora new travelexperience inNigeria

THE National Associationof Government Approved

Freight Forwarder,NAGAFF,and Association of NigeriaLicenced Custom Agents,ANCLA, have appealed togovernment to relocate themelsewhere instead of throwingthem out of their presentCargo section of the MuritalaMuhammed InternationalAirport, where they currentlyoperate.

The two unions made theappeal in a joint newsconference addressed by theChairman of NAGAFF, MrSegun Musa and theChairman of ANCLA ,MrDada Igubuzo in Lagosyesterday. The two unionshave been having runningbattle with Federal AirportAuthority of Nigeria, FAAN,who has given them notice tovacate their present premiseswithout giving themalternative venue.

According to Mr SegunMusa and Mr Dada Igubuzowho spoke on behalf of thetwo unions, ‘’ we appealed foralternative place but theregional manager of FAANsaid that there is noalternative. We have been toldthat this place have been soldto concessionaire’’.They saidthey were further told thatdue to the security situationin the country, the NationalSecurity Adviser ordered theyshould be thrown out of thepresent location as theyconstitute security risk to theLagos International Airport .

But the two unions areappealing to the Federalgovernment and the Ministerof Aviation to save them frombeing forcefully evictedwithout alternativearrangement made for them tocontinue their legitimatebusiness. They said ‘’ we areaware that some people in thecorridor of power have soldout this place we areoccupying and they say thatover night they want to flushus out of this place. They wantto use the military strength toflush us’’.

The unions are appealingto be saved theembarrassment as IATA andother international aviationunions and agencies havebeen asking why thegovernment is treating the twounions shabilly.

We are ready tobe relocated— NAGAFF,ANCLA

By LAWANIMIKAIRU & DANIELETEGHE

CMYK

40 — Vanguard, MONDAY, JUNE 25, 2012

Interview

BY PRINCE OSUAGWU

As Nigeria forays into cashless society by 2013, expertshave said that the country could only be taken seriously

if it clears all the bottlenecks that can impinge on globalstandard practices of the system. Unfortunately, some expertsdo not believe that some of these bottlenecks could be settledbefore time, meaning that Nigeria is not ready yet. Amongthese category of people is the Vice President WINI group, Mr.Tim Akano, who spoke to Financial Vanguard recently on someof the things needed to take effect before a proper cashlesssociety can be entrenched.

WINI Group is a partnership platform of the best 25 globalcompanies in e-payment, risk management, InformationTechnology database security and renewable energy. Itsheadquarters is in Boston, Massachusetts, with offices in manyAfrican countries including, Lagos Nigeria.

WINI Group is known world- wide for partnership withglobal companies and institutions on e-payment and otherdigital transactions. What can you say about Nigeria’spreparedness towards a cashless society?

Judging by what is on ground as at today, Nigeria is notfully ready. As far as cashless economy and IT security isconcerned, the expenses the banks have made so far are ontheir networks and not on customers’ awareness. That is theopposite way of preparing for a cashless economy. As we speak,

Cashless society at Nigeria’s authenticationlevel is like sleeping naked in the open —Akano

,

,

a great majority of people stilldon’t know what to do toprotect themselves whiledoing transactions online.That aspect of awarenesscannot be ignored or even betreated with levity, if we areto be taken seriously. So forus to be fully ready, we canborrow a leaf from the strategyin South Korea. When thecountry started cashlesseconomy, the bulk of moneyfor the first year was spent oneducation of people. It wasnot until people were fullyeducated and empoweredwith what and what not to doin a cashless economy that thecountry effectively launchedthe system.

In Nigeria, yes, the banksare getting ready, but are thepeople getting ready? Theanswer is ‘No’ Again, there isalso the need to have anintegrated platform foridentifying Nigerians. This isalso very important in theidentity management forsuccessful cashlesstransactions. If we are serious,we need to push thegovernment on its effortthrough the National IdentityManagement Commission toeffectively deliver a robustintegrated database foridentifying Nigerians.However, the role of theCentral Bank of Nigeria andall the people that areinvolved in driving thiscashless economy iswonderful and should beappreciated. We appreciatetheir courage because,actually, there must be astarting point.

But the country may losemuch waiting for all these tobe in place before kicking-offthe system.

We are quite aware of thenumerous benefits derived ina cashless economy. We savemoney when we go cashless;at least the money used inprinting notes will be saved.It will also reduce the cost of

transporting money from oneplace to another, particularlywith Bullion Vans.

The most of all the benefitsis that it saves life. Incidentsof armed robbers attackingand dispossessing people oftheir cash will greatly reduceif cashless initiative isintroduced, because even therobbers would know thatpeople are no longer carryingcash about any more.

When cashless society isimplemented the right way, itbecomes very impossible forpeople to exchange cash atgovernment levels. Thebribery scandal rocking one ofthe members of House ofAssembly would have beenimpossible in a propercashless society.

But having said all these, wewill lose much more if we getthe implementation wrong.Today, irrespective of theinvestments the banks havemade on the security of theirnetworks, they also need to domore. So are the hotels andAirlines. Without propernetwork security deployment,hackers can buy tickets onlinewithout paying, make hotelbookings without actuallypaying, and you can imaginea huge loss that would be tothe economy. Cashless societyat our level of authenticationwould look like sleepingnaked in the open.

Since you have partneredmany institutions that havedone this before, what arethe areas of intervention thatWini group is bringing toNigeria to help addresssome of the loopholes in thesystem?

