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JULY 30 , 2012

Continues on page 18

Customers have accused banksof unilaterally applyingcharges on their accounts

contrary to the directive of the CentralBank of Nigeria (CBN).

Meanwhile, the apex bank, in therecently released exposure draft on theRevised Guide to Bank Charges, hasbanned banks from charging customersfor transactions between account withsame ownership and in the same bank.It also banned charging of Commissionon Turnover (CoT) on returned cheques,as well as charges for account re-activation and re-opening.

Vanguard investigations revealed thatmost banks introduce new charges and

Customers accuse banks ofunilateral application of charges*CBN bans charges on inter-account transactions, returned cheques

apply them without notifying theircustomers or seeking their consent.

Bank customers confirmed this toVanguard and expressed theirdissatisfaction. “They just charge mewithout explanation. I am fed upwith them”, said Mrs AdeotiDamilola, an account holder with abank with headquarters on Akin

Adesola Street, Victoria Island. “Forinstance, I am billed N200 on thecounter charges and N5 per ATMusage. I am also charged on SMSalert messages. Some of these servicesare free in other banks. I feel badbecause I put my money in the bankfor them to save, not for them to usefor their own purpose. I save money

for them to be giving me interest,meanwhile, they deduct my money atwill,” she said.

“I am not pleased with theircharges,” said Kayode, an accountholder with a bank with headquarterson Danmole Street, Victoria Island.“Most of their charges are nothing towrite home about. Sometimes, theyover-charge me. Not quite long ago, Iwas double charged/debited on asingle transaction. Honestly, I am notokay with the system and somethingshould be done fast. It will be good ifthe CBN intervenes on the issue,” hestated.

Two other customers of the samebank, Chieji Kingsley and Okoye

Justina, condemned the charges of thebank as outrageous, saying that theywere not pre-informed before chargeswere deducted from their account.

“The bank’s billing rate isoutrageous. I wish they will stop billingus and allow us enjoy saving ourmoney with them,” Kingsley said.“There are many instances where theydeduct little money from my accountwithout due notification. I feel badespecially when I see that thesecharges are uncalled for. For instance,recently, I noticed that some moneyhas been deducted from my accountwithout my notification,” Justinaadded.

Kolawole, customer of a bank withheadquarters on Ajose AdeogunStreet, Victoria Island, said: “Initially,I was not really concerned about therate they charged. But what I havediscovered is that every month, Ialways receive alert that N100 or N50is being deducted from my accountand they will notify me that it is fromthe headquarters. I also observe thateach time money is paid into my

By BABAJIDE KOMOLAFE,LAZARUS IBEABUCHI, AHMEDIBRAHIM & WILLIAM JIMOH

Date Gross Liquid Blocked %

7/25/2012 36,403,703,249 35,037,009,683 1,366,693,567 3.76%7/24/2012 36,403,418,310 35,035,992,394 1,367,425,916 3.76%7/23/2012 36,391,121,323 35,022,869,752 1,368,251,571 3.76%7/20/2012 36,365,654,316 34,994,881,189 1,370,773,128 3.77%7/19/2012 36,371,416,240 34,999,638,681 1,371,777,558 3.78%7/18/2012 36,379,100,008 35,006,487,430 1,372,612,577 3.78%7/17/2012 36,420,992,370 35,047,470,798 1,373,521,572 3.78%7/16/2012 36,418,686,770 35,044,778,925 1,373,907,845 3.78%7/13/2012 36,429,710,135 35,054,684,830 1,375,025,305 3.78%7/12/2012 36,450,568,264 35,075,075,141 1,375,493,122 3.78%7/11/2012 36,479,564,300 35,103,634,805 1,375,929,495 3.78%7/10/2012 36,497,704,064 35,120,780,500 1,376,923,563 3.78%7/9/2012 36,508,584,087 35,131,302,305 1,377,281,782 3.78%7/6/2012 36,545,176,505 35,165,982,517 1,379,193,988 3.78%7/5/2012 36,571,697,672 35,191,863,856 1,379,833,816 3.78%7/4/2012 36,529,665,029 35,150,080,184 1,379,584,844 3.78%7/3/2012 36,566,608,821 35,187,500,219 1,379,108,602 3.78%7/2/2012 36,602,741,234 35,224,185,853 1,378,555,381 3.77%6/29/2012 36,718,909,292 35,342,121,916 1,376,787,376 3.75%6/28/2012 36,768,298,167 35,391,994,830 1,376,303,337 3.75%6/27/2012 36,829,232,311 35,453,077,062 1,376,155,249 3.74%6/26/2012 36,886,648,983 35,510,737,613 1,375,911,370 3.74%6/25/2012 36,931,189,425 35,555,551,182 1,375,638,243 3.73%6/22/2012 37,076,904,406 35,702,334,796 1,374,569,609 3.71%6/21/2012 37,136,812,354 35,762,497,019 1,374,315,335 3.71%6/20/2012 37,190,196,510 35,816,409,349 1,373,787,160 3.70%6/19/2012 37,242,250,788 35,868,886,243 1,373,364,544 3.69%6/18/2012 37,276,792,515 35,903,875,267 1,372,917,248 3.69%6/15/2012 37,461,761,514 36,089,263,928 1,372,497,587 3.67%6/14/2012 37,550,571,225 36,177,946,615 1,372,624,611 3.66%6/13/2012 37,591,813,395 36,218,871,756 1,372,941,639 3.66%

Source: CBN

Daily movement in Nigeria’s foreign Reserves

CURRENCY BUYING CENTRAL SELLING

CBN Exchange rate as at 27/07/2012

105.89 +0.63

89.48 +0.09

176.15 +2.10

2,335.00 +19.00

22.54 +0.04

CFA 0.2674 0.2774 0.2874

KRONER 25.5246 25.6071 25.6895

EURO 189.8648 190.4779 191.091

POUNDS 242.3401 243.1227 243.9052

RIYAL 41.2885 41.4218 41.5551

SDR 232.9723 233.7246 234.4769

FRANC 158.0645 158.5749 159.0853

DOLLAR 154.84 155.34 155.84

WAUA 231.6635 232.4116 233.1596

YEN 1.9816 1.988 1.9944

RENMINBI 24.2512 24.33 24.4087

18 — Vanguard, MONDAY, JULY 30, 2012

Cover Story

CMYK

,

,

Continued from page 17

Youth restiveness andunemployment in Nigeria: Theway out (2)

account; it will reduce insteadof increasing. Though Icannot say the specificamount, sometimes I feelupset because one does notexpect such things. I haveasked them severally but whatthey say is that it is from theheadquarters.”

Mrs. Ugonma Anyanwu alsoconfirmed that her bank doesnot notify her before applyingcharges. It is a polite way ofstealing,” she said.

Mr. Jay Johnson narrated arecent experience onunilateral deductions ofcharges from his account. Hesaid: “There was a time moneywas paid into my account. Inoticed deduction of N200and when I asked, the banktold me it was for alert.Another time, I was havingN700 left in my account, I wassent N10, 000 later. But to mysurprise, I saw alert of N10,300. Meaning the bank hadwithdrawn N400 without anyreason. And just recently, mybalance was N600, when Ireceived a new alert, Idiscovered my balance wasN300.”

Amusa Risikatu, an accountholder with a bank withheadquarters on Marina,Lagos Island, said she ischarged any time she uses hercheque. “I feel bad wheneverI notice that money has beendeducted from my account. Ihave complained severally butto no avail".

Another customer of thebank, Anjorin Taiwo Mayowa,said: “For no reason, theydeduct money every month. Ifeel bad because of the waythey deduct the moneywithout notice since I was notpre-informed about the termsand conditions of the

Customers accuse banks of unilateralapplication of charges

transaction,” he said.Vanguard investigations

also revealed that most of thecharges unilaterallyintroduced by banks areinvented by the banks and arenot captured by the apexbank’s Guide to Bankcharges. These include, SalaryHandling fee, AccountMaintenance fee, inter-branch and transaction fee.

Deputy Director, FinancialSystem Stability, CBN,Markus Zacharia, however,maintained that: “Banks arerequired to apprise customersof charges before they areimplemented.”

Fielding questions fromjournalists at the 308th

Bankers’ Committee meetingin Abuja earlier this month, hesaid the exposure draft on theRevised Guide to Bank

entered into with the financialinstitutions.”

Among other things, the newGuide, according to the CBN,“is to enhance flexibility,transparency, and competitionin the guided deregulatedNigerian economy.

“Where a charge isstipulated as 'negotiable',banks are required toappropriately draw theattention of their customers toit upon which the two partiesshould mutually agree on theapplicable charge.

Although the Guideprovides for charges onvarious products and servicesof banks, it is not exhaustive.Banks are mandated topresent any new product,services and charge(s) notcovered by this Guide to theCentral Bank for priorapproval,” said the CBN.

Under the new guide, theCBN banned banks fromcharging custormers for;transactions between accountwith same name in the samebank; Savings DomiciliaryAccount; Returned cheques;foreign exchange purchasesfrom customers; Cashlodgement into domiciliaryaccount.

The Guide also reduced themaximum charge for CoT toN3 per mile (N1000) from N5per mile. It also makes CoTcharge negotiable between thebank and the customer. TheCBN also pegged maximumcharge of N5 for SMS alert pertransaction.

Under the new Guide, bankscan charge up to N200 forcheque leaf obtained on thecounter. It also allow banks tocharge customers, who want toborrow, for credit referencereports obtained from creditbureaus, but banks are to bearthe cost of quarterly monitoringof credit by credit bureau.

Every year, about300,000 graduatesenrol in the NYSC

scheme. This is definitely notthe total number of graduatesbut it is a pointer.

According to the PopulationReference Bureau, the popu-lation of youth in Nigeria is43 per cent.

The Root Causes of YouthRestiveness

·Marginalization:The notion appears to have

gained ground that the youthresort to restiveness becauseof their perceived marginali-sation by the ‘selfish’ eldersin the scheme of things in thecommunities. In order to gettheir share of the benefits ac-cruing to the society, they re-sort to taking on their eldersheadlong, culminating in therestiveness rampant in mostof our communities today.

·Unemployment:Unemployment is a hydra-

headed monster which existsamong the youth in all devel-oping countries. The unem-ployment rate in Nigeria waslast reported at 23.9 per centin 2011. The National Bureauof Statistics (NBS) has put thefigure of unemployed Nigeri-ans in the first half of the yearat 23.9 per cent, up from 21.1per cent in 2010 and 19.7 percent in 2009.

Minister for Agriculture, Dr.Akinwumi Adesina noted thatNigeria’s unemployment rateis spiraling upwards, grow-ing at 11 per cent yearly. Ac-cording to him: “Youth unem-ployment rate is over 50 percent. Our unemployment rateis spiralling, driven by thewave of four million youngpeople entering the workforceevery year with only a smallfraction able to find formalemployment.

The rising tide of unemploy-ment and the fear of a bleakfuture among the youth in Af-rican countries have madethem vulnerable to the manip-ulations of agents’ provoca-teurs”. These include ag-grieved politicians, religiousdemagogues and greedymultinationals that employthese youths to achieve theirselfish ambitions. It is clearlyevident that the absence ofjob opportunities in develop-ing countries is responsible foryouth restiveness with disas-trous consequences.

This leaves in its trail lowproductivity, intra-ethnic hos-tilities, unemployment, pover-ty, prostitution and environ-mental degradation.

• Exuberance: Very often,the youth are described as fullof youthful exuberance. Thisraw energy has of late beenchannelled into unwholesomeand socially unacceptableventure that threaten the veryfabrics of the community. Alsothe issue of availability andaccessibility of drugs in streetcorners which predispose theyouth to abnormal behaviourswhen they come under theirinfluence, adds to youth res-tiveness.

It is also believed that somedisgruntled leaders, eldersand politicians in our societyresort to recruiting youths forsettling scores or using themagainst perceived enemies.With this trend, the activitiesof these youths have degen-erated to outright criminality.Once these youths getmobilised for these nefariousactivities, they become uncon-

trollable and the society suf-fers.

·PovertyPoverty connotes inequali-

ty and social injustice and thistraumatizes the poor. Morethan 70 per cent of people inNigeria are in abject poverty,living below the poverty line,and one- third survive on lessthan US $1 dollar a day . Thisfigure includes an army ofyouths in urban centres in Ni-geria who struggle to eke outa living by hawking chewingsticks, bottled water, hand-kerchiefs, belts, etc. Thesales-per-day and the profitmargin on such goods are sosmall that they can hardly liveabove the poverty line. Disil-lusioned, frustrated and de-jected, they seek an opportu-nity to express their angeragainst the state. Scholarshave over time agreed thatthere is a link among pover-ty, loss of livelihood, inequal-ity, and youth restiveness asevidenced by the numerousviolent protests against thewielders of power in Nigeria.

It is also believedthat some disgrun-tled leaders, eldersand politicians inour society resort torecruiting youths forsettling scores orusing them againstperceived enemies.

*From left: Dr. Ayo Ogunsan, Chairman, Executive Trainers; Dr. Simon Daniel, DVC, KadunaState University, Jenny Brown, Associate Dean, University of Wolverhampton Business School,Prof. Tenuche Marietu, DVC, Kogi State University; Mrs Ajoke Ogunsan, CEO, ExecutiveTrainers, and Dr. Paschal Anosike, Senior Lecturer, University of Wolverhampton at the ongoingInternational Tertiary Institution training in the UK.

Charges released by the apexbank, is a review of themandate between the banksand the customers on whatthey are supposed to becharged and when thatcontract is made, there is theneed to be bound by suchcharges.”

“The CBN feels that this newguideline would enable bankcustomers to know aheadwhat they are going to becharged to avoid any extra orunnecessary charges that arenot in the contract that they

,Banks are

required toapprise customersof charges before

they areimplemented

’

Vanguard, MONDAY, JULY 30, 2012 — 19

CMYK

BUSINESS & ECONOMY

’’

Nigerians face a lot ofchallenges everyday. Life, the most

important thing in othersocieties is nothing here.Nigerians die in droves by theday due to serious securitychallenges the nation is facedwith. Nobody has had thecourage to ask for theimpeachment of the Presidentfor not protecting lives andproperty he swore to as thenumber one citizen of Nigeriato whom all Nigerianscollectively surrendered theirsovereignty. The House ofRepresentatives does not seethis as serious enough to taskMr. President.

But just last week, themembers of the House ofRepresentatives came up withthe agenda of impeachment ofthe President for notimplementing the budget totheir satisfaction as at July2012. Every Nigeriansubscribes to Mr. Presidentimproving the lot of the nationby implementing the budget.The threat is a wake up callfor Mr. President, who manysee as sleeping on duty, to dohis job and call to orderMinisters, Heads ofDepartment and Agencies ofgovernment who are notperforming their dutiescreditably. It is even time fora proper shake up of keyofficers of this administration.

Be that as it may, it is verycurious that the members ofthe House of Representativesare asking for the head of thePresident over budgetimplementation. The firstquestion is: Is budgetimplementation more seriousthan security even when a

This House is emptysenator was killed in coldblood? Is it not whenNigerians are alive andsecured that they could talkabout their welfare? When wasthe budget in questionpassed? When was itsupposed to have been passedto meet the nation’s budgetcycle? When did the 2011Budget expire? Who causedthe delay in the passage of the2012 appropriation bill?

Except this House membersare leaving in self delusion,they do not really mean whatthey said as they do not expectthat in four months, this

government would haveachieved much in budgetimplementation. Nigeria is notknown to implement capitalbudget with jet speed. Itwould have been news if therecurrent expenditure is theissue at stake. Recurrent hasalways been 100 per centimplemented while capitalbudget at best is 60 per centimplemented. PresidentUmaru Yar’Adua was the firstNigerian President to orderministries, departments andagencies of government toreturn unspent capital budget.

Many did, tothe chagrinof thenation.

Take the 2011 Budget forinstance, implementation ofthe budget in the 2011 fiscalyear posed critical challengesaccording the report in theMinistry of Finance website.The Director, Budget Office,Mr. Bright Okogun, in hisreport on the 4th quarter of2011 Budget implementationjust released said: “Indeed,added to the late passage ofthe 2011 Budget, thepeculiarity of 2011 as a

political transition year withthe attendant implication forthe constitution of a newcabinet, the implementation ofthe budget was difficult dueto receipt of less than projectednet revenues. On theexpenditure side, whilerecurrent expenditure was ontarget, implementation of thecapital budget had to beextended to 31 March, 2012in order to allow MDAs moretime to implement the budget.The poor implementation ofMDAs' capital projects ispartly attributable to poor

project management practicesby some MDAs.” Did theHouse members read thisobservation in the Ministry ofFinance report on 2011Budget implementationreport?

The implementation of thecapital budget in 2011 wasextended to 31March, 2012 inorder to give MDAs theopportunity to improve onimplementation of their capitalprojects. If that is the case,when did the implementationof 2012 Budget begin? Howfast was its implementationsupposed to be? What makes2012 so different from otheryears that the House isthreatening impeachment? Isthere some self-servingunderlying interest?Nigerians need fulldisclosure. Should not thesemembers have discussed withtheir colleagues in theexecutive arm of government?Is the legislative arm nolonger part of the government?Were these members not partof the delay in the passage ofthe 2012 Budget?

The data from the Office ofthe Accountant-General of theFederation indicates asignificant improvement inMDAs’ utilisation of funds asat 31 March, 2012 with anoverall average utilisation ofover 87 per cent of the cash-backed funds available for theimplementation of their capitalprojects/programmes. Thedata also showed that onlyN713.14 billion (or 87.9 per

cent) of the total cash-backedamount had been utilised byMDAs as at 31st March, 2012.An analysis of the 53 MDAsreported upon by the Office ofthe Accountant-General of theFederation (OAGF) indicatedvaried level of utilisationrates. Forty seven (or 88.68 percent) of the MDAs including:Agriculture, Education WaterResources, Works, Transport,Niger-Delta, Defence, FederalCapital TerritoryAdministration, Presidency,Trade & Investment andInformation & Communication,each had overall averageutilisation rate of 87.9 per cent.

