Financial Vanguard

CMYK

Continues on page 18

A total of $88.4 billion left theshores of Nigeria to foreignlands through official

channels in 2013 of which $18.3 billionwas remmitted in three months thusgiving an average foreign exchangeoutflow of $1.7 billion weekly

This is just as the Excess CrudeAccount (ECA) component of foreignreserves has now fallen to just $2.5billion, compared to $11.5 billion ayear ago. The $18.3 billion went outof the country in the form of capitalflight, which Nigerians indulged in.According to figures captured by theInternational Remmittance unit ofCBN, the amount was remittedthrough banks, Bureau De Change,Travel agencies and debt payment toforeign creditors to which Nigeriaowes some money. This and themonthly withdrawals from theFederation Account have resulted inthe depletion of the nation’s foreignreserves. The financial haemorrhage,which has been plaguing the nationfor years due to the low productivityof the economy, has resulted in blamegames in political and financialcircles.

Nigeria foreign reserves, accordingto CBN, is made up of dollar proceedsfrom oil earning which the CBNmonitises and pays the nairaequivalent into the FederationAccount for allocation to the three tiersof government and then holds thedollars in reserves for those whointend to buy abroad. The secondcomponent is the proceeds from theExcess Crude Account which is theamount realised from sale of crude oilin excess of the budget benchmark thatis held on behalf of the three tiers of

Financial haemorrhage:Nigeria bleeds as $1.7bn goesout weekly — $18.3bn paid out in 12 weeks

By OMOH GABRIEL,Business Editor

government by the CBN.According to Sanusi Lamido Sanusi,

the CBN Governor, the Excess Crude

Account (ECA) component of foreignreserves had now fallen to just $2.5billion, compared with $11.5 billion a

year ago. It is the depletion of thiscomponent of the reserves that hasbecome a major concern to thehandlers of the nation’s finances.

However, the foreign exchange outflows, according to FinancialVanguard’s findings, has resulted inan average of $1.7 billion leaving theshore of Nigeria every week aspayment on travels, cash purchasedfrom banks and bureau de change,letters of credit, direct remittances onbehalf of expatriates working inNigeria, Wholesale Dutch Auction anddebt service payment. In twelveweeks a total of $89.647million wasspent by Nigerians in foreign travels.Cash sales in dollars by bureau de

CURRENCY BUYING CENTRAL SELLING

CBN Exchange rate as at 24/01/2014

107.22 -0.36

97.09 -0.23

113.85 -1.35

2,786.00 -5.00

15.11 0.07

DOLLAR 154.75 155.25 155.75

STERLING 257.0398 257.8703 258.7008

EURO 212.2706 212.9564 213.6423

FRANC 173.2923 173.8522 174.4121

YEN 1.4864 1.4912 1.496

CFA 0.3011 0.3111 0.3211

WAUA 236.4395 237.2035 237.9674

RENMINBI 25.5814 25.6645 25.7476

RIY 41.2612 41.3945 41.5278

KRONA 28.4399 28.5318 28.6237

SDR 237.8198 238.5882 239.3566

JANUARY 27, , , , , 20142014201420142014

Source: CBN

Cover Story

18 — Vanguard, MONDAY, JANUARY 27, 2014

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Continues from page 17

WHAT IS NOT BUSINESS?

Often time people engagein all sort of shady deals

and call it business. This shouldnot be, because any act/trade thatis not genuine and is to thedetriment of others cannot becalled a business, especially if itdoesn’t fall within the confinesof the law or is aimed at gettingprofit wrongly. Some of thesewrong businesses include,money laundering (governmentofficials), abuse of office, stealing,defrauding, internet scamotherwise known as yahoo-yahoo, 419 and a host of others.If you are involved in any of theabove, then you cannot say thatyou are in a business as theabove named are prohibited bythe laws of the land and they donot create opportunities. Ratherthey ruin or cripple the country,portraying it in a very bad lightto the rest of the world. It is onlya lazy man that looks for an easyway out all the time, not wantingto go through the right processand procedures.

THE MENTALITY OF ABUSINESS MAN:

We have discussed what abusiness is in the previouschapter and what business is not;we have also looked at theimportance of self analysis instarting a business as well as thedisadvantages and advantages.Now it’s time to talk about thementality a business man shouldpossess. We cannotunderestimate the power of themind and I make bold to say thatthat is where every idea anddream is born. The good book alsoemphasizes this by saying “as aman thinketh in his heart, so heis”.

When starting a business, youwould need to ask yourself if youpossess what it takes to run itefficiently and get the desiredresults. Every successfulbusiness man has a mentality andshould possess a strong sense ofcharacter. That is why it isimportant to carry out a selfanalysis before commencing abusiness.

The business man does not seefailure as a reason to quit; to himfailure is a stepping stone thatlaunches him to his next level.He is not afraid but is a risk taker,possessing the utmost desire tosucceed; he is not just out tomake money, but rather to bridgethe gap between demand andsupply.

He is a sharp thinker and verywitty, seizing every available

The Basic Guide to StartingYour Business Part 3

opportunity to meet thedemands of consumers. Thefollowing make up the mindsetof successful business men.