Wini Group is coming with

a lot of services for the banks,for the telecoms, for thepayment switching firms andthe hotels and airlineoperators. Wini Group, like Iearlier said has 25 majorpartners from America,Europe and Asia. One of themis SafeNet, a leader in worlddata security. It will interestyou to know that about 80 percent of world cash transactionstoday run on our SafeNettechnology. The number twovalue we are bringing to theplayers is in the area ofencryption. This helps toprotect your data such that if,

at all, by mistake, your datagets compromised, the fellowwho has your data cannotinterpret it. It is useless to himbecause it is encrypted so hewon’t have access to it.

The third value is in the areaof Payment Card IndustryData Security Standards, PCI-DSS. All the banks in Nigeriahave been mandated by theCBN to be PCI-DSS-compliant and we have one ofthe biggest names in PCI-DSScompliance in the world thatwe are partnering with. PCI-DSS is a regulatoryrequirement, which is theinternational due process of e-payment.

However, the mistake somebanks are making today is toequate PCI-DSS to security.PCI-DSS is not the same assecurity but just a standard.The 1.5 million MasterCardand Visacard that werecompromised globallyrecently also had PCI-DSS.The due process is not thesame thing as security andthat is why in WINI Group,we are not just preachingPCI-DSS, we are bringing tothe market what we call SecurePCI-DSS.

On the area ofauthentications, Wini Group

has the best technologysolution in the world….

Authentication sounds tome like insurance. Does yourauthentication guaranteeinsurance on customers in acashless society?

Of course! We have asolution called Livensure.This solution helps customerswithdraw their money fromATM, without cards but justtheir mobile phone. It is theantidote to customers’lukewarm attitude to e-business in the sense thatonce you use our technologyunder Livensure, ourinsurance company in theUnited Kingdom pays you the

full value of your money ifanything goes wrong. It hasbeen used for years andnothing had gone wrong. Soif the banks deploy Livenureon their system, the days ofcustomers money missing andbanks telling them story isgone. This will also giveconfidence to most Nigerians,who have not embraced thecashless economy becausethey fear they would lose theirmoney. The biggest bank inthe UK today, Lloyds bankuses Livensure, so why won’tour banks adopt the samething for their benefit and thebanking customers so thatevery transaction on theirnetwork is secured.

Do you think banks areready to deploy thesetechnologies and solutionsyou are talking about, afterthe investments they’ve madeon their networks already?

Oh yes! The banks haverealized the need for them todeploy these solutions eventhough we will continue toengage them. The hugebenefits they offer for securetransactions in a cashlesssociety cannot be ignored.However, individualcustomers also have to helpthemselves by being securityconscious. For instance, thereare other products we havewhich tracks the mobiledevices and PersonalComputers like Laptops.Today even our bankinformation are stored on ourmobile devices and if they getlost, we lose not only thedevices but the valuableinformation they contain. Sowe also have to takemeasures.

Incidents of armedrobbers attacking anddispossessing people oftheir cash will greatlyreduce if cashlessinitiative is introduced

Tim Akano, VP, WINI Group

CMYK

Vanguard, MONDAY, JUNE 25, 2012 — 41

BRIEF

42 — Vanguard, MONDAY, JUNE 25, 2012

Vanguard, MONDAY, JUNE 25, 2012 — 43

ICT

Solar powered telecom network set todebut in Nigeria

NIGERIA willsoon experience a

solar powered telecom-munications networktagged WorldGSMthrough a company un-der the Shyam Group,VNL. Shyan Group is aWest African and MiddleEast based Operator.

According to VNL,WorldGSM will be thefirst solar poweredbroadband network inNigeria and has been de-signed to serve ruralpopulations in develop-ing economies. It willalso help to bring mobileinfrastructure to billionsof people yearning for itin the rural and remoteareas.

The network draws nopower from the electrici-ty grid. The hardware,software, towers and net-work architecture havebeen designed from theground up, to extend ex-isting GSM networksinto areas that were dif-ficult to serve.

Chairman of ShyamGeoup, Mr. Rajiv Me-hrotra, describedWorldGSM as a com-pletely solar poweredbroadband network solu-tion for rural and remotelocations with a clear cutagenda to cater for ruralconsumers who do notlive in cities and haveARPUof 3 dollars or less.He said that the fact thatthe rural dweller neededservices that would copewith their low ARPU andalso be profitable, neces-sitated the innovation ofthis solution which doesnot run on diesel.

“The general purposenetwork of GSM is en-tirely unsuited to theunique challenges ofserving rural and remotecommunities. As opera-tors continue to expandtheir networks into theseareas, these challengescan escalate to a pointwhere any further expan-sion is no longer viable.As a result, vast portionsof the developing worldare denied telecommuni-cation access. Power wasclearly not an issuewhen GSM was con-ceived. A conventionalbase station site alonerequires about 3,000 to5,000 watts to run andthis is outside of anyBase Station Controller

(BSC) or Mobile Switch-ing Center (MSC),” Me-hrotra said.

He observed that in re-mote areas in Nigeria,there is either no electric-ity grid or it’s only avail-able for a few hours eachday. Diesel generatorsare used to fill the gaptimes, resulting in sever-al billion litres of dieselfuel being burned everysingle year and that die-sel prices are just onepart of the story.

He added that “poorfuel quality, cost andtime to transport it to re-mote locations, storagecosts, pilferage and theftmade this power sourceunsustainable for ruralGSM deployments. Thegenerators themselvesare typically overworkedand poorly maintained,resulting in replacementevery two or three yearsand also result into morewaste and more green-house gas emissions”.

Another veteran in theNigerian telecommuni-cation industry, TusharMaheshwari who also

doubles as the ChiefCommercial Officer –West Africa and MiddleEast, Shyam Group, not-

ed that VNL was com-mitted to improving therural connectivity in Ni-geria and will work with

Symantec fingers explosive ICT devt inNigeria’s growing cyber threat

Symantec Channel Manager, Nigeria & Ghana, Adeyemi Adeleke; FinanceDirector, JSP Communications Consultancy, Joseph Adeboyejo and Syman-tec Territory Manager, IWECA (Indian Islands, West, East and Central Afri-ca), Sheldon Hand during the company’s media roundtable in Lagos.