Thirty-eight out of these (or71.7 per cent of the MDAs)including Defence, Education,Water Resources, Presidency,Police Service Commission,Auditor-General, Office of theNational Security Adviser,Foreign & Inter-GovernmentalAffairs, Code of ConductTribunal, Federal Civil ServiceCommission and NationalWages & Salaries hadutilisation rates of over 95 percent of their respective cash-backed releases. Theutilisation report further showsthat six MDAs (or 11.32 percent) which includes WomenAffairs, Petroleum Resources,Revenue Mobilisation,Finance, Code of ConductBureau and Health hadutilised less than 87.9 per cent.

Going by past performance,it is too early to judge theperformance of the 2012Budget.

Be that as it may, it is verycurious that the members ofthe House of Representativesare asking for the head ofthe President over budgetimplementation

An Abuja High Court onThursday reserved Oct.

17 for the adoption ofaddresses on the allegedN10.4 million fraud leveledagainst two former officials ofthe National InsuranceCorporation of Nigeria(NICON). The IndependentCorrupt Practices and OtherRelated Offences Commission(ICPC) had in 2007 chargedOkechukwu Chukwulozie,Angela Chukwulozie, wife ofthe first accused andAdedolapo Ogungbe with thecrime.

Justice MudashiruOniyangi gave the date afterthe third accused person(Ogunde) had presented herdefence. Ogunde, a formerDeputy Commissioner incharge of Finance andAdministration, had said that

NICON fraud: Court reserves Oct. 17 for adoption of addressesthe N3.5 million she receivedfrom the organisation was herlegitimate entitlement. TheICPC had filed a three-countcharge of corrupt advantageagainst Ogunde. Theprosecution alleged that thethird accused used her positionto illegally withdraw theamount to furnish herapartment located in Maitama.

Ogunde, however, said themoney was her statutory in lieuof 28 days allowance meant forher position upon assumptionof office in 2005. “I used themoney to make the place livableas I bought curtains, four air-conditioners, microwave,refrigerator, beddings and a setof upholstery. My Lord, I havedone no wrong as the moneywas officially meant for me andtwo other executivecommissioners. In fact, Mr

Badugu Useni, a commissionerin charge of operations, waspaid before me. My allowancewas unnecessarily delayed andI became aggressive in

November 2005.“I was advised to suggest a

name that the money could beremitted to and I used MrsAina Attahiru, my friend and

the Managing Director of BarnRoot Homes Creation. MyLord, it would also interest theCourt to know that I and thefirst accused were not paid themonetisation allowance thatformed part of the prosecution’sevidence,” she said.

While Ogunde is facing athree-count charge, the firstaccused (Chukwulozie) ischarged with eight of the 15charges. The second accusedand wife to the first accused ischarged for allegedly aidingand abetting the crime. Theaccused persons deniedparticipating in anycomplexities that led to thealleged fraud.

ICPC had alleged that theactions of the accused personswere offences whichcontravened sections 12 and 19of its Act.

*From left: Dami Adefila, Client Relationship ManagementManager, AM Facilities; Mrs. Wale Odufalu, GM, CorporateServices, AM Facilities; Mrs. Margaret Mebude, Principal,Akande Memorial Senior High School, Ikoyi and Mr. AramideTwins, Vice- Principal during the Fire Safety Awarenessprogramme held at the school as part of AM Facilities' CSR project

20 — Vanguard, MONDAY, JULY 30, 2012

CMYK

BRIEFS

Business & Economy

Experts have called formore efficient ways toutilise and manage

the pension funds as a bufferfor infrastructure developmentin the country. The sessionput together by DETAILCommercial Solicitors andAfrica InfrastructureInvestment Managers (AIIM)had last Wednesday, hosted anIPFA Nigeria briefing titled:Investing Pension Funds inInfrastructure Projects: theKey Drivers which attractedmany dignitaries in theindustry.

The briefing was held inconjunction with UK Trade &Investment, and theInternational Project FinanceAssociation in Lagos. MikePurves, Director of Trade of UKTrade & Investment, speakingon behalf of the Deputy HighCommissioner, stressed theimportance of the briefing asa means of bringing keystakeholders in theinfrastructure financing sectorto discuss pension funds as analternative to infrastructurefinancing.

Nigeria has a considerableinfrastructure deficit and oneof the major challenges facedby project developers issecuring project financing.The briefing addressed theopportunities and challengesrelating to tapping into thetrillions of naira of PensionFunds in the Nigerian market.Ehimeme Ohioma of NationalPension Commission, AndrewJohnstone of AIIM and AyuliJemide of Detail CommercialSolicitors gave presentationson the regulatory, commercialand legal aspects respectivelyof investing pension funds ininfrastructure projects.

Experts brainstorm on pension fundsutilisation for infrastructure development

Andrew Johnstone whospoke about the increasingglobal trend in utilisingpension funds forinfrastructure development,noted that pension funds areparticularly suited toinfrastructure projects becauseof their long-term nature. Inthe same vein, Ayuli Jemideof DETAIL CommercialSolicitors discussed the issueof capacity of pension fundadministrators to assessproject risks and theimportance of having anunderstanding of the nature ofinfrastructure projects, aseach project presents a

different set of risks.While Mr. Ohioma, the

Pencom representative,highlighted that Pencom hasreleased an exposure draft ofrevised Guidelines onRegulation of Investment ofPension Fund Assets, heassured the briefing thatPencom has been and willcontinue to be very aware of andresponsive to developments inthe market to ensure pensionfunds can be invested in adiversified manner.

Also speaking, Mr. TaiwoDauda, Executive Director ofFinance and Administration atThe Infrastructure Bank, led the

team of expert panelists whodiscussed how pension fundscan be invested in criticalinfrastructure and what needsto be done to de-risk PPPprojects to enable them toaccess investment frompension funds.

The panelists,including Wale

Shonibare (ManagingDirector of UBA CapitalLimited), Demola Sogunle(Managing Director of StanbicIBTC Pensions ManagersLtd) and Patrick Mgbenwelu(represented by Tonna Ejiofor)of FBN Capital, spoke aboutthe factors that hinderinvestment of pension fundsin infrastructure projects.Their discussions centred ona lack of bankable projects,high political risks and theinherent risk-averse nature ofpension fund administrators.Also discussed was the factthat the current volume ofpension funds (N2.3 trillion)is still a lot less than theamount needed to close theinfrastructure gap. Mr.Sogunle mentioned that thetarget is to increase thepercentage of people whoremit pensions (currently 5million Nigerians), as thiswill significantly increase thevolume of pension fundsavailable. Panelistsdiscouraged the concept ofinstituting a requirement forpension funds managers toinvest a minimum amount ofpension funds ininfrastructure projects, asthere are insufficient‘bankable’ projects to investin.

BY NKIRUKA NNOROM

The Group ManagingDirector of First Bank of

Nigeria Plc, Mr. BisiOnasanya, has said that strictmarket control mechanismsmust be in place if theNigerian capital market willattain the desired level ofrecovery envisaged by allparticipants.

Speaking while presentinga paper titled: Rejuvenatingthe Nigerian Capital Marketfor Sustainable Growth andGlobal Competitiveness:Issues, Challenges andOptions, Onasanya stated thatthe market mechanism shouldbe strong enough to driveefficient price recoveryprocesses.

He noted that it washeartening that the currentfocus on macro-prudential

NSE recovery: Onasanya harps on marketcontrol mechanism

regulations was skewed infavour of reinforcingcoordination across regulatorsin the financial services sector.

Onasanya observed thatthough the FederalGovernment has commencedefforts to design forbearancefor brokers in order to helpjump-start activity in themarket, he noted that furtherreforms to the economy,including such reforms as arenecessary to boost finaldemand, especially throughthe availability of credit at theretail level, will be essential todrive a return of domesticsavings to the capital market inthe medium-term.

According to him, twoingredients must be in place forthe bailout package beingworked out for brokers to beeffectual.

“First is the provision of funds

at concessionary rates. Thesenew levels of liquidity willhelp brokers begin thebalance sheet adjustmentnecessary to return tofunctional levels of liquidityin the market.

“Nonetheless, funds atconcessionary rates wouldstill be inadequate to addressthe over N300 billionoperators’ debt overhang. Inorder to address this, thecapital market would needforbearances on the debtowed by operators, includinglong-term restructuring ofmargin facilities.

“AMCON has addressedthe bulk of margin lendingdriven by bank debt. But thebulk of the outstanding debtis owed on proprietarypositions, and the obligationsattendant upon this has beenthe single most importantcause of industry operators’insolvency.

215 oil blocsawait allocation— DPR

The Department ofPetroleum Resources

(DPR) said that the countrycurrently had 215 oil acreagesawaiting allocation to oilcompanies. Mr. OstenOlorunshola, the DPRDirector, said this when theHouse of RepresentativesCommittee on Upstreamvisited the department inLagos as part of its oversightfunctions. The director alsosaid that 173 blocs had beenallocated to various oilcompanies.

Olorunshola said that mostof the oil blocs that had so farbeen allocated were in theNiger-Delta region. On thePetroleum Industry Bill, hesaid that its passage wouldsave the oil and gas sectorfrom danger and create anenabling environment forinvestment. Mr MurainaAjibola, the House CommitteeChairman, said that his team’svisit to the department was inline with the Standing Ordersof the House. Ajibola said thatthe DPR had done well interms of revenue generation,keeping the nation’s oilproduction capacity aglowand steadily maintaining itsbudget. He said that thecommittee would do its bestto strengthen the DPRthrough appropriatelegislation.

Ecobank Capitalraises $228mfirst tranche ofloan syndicationfor Olam Palm

Ecobank Capital, theinvestment banking arm

of Ecobank, the leading pan-African bank, announces thatit has successfully raised, inFCFA and Euro equivalent,the sum of USD 228 millionrequired to close the firsttranche of loan syndication onbehalf of Olam Palm Gabon(OPG). The facility comprisesa USD 20 million 10-yearFCFA tranche and a USD 208million seven-year Euro andFCFA tranche, extendable to12 years. The second trancheof the syndicated loan islikely to be placed withinternational developmentfinance institutions at a laterdate. Ecobank Capital actedas the mandated leadarranger, working with twoco-arranging banks, namely,Afreximbank and BGFI BankGabon. The Central AfricanDevelopment Bankparticipated as a lender. Theclosing ceremony was held inParis on July 12.

*From left: Mrs Yemi Owolabi, Chairman, Finance Sub-Committee, CIBN 6th Annual Banking& Finance Conference; Mr Akin Fanimokun, Chairman, Consultative Committee, Mr. Uju Ogubun-ka, Registrar/CEO, CIBN at the Press conference organised by CIBN to officially announce theannual conference in Lagos.

Vanguard, MONDAY, JULY 30, 2012 — 21

CMYK

Business & Economy

BRIEFS

BY PROVIDENCE OBUH

The GermanM a n u f a c t u r i n g

Conglomerate, BASFChemical Company, hasvowed to double African sales,projecting a turnover of 200billion Euro as contributionfrom its African operations by2020.

Speaking at theinauguration of thecompany’s regional office inLagos, chosen to servecustomers in Nigeria andother West African countries,President, BASF BusinessEurope, Middle East andAfrica, Mr. JacquesDelmoities said that theregion’s potential andNigeria’s business horizonchallenged the company intoprojecting an overall turnoverof two billion Euro from itsAfrican operations in 2020,adding that the companyachieved one billion Euroturnover from its Africanoperations, excluding oil andgas, in 2011.

Delmoities said: “Throughestablishing a local presencein Nigeria, we will be able tounderstand our customers’needs and enhance BASF’smarket position.

“Africa is a huge continentwith a wealth of raw materialsand a growing population andthe dynamically growingeconomy has enormouspotential for BASF.”

BASF offers polyurethaneproducts such as foam forinsulated panels, suppliesadmixtures for the ready-mixconcrete industry, engaged infood fortification of staplefoods such as cooking oil andflour through local partners inNigeria, as well as protectivecoatings, waterproofingsolutions and joint sealants,among others.

Apart from the construction

BASF projects 200bn Euro turnover from Africa by 2020sector, BASF also targets thenutrition, pharmaceutical andhome care markets in Nigeriaand West Africa.

In her address, theCommissioner for Commerceand Industry, Mrs OlusolaOworu, disclosed that thestate government ispartnering with theOrganised Private Sector(OPS) on ensuring improvedsecurity which would furthercurtail criminal activities inthe state, saying: “ we areproud to say that the state issafe.”

Oworu who represented theLagos State Governor, Mr.Babatunde Fashola said: “Ibelieve the establishment oftheir physical office here inLagos which is the financialand economic nerve centre,would further energise thecountry’s economy in manyways and would also reaffirm

Lagos State Government'scommitment to focusing onindustrial growth anddevelopment.

“We are focusing onensuring that businessenvironment is conducive, weare focusing on ensuringsafety of property andinfrastructure, we are alsofocusing on improving thesecurity situation in the state.”

She recalled that theinauguration of the companywas coming on the heels ofthe 6

th Lagos Economic

Summit which was held inApril during which theGovernor told both local andinternational investors aboutthe investment opportunitiesin critical areas, mainlypower, agriculture and agro--allied industries.

“We are looking at theproposed international airporton the Lekki axis, we are also

looking at the deep sea port,we have started theprocurement of the proposedinternational airport whichwill be constructed on public-private partnership basis.”

German High Commissionerto Nigeria, Mrs DorothyJanetzke-Wenzel, pointed outthat the company’s re-birthinto Nigeria was part of hercountry ’s socio-economiccommitment to Nigeria.

Janetzke-Wenzel added thatthe bi-national commissionwhich Nigeria and Germanyjointly established, haveidentified investments inenergy, agriculture,pharmaceuticals and theireconomies generally, as wellas politics and migration asareas of attention. She said:“Re-investing in Nigeriawould further contributetoward in the actualisation ofthe Federal Government’stransformation agenda.”

The National Associationof Microfinance Banks

(NAMB) said that the totalperforming loans of the banksstood at N81 billion as atMarch 31, 2012. MrMustapha Yar ’adua, theExecutive Secretary of theNAMB, told the News Agency

of Nigeria (NAN) in Lagosthat the amount representedthe total performing loansfrom 2005 when the bankscame into operation to March31, 2012.

Yar’adua said that the totaldeposits for the period

Microfinance banks’ loan portfoliohits N81bn —Association

was N34 billion, while thecustomers of the banks allover the country stoodat 905,000. He addedthat the total performingloans for the periodended Dec. 31, 2011,was above N60 billion.The director said thatin spite of the absenceof financial support from theCentral Bank ofNigeria, operators had beenable to increase their loanservices to clients based onhigh demand.

He said: “According to

research carried out byEnhancing FinancialInnovation and Access(EnFIA) in 2011, 33 millionNigerians are ready topatronise microfinance banksif they get access.

“The sub-sector could onlybe accessed by about 33million Nigerians andincrease its performing loans,if there is financial back-upfrom CBN and the FederalGovernment.” He said thatthe sanitisation exercisecarried out inS e p t e m b e r 2 0 1 1

during which the licences ofover 103 microfinance bankswere revoked by the CBN, leftthe remaining banks morecommitted. Also, a researchconducted by NAMBrevealed that some of thebanks are now extending torural areas,” he said. Yar’aduaurged the FederalGovernment to support thesub-sector with funds andfacilities that would enable the33 million Nigerians willing toaccess the banks to do so.There are 837 microfinancebanks in the country.

FINO, ZaaEdgeto promotefinancialinclusiontechnology inNigeria

Financial InclusionNetwork & Operations

(FINO), India’s largestalternate channel for bankingservices & banking technologyservice provider, hasannounced the tie up withZaaEdge Resources Limited,one of the leading technologysolutions providers. Throughthis strategic partnership,FINO would be enteringNigerian market that has ahuge potential for providingbanking services to the bottomof the pyramid population.Towards this opportunity,ZaaEdge would promoteFINO’s path-breakingbanking technology solutionsand services in Nigeria.These are designed anddeveloped keeping in mindthe needs of illiterate, poorand rural people. Thestrategic partnership willextend the reach of FINO’swide range of products to theNigerian market

CBNDevelopmentCentre to train,empower 5,000youths annually

By Johnbosco Agbakwuru

THE Central Bank ofNigeria Development

Centre is to train andempower 5,000 youthsannually from the South-South geo-political zone insmall and mediumenterprises. The Director-General, Micro Finance andEnterprise DevelopmentAgency in Cross River State,Mr. Ignatius Atsu disclosedthis Wednesday during thepresentation of certificate ofincorporation to threecooperative societiesfacilitated by the UnitedCement Company, UniCemat the company’s corporateoffice in Calabar, the CrossRiver state capital. Atsu whosaid that Cross River Statehas won the hosting right ofthe nation’s apex bankenterprise developmentcentre for the South-Southzone explained that CBNwould inject a lot of resourcesto assist the centre for theempowerment of the youths.

*From left: Mr. Umar Adabara, Regional Manager, Apapa, Lagos, Unity Bank Plc; Mrs.Yemi Adeyinka, Regional Manager, Ikeja Zone, Unity Bank; Mr. Abayomi Oshunmakinde,Independent Auditor To the Aim, Save And Win Promo and Mr. Fidelis Ajibogun, NationalLottery Regulatory Commission, Ibadan Office, at the Unity Bank Plc Aim, Save And WinPromo zonal draw held in Ibadan.

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Banking & Finance

*From left: Mr. Musa Itopa, Head of Payments System Oversight Office of CBN; Mr. TundeLemo, Deputy Governor (Operations), CBN; and Mr. Wale Ogundare, Associate Partner, PhillipsConsulting at the workshop on Payment Card Industry Data Security System (PCIDSS).

Protecting Customers’ Information:Will operators embrace global standards?

By BABAJIDEKOMOLAFE

,

,

Unfortunately, only one per cent ofelectronic service providers in Ni-geria have systems that conform tothis standard, consequently, 60 percent of the electronic payment sys-tem infrastructure in Nigeria is saidto be vulnerable to fraud

THERE are people whohave vowed never to have

anything to do with electronicpayment again, no matter thepreaching about the benefits.

They are bank customers whohave fallen victim to electronicpayment fraud or e-fraud, andlost huge sums of money in theprocess. Their bitterness is ag-gravated by the callous man-ner some banks usually re-spond to their plight. “Oh youmust have compromised yourPIN (personal identificationnumber) by giving it to some-body or by allowing somebodyto access it”, these banks tellsuch people.