OptimismOptimism continues to be a

primary factor in whether or notan individual will stay focusedon goals rather than bethwarted by the negative eventsthat would impede progress. Itis the absolute ideal that leadsto achievement as nothing canbe done without hope.Therefore, it is the very essenceof success.

If you want to have asuccessful business, it isimportant that you start out asan optimist, refusing to seeimpossibilities and obstacles.An optimist is not discouraged,but rather looks for other ways

to make things better. A goodbusiness man will alwaysdiligently search for answersthat will work. He possessesthe “yes I can” aura andmentality which will endearhim to clients and friends alike.

Before you start a business itis very important that you havea very optimistic mentality, onethat is not easily swayed byvarious obstacles you willencounter in the course ofcarrying out your business.This is because nobody wantsto do business with apessimist.

CreativityA creative ability is a very vital

tool in the hands of a personwho intends to start a business,although sometimes even as abusiness owner there is a riskwith being creative; it is notpossible to do something thesame way and expect adifferent outcome. You have tobe very dynamic in your choiceand approach to the businessyou intend to start. Brainstorma list of possibilities no matterhow wild it seems. Look for theunusual but plausible.

If you want tohave asuccessfulbusiness, it isimportant thatyou start outas an optimist,refusing to seeimpossibilitiesand obstacles,

,

change and banks to smallscale businesses andindividuals amounted to$2.665 billion. In the twelveweeks, amount attributed todollars sales through lettersof credit opened on behalf ofNigerians for businesspurchases amounted to$365.810 million, while atotal of $1.159billioin went outof the country as directremittances.

According to the CBNfigures, within the

twelve weeks, foreignexchange purchases throughthe official market of theWholesale Dutch Auctionsales stood at $13.906 billionand payment of interest onforeign loans by the FederalGovernment took out the sumof $144.83million from thenation’s coffers. A breakdown of the foreignexchange out flows from theCBN showed that in the weekending 20th September 2013,the sum of $38.93 million wasspent on travels, while cashsales to bureau de changeand banks took out the sumof $263.575 million out of thenation’s foreign reserves. Inthe same vein, within thesame week, the sum of$96.05million went outthrough letters of credit andthe sum of $1.26billion wassold by CBN at the foreignexchange market toNigerians, who apply to buygoods and service abroad.

This resulted in thedepletion of Nigeria foreignreserves by a total of $1.708billion in this particularweek. In the week that endedon the 6th of September 2013,the sum of $3.2 million went

Financial haemorrhage: Nigeriableeds as $1.7bn goes out weekly— $18.3bn paid out in 12 weeks

out through travels whilecash sales to bureau dechange during the weekstood at $240 million. Thevalue of the Letters of Creditopened on behalf of severalNigerian’s businessesamounted to $19.71 millionand direct remittances stoodat $79.491million.

Wholesale Dutch Auctionduring the week sold a totalof $1.122billion to those whoapplied for foreign exchangeto the CBN. Governmentinterest payment on foreignloans that fell due during theweek amounted to$14.444million. At the end of

6th September 2013, a totalsum of $1.479 billion waspaid out from the foreignreserves. The story is thesame for the rest of the tenweeks surveyed by FinancialVanguard. Nigeria's foreignreserves peaked at$48.2billion in August 2013before it moderated to $43.9billion at the end of 2013.Nigerians penchant forforeign made goods, the

insistence by politicalactors in the country on thesharing of the proceeds ofthe excess crude account,the falling receipt from thenation’s mainstay oil andgas are largely responsiblefor declining level of thenation's foreign reserve.

But Minister of Finance,Dr Ngozi Okonjo-Iweala,says the present amountin Nigeria’s externalreserves should not beseen as declining.Addressing reporters inAbuja before she left thecountry, Tuesday, to attendthe World Economic Forumin Davos, Switzerland, DrOkonjo-Iweala attributedthe role of theaccountability of the fundto the Central Bank ofNigeria. She said thatNigeria’s external reservewas in a robust condition.“When the reserves declineby few million dollars,there is a big headline.

The external reserve ofthe country is really

robust compared to what isreally needed,” she said.Her statement is expectedto clear the air on reportsthat the external reservesof the country wasdeclining.

Reacting to the depletionin foreign reserves, Sanusiexpressed concern aboutNigeria’s dwindlingExcess Crude Account,saying that its ability tosuccessfully protect thenaira will be based on theamount in the ExcessCrude Account and theForeign ExchangeReserve. According to him,


Nigeria'sforeignreservespeaked at$48.2billion inAugust 2013before itmoderated to$43.9 billion atthe end of 2013

From left: President Goodluck Jonathan, Chairman, Heirs Holdings, Mr.Tony Elumelu ; and GMD/CEO, UBA Plc, Mr. Phillips Oduoza, at the ongoingWorld Economic Forum, in Davos, Switzerland.

CMYK

Vanguard, MONDAY, JANUARY 27, 2014 — 19

,,

Sanusi’s $49.8bnalarm and itsimplications

Nigerians have come tobelieve is corruptionpersonified. The figure ofnearly $50 billion was suchthat neither the president norhis aides would let go asusual.