AIRTEL Nigeria,

l a s tweek, re-launched

its flagship 2Good planwith extra benefits thatallows customerschoose from amongstthree t ime bandsduring which they canconnect family, friendsand business associ-ates at net rate of 10k/sec.

Tagged 2Good Time,the three special timebands are: TrafficTime - 5am to 7am;Lunch Time - 1pm to4pm and Party Time -10pm to 12.00am.During these t imebands, customer willenjoy special on netcall rate of 10k/sec.

Subscribers to the2Good time service willalso enjoy midnight onnet call rate of 10k/secas well as 20 free SMSon their first N100 re-charge of the month.

Airtelrepackages2Good offer

all stakeholders to ensurethat the rural communica-tions get the desiredthrust.

WORLD renownedcyber Security com-

pany, Symantec, has fin-gered Nigeria’s explosiveICT growth as one of thereasons the countrykeeps soaring in cyberthreats. Symantecthrough its TerritorialManager, Indian OceanIslands , West, East andCentral Africa , Mr Shel-don Hand, while interact-ing with Journalists in

Lagos last week, said thatthe price the countrywould have to pay in thekind of growth experi-enced in ICT in the lastdecade would also be acommensurate threatgrowth.

He said that the worsthit would be the smalland medium businesseswhich, about 50 per centworldwide, do not haverecovery plans. This is

even when reports haveshown that 71 per cent ofSMBs that suffered a cy-ber attack never recov-ered. Hand however,said that enterprises andconsumers needed to bewary about four keytrends in the securitylandscape which it dis-covered in its Global In-ternet security threat re-ports volume 17.

The report released re-cently identified four key

trends in cyber threat, in-cluding malware attacks,targeted attacks, mobilethreats and data breaches.

It will be recalled that thesame report indicated thatNigeria stepped up six po-sitions to rank 59th in globalinternet threat, a case Handsaid was partly due tomajor developments in theICT landscape includinggrowth in internet sub-scription and penetration,adoption and use ofmodern gadgets and appli-cations like smart phones,PCs and tablets as well asNigeria’s in roads in sub-marine broadband cables.

Hand even predictedthat the threats targeted atmobile devices would beon the increase in 2012,particularly as the sale ofsmartphones and mobilemoney transfers continuedto gain ground. Mean-while, in the same way wasmobile malware said to bepoised for tangible threatto enterprises and consum-ers if they failed to takemeasures at safeguardingtheir systems and devices.

Hand summed it all upthus: “While profits remainlucrative in the Personal

Computer space, mobileoffers new opportunitiesto cybercriminals that po-tentially are more profit-able. Mobile growth alsocreates an urgent concernto organisations aroundthe possibility of breach-es. Given the intertwiningof work and personal in-formation on mobiledevices the loss of confi-dential information pre-sents a real risk to busi-nesses. Unlike a desktopcomputer, or even a lap-top, mobile devices areeasily lost.” He advocatedbest practice guidelines,including developing andenforcing IT policies,protection of information,authentication of identi-ties, efficient manage-ment of systems and ade-quate protection of keyinfrastructures.

But Hand was also onhand to unveil some ofSymantec’s productsmeant to help businessesout of the cyber threatquagmire. They includethe Backup Exec 2012,which is a cloud-baseddisaster recovery solutionwith simplified user inter-face and NetBackup 7.5that simplifies manage-ment and recovery of stor-age level snapshot from asingle console.

Stories byPRINCE OSUAGWU

A VNL Solar network site

BRIEF

44 — Vanguard, MONDAY, JUNE 25, 2012

Appointments & Promotionsvicahiyoung@yahoo.com

BRIEF

IMO State Governor,Chief Rochas Okorocha,has approved the

appointment of Mr. ChikezieDozie as Director General,Imo State InvestmentPromotion Agency, ISIPA andMr. Okey Obi Dike as GeneralManager, Imo StateTransformation Commission,ISTC.

From Left: Medical Director Clinical Research, GlaxoSmithKline UK, Dr. Stephen Mason;Brand Manager Sensodyne, Isaac Okanlawon; and Expert Marketing Manager,GlaxoSmithKline, Kavita Sud, at the unveiling of the newly improved Sensodyne toothpasteduring the Nigerian Dental Association, NDA, National Conference in Lagos

ChevronappointsHaastrupGM ongovernmentpolicy

CHEVRON NigeriaLimited, CNL,operator of the

Nigeria National PetroleumCorporation, NNPC/ChevronJoint Venture, has announcedthe appointment of Mr. DejiHaastrup as its GeneralManager, Policy, Governmentand Public Affairs, PGPA,Department.

Until his new appointment,Haastrup was the GeneralManager, Security Services.

Haastrup who joined CNLin 1995 as a Coordinator,Government and CommunityAffairs has a Master’s Degreein Communication Arts fromthe University of Ibadan andhas handled assignments ofincreasing responsibilities inChevron operations withinand outside Nigeria.

He has worked in mostPGPA Manager rolesincluding ManagerCorporate Responsibility,Manager Communications,Manager CommunityRelations, Public AffairsSuperintendent (Escravos -Delta State), PGPA Manager,East (Port Harcourt), andManager PGPA BusinessServices (Lagos).

He also worked in theUnited States of America asInternational Liaison for LatinAmerica Business Unit and asCorporate ResponsibilityProject Advisor.