It is not peculiar to Nigeria,e-fraud popularly known asATM fraud is a global phenom-enon. The amount lost to thisfraud by customers and elec-tronic payment services runinto billions of dollars.

The first step to successfulperpetration of this kind offraud is to have access to theinformation of the customer,including the PIN, accountnumber etc. The information isthen used to produce a dupli-cate ATM card of the customerwhich is then used to access andsteal his/her money. The infor-mation can also be used to ac-cess the money to make pur-chases or transfers via the in-ternet and Point of Sale termi-nals (PoS). That is why e-fraudthrives during transition fromcashless to electronic paymentdominated economy, as Niger-ia is doing. For most of part ofthe transition, most people arenot yet familiar with the opera-tions of electronic paymentchannels, and also their vulner-ability to fraudsters vis-a-vishandling of their cards andPIN. Also because it is a newsystem, there are loopholes,vis-a-vis regulation and infra-structure that can be easily ex-ploited by fraudsters.

Globally, so much efforthas been devoted to

checkmating these fraudsters,and much of the effort is chan-nelled towards preventingthem from accessing customerinformation. This is done byensuring that electronic pay-ment systems and operationshave the necessary securitymeasures for protection of cus-tomers’ information. The aim isto ensure that no one can ille-gally access these systems andchannels to steal information ofcustomers transacting busi-nesses over them. This efforthave over time culminated to

what is called Payment CardIndustry Data Security Stand-ards (PCIDSS).

PCIDSS is the global mini-mum standard for protectingcustomers or users of electron-ic payment services from e-fraud. Any electronic paymentsystem or channel that doesconform to this standard ishighly vulnerable to fraud.

Unfortunately, only one percent of electronic service pro-viders in Nigeria have systemsthat conform to this standard.Consequently, 60 per cent ofthe electronic payment systeminfrastructure in Nigeria is vul-nerable to fraud. Very disturb-ing! This is despite the direc-tive by the CBN that all opera-tors comply with this standardby December 31, 2012.

This embarrassing vulnera-bility of e-payment to fraud inNigeria and the need to con-form to PCIDSS was the focusof two major industrygatherings last week. The firstwas a workshop on PCIDSSand the Cashless Nigeriaorganised by PhillipsConsulting International andthe Central Bank of Nigeria(CBN). The Second was themeeting of the Nigeria E-Fraud Forum (NEFF).

In her remarks at the NEFFmeeting, Managing Director,Standard Chartered Bank, Mrs.Bola Adesola, said that everynew system has its vulnerabil-ity and this should be ad-dressed. “There is a lot of col-laboration internationally tofight against fraud and Niger-ia cannot afford to be left out,”she said.

At the workshop on PCIDSS, Mr Musa Itopia,

Head of Payments SystemOversight Office of CBN saidthat there are three major rea-sons why electronic paymentoperators in Nigeria have notconformed to PCIDSS andhence the high level of vulner-ability to fraud. The first is lackof management buy-out, thesecond is budgetary constraintand the third is dearth ofQualified Security Assessors(QSAs) to help them upgradetheir system to conform to thestandards. The way forwardaccording to EmmanuelObaigbon, Chairman, NEFF iscollaboration and sensitisation.

He said: “The new standard,PCIDSS, will aid the securityof electronic payment in thecountry, as it is associated withthe management of privilegedidentities and controlling insid-

ers and administrators fromaccessing sensitive data. “Themove is a proactive process to-wards enlightening Nigerians,especially those in the finan-cial sector on measures to mit-igate fraud associated withelectronic payments.”

According Mr. EmekaEmuwa, Chairman, EnterpriseBank, the industry needs to beahead of fraudsters. “We mustalso be sure that fraudsters willfollow the new form of paymentboth physically and logically.As the fraudsters are planning,we need to develop our skillsand plan.”

Encouraging operators toembrace the standard, Mr Ade-wale Obadare, Managing Di-rector, Digital Encode Limited,a security solution company,said: “Compliance with PC-IDSS helps to mitigate risksassociated with prevalent useof banks’ cards and paymentchannels. There is a growingcloud community of fraudstershoping to hack new electronicpayment platforms. With thistrend, PCIDSS has been man-dated for all merchants or banksthat store, process and or trans-mit cardholder data.

“Managing and monitoringaccess to the electronic pay-ment environment while lock-ing down administrative privi-leges is crucial to protectingsensitive data within this ex-panded threat environment.Many organisations are stilltrying to catch up on PCI 2.0requirements, and those ex-ploring virtualisation will nowneed to fully understand newhurdles to meeting audit re-quirements and protecting sen-sitive customer data and finan-cial information”.

Sterlingbags CITIexcellenceaward

THE decision of theManagement ofSterling Bank to re-

structure its operationallines for eff iciency andquality service delivery es-pecial ly in electronicbanking during the last fis-cal year has started to yieldthe desired result. The bankat the weekend, clinchedthe prestigious CITI BankPerformance ExcellenceAward for 2011.

With an outstanding scorecard of 98 per cent or high-er in her operat ions inStraight-Through-Process-es (STP) and MT 202-basedundertakings, a testamentto the bank’s consistency indelivering accurate inputand responses on a timelybasis in line with the moststringent global bench-marks.

Sterling Bank beats otherfinancial institutions in thecountry to bag the award.

The yearly award ispresented by CITI , aleading investment bank inthe world and a correspond-ence bank of note forseveral Nigerian banks, toleading f inancialinstitutions worldwide withstate-of-the-art internation-al electronic payment serv-ices that meet globally ac-ceptable standards in cor-respondent banking, re-sponse quality & time andprocessing accuracy.

The bank in a statementnoted that the award byCITI is a bold indicationthat the bank is on the righttrack in view of sustained ef-forts by the bank to makebanking easier for its cus-tomers on all fronts.

According to Moses Akin-nawonu, the bank’s head ofTrade Services , “ thisachievement is a product ofconsistent high perform-ance and focus on custom-er satisfaction. We willcontinue to provide valueadded service in all areas ofour operations just as we seethis award as an invitation toachieve more.”

Sterling Bank Plc, original-ly incorporated in 1960 asNigeria Acceptances Limited,was licensed as Nigeria’sfirst merchant bank in 1969.

It has since grown in leapsand bounds even as itcontinues to reach for thesummit of professionalismand global best practicestandards.

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Banking & Finance

BRIEF

THE Central Bank of Ni-geria of Nigeria (CBN)

has banned indebted banksfrom lending to other banksin the interbank money mar-ket. It also banned banks thatlend funds in the interbankmarket from accessing itslending facilities.

Announcing this ban in aletter titled: Revised guide-line for accessing CBN lend-ing windows and repotransactions, to all banks anddiscount houses, Director ofBanking Supervision, CBN,Mr. A. O. Idris said: “As partof the process of unwindingthe extraordinary measuresintroduced in the wake of theglobal financial crisis and toensure the effectiveness ofmonetary policy, any DepositMoney Bank/Discount Housethat obtains funds from anyCBN lending window is notallowed to simultaneouslyplace funds in the inter-bankmarket.

Deposit Money Banks/Dis-count Houses that also placefunds in the inter-bank mar-ket are not allowed to concur-rently access the window.

Any institution that contra-venes any provision of thiscircular will be suspendedfrom CBN’s money marketwindow. In addition, the in-stitution shall forfeit the prof-its it would have made on thetransaction.

This circular takes immedi-ate effect and supercedes allothers relating to the abovesubject."

Meanwhile, an inflow ofN266 billion Federation Ac-counts Allocation (FAAC)funds rescued interbank mar-ket from severe scarcity offunds and rising cost of funds.The inflow revived liquidityin the market from a deficit ofN222 billion on Wednesday toN186 billion at the close ofbusiness on Friday.

Short-term interest ratesalso fell sharply on Friday inresponse to the inflow. For ex-ample, interest rate on Over-night borrowing and OBB(open buy back or colaterised)borrowing which had risen to18.5 per cent and 17 per centin response to the decisionsof the CBN to further tightenmoney supply fell to 13.5 percent and 13 per cent on Fri-day.

CBN bans debtor banks frominterbank trading

By BABAJIDEKOMOLAFE

*As N266bn FAAC funds rescue interbank*Experts commend MPC decisions

Meanwhile, experts havecommended the decision ofthe CBN to jerk up the cashreserve requirement (CRR)and the foreign exchange netopen position (NOP) limit ofbanks.

The CRR is the portion oftotal deposits that banks aremandated to keep in cash,while the NOP is the amountof foreign exchange banks areallowed to keep per time.

On Tuesday, the CBN atits monetary policy com-

mittee meeting (MPC) raisedthe CRR to 12 per cent from8.0 per cent. It also reducedthe NOP to 1.0 per cent ofbanks’ shareholders’ fundsfrom 3.0 per cent.

This, according to experts,will help to checkmate infla-tionary pressures andstabilise foreign exchange.

In a comment sent to inves-tors, Afrinvest, an investment

and research firm said: “Theupward adjustment of theCRR in our view, is primarilya risk management initiative,taken by the CBN to reducethe excess liquidity in thebanking system and mini-mize the upward movementin the MPR. This moveshould fine- tune the qualityof assets in the loan books ofdeposit money banks (DMB)going forward.

“The downward adjustmentof the net foreign exchangeopen position for DMB’s im-plies that the net differencebetween assets and liabilitiesof foreign currencies in bankbalance sheets should narrowto 1.0 per cent. Thus, DMBswith excess foreign exchangeassets have to sell down suchpositions by the announceddeadline and this could leadto a re-evaluation of the nairain the near term.”

Commenting on the deci-

sions, Razia Khan of stand-ard Chartered Bank, Londonsaid: “We expect the naira tobe the immediate beneficiaryof the policy measures an-nounced today, with dollar/naira rate likely to trade low-er on the interbank market,falling again within theCBN’s official +/-3% bandaround N155 exchange ratepeg.

In the absence of a moresignificant impact on Niger-ia’s oil earnings, the peg islikely to be sustained, helpedby the CBN’s latest tighten-ing. However, global growthrisks and the impact on oilprices, will still have to bemonitored.

The CBN has consistentlymaintained the ‘soft’ natureof the naira peg. In the eventof a severe global shock, thecurrency peg might stillchange. For now, it remainsunchanged, supported by thelatest policy action.”

INTERSWITCH NigeriaLimited, an electronic pay-

ment switching firm, hasachieved the Payment CardIndustry Data Security Stand-ard (PCIDSS) re-certification,making it the only Nigerianand West African organisationto be compliant two years ina row.

With this re-certification,Interswitch has reassuredthat card users wouldcontinue to experienceenhanced payment accountdata security. PCIDSScertification represents acommon set of security best

Card Security: Interswitch achieves

PCIDSS re-certification

practice that if adhered to,will ensure the safe andsecure handling of paymentcard data and transactions.

The requirements ensurethat the entities that process,store or transmit cardholders’data meet and adhere to thefollowing standards: maintaina secure network for process-ing transactions; protection ofcardholders and transactiondata while in transit or at reston the network; regular mon-itoring and testing of IT in-frastructure among others.

“We have demonstrated ourcommitment to raise the bar

on transaction security byseeking and achieving recer-tification based on the Pay-ment Card Industry SecurityStandards Council (PCISSC)”, said MitchellElegbe, Managing Directorand CEO of Interswitch.

“Data security is a criticalpart of the switching busi-ness. In order to maintain andreinforce the same globallyacceptable standards, wehave gone to a great lengthand a rigorous process to en-sure we are re-certified”, hesaid in a statement issued onFriday.

FirstBankupgradesFirstContactfor enhancedservicedelivery

IN line with global bestpractices and the quest to

drive instant access to itsproducts and services, FirstBank of Nigeria Plc, has up-graded their contact centercalled FirstContact to an in-teractive, multilingual and 24/7 customer service center.

FirstContact, a major initi-ative of FirstBank was first cre-ated in 2008 to give custom-ers increased access to bank-ing services. With the recentupgrade, particularly the in-troduction of the InteractiveVoice Response (IVR) system,the bank aims to provide cus-tomers with a state-of-the-artplatform that offers a higherlevel of confidential bankingby phone and enables the cus-tomer carry out several trans-actions by simply following aset of voice prompts and mak-ing selections on phones key-pad.

The upgrade alsoensures easy access to infor-mation on customer care ini-tiatives in Pidgin, Yoruba, Ibo,and Hausa. This is designedto provide a wider platform forcustomer feedback while alsofacilitating faster issue reso-lution ensuring immediateresolution/response to thecustomer.

With the enhanced First-Contact, customers can initi-ate and conclude several en-quiries and transactions with-out having to leave the com-fort of their homes or visit thebanking hall. The new fea-tures include: Self Services,Funds Transfer with the IVRsystem, Bills Payment, Liveweb chat, SMS to short codeand the Multi-Lingual serv-ices.

Head, Marketing and Cor-porate Communications, Mrs.Folake Ani-Mumuney, First-Contact was designed to pro-vide world class customerservice via phone and e-mailinteractions. Ani-Mumuneysaid it serves as the first pointof contact between the bankand its customers and alsoacts as an intermediary be-tween customers and othersubsidiaries within the group.“The upgrade of the contactcenter is another demonstra-tion of our passion for con-stantly seeking innovativeways of giving our existingand prospective customers thebest service possible.

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Corporate Finance

Total to sell gasnetwork

French oil and gas major,Total (TOTF.PA ) is

preparing to sell its domesticgas transport and storageunit, TIGF, in a deal thatcould help it raise about 2.8billion euros ($3.39 billion),three people familiar with theplan told Reuters.

Total could use the proceedsof the disposal of the network,which operates in the south-west of France, for potentialacquisitions as marketplayers compete for shale gasand new natural resourcesdiscoveries.

“The process is at a veryearly stage. Total Chairmanand Chief Executive,Christophe de Margerieshould announce hisintention to sell inSeptember”, said one of thepeople.

Goldman Sachs (GS.N) andLazard (LAZ.N) are vying formandates to advise Total onthe deal, the people said.

Citi faces hugeloss over sunnybrokerageappraisal

Citigroup Incorporated’s$22 billion valuation of

its brokerage joint venturewith Morgan Stanley (MS.N)reflects an extremelyoptimistic view of the futureof Wall Street profits, makinga multi-billion-dollar loss onthe business more likely forCiti.

Sources familiar with thesituation said Citi’s appraisalworks out to 50 times currentone-year earnings for thejoint venture, MorganStanley Smith Barney. Thelong-term average price-to-earnings ratio for retailbrokers is only about 18 times.

Morgan Stanley’s $9 billionappraisal is about 20 timescurrent earnings and impliesan expectation that profitswill stay in a rut, even whenthe costs of combining the twocompanies’ brokeragessubside. The companiesexchanged appraisals as astep to set the price thatMorgan Stanley, which owns51 per cent of MorganStanley Smith Barney, willpay to buy another 14 per centfrom Citigroup.

People at both companiesbelieve an arbitrator will comedown somewhere in themiddle, which would stillforce Citigroup to take a non-cash charge to earnings towrite down the value of its 49per cent of the business.

Revenue growth rates forwealth managers have fallen

By PETER EGWUATU

The Chairman ofAssociation of Issuing

Houses of Nigeria (AIHN),Mr. Bolaji Balogun, hascalled for the establishment ofa stabilisation fund for thenation's capital market as away out of the downturn thathas lasted for more than twoyears.

He made the call last weekduring a dialogue betweenthe Finance Minister andoperators in the capitalmarket, organised by theNigeria Economic SummitGroup (NESG) in Lagos.

He advised the FederalGovernment to quicklyintervene in the market if thecountry must have adequategrowth and development.According to him: “Whateverform of intervention in themarket is necessary toaddress the liquidityproblem, be it forbearance,stabilisation fund or whateverit may be called, is urgentlyneeded.

However, some brokers hadnoted that debt forbearancedoes not mean debtforgiveness. They stressedthat forbearance only allowsthe debtor to negotiate withthe creditor so that they couldagree on the repaymentterms.

According to him: "I believesome brokers are alreadyenjoying forbearance despitethe fact that government hasnot formally unveiled itspackage. What the marketreally needs is a StabilisationFund that would ensuredirect injection of funds intothe market.”

Meanwhile, theCoordinating Minister of the

AIHN advocates creation ofstabilisation fund for capital market

Economy and FinanceMinister, Dr. Ngozi Okonjo-Iweala, while responding tothe call for forbearancepackage for stockbrokersreiterated FederalGovernment's plan to workout a forbearance package forstockbrokers as part ofmeasures to stimulateconfidence in the Nigerianstock market and increaseliquidity.

According to her: “If theeconomy is not doing well,the capital market cannotthrive, so the FederalGovernment is moreconcerned with projects thatwill benefit the majority ofNigerians in the short-term.Government has to givepriority to those areas thatmajority of Nigerians areconcerned with, such asPower, infrastructure among

others. But Government hasset up committee onforbearance to makerecommendations on themodalities for intervention.”

It will be recalled recentlythat the immediate pastPresident of CIS, Mr. MikeItegboje, restated the need fora stabilisation fund, sayingthat would bring back themuch needed investorconfidence into the market.According to him, the fundwould go a long way inaddressing the margin loansoverhang, which had beenposing a huge challenge tobrokers.

He had noted that since theglobal meltdown, somecountries had made use ofsuch funds to cushion theeffect of the meltdown on themarket. “We as stockbrokersare again renewing our callfor a stabilisation fund for ourmarket. This fund is verynecessary as it would help tomitigate the losses incurredby investors and stockbrokersin the capital market in thelast few years. And so, wewant the Federal Governmentto look into this issue as manycountries have taken the routeof this fund for their marketand Nigeria should not be anexception.”

Itegboje suggested that theAsset ManagementCorporation of Nigeria(AMCON) could take up thechallenge of ensuring thatsuch funds were properlyused in the market.

BY NKIRUKA NNOROM

The current year may notbe rewarding for

shareholders of ChampionBreweries Plc, as the companymay likely end the year ondeficit going by the half yearfinancial results recentlyreleased by the company.

A peep into the unauditedfinancial results for the periodended 30

thJune, 2012, made

available to the investingpublic through the NigerianStock Exchange (NSE)indicated that both earnings,pre and post tax profits, andother key performanceindicators took a turn for theworst. During the period underreview, the company ’sturnover slumped bysignificant 60.04 per cent toN127.979 million, as againstN320.276 million in thecorresponding period of 2011.The gross profit nose-dived by52.14 per cent from N96.634million to N46.252 million,while the profit before taxslumped further from negativeposition of N249.530 million in

Champion Breweries records declining fortuneas turnover, profits slump

the preceding year to anothernegative of N422.569 million inthe review period.

The profit after tax alsorecorded the same fortune asthe pretax profit, declining bythe same margin to a negativeposition of N422.57 million.

The company’s cost of salesrose to N545.939 millioncompared to N415.412 millionin the same period of 2011,representing 31.42 per centincrease. The administrativeexpenses witnessed went up toN220.582 million fromN129.200 million, a 70.73 percent increase. On the balancesheet side, the net asset roseto N2.83 billion as againstN2.03 billion in 2011,indicating 39.4 per centincrease.

The result released last weekwas in contrast to theenvisaged value addition thebrewer would enjoy as a resultof its acquisition byConsolidated Breweries Plc.

The Managing Director,Consolidated Breweries, Mr.Boudewijn Haarsma, hasassured at that point that thepartnership between the two

companies would also affordChampion Breweries theopportunity to enjoy bettergrowth prospects, thusincreasing its bottom-line.

He said, “As a result of thistransaction, the acquiredcompany would have goodopportunities arising from thispartnership with ConsolidatedBreweries. The reason is thatthe transaction will, amongstother things, provide an evenbetter avenue for furtherdevelopment of the ChampionLager Beer brand.

“It will also provide thecompany with access toexpertise, synergies in allfunctional fields and, not theleast important, increase thecapacity utilisation of itsbrewery through possiblemanufacturing of ConsolidatedBreweries Plc’s brands in thefuture.” He further stated thatthe partnership would enableChampion Breweries to haveinstant access to improvedproduction capacity, which willallow it to address its currentcapacity constraints and furtherstrengthen its platform forfuture growth.

*From right: Hon. Chibudom Nwuche, former Deputy Speaker, House of Representatives,Guest Speaker; Arch Thomas Awagu, President/Chairman of Council, Institute of Directorsand Mr. Femi Ekundayo, past President at the Institute of Directors of Nigeria July 2012Members' evening/New members induction held in Lagos. Photo by Lamidi Bamidele.

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Homes & Housing Finance

BRIEFS

Stakeholders in thehousing sector have

taken the federal governmentto task over its targetedyearly delivery of one millionhousing units across thecountry.

It would be recalled that acouple of months ago,President Goodluck Jonathanat a Federal Executive Council(FEC) meeting directed theMinister for Lands, Housing &Urban Development, Ms. AmaPepple, to set the machinery inmotion that will ensure theprovision of one millionhousing units annually in thecountry, starting from January2013. The mandate cameagainst the backdrop of thehuge housing shortfall in thecountry estimated to be over 16million, which the presidentnoted requires specialintervention for it to bridged.

Industry experts howevernoted that although meetingthe target is a tall order, theprojected number of housingunits could be achieved withthe involvement of the privatesector and the provision of anenabling environment.

President of Real EstateDevelopers Association ofNigeria (REDAN), Chief

Building collapse: Experts seekquick passage of building codeStories by YINKAKOLAWOLE

In the bid to curtail theincessant incidence of

building collapse across thecountry, experts in the builtenvironment have called forquick passage into law of theNational Building Code tofacilitate the regulatoryprocess of policingconstruction of buildings.

The experts aired their viewsat the recently concluded42

ndNational Conference/

Annual General Meeting ofthe Nigerian Institute ofBuilding (NIOB) in Enugu.The builders noted that abuilding may collapse due toa problem, , but for thephenomenon to become arecurring decimal isunacceptable and must becurbed, adding thatimmediate review of existinglaws and implementation ofthe National Building Codeare needed to nip the menacein the bud.

They also called for animmediate inauguration ofbuilding laws reviewcommittee with allstakeholders’ involvement toharmonise them for properenforcement by government atall levels.

In a paper titled: ‘Curbingthe Incidence of BuildingCollapse in Nigeria:Sanctions, Liability and LegalImperatives,’ immediate pastPresident of Nigerian Instituteof Building (NIOB), Mr.Dachollum Jambol, pointedout that in order to curb themenace, there is need forurgent implementation of thebuilding code to addressabsence of planning of thenation’s towns and cities,incessant collapse of building,fire incidents, builtenvironment abuse and otherdisaster.

He said theimplementation of thebuilding code would addressthe issues of dearth ofreference design standardsfor professionals, use ofunqualified persons forbuilding production processand lack of maintenanceculture.

Jambol, who is a lecturerin the Department ofBuilding, University of Jos,

called for government’scollaborative efforts withprofessionals and regulatorybodies without any delay toconduct a comprehensiveaudit of all construction firmsoperating in Nigeria toensure their level ofcompliance with the buildingcode and all relevant industrypractice regulation,legislations and controls.“There is need for

comprehensive audit of allconstruction firms to assurequality and competence ofpersonnel allowed into theindustry and quality ofproducts; and ascertaintechnological capabilities/capacities for practice,” hesaid.

Also speaking at the event,Chairman, Council ofRegistered Builders of Nigeria(CORBON), Prof. AkinAkindoyeni, canvassed theimmediate review of theNational Urban Planning Lawto take into consideration allpolicies and other lawsrelating to urbandevelopment, industrialpractices, regulations andcodes affecting the differentaspects of the builtenvironment, especiallybuildings.

Akindoyeni called on stategovernments to enact urbanplanning laws that would makethe enforcement of thebuilding code mandatory andprovide the framework for theconstruction of greenbuildings in their variousjurisdictions. He saidCORBON had forwarded asample of the bill on the NBCto every state governor in thecountry for consideration. Theprofessor of building soughtthe review of other laws suchas the Compulsory BuildersInsurance Liability, saying thelaw would have been moreenforceable if it had beenmade dependent on theprovision of the NationalBuilding Code for Health andSafety Management as well asQuality Management Plans.

Stakeholders task FG on 1m annual housing target

Olabode Afolayan, said themandate is a wonderful ideabut was skeptical based onthe issue of officialbureaucracy that has stalledsimilar initiatives over theyears. He noted that similardirectives in the past havenot materialised as a result ofthe absence of the political willto make it happen, addingthat it is one thing to saysomething, but another tomuster the political muscle toturn it into reality.

According to him, the needto build as much as one millionhousing units annually for thepopulace cannot be faulted butnoted that outlining themodality of actualising themandate is fundamental. Heasserted that unless the privatesector was involved, the wholeconcept would be akin to merepolitical propaganda, addingthat REDAN is ready to partnerwith government in making thedream of providing one millionhousing units every year cometrue.

On his part, President ofAssociation of ProfessionalBodies of Nigeria (APBN), Mr.Segun Ajanlekoko, saidthough a lofty idea, it is notnew. He likened the mandate

to the one given by the latePresident Umaru MusaYar’Adua to provide a similarnumber of housing units, whichwas never actualised until hisdemise. He declared that theinvolvement of the private sectoris needed to make the dream areality, adding that theprojection could only berealised if government couldmuster the political will to doso. According to him, ifgovernment is willing toprovide the basic infrastructureand the enabling environment,the tendency is there for theproject to become a reality.

In a similar vein, President ofNigerian Institute of Building(NIOB), Mr. Chucks Omeife,said government needs to takethe issue of mass housingbeyond mere rhetorics. He saidunless the core professionals inthe built sector are involved, itwould be a futile exercise.According to him, the rightthing to do is to ensure that theprofessionals in the constructionindustry were allowed to makemajor inputs in the scheme. Headded that the reason similarprojects or concepts in the pastfailed are not unconnected withthe absence of the political willto implement the plans.

FG taskssurveyors on highconstruction cost

The federal governmenthas charged quantity

surveyors to help tackle theproblem of high cost projectconstruction in the country.

Vice President NamadiSambo, who said the situationwas no longer acceptable,gave the charge at the2nd

building and constructioneconomic roundtable, with thetheme “The Role of theBuilding and ConstructionSector in Achieving Vision20:2020”.

Represented at the occasionby Minster of Lands, Housingand Urban Development, Ms.Ama Pepple, he said: “Thereare insinuations that thesector is a conduit pipe for allforms of nefarious activities,thereby denying the economythe necessary resources forimpactful development. Thefederal government isseriously worried about thisdisturbing trend, and herebychallenges quantitysurveyors, as building andconstruction cost experts, tofind a lasting solution to theproblem of high cost ofconstruction projects in thecountry.” Sambo noted thatthe expertise of quantitysurveyors is needed to ensureincrease in projectscompletion rate in the country,and also urged them tosupport government’s effortaimed at bringing sanity tothe construction sector.

LG set tocomplete 250housing units

Oji River localgovernment in Enugu

State is set to complete its OjiRiver Urban housing estate,comprising 250 housingunits.Chairman of the council,Chief Gabriel Onuzulike, saidwhile on inspection of theproject that it was conceivedbecause Oji town is an urbancouncil with housingchallenges, noting that someof the one-bedroom terracehouses were nearingcompletion. He said thehousing units include threebedroom bungalows, twobedroom bungalows and onebedroom terrace housesmostly meant for workers thatwould be accommodatedthrough mortgageagreements. Onuzulike saidOji River local government isa bridge between Anambraand Enugu states that neededhousing accommodations forthe growing population of thesemi-urban council. Hepromised that before thesecond quarter of next yearall amenities needed in theestate would have been put inplace, adding thatapplications for ownership ofthe houses were already beingreceived.

•A typical development of mass housing

Vanguard, MONDAY, JULY 30, 2012 — 27

the present threat of climatechange as a result of globalwarming, which can best beaddressed through bilateralagreements not only betweennations but regions, like theECOWAS community.Development control is amajor tool for addressingclimate change.

Some state governments areusing this judgment to stiflethe activities of agencies ofFG within their jurisdiction inmany ways. A case in point isLagos State Governmentagencies that opine that landis their oil and should do whatthey deem necessary tomaximise returns from landtransactions.

If development is looked atfrom the broader sense asdefined by estate surveyors,there will be total chaos in thecountry as indigenes of theoil-producing areas can stopoil companies from operatingin their territory until theyobtain their approvals.

The Federal Governmentshould request for furtherclarification andinterpretation of thejudgment from the SupremeCourt. If the present impassestill subsists, she should movefor constitutional amendmentto save the country fromchaos.

Finally, the discussionsabove reveal that there areprovisions in different parts ofthe constitution that militateagainst the provision ofaffordable housing, in orderto overcome them, there isneed to reform, harmonisethem and bring all of themunder a single bill.

*OBIECHINA is an engineerwith the Federal HousingAuthority (FHA).

the exception of land forprospecting for oil and gasand those with well spelt outareas, like Inland WaterwaysAuthority.

These requirements ofgovernor’s consent and C ofO have made it verycumbersome for owners ofland to use their assets intransactions. This has affectednegatively individuals,corporate bodies and evenagencies of FederalGovernment. Stategovernments in differentpolitical parties from thegovernment at the centre(federal) have used the LandUse Act to deprive her citizens

BRIEFS

Homes & Housing Finance

By NWACHUKWUOBIECHINA

IN the advanced westerneconomies, housing

development is used as agood indicator of the state ofhealth of the economy. It isalso used to createemployment and generatewealth because of themultiplier effect it has on theeconomy as a whole.

Housing can only bedeveloped when land isavailable, it cannot be donein the air, and it is key to anyhousing development. Majorconcerns will be theavailability, accessibility,suitability and affordability.Some issues have beenmilitating against the fullrealisation of the potential ofthe housing sub-sectorcontributing to the massivegrowth of the economy,wealth and job creation.

Finance is needed for bothfunding the housingdevelopment and forempowering the intendingbeneficiaries to be able topurchase them. Theprocurement of funding atreasonable interest rate forboth will dictate the deliveryand affordability.

The availability, suitability,affordability and durability ofthe construction materials willinfluence the cost ofconstruction and thereforethe overall cost. Theconstruction technology andtechniques in use affect theaffordability and the qualityof housing to be delivered.

The most known and widelydiscussed is the Land UseLaw/Act, promulgated by themilitary, incorporated intothe 1979 constitution and

,

,

De-regulation vital for robusthousing sector

brought forward in the 1999constitution. This wasintended to make acquisitionof land both easy andaffordable but presently it hasbecome a cog in the wheel ofprogress.

In the law, the governor ofthe state holds land in trustfor the people. No transactioncan be valid unless he issuesa C of O or his consent isrequired. This is not only truefor individuals and bodycorporate but also for agenciesof Federal Government, with

from benefitting maximallyfrom projects of the federalgovernment. A case in pointis the action of the then OyoState Governor, late Bola Igeof the UPN against the FG ofNPN in 1980.

There are many cases ofsuch, most recently, FHAcalled for partnership bids forthe development of 2nd Phaseof Festac Town in a nationalnewspaper on Monday, April3rd, 2012, only for an agencyof Lagos State Government topublish a caveat emptor in

in some cases the LGC may nothave the expertise and manpowerto carry out these functions.

This section of the constitutionshould be amended toaccommodate and recognise therole private estate developers’play in maintaining estates theydeveloped. In this era ofglobalisation, there is the urgentneed to de-regulate themaintenance of municipalservices, so that the expertiseand prudence of the privatesector can be utilised to provide

well-managedenvironmentthrough theapplication ofbest practices.

The thirdissue has to dowith theSupreme CourtJudgment of2003; thehighlight of thejudgment isthat it buriedthe Town andR e g i o n a lPlanning Act byv e s t i n gDevelopmentC o n t r o lfunctions onthe stategovernment.

The judgmentdid not takei n t oconsideration

another national newspaperon Wednesday, May 9th,2012 telling the public tobeware.

These anomalies can becorrected throughconstitutional amendment.The second issue has to dowith the provisions of FourthSchedule of the 1999Constitution. It vested themaintenance of municipalservices in the LocalGovernment Council (LGC).

On the face of it, it appearsokay, but when and where aprivate organisation developsan estate, conflict arises as towho is to maintain theseservices, bearing in mind that

State governments indifferent political parties fromthe government at the centre(federal) have used the LandUse Act to deprive her citizensfrom benefitting maximallyfrom projects of the federalgovernment

Imo, US firmsign MoU onhousing

Imo State government andBluefield Associates

Incorporated, an Americanproperty firm, have signed amemorandum ofunderstanding (MoU) tobuild a residential estate andan industrial park in the stateunder a private-public-partnership (PPP)arrangement.

The deal was sealedrecently when a former USambassador to Nigeria, Ms.Robin Sanders, led adelegation of the Americaninvestors to Owerri, the statecapital. She assured that, ifthe PPP works out well, itwould enable Imo State haveto access funds fordevelopment frominternational agencies, whileexpressing confidence thatthe evolving partnershipwould create jobopportunities.

Vice President, BluefieldAssociates, K.C Obioha, saidhis firm would provide theinitial equity, managementas well as fund the project,whose cost was notimmediately disclosed.

In his remark, GovernorRochas Okorocha assured thevisiting US investors that thestate government was readyprovide all the necessaryeconomic incentives and landfor the projects.

UN-Habitatappoints newcountry manager

Mr Kabir MohammedYari has been

appointed the new HabitatProgramme Manager forNigeria. He will oversee theUnited Nations HabitatHuman SettlementsProgramme Support Office(HAPSO) in Abuja

Yari, according to astatement, holds a B.Sc.Degree in Geography fromthe Bayero University, KanoNigeria and a MastersDegree in Urban andRegional Planning from theAhmadu Bello University,Zaria, Nigeria. In addition,he attended many shortcourses in Housing, ProjectPreparation and Appraisal,Public Private Partnershipsand Urban and CityManagement among others. He is a professional townplanner with extensiveexperience in urbaninfrastructure projects,participatory planning, citydevelopment strategy andurban governance. Hestarted his working careerwith the Federal Ministry ofWorks and Housing beforejoining Urban DevelopmentBank of Nigeria where herose to the rank of ActingManaging Director andChief Executive Officer.

Good houses require funding for development and acquisition

28 — Vanguard, MONDAY, JULY 30, 2012

CMYK

Insurance

’

’

BRIEF

Compensation tofamilies of Danacrash victims is toset positiveexample — Uranta

Mr. Justus Uranta is the Managing Director ofNiger Insurance Plc. In this interview, he

revealed that insurers that covered the Dana planethat crashed are paying compensation to familiesof the victims to safeguard the image of theindustry even when some deficiencies existed inthe insurance contract

Challenges encountered in settling familiesof Dana plane crash victims

The London market is majorly the owner ofaviation insurance and they know the extentthe business has gone there. Aviation insuranceis highly capital-intensive vis-a-vis Nigerianoperators' capital base. Everything boils downto having sufficient capacity and being ableto carry these risks. Some time ago,insurance companies increased capitalbase. Before then, for aviation; oiland gas and huge marinebusinesses, Nigerianoperators were more like postoffices because our capitalbase was very low and youcannot carry a risk that canswallow you when claimoccurs. But I thank God thatwe are building capacityincreasingly to the extent thatwe can boast of being able topick some percentage of theserisks especially now that we

take advantage of thecompulsory insuranceproducts under the MarketDevelopment andRestructuring Initiative,MDRI. Meanwhile, we arejust in July, we have not

of that and every insurancecompany has also done so.Even NAICOM have putenough efforts to assist us,they have gone on roadshows and all that to sensitizethe public. What perhaps hasnot been properly done is togive the MDRI the teeth tobite in terms of properlegislation to compel the

at all that, there are a lot of things on theirtable, and I hope all these will be addressed.Meanwhile most of us that are appreciative ofthe efforts of the government and are willingto take advantage of them are already doingso and it is adding to our portfolio.

Opportunities in the local content initiativeThe local content initiative is a policy that

the government has instituted to encouragelocal operators and not only the insuranceindustry. What that does is that it has forcedthe local market to absorb increased capacity.It started with 10 per cent involvement andclimbed to 40 per cent now and the intent isfor it to go up to 70 per cent in the future, we

hope that it will get to 100 per cent. What thathas done for us is to make us sit up in terms ofimproving our capital base because if your

capital base is low, you cannot participatein the local content policy. Because

of the nature of our business,if you are may be in marinebusiness where you are notdirectly faced with mitigatinga loss, perhaps the scenariomay be different but wherebywe are in a position where wehave to meet a claim when aloss occurs, then we must besure that our capacity issufficient to carry such risksthat have been bestowed on us

are being encouraged by thelocal content policy.