Okorocha appoints DG, GMfor ISIPA, ISTC,

According to a GovernmentHouse release by theCommissioner designate, Mr.Chinedu Offor, Rev. J. C.Ayozie was named SpecialAssistant to the Governor,Owerri Capital DevelopmentAuthority, OCDA.

While the appointments areto run with immediate effect,Governor Okorocha equally

directed the redeployment ofChief Cyril Y. Amako asSpecial Adviser to theGovernor on State and LocalGovernment Projects.

Meanwhile, all the newlyappointed commissioners willbe sworn-in today, at SamMbakwe Chambers,Government House, Owerri.

It will be recalled that sixformer members of the StateExecutive Council weresacked by Okorocha and newones appointed to replacethem.

THE Congress of theUnited States in

collaboration with AfricanSociety Summit has honouredbusinessman andphilanthropist, Captain HosaWells Okunbo with the 2012Africa Titans Award.

Okunbo is the chairman ofWells & Jeta Entertainment,Westminster SecuritySolutions, Hoslyn Venturesand Hoslyn Oil & Gas ServiceLtd, the indigenous oilfieldservice company that was

Okunbo gets US 2012 Africa Titans Awardresponsible for the EarlyProduction Facility (EPF)project at NNPC/NPDC,between 1998 and 2001,among other companies,received the award last week.

According to a letter by twoMembers of Congress, BobbyL. Rush and Yvette Clarke,the award was in recognitionof his “strides on behalf ofAfrica in the internationalarena.”

The statement said CaptainOkunbo had been one of

those “who seek to project anew and hopeful light onAfrica. Members of Congressin conjunction with theAfrican Diplomatic, and theUS business community, wantto show their support foraddressing challenges andtaking advantage of thediverse opportunities thatexist throughout Africa.”

In his congratulatorymessage, Chairman ofDanjan Sports UK (promotersof Arsenal Tour of Nigeria),

Hon. Razaq Bello-Osagie,eulogized Captain Okunbo asan uncommon philanthropisttotally committed to theimprovement of the quality oflife his people and thedevelopment of his nation.

“This illustrious son of EdoState has distinguishedhimself in many fields ofhuman endeavour to merit therecognition of the USCongress,” Hon Bello-Osagiestated.

Diageo Africawins award

DIAGO, the world’sleading premium

Drinks Company, has won the‘Good Corporate Governance’award at the 2012 AfricanBusiness Awards, ABA.

The event organised byAfrica Business magazine andthe Commonwealth BusinessCouncil (CBC), was held inLondon on June 7 andattended by more than 300leaders from government,business and the diplomaticcommunity.

The ABA has, over the lastfive years, becomes aprestigious platform tocelebrate business excellenceand best practice, recognisingthe leaders and companiesthat are driving Africa’srapidly transformingeconomies.

Winners have made anoutstanding contribution tothe development of thecontinent, the economicempowerment of its citizensand the transformation ofAfrica’s image in internationalmarkets.

The Good CorporateGovernance award recognisesresponsible business ethicsand practices, transparencyand an active policy to tacklecorruption.

On receiving the award,Anne McCormick, CorporateRelations Director, DiageoAfrica, remarked that, “At thecore of Diageo’s business andour values is the commitmentto being one of the world’smost respected companies,with an earned reputation ofintegrity, fairness and goodgovernance. This is a sourceof pride for our employeesand is core to the long termsuccess and sustainability ofour business.

CHAIRMAN Afren Plc,Mr. Egbert Imomoh, has

been named the BusinessLeader of the year inrecognition of his leadershipskills and contribution toeconomic development.

The award, African BusinessAward, ABA, is organizedannually by African Businessmagazine and theCommonwealth BusinessCouncil, CBC, to celebrateexcellence and best practicein African Business andrecognise those who havedriven Africa’s rapidlytransforming economy.

Imomoh successfully led the

AFREN chairman named Business Leader 2012

growth of Afren’s Nigerianasset base, establishedpartnerships with indigenouscompanies and realised FirstOil at the OkoroSetu and Ebokprojects. He was alsoinfluential in theestablishment of FirstHydrocarbon Nigeria, FHN,an indigenous Oil and GasCompany owned by aconsortium of Nigerianbusinesses which takesAfren’s partnership model tothe next level through a directequity investment in anindigenous company.

Prior to joining Afren,Imomoh had several

leadership roles including atShell Petroleum DevelopmentCompany, SPDC, (Nigeria),one of the Shell group’slargest operating companieswhere Mr Imomoh wasresponsible for operating ajoint venture that producedapproximately 1 millionbarrels of oil per day.

Trained as Mechanical andPetroleum Engineering, MrImomoh held a wide varietyof senior positions throughoutthe Shell group from ChiefPetroleum Engineer in SPDCto Technical and PlanningManager to DeputyManaging Director of SPDC.

First Banksponsorsshort-formseries on CNN

First Bank of Nigeria issponsoring ‘From

Passion to Portfolio’, a newseries of short-form films onCable News Network, CNN,International that will focus onindividuals whose hobbieshave evolved into profitableinvestments.

The series, which willappear in commercial airtimeon CNN International,follows a wide variety ofpeople from across the globe,examining how theircommitment and drive indoing what they truly lovehave helped them achievebusiness success.

Every month CNN willexamine the backgrounds ofthese individuals anddiscover what drove them toturn their hobbies intobusiness ventures.

•Deji Haastrup

Vanguard, MONDAY, JUNE 25, 2012 — 45

People in Business

BY EBELE ORAKPO

Dr Evelyn OmawumiUrhobo is theM a n a g i n g

Director/Chief ExecutiveOfficer of Morgan SmartDevelopment Foundation(MSDF), an NGO dedicatedto the economicempowerment of rural andurban poor women andyouths. In this chat withFinancial Vanguard, DrUrhobo said that throughMSDF, she has been able tohelp women access credit toimprove on their livelihoodpattern and also be in aposition to take care of theirfamilies. Excerpts:

After her O’Level andA’Level certificates at HusseyCollege, Warri, Delta State, DrEvelyn Urhobo proceeded tothe University of Lagos andupon graduation, joined thecivil service.