However, I will be morecomfortable if insurancecompanies can retain morebusiness in our local marketbecause I am a businessmanand my bottom-line is to havemore business that I can keeprather than sending them toalready enriched economies.

Well, for the Dana planecrash, the industry providedcover for it but there werecertain challenges whichcreated some difficulties inthe market but I think that thematter has also beenaddressed. Insurancebusiness is like a bindingcontract and there are certainbasic considerations whichthe risk must be attached to.When some of these factorsare deficient, the contractitself becomes questionableand of course those are thechallenges we are havingtoday in the market.

But I want to belief thatthe practitioners want to

set example by encouragingthe aviation industry tocontinue to patronize us. Sowhat we are trying to do isactually being able to meetthese risks when in actual factthere are some deficiencies. Iam very sure that the marketwill be able to cope with thesechallenges.

N1 trillion GPI target byNAICOM

Well, remember that the N1trillion Gross PremiumIncome target for theinsurance industry by the endof year 2012 by the NationalInsurance Commission,NAICOM, is just a forecast.It was a kind of challenge toinsurance practitioners thatthey should work hard and

so to speak.

So by extension, we atNiger Insurance have

embraced capitalisation andalso expanded our retentioncapacity. In the past wherewe use to have like 10 percent, we have set up to 20-25per cent as the case may beso that we can be able to playwell under this advantagethat have been given to us.So we are continuouslyreviewing and improving ourretention capacity in terms ofour reinsurances. That iswhat we are doing to playeffectively in order to takeadvantage of the local contentexposure.

Effects of Boko Haram oninsurance business

Just like in any otherbusiness, we have had ourchallenges in the Northernpart of the country, but we arestill coping. It hasn’t beenentirely bad. When the attacksget too much we ask ourworkers to close office for awhile then we reopen again.We cannot run away from aparticular part of the country.We are sure that thegovernments are on top of itand they are still promisingus and we are striving.

Takaful insuranceWe were one of the early

initiators of the takafulinsurance product and thepractice has been transformedover and over. In terms ofwhat NAICOM is doing now,we have gone beyond thatbut we are always willing andopen to accept whateverdirectives the regulator wantsto give us to ensure thatwithin the public domain weare always better off in termsof the benefits of theseproducts.

gotten to December and fromnow till December somethingcould happen and we mightget there. Seriously speakingall the insurance companiesare working hard to reachthere. Here in NigerInsurance, we have adepartment that is taking care

public to take advantage ofthat. For example, I, as aninsurance practitioner, Icannot walk up to your houseand tell you that your twostory building must beinsured. There is no suchlegislation yet to support me.But the government is looking

STI settlesN439m claims infirst half

Sovereign Trust InsurancePlc has paid the sum of

N439.9 million as claims tovarious policyholders whoseclaims matured in the firsthalf of 2012. In a statement toVanguard, the company saidthat total figures paid asclaims settlement betweenJanuary and June 2012 wasN439, 946,599.87, (Fourhundred and thirty-ninemillion, nine hundred andforty-six thousand, fivehundred and ninety-ninenaira, eighty-seven kobo).

The breakdown, accordingto the company, showed thatmotor insurance recorded thehighest figure ofN206,958,578.43, followed bygeneral accident portfoliowhich had N84,548,986.44while N83,600.962.46 wentinto claims settlement on fireand special perils. Marineand aviation claims amountedto N39,685,847.72,engineering claims came toN23,333,591.65 while the oil& gas portfolio settled theleast claims of N1,800,880.00.

In all, a total of 1,018policyholders, werebeneficiaries of claimssettlement in respect of thedifferent classes of insurancepolicies under the stable of theunderwriting firm.

The Divisional Head,Technical, Mr. TajudeenRufai reiterated thecompany’s uncompromisingstance towards promptsettlement of genuine claims.He said: “A customer-friendlyclaims process has beendesigned to facilitate timelyclaims settlement with themajor intent of delighting ouresteemed customers as andwhen due.”

In the same vein,Managing Director/CEO,Mr. Wale Onaolapo statedthat the company has lived upto its responsibility byfulfilling its financialobligation to thepolicyholders. He also statedthat prompt settlement ofclaims enhances thereputation of anyunderwriting firm and assuch, the brand equity andimage of that organisationwould receive a boost that canresult to more patronage. "Weare serious about our businessin Sovereign Trust InsurancePlc and we hold ourcustomers dear in everythingwe do,” he said.

He further said that thecompany will not leave anystone unturned in ensuringquality and exceptionalservice delivery to its variouspolicyholders.

Insurance business is like abinding contract and there arecertain basic considerationswhich the risk must be attachedto; when some of these factorsare deficient, the contract itselfbecomes questionable and ofcourse, those are the challengeswe are having today in themarket

•Uranta

By ROSEMARY ONUOHA

BY ROSEMARY ONUOHA

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CMYK

Appointment & Promotions

THE new Managing Direc-tor of Nigerian Ports Au-

thority, NPA, Mallam HabibAbdullahi, holds a Master’sdegree in Public Policy andManagement from the Har-vard University USA.

He is also Edward MasonFellow of Harvard Institute ofInternational Development,Harvard University.

President Goodluck Jonath-an, has Thursday last weekconstituted a new manage-ment team for the NPA led byAbdullahi after the dissolutionof the former managementteam led by Omar Suleiman.

Abdullahi is the former act-ing Executive Director,Finance and Administration ofthe authority.

Others are Engr. DavidOmonibeke, ExecutiveDirector, Marine andOperations; Mr. MohammedSani Saleh, ExecutiveDirector, Engineering andTechnical Services; andOlumide Oduntan, Executive

Meet Abdullahi, new NPA MD

•Mallam Habib Abdullahi,NPA MD

Director, Finance and Ad-ministration.

A statement by Mrs. S.K.Ballah said the new Manag-ing Director, 56, hails fromKano State of Nigeria.

He served in different ca-pacities in the state as Direc-

tor of Budget, managingdirector of some parastatalsand also as First Chairman/Sole Administrator of KaboLocal Government, all inKano State before joining theservices of Nigerian Ports Au-thority.

Earlier, he served as theChief of Staff to the Speaker,House of Representatives,National Assembly Abuja.

His university educationwas at the prestigious Ah-madu Bello University, Zariawhere he bagged his first de-gree in 1978. He also attend-ed the University of Bath andUniversity of East Anglia allin the UK.

He served as GeneralManager, Administration andwas later deployed to Londonas Overseas Representativeof the Nigerian PortsAuthority, a position he helduntil December 2011 when hewas appointed Ag. ExecutiveDirector, Finance and Admin-istration.

THE United NationsI n d u s t r i a lDevelopment Organi-

sation (UNIDO), has hon-oured the Executive Secre-tary, Nigerian InvestmentPromotion Commission(NIPC), Engr. MustaphaBello with honorary Director-General of the organisationfor his commitment and ded-ication to the promotion ofinvestment in the country.

The Representative and Di-rector, Regional Office,which takes care of Mali,Burkina Faso, Benin Repub-lic and Nigeria, Dr. PatrickM. Kormawa who decoratedthe Executive Secretary, com-mended him for his sterlingleadership qualities inadvancing the economic de-velopment of the countrythrough the activities of theCommission on the invest-ment promotion and facilita-tion.

The Regional Director of

UNIDO honours NIPCDG, Bello

UNIDO noted with satisfac-tion the cordial working re-lationship existing betweenthe two organisations andthe role the NIPC hadplayed in hosting them intheir premises at the pointof their entry into the coun-try.

“UNIDO and NIPC have avery good collaboration andcordial working relationshipsince our entry into Nigeriathrough our activities, andthis we promised to sustainand strengthen,” he stated.

Dr. Kormawa promised hisorganisation’s readiness towork with the Commission topromote small scalebusinesses in Nigeria as thatis the catalyst for economicdevelopment and transfor-mation, stressing that “thevisit of NIPC was timely asit coincided with thereviewing process of their‘Country Framework’ docu-ment”, and assured that theCommission’s interest willbe taken care of in the pro-gramme. The CountryFramework documents, heexplained, cover threemajor thematic areas -“Poverty reductionprogramme; Private Sectordevelopment and Energyand Environment.”

He commended the NIPCfor their active role and par-ticipations in all pro-grammes organised by UN-IDO in time past andpromised to continue to as-sist the Commission in thearea of capacity building.

Earlier, the Executive Sec-retary commended the col-laboration between the Com-mission and UNIDO whichcommenced in 2001 withthe Country Service Frame-work (CSF) agreement inwhich the agency handledthe investment promotioncomponent.

Okeke, Afudego, Ogunlowo join Ernst & Young

ERNST & Young has ap-pointed three new Part-

ners in Linus Osita Okeke,Benjamin Afudego and Funmi Ogunlowo in its effortsto strengthen capacity in theForensic Investigative & Dis-pute Services (FIDS), RiskAdvisory and Assurance busi-ness.

OkekeHe becomes a Partner in

Assurance Services for WestAfrica with focusonForensic Investigative &Dispute Services.

Okeke attended the Univer-sity of Jos where he ob-tained a Bachelor’s degree inLaw, emerging the best Lawstudent in the full-time class.

He also obtained a Master’sdegree in Law at the Univer-sity of Benin, graduating asthe best student in his class.He was called to the NigerianBar in 1993.

Okeke started his career with

the law firm ofMessrs Iwelumo & Iwelumo inJanuary 1994 and laterjoined the then Arthur An-dersen (now KPMG Profes-sional Services) and rosethrough the ranks to becomeHead of Forensic Services forAnglophone West Africa.

Afudego As a new Partner

in Advisory Services, hewill focus on Risk FinancialServices.

Afudego brings to Ernst &Young’s clients over 15 yearsof world-class experience ingovernance, risk and con-trols.

He specialises in bankingand capital markets and hasextensive experience in pub-lic sector financial manage-ment as well as donor fund-ed projects.

Prior to his recent appoint-ment, Afudego was a leadingmember of the Risk depart-ment in Ernst & Young’s Fi-n a n c i a lServices Organisation (FSO)based in the UK, where heworked for seven years. Dur-ing this time, he managed anumber of high profile inter-nal audit and internal controlassignments for FTSE 100companies, including thetop five banks in the UK.

He supported leadingbanks in assessing the effec-tiveness of sanctions process-es & controls and in perform-ing review of risk manage-ment functions and alsoplayed leading roles on a

number of high profile as-signments during the recentfinancial crisis, includingmanaging the payments proc-ess for a bank that wasin administration.

Afudego recently managedthe review and design of thetarget operating model forinternal audit and internalcontrol function of a leadingbank in Nigeria,including writing the meth-odologies and manuals.

He previously managed thereform of public sector finan-cial management processesfor governments of Ghana andUganda, including thecentral and local governmentagencies and re-engineeredthe business registrationprocess for Ghana.

Ogunlowo Ogunlowo is the new

Partner in-charge of Diversi-fied Products and Public Sec-

tor in Assurance service line. A 1989 graduate of Account-

ing and Management fromthe prestigious ObafemiAwolowo University,Ile-Ife, Nigeria, he started hisprofessional career in Ac-counting with Horwath Dafinone (formerly D.O.Dafinone & Co) in October1990 and qualified as a Char-tered Accountant in May1992.

Ogunlowo is also an Asso-ciate Member of CharteredInstitute of Taxation of Niger-ia and joined the employ-ment of Ernst & Young in Oc-tober 2002 as a Manager withresponsibility for the audit ofvarious public sectorand non -gove rnmen ta lorganisations as well as oth-er private companies. He waselevated to the position of aSenior Manager in 2005 andAssociate Director in 2008.

•Okeke

•Afudego

•Ogunlowo

•Engr. Mustapha Bello,Executive Secretary, NIPC

38 —Vanguard, MONDAY, JULY 30, 2012

BUSINESS & ECONOMY

“0810-0623558On rubber. I am Dutch, but if

I do not control myself, I willcry everyday over Nigeria’sparadise lost. Rgds Capt AddoRoosa.”

I want to extend my greatestgratitude to Captain Roosa forcaring about Nigeria more thanour leaders apparently do. Idon’t cry over rubber becauseit represents severalopportunities lost in thiscountry. In my short span of life,I have been closely associatedwith at least four crops – twofood and two cash crops –which if grown to the limit ofour collective abilities couldmake our squabble over crudeoil revenue disappear. Theseare: rubber, cashew, rice andsorghum. But farmers engagedin growing cassava, yams andmaize, close by the farms withwhich I was involved, haveprovided me with a glimpse ofwhat an agricultural paradiseNigeria can be.

Perhaps, the first notion any-one really interested in agricul-ture, and that should includeour presidents, governors, min-isters (agriculture, water re-sources, works, transport, fi-nance and power etc), the cen-tral bank governor and the re-search institutes is that farm-ing is not a neat job; it is not adesk job and it is certainly nottheoretical. It is “dirty”, diffi-cult, sometimes frustrating; but,in the end, thoroughly reward-ing. The success of the nationsresponsible for the greatestoutput of food globally, rests inthe fact that only a small per-centage of people engage in it.Generally, they are people whoreally love the work and willdo nothing else. I left farmingand rice milling in 1990 when

Diversification: Missing theboat on rubber – 2

’’

I became head of an extendedfamily at 46 with virtually allthe family estates in Lagos.There was no way I could han-dle the God-given task fromSokoto. Otherwise, I was readyto spend years in the north tohelp achieve the goal of mak-ing Nigeria self-sufficient inrice production. Then, I had noother idea. I just wanted to bea rice producer. The notion ofeverybody who has nothing todo should go into farming willnot work. We might as well or-der everybody unemployed togo and become a musician orfootballer. Only a few dedicat-ed Nigerians can turn aroundour fortunes in agriculture. Ourtask is to find them.

Given that as background,a product like rubber

calls for even more dedicationbecause the farmer has toendure a long period betweenplanting the first seeds andharvesting the first output ofraw rubber. Meanwhile, a lotof things could go wrong alongthe way. At this point, let mesketch for all of us the growthcycle of rubber and, in a thirdpart of this series, the sort ofinterventions governments,banks, research institutes, farmextension workers etc, canprovide will be discussed.

Rubber from seed to raw rub-ber: For the purpose of this part,we will assume a 100 hectarefarm already cleared and readyto be cultivated. A virgin forestwill require more time and

planting time will depend onhow fast the clearing can bedone.

Ideally, 555 stands of rubbercan grow on one hectaremeaning 5,550 plants from thenursery. Meanwhile, 70,000plants can be grown in onehectare of nursery. So, the 100hectare farm will absorb 55,500if they all germinate. But,there is a catch, fortunately, nota big obstacle.

Seeds must be gathered inSeptember when the pods onmature trees are exploding.

They are then planted on seedbeds. Within 14 days, 20 percent of what was planted willsprout vigorously. These willthen be transplanted to thenursery where they will stay for15 to 18 months. Here again,two snags are experienced andany error at this stage can re-sult in the loss of the wholestock of nursery plants or lowyield later on.

The plants from the nurserymust be transferred to the farmin April-May, not later.Second, the plants cannot betransplanted without first pro-curing the number of “budding

woods” required to speed themon their way. Michelin, at themoment, is the major supplierof budding woods and that ex-tent is a limiting factor to theeffort to increase the output ofrubber in Nigeria. Another sup-plier is at Akwete, Abia State;but Michelin remains the pre-ferred supplier – for obviousreasons. But, as usual, this isnot a total limitation, produc-tion of budding woods can beincreased and, if not, they canbe imported. About 80 per centsuccess is recorded from bud-

ding; so in order to get 55,500trees on the farm, the farmermust start with at least 80,000plants from the nursery.

For maximum yield, thefarmer must also procure ethe-real, a chemical also used toimprove the yield of pineap-ples and citrus fruits. The sub-stitute for ethereal is calciumcarbide but that chemical canhurt the plant. Swiss Pharma-ceuticals used to be a big sup-plier of ethereal but there isacute scarcity of it now; per-haps because expected in-creased cultivation of rubberhad failed to occur.

There are one or two otherminor obstacles to

consider; but those need notdelay us here. The mostimportant thing at this stage isto observe that from the timeseeds are gathered and plantedand the time the plant startsyielding, a total of seven (7)years would elapse. If there isone thing governments and thebanks have been doing todiscourage rubber cultivationthe most, it is denying credit tocover the full cycle of the seedto plant of the rubberplantation. Credit is seldomavailable to the farmer, andwhen it is, the banks do notlend for more than five years –at most. Most often, the creditis for a shorter tenure and atinterest rates of 25 per cent ormore. No other rubber-produc-ing country in the world pun-ishes its rubber producer thatway.

We still have a chance to geton the “rubber boat”; for manyreasons which constitute ourcomparative advantages. First,Nigeria still has vast areas ofland which have not beencultivated in the southern andmiddle belt regions. Second,we have abundant labor to dothe work required for success.Third, we experience long andheavy rain during the seasonand rubber loves rain. What weseem to lack is the will, theplan and the determination tosucceed and earn the hugebonanza rubber offers.

The third part of this serieswill focus on what we need todo to participate andperhapseventually lead in rubberproduction worldwide.

THE Chartered Institute ofBankers of Nigeria

(CIBN) will issue anotherround of Agency Bankinglicence in November as partof measures to promote finan-cial inclusion in the country.

Dr. ‘Uju Ogubunka, Regis-trar/CEO, Chartered Instituteof Bankers of Nigeria (CIBN)revealed this weekend inLagos that “ the newly intro-duced Agency Banking willhelp drive penetration ofbanking services to the ruralareas.”

In his words: “Agency bank-ing will drive an impressionof banking in Nigeria. Thereare few branches of banks inthe country and there is agrowing need to spreadacross the country such that

CIBN to issue new Agency Banking licence in Nov

By PETER EGWUATUthe distance between wherepeople live and where banksare located are close. So, in-stead of going to all parts ofthe country, building morebranches, people are allowedto use their existing businessoutlets to provide bankingservices. With this, it makesbanking become neighbour-hood banking.”

He stressed that AgencyBanking will help penetrateand propagate banking busi-ness in the rural areas,adding: ”It will helpsignificantly and will makebanking grow and moreacceptable to the uneducatedand those in rural areas.”While commenting on theplanned issuance of newagency licence, he said:”There are requirements thatprospective agents must pos-

sess. They must undergo train-ing and must have requisiteskills needed for such opera-tions.”

Commenting on cashlesseconomy, he noted that “it is agood development for thecountry as there will be less

carriage of cash. Almost all thebanks in the country haveAutomated Teller Machines(ATMs) situated in all areas ofthe country. It is a gradualprocess; we will get there whereevery person will accept thecashless economy. The cashless

system is part of what you willsee with the mobile money. Weare bringing market place to themobile money, where you canbuy airtime, pay your bills, andpay for tickets and so on. So Ithink the agency banking willgrow and prosper in the ruralareas. Among people that knowhow to use phones and otherdevices, you will see moreacceptance of alternativechannels.

THE Lagos BusinessSchool has advocated the

need for industrial research,as a catalyst for growth andquality management decisionin an organisation.

"There is no way out, theyjust need research, they needresearch to give them the factsand the figures on which to

LBS advocates industry growth through research

By PROVIDENCE OBUHbase decision-making, if theydon’t have information thenthe management decisionwould be difficult and it wouldbe difficult to strategise on de-cision that will move the busi-ness forward," says Mrs. Mar-tha Onyeajuwa, Director of theGfK Centre/ Lecturer, ResearchMethodology.

Onyeajuwa spoke at an in-teractive forum on Market andSocial Research with the

theme: Industry Growththrough Research, under theauspices of the LBS, Pan-African University.

“Nigerians do not believe inthemselves, they do not giveinformation, and I can tell youthat they do research thatmake them carry out day-to-day operations, they don’thave strategic research whichfocuses on the long-term.

What we seem to lack is thewill, the plan and the determi-nation to succeed and earn the

huge bonanza rubber offers

Vanguard, MONDAY, JULY 30, 2012 — 39

Micro-Finance

BRIEFS

OKELEME Frederick isthe National Secretary of

the Association of Micro En-trepreneurs of Nigeria,(AMEN). In this interviewwith Financial Vanguard, hehighlights some of thechallenges faced by Microentrepreneurs. He lamentedthe unfriendly policies of theLagos State Government andthe Association's contributionto economic growth. He not-ed that the N200 billion MS-MEs development fund(Credit Guarantee Scheme)may not get to the real sector.excerpts:

What is AMEN all about?Association of Micro Entre-

preneurs of Nigeria (AMEN)is an association of small pro-ducers, established to promotethe growth of members’businesses and to contribute tothe Gross Domestic Product(GDP) of the country. This isdone through the technique ofcombining lower cost ofproduction with competitionthrough invention and innova-tion using our local rawmaterials for production ofquality products that meet in-ternational standards.

How has the MSMEs bene-fited from microfinance banksin terms of micro lending, orwhat impact have they madeto the association so far?

The truth is that MFBs inNigeria are not doing the rightthing they were set up for.Fraud is their name. We adviseour members to go for commer-cial banks if they have the re-quirement for borrowing to fi-nance their businesses.

Also, MFB has failed andperformed below average in thefollowing areas: (1) High in-terest rate. (2) The manage-ments are deceitful and oper-ate their businesses with lies.(3) Bank charges have sky-rocketed. (4) They don’t keepagreements. (5) Some of theirstaff are dubious etc. Theyhave not contributed anything,rather they have been feedingbig on micro entrepreneurswho are desperate to collectloan.

You sound angry, unhap-py, tell us more.

I am not angry and I don’thave any grudge against theMFBs in Nigeria. But I amangry at the exploitation ofyoung Nigerian entrepreneurswho are desperate to borrowmoney to finance theirbusinesses at all cost.

Can you tell us how much

What micro entrepreneurs face doingbusiness in Nigeria

•Okeleme Frederick

By PROVIDENCE OBUH

’

’interest MFBs charge and howit affects your association?

They charge between five percent and 10 per cent per month,hidden charges not included.

Concerning your claims, justgive details of yourexperience with the MFBs andhow they have defraudedyou.

I knew one of the MFBs whogave out Keke NAPEP to a co-operative and how one of thestaff defrauded the cooperativein the name of processing pa-pers which is one of the condi-tions these banks gave them.

Were you not in the countrywhen the Central Bank of Ni-geria withdrewoperating licences of many ofthem, even the most viableones? As a result of fraudulentactivities, one of my memberslost N300, 000.

I have not approached themfor loan but I went to differentMFBs in the country, about 20of them on fact-finding missionand I can authoritatively tellyou that their activities andmode of operation are the

same. My sister, I will adviseyou to do investigativejournalism on the activities andoperations of MFBs in Nigeria.

So what exactly are the chal-lenges of the association?

Our challenges have beenfinance, the Bank of Industryis not helping, Commercialbanks require billions of nairaworth of collateral, work spaceprovided already by SMEDANare graveyards, no amenities.Government regulations espe-cially in Lagos, are killingbusinesses. Example is the ac-tivities of KAI Brigade, Taxofficials, LASTMA, high cost ofbranding and transportation tomention a few.

The Federal Governmenthas approved N2 billion

MSME development funds,which they will start disburs-ing soon. BOI too has beengiving funds to MSMEs. Whathappened that AMEN mem-bers have not accessed thefunds, or are their loan re-quirements beyond theirreach?

My President had addressedthe issue in Daily Sun publica-tion requesting the BOI to comeout and tell Nigerians howmany micro producers havebenefited from the fund.

We wrote to BOI, requestingto have a meeting with them,the acknowledgement dulystamped took three weeks butwas not found in their system.

Concerning the N2 billioncredit scheme, I bet you, thatmoney will end up with fewindividuals who claim to be godsof industry in Nigeria.

What contributions haveAMEN made to the economy?

We have put smiles on thefaces of young entrepreneursespecially in area of NAFDACregistration and documenta-tion, organising trade fairs andexhibitions through our meet-ings with various distributorswithin and outside Nigeria,organising trainings for them,provision of work space formembers etc.

The association partners withover 28 government agenciesand non-governmentalorganisations. Ourcontributions to the growth ofMSMEs are numerous. Wecontributed immensely to thedrafting of National Policy onMSMEs, in collaboration withSMEDAN.

Let me shock you, 80 per centof micro manufacturing indus-tries are owned by our mem-bers with their products dulyregistered by NAFDAC. In thearea of agriculture, our mem-bers are doing well, some ofthem who cultivate maize, sup-ply to members who are intofood production, especiallycustard and corn meal.

In terms of employment gen-eration, some of our membershave up to 20-30 workers,while some employ up to fiveto 10 labourers. We have morethan 180 members in Lagoswho manufacture products andprovide services.

What are some of the actionplans you are putting in place?

By October, we will shockNigerians with our One Mil-lion Man March in support ofour vision.

We are happy the Small andMedium Enterprises Develop-ment Agency of Nigeria(SMEDAN) is keying into thevision and supporting usthrough provision of workspace across the country.

On the One Million ManMarch, what is your target andwhat is the vision you talkedabout?

On the one Million ManMarch, by the grace of Godwe will shock Nigeriansbecause we want to repeat inNigeria what happened inthe Asian countries. Ourvision is “One Family, OneProduct & Service.” Thismeans in every home, theremust be a member of the familywho owns one business eitherin manufacturing sector,agriculture, engineering, in-formation technology, wood-making, or render services.

For instance, our youths andgraduates are keying into thevision already, after gradua-tion some of them come to ouroffices to start their ownbusinesses.

I am appealingto the Ministerof Industry andInvestment as amatter of urgen-cy to inspectfacilities at var-ious IndustrialDevelopmentCentres nation-wide

MORE winners haveemerged in the Unity

Bank Plc’s ongoing Aim Saveand Win promotion as thetrain advanced to Lokoja,Kogi State for the secondzonal draw.

Hauwa Musa, from Keffi inNasarawa State, emerged thestar prize winner of a motorbike, popularly called(Okoada) under the N75,000category, while Jubril Ruqqa-yat from Suleija in Niger Statewent home with a televisionset under the N5,000 category.

The Zonal Director, AlhajiAminu Bafa told the savingsaccount customers thatemerged winners in the draw,observed by representatives ofthe National Lottery Regula-tory Commission that it wasadministered under transpar-ent condition.

Bafa explained that thebank's initiative was designedto inculcate savings habit inNigerians, stating that thepromo would see more win-ners emerge in the next zon-al and national draws beforethe grand finale which wouldbe held in the Federal Capi-tal Territory, Abuja.

Also speaking, RegionalManager, Shehu Sani, said“the promo is aimed atshowing appreciation andrewarding loyal customerswith various gift items rang-ing from cars, motorcycles,generating sets amongothers.”

By PROVIDENCE OBUH

More winnersemerge in UnityBank promo

Academy forEntrepreneurialStudies to hostAregbesola

THE management of theAcademy for Entrepre-

neurial Studies (AES) Excel-lence Club will host the OsunState Governor, Rauf Areg-besola at the August editionBusiness Luncheon.

A statement from the Acad-emy, signed by the Asst.Registrar, Tony Ajiboro, saidAregbesola is expected to ad-dress the gathering on,Transformation and Invest-ment Opportunities in OsunState.

Ajiboro said the luncheonwhich is billed to hold onThursday, August 2, 2012 atthe Lekki Oxford Hotels,will feature two eminentspeakers who will beaddressing dif ferentsubjects.

40 —Vanguard, MONDAY, JULY 30, 2012

Agric

BRIEFNigeria releases Vitamin A maize toimprove nutrition

The National VarietyRelease Committee of

Nigeria has released two newmaize hybrids known as Ifemaizehyb 3 and Ife maizehyb4 that can provide morevitamin A in the diets ofmillions in the country.

The released hybridsrecognised as IITA hybridsA0905-28 and A0905-32,respectively, have raisedoptimism about stemming themenace of vitamin Adeficiency in the years ahead,especially among children,pregnant women, andmothers. The pro vitamin A isconverted by the body intovitamin A when the maize iseaten.

“The hybrids are a productof nearly a decade of breedingfor enhanced levels of pro-vitamin A,” says Dr. AbebeMenkir, maize breeder withthe International Institute ofTropical Agriculture (IITA),who led the development ofthe new maize hybrids.

The hybrids outperformedlocal checks with yieldsranging from six to nine tonsper hectare compared withtwo tons per hectare recordedon most farmers’ fields.

The vitamin A hybrids weredeveloped by IITA inpartnership with the Instituteof Agricultural Research &Training (IAR&T) usingconventional breeding in aproject funded by theHarvestPlus—a ChallengeProgram of the CGIAR as partof strategies to address theprevalence of vitamin Adeficiency. Othercollaborating partners includethe Institute for AgriculturalResearch (IAR), Zaria;University of Maiduguri;International Maize and WheatCenter (CIMMYT), Universityof Illinois, and University ofWisconsin.

In Nigeria, vitamin Adeficiency afflicts about 30 percent of children below fiveyears of age, almost 20 per centof pregnant women, and 13 percent of nursing mothers.Vitamin A deficiency lowersimmunity and impairs vision,which can lead to blindnessand even death.

Researchers say the twohybrids can supply enhancedlevels of vitamin A in the diets.Maize is consumed by millionsof people throughout Nigeria,whether roasted and eaten offthe cob or as a dish preparedfrom fermented maize flour.

According to Menkir, maizeis the most frequentlyconsumed staple in Nigeria

with about 20 per cent ofhouseholds consuming it atdifferent times within a week.

“These hybrids will providenot only increased amounts ofprovitamin A but alsoimprove productivity infarming communities,” hesaid.

Farmers who participated inthe on-farm trials indicatedthat they liked the varieties,so there is a high prospect forquick adoption.

IITA and IAR&T, inpartnership with private seed

companies, now plan tomultiply these hybrids so theycan begin distributing them tofarmers by 2014, and tocontinue to develop higherlevels of vitamin A in maizeby conventional breeding.

“We plan to target areaswhere maize consumption ishigh to help address theproblem of vitamin Adeficiency in Nigeria,” said Dr.Samuel Olakojo, a maizebreeder with IAR&T, whoworked on the varieties withMenkir. The release ofvitamin A cassava in Nigerialast year should help pave theway for broad acceptance of

the vitamin A maize. Thesenew maize varieties are wellsuited to the tropicallowlands of many WestAfrican countries and areexpected to spread beyondNigeria’s borders.

In a parallel effort, theInternational Maize andWheat Research Center(known by their Spanishacronym CIMMYT) – asister CGIAR Center of IITA– has been breeding mid-altitude vitamin A-richvarieties for Zambia in aproject also funded byHarvestPlus, with releaseanticipated later this year.

A former President of theNigerian Association of

Chambers of Commerce,Industry, Mines andA g r i c u l t u r e(NACCIMA), has called foradequate incentives,information and accessiblefunds to boost theperformance of theagricultural sector.

Dr. Simeon Okolo duringthe week in Aba said thathe was worried that over 50years after independence,Nigeria could still not attainfood security.

He noted that over 70 percent of Nigeria’s population were hungry and in abjectpoverty, in spite of the billionsof dollars expended on foodimports annually, andadvocated for 'drastic'measures to address theanomaly.

According to him, somecountries in Africa, Asia andSouth America have used theagricultural value chainconcept to transform theiragricultural sector.

He said that Nigeria couldachieve such feat if thegovernment could integratesmallholder farmers throughthe formation of cooperatives,to fast-track the agriculturaltransformation process.

Okolo, therefore,challenged the stategovernors to take advantageof the Nigeria Incentive RiskSharing Scheme forAgricultural Lending(NISRAL), a CBNinitiative, to improve foodproduction.

He also urged thegovernors to boost increasedproduction of both food andcash crops that they havecompetitive and comparativeadvantage in, as the sureway to overcome poverty andensure food security in thecountry.

The high rate of poverty inthe country, he said, called forurgent action, to revivethe agriculture sectoracknowledged asthe mainstay of the nation’seconomy.

He reiterated the need tore-orientate the stakeholderson the value chain conceptto ensure its success.

Former

NACCIMA

President urges

adequate

incentives to

boost agric

sector

performance

The Minister ofAgriculture and Rural

Development, Dr AkinwumiAdesina, has promised toprovide support that willstrengthen commodityassociations in Nigeria.

The minister made thepromise in Abuja on Tuesdaywhen Mr James Awoniyi, amember of the Cassava ValueChain programme of theministry led some cassavafarmers and processors to hisoffice.

The minister commended thefarmers and the processors forconforming to the FederalGovernment’s policy of 20 percent cassava inclusion inbread-making.

Adesina said the FederalGovernment’s policy was abouttaking advantage of whatNigeria produces to developand lauded the farmers’doggedness in condemningcalls that cassava bread washarmful to health.

“I am happy about the wayyou rose up in support ofcassava in this country. Our

Minister promises to supportcommodity associations

decision to include cassava inbread-making is purely aneconomic decision.

“The Federal Governmentwill continue to create theenabling environment and theappropriate instrument forfarmers and processors to grow,” he said.

Adesina promised to addressall challenges facing thecassava stakeholders bymeeting regularly with them.

He said that the CassavaValue Chain programme hadbegun to yield results as thecountry had started exportinghigh quality cassava flakes toChina.

Earlier, Awoniyi had said thatthey were on the visit toexpress appreciation to theminister for his efforts intransforming the sector.

In his remarks, Mr SegunAdewumi, President of NigeriaCassava Growers Association(NCGA), urged the minister toinclude National Youth ServiceCorps members as agricultureextension officers.

He said the N1 billion

commercial agriculture fundhad not been judiciouslyused by states and suggestedthat the ministry introduceland developmentprogrammes to increasecassava production.

Mr Femi Salami, a memberof the National CassavaProcessors and MarketersAssociation (NCAPMA), saidthat the FederalGovernment’s cassavadevelopment policy hadhelped in resuscitating theassociation’s business.

“The advent of thisadministration has broughthope to some of us. We wantthis policy sustained,” Salamisaid.

He urged the minister tohelp the association tofacilitate access to loans fromthe Bank of Agriculture.

Mrs Folusho Olaniyan,Managing Director of theUnited Trading Company(UTC), lauded the reductionof incentive on cassava activeagent, thereby encouragingbakers and millers.

By JIMOH BABATUNDEwith agency reports

Vanguard, MONDAY, JULY 30, 2012 — 41

BRIEFS

Technology News& Reviews

AS eTranzact, a Nigerianswitching and payment

processing company gatheredits partners and member banksto a forum in Lagos taggedMobile Payment Forum, thecompany has confessed thatdespite infrastructural chal-lenges facing growth of mo-bile payment in the country,there were bright chances thatthe cashless system wouldflourish beyond expectations.

The company through itsChief Executive Officer, MrValentine Obi said that at in-ception mobile paymentsfaced a lot of challenges dueto infrastructural challenges,making people doubt the se-curity efficacy of the system.

According to Obi, “at incep-tion, mobile payment transac-tions were SMS-based andthese had its attendant risks.There were also compatibilityissues in the areas of mobilephone and software and thesedid not give users enoughconfidence in the system”

He however said that thosedays were gone because asmobile technology keeps im-proving, operators likeeTranzact have successfullyovercome the challenges andare now providing cutting-edge electronic switching andmobile payment services tousers.

Obi added that confidencehas returned fuelling massiveinvestments in the business.For instance eTranzact, saidit was collaborating with 11Nigerian banks and one Gha-naian bank for its mobile bank-ing services platform. A part-nership he said had producedinnovative mobile money,mobile banking services likeUMobile, AccessMobile, Un-ion Mobile, Wema Mobile,FCMB Mobile, Unity Mobile,Skye Mobile, First Mobile,Fidelity Mobile and Enter-prise Mobile packages amongothers.

The eTranzact partnership with Ghana Com-

mercial Bank Limited, accord-ing Obi, was to allow teem-ing Ghanaian users transactbusinesses via their mobilephones through the eTranzactplatform just like their Nige-rian counterparts

Earlier in an interview withthe Chief Technology Officer,of the company Mr. RichardOmoniyi, he corroborated his

*eTranzact Mobile Payment Forum: Obi demonstrates eTranzact mobile payment route toparticipants at the event.