“Along the line, I workedwith an international agency.We brought refugees fromSouth Africa to Nigeria. Forsome years, I was a studentcounselor. Eventually, SouthAfrica gained independenceand they had to go. I thencame into the mainstream civilservice,” she said.

Because of her love foreducation and thirst forknowledge, Dr Urhobo whobelieves that education keepsthe mind broadened, agile,and makes one have access toinformation, has over the yearsparticipated in a lot ofprogrammes to update herinformation. From LagosBusiness School to DukeUniversity, North Carolina,US and recently, at Harvardfor a short course inNegotiation. She is doing amaster’s programme inCorporate Governance atLeeds MetropolitanUniversity, UK. “So in termsof education, I have reallyensured that I am abreast withdevelopments to make memore knowledgeable in theareas that I want to getinvolved so that I can comefrom a position of strength inwhatever I am doing.”

Okere Community Bank:“I have always been social

work-oriented, always wantedto add value to society so whenthe Babangida administrationstarted approving that wecould set up communitybanks, naturally, the womengroup that I belonged to, TheItsekiri Duchess, decided to setup a community bank in Warribecause we hoped we coulduse it to empower the womenwhich was our concern at thattime. Whatever you do, youmust always have anarrowhead if you want tosucceed so inevitably, it waslike I had to do all the pushingto ensure that the projectsucceeded. This year, the bankwill be 20 years old. We neverreally looked in terms of profit,

Women are theengine room fordevelopment—Dr. Evelyn Urhoboit was more in terms of usingthe bank to provide service andhelp the women access creditso that they can at leastimprove on their livelihoodpattern and be in a position totake care of their families.Today, we have over 18,000customers in that bank who weare effectively empowering interms of making them haveaccess to credit to help themimprove their livelihoods,” shestated.

New Project:“Recently, I started a project

called Tracking Women out ofPoverty where we look atspecific number of women thatwe have empowered over aperiod of time to see the impact.It is a project we are workingon now and we want to reporton it over a five-year period tosee where they started andwhere they are now, to be ableto confirm that whatever we aredoing in that bank has reallymade impact,” she stated.

From Community toMicrofinance Bank:

“Four years ago, the FederalGovernment said we shouldtranslate into microfinancebank by increasing our sharecapital and I remember sayingthat ‘please I did not want torun a business, I wanted acharity organisation with acommunity bank so this stresslevel is too much.’ But we wereable to meet the requirementand we have actuallymetamorphosed into theCoastline Microfinance Bankfrom Okere Community Bank.At some point, they even

withdrew our licence becausethey said our debt portfolio wastoo high but like I said, thewhole essence of the bank wasto empower women so we werereally very micro loan-driven interms of making a lot of peoplebut unfortunately, it led to ourhaving very high loan portfolioand the CBN actually de-licensed us and we had to goback to the drawing board. Butwe are doing very well. Wehave not lost our focus ofempowering women becausethey are the engine room fordevelopment in this country

and we must come to terms withthat and see how we canimprove their livelihood. Theyare the mothers of our children,some are even bread winnersin their families and unless weget them empowered, thebedrock of the nation will notbe well formed. We are goingto have problems when motherscan no longer meet theirresponsibilities towards theirchildren. That is why ourconcentration is actually onempowering women which wehave done over the period.”

Paying back loans:“Interestingly, the poor ones

pay back because they say theydon’t want trouble. We reallygot burnt when we tried to docommercial banking by givingout bigger loans to businesspeople who come desperate.When you give them loans, theydon’t pay so a lot of ourproblems actually came fromthose people that we shouldn’treally have had business givingloans to. But those within theN50,000 - N500,000 loanbracket do not default to a verygreat extent. We have this esusuthing where we make themregister for the esusu so thatthey must have dailycontribution and at the end ofthe month, they use part of it topay off the loan they took andplough back the rest into theirbusiness. And because we havegiven them money to build uptheir businesses, at least thebusiness will get more efficientand they have more money totrade with and have income. So,we really do not have problemwith these people and that iswhy our business model now isgeared towards actual microcredit banking where we aregoing to just be dealing with thesmall beneficiaries.

We monitor these businessesbecause like I said, it is a dailyesusu thing, we have esusupeople who are on the fieldeveryday to collect their dailycontributions so inevitably, theyget visited at their place ofbusiness. We knowimmediately when they run intoproblem. So you have to monitorto see that she gets back andcontinue. In very few cases, we

had to put in more money whenthey have really fallen back toget them going again.

Contribution to the economy:“It is the informal sector that

is carrying this economy. Theformal sector has collapsed. Theinformal sector contributes over60 per cent because they are thepeople who are actually settingthe engine moving and that iswhy when the wholemicrofinance policy came onboard, everybody was excitedbecause it was like we got theright focus.

Unfortunately, a lot of thingshappened in that sector. If yougo by the policy itself, thefederal, state and localgovernments were to channelfunds through the microfinancebanks so that the informal sectorcan have access to funds. Weare in a dilemma now. We havebeen able to mobilise customersand our savings portfolio is veryhigh because we have createdthe awareness and we don’thave money anymore to giveout to customers. As we speak,we have documented request ofabout N56 - N60 million but wedon’t have that kind of money.

So we will go back to the CBNand try to access some funds.We are also looking at thelikelihood of getting somecheap funds from otherorganisations that are reallycommitted to driving growth inthe sector,” she stated.