CASHLESS NIGERIA:

eTranzact's mobile payment forumlists challenges, sees future growth

CEO, saying that there wasfuture for mobile paymentsand cashless society in gen-eral.

He, however, said that someof the bottlenecks that couldimpinge on fast growth of thesystem included very lowawareness of the convenienceand benefits of the system,particularly to those plyingtheir trade on the informalsector of the economy.

According to him, “one ofthe most significant aims of the

mobile money scheme is toprovide financial inclusion tothe unbanked and under-banked in Nigeria. Gettingmore people to embrace mo-bile money depend on the lev-el of awareness stakeholderscreate. Currently, the level ofawareness is low and manypeople have yet to see thebenefit of the system. It is thusimportant for the governmentto support other stakeholdersto create massive publicawareness for the public”.

He said that the CBN hadgranted eTranzact licence torun mobile money service inNigeria and consequent uponthat, the company floated aservice platform known asPocketMoni, that allows usersto send and receive money,pay their bills, anywhere, an-ytime, via their mobilephones. The service platformaccording to him has regis-tered a user base of up to500,000 between March toMay, 2012 alone.

MAIN One cable company is setting a new tone

in Nigeria’s quest for rapidbroadband development.

Within two years of opera-tion, the company has alteredits own set businesses poli-cies, just to incorporate theinterest of Nigerian massesand answer truly to thebrand’s original identity asthe Nigerian broadbandpride.

It formerly set out as a pure-ly wholesale broadband com-pany but when it probably sawthat penetration was not get-ting to the hinterlands henceslowing down the broadbandgrowth, the companychanged tactics and an-nounced readiness to go intothe retail turf of the market.

Now, within few months ofmaking the announcement,

Stories by PRINCE OSUAGWU

Main One brings Tata Communications’Video Connect network to Nigeria*gives Africa’s key media hotspots exposurevia Nigeria point-of-presence

the company has partnereddifferent companies and haslinked more of the people oth-erwise referred to as the lastmile users to the ubiquitousbroadband access.

Recently, the company tieda business partnership withNigeria’s CommunicationsSatellite Company, Nig-ComSat for the same purposeof linking access via satelliteto the areas that would haveordinarily taken time to reach.

However, its newest part-nership is with Tata Commu-nications, a leading providerof the New World of Com-munications. The partnershipresulted in extending thecompany’s Video ConnectNetwork into Nigeria TheVideo Connect service willallow broadcast and produc-tion companies in Nigeria to

distribute their live video con-tent worldwide as well as en-hance international broad-casters’ reach into this keyemerging region.

Tata Communications’partnership withMain One would see

it connecting its global videonetwork to an expansive lo-cal fibre network, creating adedicated video network toalso connect key broadcastersas well as production andpost-production houses inAfrica. Unlike traditionalMPLS or contention net-works, having a dedicatedvideo network ensures thehigh quality and consistentvideo transmission needed forvideo broadcast, allowing Ni-gerian media companies to betruly global.

New iPad launchedofficially in Nigeria

FRONLINE Value AddedDistributor (VAD) for Ap-

ple, Core Group Africa, lastweekend announced the offi-cial entry of the new iPad,popularly known as iPad 3 inNigeria. The group says theofficial starting price of theproduct would just beN105,000 (one hundred andfive thousand Naira) only.

The new iPad became avail-able in Nigeria from Friday aspart of the next global rolloutby Apple. This is the first timethe new product will be avail-able through the official Ap-ple channel in Nigeria.

The group also said that theproduct will be available inblack or white in 16GB, 32GBand 64GB models. It featuresa stunning new Retina dis-play, Apple’s new A5X chipwith quad-core graphics anda 5 megapixel iSight camerawith advanced optics for cap-turing amazing photos and1080p HD video.

The new iPad delivers thesame all-day 10 hour batterylife and is amazingly thin andlight. It runs almost the en-tire over 650, 000 apps on theiTunes App Store. It providesthe most versatile, on-the-gouser experience whetherchecking email at home, read-ing a magazine while waitingin a queue, watching a movieon a plane, updating docu-ments before a meeting,checking sport fixtures, up-loading a Facebook status, or

Facebook records$157m net lossin Q2

POPULAR social site, Facebook has reported sec-

ond-quarter net loss of USD157 million of USD 0.08 pershare. But its revenues how-ever moved up 32 percentfrom a year earlier to USD1.18 billion. Advertising issaid to make up 84 percent ofits revenues and grew by 32percent year-on-year to USD992 million. The companyposted an operating loss ofUSD 743 million, versus aprofit of USD 407 million ayear ago, due to USD 1.3 bil-lion in costs for share-basedcompensation.

Excluding this expense, itsoperating profit rose to USD515 million from USD 477million. The company invest-ed USD 413 million in thequarter, moving up 213 per-cent year-over-year. Howev-er, it finished the quarter withtotal cash of USD 10.8 billion.

42 — Vanguard, MONDAY, JULY 30, 2012

CMYK

Aviation

Aero commences third partymaintenance of medium sized aircraft

FG urged to improve infrastructure in airports

*From Left: Mr. Abdoulkarim Soumaila, Secretary-General, African Telecommunication Un-ion (ATU); Dr Eugene Juwah, Executive Vice-Chairman, Nigera Communications Commission,and Mr. Stanley Jegede, Chief Executive, Phase Telecom Limited, during the Nigeria BroadbandForum with theme: 'Demand as Catalyst for Boardband Services in Nigeria' organised byNigeria Communications Commission, (NCC) held on last Thursday at Eko Hotel, VictoriaIsland Lagos. Photo: Kehinde Gbadamosi.

BRIEFS

By LAWANI MIKAIRU

Operators of Aero Airlinesare to start rendering

maintenance of medium sizedaircraft services to other airlinesand aircraft owners. This iscoming as the airline has ex-panded its existing hanger inLagos to meet the requirementsof aircraft maintenance workincluding third party C-Checks

and servicing the West Africansub-regional market for thirdparty maintenance work.

It will be recalled that theNigerian Civil Aviation Author-ity ,NCAA, in 2011 approvedAero as an Aircraft Mainte-nance Organisation, AMO, for“A” and “B” checks on BoeingAirplanes, various levels ofchecks on other Airplanes, Bor-oscope, Wheels and Brakes(Assembly, Overhaul, Replace-

ment, NDT), Air Frames(NDT), and Avionics and Bat-tery (Cap Check, Overhaul).This latest development byAero will provide employmentopportunities for more Nigeri-ans and training and staff en-hancement programmes for itsemployees.

However, the Managing Di-rector of Aero, Capt. AkinGeorge said for the Nigerianairline to set up bigger hanger

that will enable them carry out‘ C’ and ‘D’ Checks locally,government should give air-lines duty waivers on spareparts and tax rebate. Accord-ing to him ‘’ a lot has been saidabout carrying out “C” and “D”checks abroad. The expectedsavings currently anticipatedfrom doing the checks in Ni-geria are quite little due to thecurrent taxation policy.

“Nigeria has relatively highimport duties on aircraft parts.Airlines typically fly their air-craft to, say, Turkey to havethem serviced and relevantparts replaced. Once that air-craft flies back to Nigeria, thenew parts are not subject toimport duties as they are al-ready installed on the plane.This puts any Nigerian main-tenance provider in a big dis-advantage against foreignplayers. A Nigerian mainte-nance provider would need toimport all spares used in main-tenance and thus incur the im-port duties that those maintain-ing their aircraft abroad avoidcompletely.”

Captain George advised thatif Nigeria wants to allow air-craft maintenance business todevelop in Nigeria, it needs tocreate a level playing field be-tween domestic and foreignoperators. Right now, Nigeriais subsidizing maintenancebusinesses abroad and as a re-sult, is not allowing the samebusiness develop in Nigeria.

By DANIEL ETEGHE

THE Federal Govern-ment has been charged to

improve on the level of infra-structure in the nation’sairports and also step up thepace of work on the currentremodelling exercise em-barked upon by the Ministryof Aviation. The charge wasgiven by the Managing Direc-tor, West Africa, Lufthansa

German Airlines and Swiss In-ternational, Claus Becker, onThursday in Lagos.

Speaking at a press briefingto mark the airline’s 50 yearsof operating into the MurtalaMuhammed International Air-port, he said if the governmentis really interested in makingthe aviation industry viableand growing the economythrough the sector, it shouldbe prepared to reduce the

number of levies beingcharged in the sector.

According to him, reductionin the number of levies beingcharged by regulatory author-ities in the aviation sector willhelp the operators to grow. Hestated that the airline declareda profit of over 30 billion Eurosin its group network andabout 60 million Euros in theNigerian aviation sectorpointing out the airline couldhave made more profit but forthe number of levies imposedby regulatory authorities in thesector.

“We all know that an effi-cient airport structure deter-mines the success and the eco-nomical prosperity of thecountry. I think you are alsocommitted as a country inputting this in place. And theminister of aviation is doing agreat job of really supportingwhatever is needed in orderto implement theseinfrastructure in this country.

“But I can only say followthat path, continue to really

support it because loweringtaxes is key to internationalairline market, and is key tosupporting and strengtheninginfrastructure and finallybringing wealth and prosper-ity to the country. And I be-lieve that is something whichis well underway in the coun-try. Building infrastructureand airlines being part of thatis something very critical forthe economic development ofthe country.”

He said the airline is com-mitted to deploying its bestpersonnel to the Nigerianmarket and delivering qualityservices to its customers in thecountry adding that the coun-try is a strategic market for theLufthansa Group.

He said the passenger traf-fic of the airline’s network hasincreased from 1.5 million pas-sengers annually when it op-erated two services weeklyfrom Nigeria, affirming thatthe group now transports overone hundred million passen-gers annually.

Eleven-year-oldsneaks intoRome planewithout passportor boarding pass

An 11-year-old boy has tak-en a flight to Rome on his

own from Manchester Airportin the United Kingdom with-out a passport or boardingpass. Liam Corcoran passedthrough security without be-ing checked, before makinghis way on to the plane onTuesday.

A Manchester Airportspokesman said: “This ex-tremely serious matter is nowbeing urgently investigatedby officials from the airportand airline. It is clear thatdocumentation has not beenchecked correctly at securityand the boarding gate. Theboy went through full securi-ty screening so the safety ofpassengers and the aircraftwas never compromised.”

The Manchester EveningNews reported that the cap-tain of the flight was onlyalerted to the extra passengerwhile mid-air, whenholidaymakers raisedconcerns. It is also reportedLiam had ran away from hismother while she wasshopping at WythenshaweCivic Centre and made hisway to the airport.

There, Liam is believed tohave followed another familyand, although he wasscanned, was allowedthrough without boardingpass or passport. It is believedthe crew failed to take anaccurate headcount and withpassengers and boardingcards matching up, the planetook off.

The boy remained on boardafter landing in Rome andthen returned home on thesame plane, where he wasmet by his mother, who hadearlier been informed of hiswhereabouts by police. Aninvestigation into the matterat Manchester Airport and theairline continues.

AERO Airlines is taking de-livery of Boeing 737-400

and -700, including the Dash8-Q400 new generation air-craft next month, as part ofits fleet renewal programme.

The new generation aircraftare expected to assist the air-line in its expansion pro-gramme, and add new desti-nations and offer greater cus-tomer service and comfort.

The new generation B737aircraft is equipped with the

AERO to take delivery of new generation aircraft

latest navigation equipmentwith lower fuel burn and in-creased reliability, makingthe aircraft more efficient,environment-friendly andeasier to maintain.

Aero, Nigeria’s oldest avi-ation company with 52 yearsexperience, has been oper-ating scheduled servicessince 2000 . It has consistent-ly operated with 80 per centload factors over the last twoyears, and a completion factor

of 98 per cent for all its flights.The rotary wing of its busi-

ness has remained robust de-spite the challenges in thesector. The Managing Direc-tor of Aero, Capt. Akin Georgesaid: “We are currently focus-ing on a niche market of smallmedium sized oil and gascompanies, not only the ma-jors. We believe these compa-nies have very great prospectsin the future, and we can part-ner with them to grow as well.

Vanguard, MONDAY, JULY 30, 2012 — 43

CMYK

Advertising, Media & Marketing

BRIEFS

FEW months after the re-launch and takeover and

brewing of Goldberg by Ni-geria Breweries Plc, the beerseems to have re-aligned it-self to market technicalities.

From observed trend, thebrand is pulling some strings,using all Integrated Market-ing Communication (IMC)tools to push for visibility andeventual market dominance,not minding the existence ofother big brands in the mar-ket.

For dominance to occur,there are steps. Marketersand brand custodians oftendevise strategies for makinginroads into the market, butunfortunately, only fewsucceed. It is a different ballgame particularly when itcomes to a product that hadexisted and needed to be re-launched, then it requires asuperior market strategy. Thishappens when a brandmodifies its key elements ofthe marketing mix withoutmaterially changing its targetconsumer group.

Some years back, Goldbergwas consumed by a class ofpersons who were in the mi-nority, and barely seen in no-table bars and this hinderedits growth for many years de-spite going through namechange several times.

From the stable of its formerbrewer, Sona Breweries,Goldberg was crawling interms of patronage until NBtook over and gave it a faceliftthat is making it a sought-after brand by its lovers,particularly in the westernregion of Nigeria, withpockets of presence in Lagosand some states.

In a bid to sustain its posi-tion and expansion trend, NBrecently extended the brand’sequity profile with its re-launch in Ibadan, Oyo State.The event reinforced the realmeaning of “Goldberg” that is‘Gold Mountain’, a name thatbest describes the beer,brewed from finest grains andhops.

Brewed to golden standard,the new improved Goldberglager beer now comes with adistinguished attractivepackaging (New Crown Cork,New Bottle, and New Labels)and improved product quali-ty. At the trade briefing inIbadan, the new brand wasrevealed to the key partnersamidst rich cultural ambiencethat emphasized how the beerwas expertly brewed to pro-duce a crisp, distinctive fla-

Beer Market: Goldberg pushes for marketvisibility, dominance

Stories byPRINCEWILL EKWUJURU

*From Left: Segun Aluko, Managing Director, BTL Solutions,Nigeria; Craig and Cynthia Cunningham, President and Vice-President, Market C&C Research, USA and Jonathan Alabede,Chief Operating Officer, Brand Futurz Limited, Nigeria at theongoing Marketing Week Live event in London recently.

vour, refreshingly pleasingaroma and a classy goldenhue.

According to Mr. WalterDrenth, Marketing Director,Nigerian Breweries Plc,

“Goldberg came from thequest to satisfy all lovers ofquality lager beer and we willnever stop in giving consum-ers the best product and serv-ices with the hope of bring-

ing satisfaction. To our dis-tributors and consumersaround, this re-launch is def-initely going to be a new gold-en business experience”.

Drenth had reassured con-sumers that in terms of pric-ing, Goldberg has a new pric-ing position different from thelikes of other beers from NBstable. “A lot of our consum-ers who desire high qualitylager beer who cannot affordthe likes of Heineken, Star orGulder lager beer now haveGoldberg, stamped with acrest quality.

However, the reasons for theproduct re-launch generallyincludes when it is apparentto the marketer that the brandin question is losing sharebecause its physical qualitiesneed a rejig. It is also possi-ble that, in comparison to com-petition, the brand is lookingtired and old-fashioned; thiscould be a reason to strength-en the brand communication.

MR. Sola Odeja, GroupManaging Director,

D’Message, an integrated mar-keting communication compa-ny, had explored neighbouringWest African markets like TheGambia, Sierra Leone, and oth-ers. Motivated, he is now backin Nigeria with full-fledged of-fice to continue business. Hehad a chat with Princewill Ek-wujuru.

Can I have insights into your

pedigree?I started from JWT/LTC and I

was there for over 10 years be-fore I moved to Media Super-mart to become the ManagingDirector in 2001, after which Iequally moved on to InnovativeMedia Concept, as the Manag-ing Director, and eventually leftin 2006 to set up my own busi-ness, which is D’Message.

D’Message as a practice wasactually borne out of the questto cater to the needs of adver-tisers who were moving to theWest Africa sub-region. Becauseat that point in time, there wasthis mass movement of adver-tisers, the banks, moving out-side of Nigeria to operate insome of these markets. Andwhat we noticed was that therewasn’t the manpower base tosupport such businesses inthose countries. So, we wereforced to see what we could doin terms of setting up structuresto support those businesses.And that was why we actuallywent out to launch D’Messagebrand in 2006. And our first port

Advertising industry is a reflection ofeconomy — D’Message boss

•Sola Odeja, Group Manag-ing Director, D’Message

of call was The Gambia, afterwhich we also launched thebrand in the Sierra Leoneanmarket in 2007 and thereafterwe launched in Guinea Co-nakry and equally have foot-print in Liberia. So, that waswhat informed why we had tostart from outside of Nigeria.The business was actually reg-istered in Nigeria, but in termsof operations, we have to startour operations outside of Niger-ia because of the exigencies ofbusinesses we had to handle atthat point in time.

Having been able to establishthe brand effectively in thosemarkets, the Nigerian market iswhere our key clients comefrom. Most of the businesses wedo over there are from Nigeriabut we didn’t have the structuresin Nigeria to support thosebusinesses, we were actually

doing much of what we aredoing outside of Nigeria. So, wefeel there is the need for us tocome back to Nigeria becauseemerging business reality hasshown that definitely, Nigeriashould be our up market. Andso, we have to strategise andmake Nigeria our up market.And we are going to use thestructure here in Nigeria todrive other sub-regionalmarkets where we operate.

What is the core businessof D’Message?

D’Message as a business wasset up as an integrated market-ing communications company.What we noticed was that inthose markets outside of Niger-ia, the practice is not that spe-cialized because they are smallmarkets. So, you end up hav-ing an agency running PR busi-ness, running the branding,running the media planningand buying, running the re-search, running the content, soyou have to do everything to-gether because if you say youare specializing, the market can-not sustain that. And becausethat has been the platform welaunched the brand, there is noway we are going to change thatpositioning in Nigeria. We arestill going to be an integratedmarketing communicationscompany. If we are going intoanother specialised area, itmeans we have to launch an-other brand to cater to thosebusinesses.

Friendship Networkdonates to charity

FRIENDSHIP Network In-ternational Association, a

n o n - g o v e r n m e n t a lorganisation has donated itemsand cheque worth N150,000 tothe Little Saints OrphanageHome.

Dr. Nosike Agokei, presidentof the Association at the Home,said the reason for visiting thehome was to contribute to thehome by providing items ofimportance and also organiseseminars to educate the chil-dren on how to succeed in life.

Speaking, Mrs. Dele George,Founder of the Home, thank-ing the Association and tutor-ing them in the processes ofadopting a child in the Home,said one has to pass throughthe Minister of Youths and So-cial Development.

Speaking further, Rev. Mrs.Dele George said that concern-ing the education of the chil-dren, “we get sponsorshipthrough good citizens ofNigeria and those that did notget sponsored, the Home bearstheir burden. Some schools giveup to 50 per cent discount.”

Champion Lagerbeer re-packaged

FOLLOWING the success-ful acquisition of majority

stake in Champion Breweries(CB) Plc, Consolidated Brew-eries Plc has repackagedChampion Lager beer.

Mr. Boudewijn Haarsma,Managing Director, Consoli-dated Breweries Plc, at theunveiling ceremony in Uyosaid, CB has a tradition inoffering high quality brands toconsumers at affordable prices.After a year of hard work andinvestments, “I am pleased tosay that we have now alsoachieved that with Champion.The new refreshing packagingand improved product qualityare the outcome of putting ourconsumers at the forefront inour thinking and action”.

The General Manager-Sales,Mr. Frank Van Asperen, whileaddressing trade partners stat-ed that a full range of activitiesaimed at restoring ChampionLager Beer to its prestigiousposition will be rolled out. Thisincludes activations for bothtrade and consumers at alltouch points.

Speaking on the launch of thebrand’s new visual identity &advertising campaign, theHead of Marketing, Mr.Prashant Patwardhan statedthat “the new bold and contem-porary label makes the brandstand out among its peers.

He further explained that“The new pay-off line, Rise toGlory is based on the premiseeveryone is a champion or haschampion within.

44 — Vanguard, MONDAY, JULY 30, 2012

CMYK

BRIEF

People in Business

SEC allegesinsider trading inCNOOC, Nexendeal

US securities regulatorhas filed a complaint in

court against a firm controlledby a Chinese billionaire andother traders, accusing themof making over $13 millionfrom insider trading ahead ofa bid by China’s CNOOC forCanadian oil company,Nexen Inc.

The Securities andExchange Commission saidthe federal court inManhattan had frozen assetsworth over $38 millionbelonging to Hong Kong-based Well Advantage,controlled by businessmanZhang Zhirong, and otherunnamed traders who usedaccounts in Hong Kong andSingapore to trade in Nexenstock.

They made trading profits of$7 million and $6 millionrespectively by using insideknowledge of the merger tobuy Nexen shares before theannouncement, the SEC says.

The trading was suspicious,the SEC claims in itscomplaint, because theaccounts used to buy theshares had ‘either no historyor extremely limited history”of buying Nexen sharesbefore July 2012.

CNOOC said on July 23 ithad agreed to acquire Nexenfor $15.1 billion, China’sbiggest foreign takeover bid.Shares of Nexen jumpedalmost 52 percent that day.

The unnamed Singaporetraders used accounts in thenames of Phillip Securitiesand Citibank, while WellAdvantage made its tradesthrough accounts held at UBSSecurities and CitigroupGlobal Markets. Neither of theWell Advantage accounts hadtraded Nexen shares sinceJanuary 2012, nor had theCitigroup account beencompletely dormant for oversix months.

Zhang Zhirong also controlsChina Rongsheng HeavyIndustries Group Holdings,which according to a companyfiling in October 2010,entered a strategiccooperation agreement withCNOOC.

A spokeswoman for CNOOCdeclined to comment. Calls toWell Advantage’s office inHong Kong were notanswered on Saturday.

Hong Kong’s Securities andFutures Commission alsodeclined comment whileofficials at the MonetaryAuthority of Singapore werenot immediately available.

BY MOSES NOSIKE

Never in his wildest

dream did Evang.(Dr.) Solomon OghenewetaOlotu, ever imagined that hewill be what he is todayconsidering the circumstancessurrounding his growing up.He had lost his father evenbefore he was enrolled inprimary school. Today, he sitsatop S. O. Olotu Group ofCompanies as GroupChairman/Chief ExecutiveOfficer. In this chat withFinancial Vanguard, Olotutells his story. Excerpts:

According to Olotu, it wasdifficult to acquire basiceducation but thanks to hismother who took it upon herselfto ensure that her children gotat least basic primaryeducation.

Said Olotu: “Although wewere not born with a silverspoon, but my father tried to dothe little he could for us beforedeath took him from the family.That was before my enrolmentinto primary school. It was adifficult period for us. You knowhow difficult it is when thefather of the house dies earlyleaving children and wife withlittle or nothing to survive on.That was the situation I foundmyself. “

Faced with so manychallenges, the young Olotuinstead of bemoaning his fate,decided to make lemonadewith the lemons life wasthrowing at him.

Said he: “At that time, therewas nobody ready to sponsormy education. It was just mymother. Relations tried thelittle they could. My mothertried her best to make sure wegot that basic education and wedid little jobs to assist her. Istruggled to finish primaryschool under that difficultsituation. After that, I had toleave home to look for uncleswho could help me continuemy education since my mothercould not carry on alone; butthey could not help. Havingseen the challenges in myfamily, I learnt to work hardanywhere I went. I hated to sitidle or follow friends to crackunnecessary jokes. I wasalways working to survive andhelp my widowed mother andmy siblings. Again, I hatedbegging, so I was always tryingto see what I could get formyself.”

Light at the end of the tunnel:Dr. Olotu’s friendly

disposition paid off asaccording to him: “I was luckywhen Shell Company came tomy area for a project. I becamefriends with some Shellworkers who assisted mesecure casual work with Shell.I did the job for some timebefore I went to Ondo to meetmy uncle to help me further myeducation to university level.My uncle who was a goldsmithsaid he would only assist me

Success is not necessarily money or wealthyou have acquired — S. OLOTU

to acquire the skill if I joinedhim. I was disappointedbecause I had come with all mybooks with the hope that Iwould continue my educationin his house. I lived with himfor three years and all thewhile, I was feeling for mymother. I tried one other unclein another city who is late now,it didn’t work out. After tryingall and none worked out, Idecided to learn bakery. WhenI finished learning, my uncle

came up with one Isaac andestablished a bakery and westarted running it. With time, Iwas promoted as a chief bakerand after a while, because I washard working, I was made anassistant manager.

However, we had to leave thecommunity for Ilaje because ofcholera outbreak in the town.While in Ilaje, I started doingsome jobs to help myself. I wasthere when a constructioncompany, Demaz, came toconstruct a road. God helpingme, I became friends with oneof the workers and he asked meto start supplying the companygranite but I told him I didn’thave money to do that.”

God’s intervention:“But the way God works for

anybody He would have mercyon, my friend decided to sourcemoney for me from his companywith the condition that when Isupply and the company paysme, I would return the moneyand then take my profit. He didthat for me several times until Irealised enough money to startsupplying the company granite.The first time I supplied was fivetrips of granite that was not upto N2,000 even though it wasthe time of pounds and shilling.Later, the supply businessincreased as the company waspaying, I was supplying. Thefirst time the company paid me,I was very happy. That washow I got registered with thehelp of one Benin man calledDickson and that was how Ibecame a petty contractor. I wantto say that it is good to be honestin whatever thing you do sothat people will come tomorrowto entrust you with biggerthings when you remain

faithful. At this time, I hadstarted working with theSupplies section of AbrakaUniversity then called Collegeof Education. I was handlingthe two until I was linked toShell and we started supplyingShell and from there, wediversified into constructionwhen Shell gave us littlecontracts to fill up pot holesand we did it to theirsatisfaction. I want to tell youthat life is aboutdetermination,” he said.

Asked if he had expected thathis challenges wouldeventually be his steppingstones to greatness, Olotu said:“It is God that gives you thedetermination. I could stillremember there was a time weneeded some money in myfamily to buy textbooks andother writing materials forschool but it was difficult to get.You meet uncles; they gaveexcuses why they could notgive you. At a time, my motherwas crying, calling my latefather and blaming death asbeing responsible for thesuffering of her children. Whilemy mother was crying, I startedconsoling and comforting herto stop crying that I’m a bigman and she should not mindanybody. And I promised her Iwould build a house for hereven when there was nothingto boast of. Till today, mymother has not forgotten thatand that served as a prophecyfor her and she didn’t knowthat God spoke through me.Thank God, here we are today,it’s the Lord’s doing not by mypower.”

Advice to the youths:“If you must make it in life,

focus on God. If you fear theLord and follow His ways, eventhough people may make jestof you, don’t worry. Commityour ways unto God and Hewill bring your heart’s desireto manifestation. Don’t bejealous of people who aredoing evil. Don’t make friendswith criminals, and evil people.Abstain from evil and focus onGod, you will surely make itbecause every good thingcomes from God.

In addition to knowing God,be determined, focused andprincipled. Be principledenough to do what is right andresist the temptation to supportevil. Even though we can makemistakes as human beings,quickly adjust yourself. Neverthink that you have known itall. Beware of the spirit of pride.It is a dangerous thing. Imbibethe spirit of humility. Itpromotes people in life,” headvised.

True success:“Success is not necessarily

the money or wealth you haveacquired. To me, success isGodliness and contentment.There are many people whohave so much money in theiraccount but they are not happybecause many of them are stillliving questionable lives.Success is living to the glory ofGod. “

’

’

Having seenthe challengesin my family, Ilearnt to workhardanywhere Iwent. I hatedto sit idle orfollow friendsto crackunnecessaryjokes. I wasalwaysworking tosurvive andhelp mywidowedmother andmy siblings

•Olotu

Vanguard, MONDAY, JULY 30, 2012 — 45

CMYK

CMYK

46 — Vanguard, MONDAY, JULY 30, 2012

Vanguard, MONDAY, JULY 30, 2012 — 47

CMYK

48 — Vanguard, MONDAY, JULY 30, 2012

CMYK

Omoh Gabriel - Group Business EditorBabajide Komolafe - Acting Finance EditorClara Nwachukwu - Energy EditorPeter Egwuatu - Head, Capital MarketYinka Kolawole - Snr Bus. CorrespondentFavour Nnabugwu - Insurance CorrespondentGodwin Oritse - Maritime CorrespondentGodfrey Bivbere - Maritime CorrespondentYemi Adeoye - Energy CorrespondentOscarline Onwuemenyi - Energy CorrespondentFranklin Alli - Industry ReporterMichael Eboh - Capital Market ReporterEbele Orakpo - Energy ReporterIfeyinwa Obi - Maritime Reporter

CONTRIBUTORSPrincewill Ekwujuru - Media/MarketingNaomi Uzor - IndustryProvidence Obuh - Capital MarketLAYOUT - Graphics Department

0817 002 3569

BUSINESS & ECONOMY

,

,

The Central Bank of Nigeria (CBN) has warnedthat continued increase in

inflow of portfolio investmentover Foreign Direct Investment(FDI) into the country portendsdanger to the entire economy.This is contained in the quar-terly review of development inthe external sector of the Nige-rian economy for the first quar-ter ended 31st March, 2012,released by the CBN’s Tradeand Exchange Department.The report said that aggregateforeign capital inflows into thecountry for the quarter stoodat $5.53 billion up from $3.48billion and $3.39 billion infourth quarter and first quar-ter of 2011 respectively. How-ever, portfolio investment inflowrepresented 69 per cent of thetotal inflow in the first quarter,while FDI accounted for the re-maining 31 per cent.This trend

Increased portfolio investment detriment to economy-CBN

if unchecked would have neg-ative impact on foreign ex-change management going for-ward, the apex bank warned..Further analysis revealed thatFDI dropped from $2.13 billionin the preceding quarter to$1.72 billion in first quarter of 2012. In contrast, estimatedPortfolio Investment inflows in-creased significantly from $1.36billion to US$3.82 billion dur-ing the same period The apexbank observed that the declinein FDI inflows during the re-view period was traced to theinsecurity occasioned by terror-ist activities while the increasein portfolio investment inflowwas attributable to the positiveeffect of the Bank’s policy onforeign investment in short-term instruments and the rela-tively high yield on those in-struments.“Portfolio investment at 69 percent of total capital inflows por-tends serious consequences forforeign exchange management

in the event of sudden portfolioreversal. There is therefore,need to closely monitor this in-flow and put in place measuresto stem the adverse effects incase of a reversal. “Also, theManagement should considerreducing the reserve holding of7.3 per cent in Euro and diver-sify to other stable investmentsin view of the unabated Euro-zone debt crisis,” it said.On a brighter side, the reportnoted that there was generalimprovement in the perfor-mance of the external sector asevidenced by the robust currentaccount position which it attrib-uted to downward trend in non-oil imports and deficit in theservices account, saying thatother developments during thequarter included increased ag-gregate foreign capital inflowsby 61.2 per cent to US$5.53 bil-lion. “In addition, the level ofexternal reserves equivalent to10.8 months of imports, exceed-ed the international benchmark

of 3.0 months while the BDCpremium at 2.35 per cent re-mained lower than the thresh-old of 5.0 per cent and the ex-ternal debt sustainability indexremained at 0.1 per cent despite

the increase in the stock of ex-ternal debt to US$5.99 billion atthe end of March, 2012.

LAST week, CBN’sMonetary PolicyCommittee agreed to

keep the Monetary PolicyRate (MPR) at 12%, but de-cided to increase commer-cial banks’ Cash ReserveRatio (CRR) from 8 – 12%. In the aftermath of this de-cision, CBN accused theMoney Deposit Banks of notlending to the real sector. CBN governor, LamidoSanusi decried the realitythat “rather than lend to thereal economy, the bankshave continued to take ad-vantage of the high yieldsof government securities todirect credit away from thecore private sector.”

Not only that, CBN alsobelatedly recognized thatthe excessive liquidity of thebanks had provided oppor-tunity for speculative activ-ities in the forex market. Sanusi finally concludedthat the product of banks’anti-economy activities isthe reality of aggregate do-mestic credit declining byover 5% between June 2011and June 2012.

Regular readers of thiscolumn may be forgiven ifthey imagined that Les Lebawas actually the speech-writer for Sanusi’s presen-tation, because, the obser-vations expressed by Sanu-si are in full consonancewith our advocacy in thiscolumn for almost a dec-ade. To that extent, there-fore, I feel vindicated that,finally, the authorities now

CBN and the Ostrichrecognise that this columnhas not deliberately set outto carelessly oppose the pol-icies of the CBN without anyjust cause!!

Alternatively, while wehave ceaselessly main-tained that CBN has in itsportfolio the antidote to theproblems of bank lending tothe real sector and fund di-version to speculative for-eign exchange transactions,Sanusi, unfortunately, inhis media address lament-ed that the apex bank washandicapped as it could notforce the commercial banksto lend. Presumably, thiscould also mean that CBN,in spite of the usual brag-gadocio on its ability to su-pervise and control thebanks may indeed havecompromised that ability;that, of course, would bevery tragic.

It is also curious that inspite of banks’ aversion

to real sector lending, andtheir evident affinity foranti-social speculative forexactivities over the years,CBN, nonetheless, contin-ues to featherbed the mon-ey deposit banks at the ex-pense of our economic andsocial welfare. Indeed, werecall the humongous bail-out sums, which the CBNmade available to save thebanks and encourage them

to support the real sector. The addit ional publ icfunds of over N2tn injectedinto the banks through AM-CON has also done little ornothing to boost lending tothe real sector nor has it re-strained the banks fromspeculative forex trading.

Consequently, the ulti-mate impact of CBN’s andAMCON’s injections havebeen the instigation of aninflationary spiral, becausethese funds, which are lit-

erally cash creations byCBN, inevitably increasemoney supply and engen-der a cash surfeit in the sys-tem. In other words, whilethe money deposit banks gohome with a smile on theirfaces everyday, millions ofordinary Nigerians go homewith a huge frown on theirfaces because of the eco-nomic deprivations igno-miniously nurtured by CBN.

Not yet done, CBN, in

apparent collusion with thebanks, instituted the cash-less policy in the expressedhope that the operationalcost of running each bankwould fall by at least athird. CBN had earlier not-ed that cash handling costswere responsible for over athird of the infrastructuraland labour costs in bankoperations; therefore, ‘cash-less’ banking should reducebank-operating costs ac-cordingly, and thereby en-

courage banks to lend to thereal sector. Well, regretta-bly, once again, there is noindication that the banks arebetter primed or inclined toeither lend to the real sec-tor or to curb their appetitefor speculative forex trad-ing. Furthermore, CBN isevidently also in a dilemmaconcerning its core mandatefor price stability in theeconomy, as core inflationrate (which includes price

index of food items) is nowon the inflammatory thresh-old of around 15%.

Indeed, Sanusi notedthat”the committee recog-nized that a logical re-sponse (under the circum-stances) would be an in-crease in the MPR, especial-ly, considering the impact ofsustained liquidity in thebanking system on ex-change ra tes . Conse-quently, rather than furtherfueling the rate of inflationwith high MPR, the commit-tee decided to increase theCash Reserve Ratio from 8– 12%”.

Undoubtedly, CBN appears totally con-

fused; meanwhile, it stub-bornly refuses to accept thetruth that the poison in itsmonetary model is i tsmonthly substitution ofnaira allocations for dollar-derived revenue. This,surely, instigates the eter-nal curse of excess liquidi-ty and also drives high in-terest rates and fuel prices,and further provides an un-ending source of funds forspeculative forex trading.

Until CBN accepts thisreality, its shenanigans willbe synonymous with the os-trich with its head stuck inthe sand in the hope that itwould become unnoticed; itwould be a mark of gross in-sincerity for CBN to followsuit.

SAVE THE NAIRA, SAVE

NIGERIANS!!

While the money deposit banks gohome with a smile on their faces

everyday, millions of ordinary Nige-rians go home with a huge frown ontheir faces because of the economicdeprivations ignominiously nurtured

by CBN

By NKIRUKA NNOROM