*Dr. Evelyn Urhobo... Our concentration is actually onempowering women

Colours in Africa Ltd. opens Lagosshowroom

An indigenous furnituremanufacturing and re-tailing company, Co-

lours in Africa Limited, will onWednesday, June 27, formal-ly open its Lagos showroomand conduct a four-day fur-niture exhibition at its Lagospremises on Victoria Island. The event is expected to bedeclared open by the LagosState Commissioner for Com-merce and Industry, Mrs.Sola Oworu while Mrs. Ifeo-ma Idigbe, Executive Direc-tor, Benin-Owena River Ba-sin Development Authorityand board member, WomenIn Management & Business(WIMBIZ), will be speakingon the topic: The Nigerian

Standard. A Press release by the com-pany said the four-day furni-ture exhibition which comesup between June 27 and 30,will be in two parts. “The firsttwo days will be open to in-dustry players like propertydevelopers, estate managers,architects, interior designers,industrial designers and com-panies with similar interests,while the last two days willbe open to the public and ourexisting and prospective cli-ents." The product range, accord-ing to the release, comprisesoutdoor and patio furnitureproduced by persons withspecial needs - deaf and

dumb, indoor furniture, hotelfurniture like beds and bars,construction furniture, officefurniture and other accesso-ries like lamps.The company started full man-ufacturing operations nineyears ago with the intentionof empowering the youththrough employment andskills acquisition.Colours in Africa Limited wasestablished in 1994 by Dr. SojiAkinkugbe, a physician, andspecialises in the design, pro-duction, and retailing of resi-dential, office, hotel, resortand leisure furniture in addi-tion to cabinetry and fittingfor hotels and apartments.

When you givethem loans, theydon’t pay, so a lot of our

problemsactually camefrom thosepeople that weshouldn’t reallyhave hadbusiness givingloans to ’

,

CMYK

46 — Vanguard, MONDAY, JUNE 25, 2012

Media & Advertising

BRIEFS

STORIES BY PRINCEWILLEKWUJURU

Keystone Bank haslunched a new cam-

paign. The campaign, ‘Nev-er Say Never’ which debut ontelevision stations and news-papers on June 18, 2012 seemsa commitment by the bank.

The campaign is a storyaimed at inspiring all stake-holders of the bank and Ni-gerians in general that Nige-rians can break into new ho-rizons if it persist in its drive.

Bearing in mind the gloomysocio-economic landscapesthe country is witnessing pres-ently, the campaign says thebank can only be relevant topeople by inspiring them nev-er to give up on their dreams.

Speaking on the campaignand its relevance to the histo-ry of the bank, Mr. KennyBadmus, Creative Director ofCentrespreadFCB, said it wasconceived to let the bankingpublic know that the bank isnever tired of giving consum-ers the best.

Badmus said, “The Televi-sion commercial is a journeyof a mountaineer who keepsclimbing a mountain thatseems impossible to surmount.In the end, we discover ed thatthe mountain he is climbingis actually a financial graph ofKeystone bank”

Speaking further, Badmusstated that the commercial isa brilliant execution of a mod-ern story, adding that it’s awider screen ready with emo-tional music and world-classproduction. Badmus disclosedthat the print version of theads looks into human historyand share the stories of great

Keystone Bank and newcampaign philosophy

people who didn’t give up ontheir dreams. “For instance,consider Einstein who was de-clared a disabled child by doc-tors and teachers and laterwent to become the icon of bril-liance in history because hepushed ahead. What aboutQueen Amina? What aboutJaja of Opobo?”

Earlier, Mr. Oti Ikomi, Man-aging Director of the bank hadsaid it’s so easy for people toget negative or stop halfway,while he stated that at Key-

stone bank the managementnever say never.

According to him; “That’sthe spirit of our people and wecan share this story becausewe know what it means tonever say never. Look at thehistory of the bank, especiallythe fears raised by many buttoday, we are promoting staff.We are gaining new custom-ers in all sectors and we aregetting into new locations. Weare powering more business-es. Because we don’t just see

the cups half empty, we seethem half full,”

“People are still buildingnew homes and they are stillbuilding new businesses. Peo-ple are still sending childrento schools and many othersare still traveling for theirdream vacations. These areKeystone people,” the CEOsaid.

The Managing Directorwent further to explain that inthe last 10 months the bankhas existed, a lot of strategieshave been embarked upon toreposition the bank.

A year after coming into ex-istence, Keystone Bank hasjust proved through creativi-ty that its newness is nothingbut a mark of freshness andbetter service offering.

Penultimate week while un-veiling the campaign in La-gos, Mr. Oti Ikomi, Manag-ing Director of the bank, as-sured customers that the bankwas re-dedicating its commit-ment to them where he saidthe new campaign was meantto refresh the bank.

Considering the fact thatadvertising has always playeda major role in brand build-ing, the new initiative whichtend to reawaken all stake-holders in the bank may be theopportunity needed to shoreup the profile of the brandand increase its equity.

Information had it that thebank recently partnered Kwaraand Bayelsa States to boosterdevelopment in the two states. The bank expressed readi-ness to partner the KwaraState Government on theachievement of the state’s pro-gramme of shared prosperity.

AdvertisingAcademy takesoff soon—AAAN president

THE advertising Academy

instituted by the Association ofAdvertising Agencies ofNigeria (AAAN) will take offsoon. The Academy isexpected to train and groomcreative minds for theindustry.

This was the first anniversarymessage Mr. Rufai Ladipo,president, AAAN made whenhe interacted with media men,prelude to the Association’sAnnual General Meetingscheduled for Ibadan nextweek where new officers willbe elected to steer the affairsof the Association.

The president who said hewould not be seeking re-election, noted thatappreciable progress towardsthe completion and take off ofthe Academy has been made,while stating that the businessplan of the Academy is beencompleted, discussed andagreed by the Academy’sboard led by Mr. BiodunShobanjo. He went further tosay that registration for theAcademy has been completedand the Association is waitingfor the Academy’s certificateand other documents from theCorporate Affairs Commission(CAC), with hope that the nextadministration will see to itsfruition.

OYSAA holds

Stakeholders

forum

THE Oyo State Signageand Advertising Agency

(OYSAA) charged with theresponsibility of regulating ofSignage, Hoarding andAdvertisement in Oyo Statewill be holding its inauguralstakeholders forum this week.

According to a statementemanating from the office ofthe Director General of theAgency said the purpose of themeeting is to ensure thatstakeholders are carried alongin the actualization of theAgency’s mandate as it intendto roll out the new order ofwhat the outdoor space in thestate will look like vis a vis theAgency’s guidelines

The statement also said thatStakeholders forum willequally afford all practitioners,advertisers, governmentalinstitutions and the generalpublic opportunity to maketheir modest contributions onthe way forward for the Out-Of-Home media in Oyo State.

Airtel Nigeria subscribershave started reaping the

fruits of subscribing to thenetwork’s free millionairespromo as 21 subscribers haveemerged star winners of N1million (one million naira)each, from the first threedraws of the promo.

The draws, conducted at theCorporate Headquarters ofAirtel Nigeria in Lagos weresupervised by AlexanderForbes, a system processesand applications audit firmproduced 21 winners of thelatest Samsung Galaxy Tab 7.0bundled with complimentary200MB worth of Airtel data.

According to the company,the winners will be presentedwith their prizes at a locationnearest to their homes.

Deepak Srivastava, ChiefOperating Officer of AirtelNigeria, said the free million-aire promo is a credible initi-ative that seeks to enrich moreNigerians and provide themwith more opportunities torealize their financial dreams.

“Airtel is committed to

The entry of Washlinelaundry and dry

cleaning has increased thenumber of Small and MediumEnterprises (SMEs) in thecountry.

Speaking, Mrs. AdebisiJunaid, Managing Director ofthe company at the openingceremony at Ikeja GRA, saidthe company is poised to offersuperior service delivery asthe company intends toadhere to ethical andprofessional standards in itsapproach to business. “We are

Washline entry boosts SME profileprepared to raise the bar inthe cleaning industry.”

According to her, “we havea strong focus to differentiateourselves in the way we dobusiness and our goal is toensure that we embrace allavenues to remain aformidable force in theindustry.

Further she said, “we wantto remain the best in our lineof business and our creed iscustomer satisfaction. We donot only want to meetcustomers expectation, but wealso want to exceed them.

Airtel’s free millionaire promo:First batch winners emerge

rewarding Nigerians. TheFree Millionaires’ Promo isjust another channel for us tosay a big thank you to all ourcustomers. We are particularlyexcited that all the winnersemerged through atransparent process certifiedby Alexander Forbes forauthenticity in compliancewith global standards,”Srivastava said.

Malam Sanni Ibrahim, a

farmer; Mr. BarnabasVishigh, a retired teacher;Miss Rita Ekeh, a student;Mr. Dzaki Francis Terwase, amedical officer with Com-mand Government SecondarySchool, Oshongu, BenueState; Mr. Ezekiel Ojolokoand Mal Lawal Musa, bothcivil servants, were some ofthose that won N1 millioneach.

A winner of Television set in the on-going Legend Deal Promo flaked by a staff ofNigerian Breweries Plc and some ushers.

CMYK

Vanguard, MONDAY, JUNE 25, 2012 — 47

CMYK

48 — Vanguard, MONDAY, JUNE 25, 2012

CMYK

Omoh Gabriel - Group Business EditorBabajide Komolafe - Acting Finance EditorClara Nwachukwu - Energy EditorPeter Egwuatu - Head, Capital MarketYinka Kolawole - Snr Bus. Correspondent

Favour Nnabugwu - Insurance CorrespondentGodwin Oritse - Maritime CorrespondentGodfrey Bivbere - Maritime CorrespondentYemi Adeoye - Energy CorrespondentOscarline Onwuemenyi - Energy CorrespondentFranklin Alli - Industry ReporterMichael Eboh - Capital Market Reporter

Amaka Abayomi - Money market ReporterEbele Orakpo - Energy ReporterIfeyinwa Obi - Maritime Reporter

CONTRIBUTORSPrincewill Ekwujuru - Media/Marketing

Naomi Uzor - IndustryProvidence Obuh - Capital MarketLAYOUT - Graphics Department

0817 002 3569

Boxing enthusiasts willassociate the above with

the title of a fight contest,while our learned gentlemenmay expect a legal confron-tation; either way, Nigerianswill laugh and cry at the sametime at the unfolding dramabetween the oil magnate,Femi Otedola, on the onehand and the consummatelegislator, Farouk Lawan, onthe other. The contest is allabout integrity; but it is glar-ingly becoming difficult topick an ultimate champion. The Farouk Lawan group al-truistically positioned them-selves to catch a thief, butsomehow, the chief hunterappears to have been caughtin the trap of the hunted.

While the public continuesto yearn for all the truth to beunearthed, a number of is-sues still remain unclear fromthe revelations so far in thepublic domain. Why did Fa-rouk Lawan initially deny thathe collected money from Ot-edola and why did he deni-grate the ‘video show’ as acontrived Nollywood film todiscredit him because of hisunshakeable stand in sustain-ing integrity in the investiga-tions of the House Commit-tee? Why did Farouk’s state-ment later change to admitthat the bribe was taken as asting operation conducted inconcert with the securityagencies?

If this was so, in keepingwith the usual practice insting operations, why didn’t

Femi Otedola vs Farouk Lawan

the police immediately showup to apprehend Otedola withthe cash evidence as soon asFarouk stepped out of Otedo-la’s compound? Farouk ur-gently needs to clear the air,if he must prove his inno-cence. It is unusual for cashcollected as evidence of asting operation to remain inthe hands of the collectorrather than the Police forclose to two months, withoutapparent further action tobring the villain to book.

If the Otedola/Faroukshow was the theme of a Nol-lywood movie, the storylinemay be considered unlikely,but the film would have beenenjoyed all the same, becauseof the unexpected twists andturns.

Otedola, on his side, alsoclaims to have acted in con-cert with the security agenciesin a sting operation to exposeFarouk’s demand for bribe. If this were so, Farouk should

have been immediatelypicked up as soon as hestepped out of Otedola’s res-idence with the half a millionmarked currency notes in hisbulging pockets!

Why did the security agen-cies fail to act until news ofthe scam filtered into the pub-lic domain? Many questionsbegging for answers, but themillion-dollar question cer-tainly must be, why did Fa-rouk Lawan, in full publicglare, advise the House todelist two companies (includ-ing Otedola’s ZENON?) fromthe list of fuel subsidyscammers after $500,000changed hands?

Lawan’s excuse for remov-ing the names of the two com-panies from the list was thatboth companies did not actu-ally collect subsidies, but thatthey misapplied their forexallocations. Again, this rais-es a number of questions; inthe first place, as far as I know,

a customer’s purchase of fo-rex is ordinarily tied to anexisting invoice, letter ofcredit or bills for collection bythe vending bank. Compa-nies, such as Otedola’sZENON, would be expectedto make payments for theirdiesel imports through appro-priate money deposit banksrather than speculative pur-chasing from street side bu-reau de change.

In this event, Farouk willneed to identify the banks,which provided the millionsof dollars, which Otedola isalleged to have misapplied. The Central Bank of Nigeria,on their side, will need to in-vestigate the forex transac-tions and practices of thatbank. The forex regulatory

agency would also have toexplain why and how suchserious infraction escaped itsnotice.

It is also difficult to under-stand why the other membersof the House Committee onFuel Subsidy accepted theexcuse of forex misapplicationfor condoling the removal oftwo companies from its primafacie list of subsidyscammers. Curiously, as ev-ident from TV broadcasts ofthe hearing, there was no sin-gle voice of dissent from anyquarter of the House againstFarouk Lawan’s plea; couldthis be indicative that Mr.Lawan did not take the deci-sion alone, or was their acqui-escence out of respect for theperceived integrity of possi-bly the longest serving mem-ber of the House of Reps? Once again, many more ques-tions are begging for an-swers!

On the other hand, if Ot-edola acted on his own, with-out the complicity of the se-curity agents, many Nigeri-ans would feel that his belat-ed expose’ was an after-thought or a politically moti-vated scheme to discredit thesubsidy report. Nonetheless,we can now look forward toOtedola vs Lawan Part 2,even though it might be eas-ier to cry than to laugh fromthe revelations in the nextepisode.

SAVE THE NAIRA, SAVE

NIGERIANS!

•Farouk•Otedola

It is also diffi-cult to under-

,,

stand why the othermembers of theHouse Committeeon Fuel Subsidyaccepted the ex-cuse of forex mis-application forcondoling the re-moval of two com-panies from itsprima facie list ofsubsidyscammers.

BUSINESS & ECONOMY

BY EMMA UJAH

Unity Bank PLC hasgrown its balance

Unity Bank grows by 63% to N506bnsheet by 63.68% fromN309.35billion in December2010 to N506.35 billion inDecember 2011 whileoperating income grew by

N27.59% from N24.23 billionto N30.91 billion.

The Chairman of the bankAlh. Nu’uman BarauDanbatta, disclosed this at thebank’s 6th Annual GeneralMeeting, in Abuja, yesterday.

Reflecting increasedcustomers’ confidence in thebank total deposits grew by20.14% from 222.15 billion toN266.88 billion as at end ofDecember.

The bank also recordedmarginal increase inshareholders’ funds whichstood at N44.51 billion in 2011as against N44.15 billion in2010, representing anincrease of 0.81 %. while theloan recovery efforts of thebank reduced its Non-Performing Loans to TotalLoans Ratio from 15 % theprevious year to 5% in theyear under review.

Alh. Danbatta further

explained that Loans andAdvances grew by 2.88% fromN 118.58 billion to N 121.98billion during the sameperiod. This, according to himwould have been higher butfor the sale of assets worthabout N20billion to the AssetsManagement Corporation ofNigeria. The Chairman saidthe clean- up exercise as wellas other initiatives currentlybeing implemented wereaimed at putting the Bank onthe path of sustainable growthand profitability in 2012 andbeyond. The chairman alsoassured that the Bank ispoised to building a superiorcustomer service environmentto make the institution thepreferred choice of a widerange of customers andexplained that this can beachieved with a highly skilledand dedicated staff that iswilling to go the extra mile for

its clients which can beachieved through in attractingand retaining the best people.

In his submission, theManaging Director of theBank, Mr. Ado Yakubu Wankareiterated that the Bankwould continue in its bid toshore up its capital base tosustain a vibrant andfinancially strong and stableBank. In that direction, hesaid, arrangements havereached advanced stage forthe raising of tier 1 capital inorder to enhance the Bank’slong term solvency andfinancial stability.

Mr. Wanka also disclosedthat in furtherance to theBank’s retail banking posture,several products have beenintroduced even as new ATMs and POS terminals havebeen rolled out in manymerchant locations across thecountry.