The various agenciesconcerned went to work andcame out with the fact that itis about $10.8 billion that wasyet to be accounted. Certainly,Sanusi as the custodian ofgovernment funds has everyright to raise issue when indoubt. But a governor of anapex institution in the bankingindustry cannot afford to betrivial in raising false alarm.He must not be in a hurry toact and raise alarm when heis in a position to cause thevarious agencies involved ingovernment revenue collectionto look into their books andcome up with the fact.

Yes! There are some figuresyet to be reconciled, but theissue with NNPC pre-datesboth Sanusi and PresidentJonathan.

When Mansur Muhtar wasthe Minister of Finance underAlhaji Umaru Yar A’adua, hesaid that NNPC had aboutN1.2 trillion claims submittedto his office. Dr. MansurMuhtar said that thedownstream sector of theNigerian petroleum industryis hemorrhaging as a result ofinefficiencies in the system.The then minister, in anexclusive interview withVanguard published on the 9thof December 2009, said thatNNPC posed a challenge tothe Federal Government.According to him, “NNPCpresents a big challenge to us.Again, I think there are someissues to be considered here.

“NNPC has outstandingclaims against the governmentin relation to petroleumsubsidy, which has not beenpaid over the years. Inaddition, as an organisation,it also has taken some moneyto repair pipelines vandalised

by the militants. These, overthe years, have risenconsiderably. What theCorporation has been tellingthe Federation AccountAllocation Committee, FAAC,is that it is unable to remit themoney because governmenthas not settled obligations orthe outstanding liabilities dueto it.”

Sanusi was certainly notsaying anything new, but themagnitude of the figure is

what was alarming. If thematter did not unnerve thePresident, it would have beenswept under the carpet andnothing would have been doneto reconcile the figures.Sanusi’s alarm, however,raised several fundamentalissues that needed to beexamined.

The CBN as we know it sinceinception has a very reputableresearch unit which data untilrecently cannot be faulted. TheCBN then boasted of very highgrade economists who couldhold their heads high anywhere in the world. Thatcannot be said of today ’sCBN.

The alarm raised by Sanusi’sletter is a serious indictmenton the capacity of the CBN toact as a banker of last resort.It would mean that whateveris coming out o the apex bankshould not be taken as given.Both the government and thecitizenry will have to doublecheck information coming outof the apex bank. The letterseriously indicts the variousgovernment agencies as itappears that there is no

element of cooperation amongMinistries, Department andAgencies of government. It isthis simple fact that has madethe economy prostrate as eacharm of government is workingat cross purposes. This alsoexplains why there are noreliable data in the countrycalled Nigeria.

More seriously, the letterand the facts therein cast doubton the Sanusi’s CBNorchestrated reforms. It was inthe same manner in 2009 thatSanusi accused banks of hugenon-performing loans andsacked with immediate effectthe Managing Director/ChiefExecutives and Executive

Directors of five banks. WhenSanusi made the allegationagainst these banks, he wasbelieved and no second checkwas made to verify the gravityand veracity of theseallegations. The governmentturned deaf ears to all pleas tocross check the fact of theallegations.

To remind Nigerians,Mallam Lamido Sanusi at thetime said “the banks officialswere removed due to highlevel of non performing loansin the five banks, which wasattributable to poor corporategovernance practices, laxcredit administrationprocesses and the absence ornon-adherence to the banks'credit risk managementpractices. As at June 4, 2009when I assumed office asgovernor of the CBN, the totalamount outstanding at theExpanded Discount Window(EDW) was N256.571 billion,most of which was owed by thefive banks.

“The five banks were eitherperennial net-takers of fundsin the inter-bank market orenjoyed liquidity support fromthe CBN for long periods oftime, a clear evidence ofliquidity. In other words, thesebanks were unable to meettheir maturing obligations asthey fall due without resortingto the CBN or the inter-bankmarket. As a matter of fact, theoutstanding balance on theEDW of the five banksamounted to N127.85 billionby end July 2009,representing 89.81 percent ofthe total industry exposure tothe CBN on its discountwindow, while their netguaranteed inter-bank takingsstood at N253.30 billion as atAugust 02, 2009. TheirLiquidity Ratios ranged from17.65 percent to 24 percent asat May 31, 2009. (Regulatoryminimum is 25 percent)”.

The expanded window thatwas offensive to Sanusi was alending outlet from which

banks could borrow from oninterest, but the N620 billionhe injected into the banks waspublic funds. Which was morecost effective for the nation,the expanded window or theN620 billion?

He thought in this last movehe could end his tenure by yetanother sensation, this timearound to embarrass thenation, the president andpresent all the other revenuegenerating agencies asincompetent and manned byunpatriotic fellows.

Nigerians are swayed bywhatever data they are given;no one would bother to crosscheck. The CBN governorwent ahead and liquidatedthose banks. Today, with thebenefit of hindsight many atthe CBN officials privately,are saying that those bankswere not as bad as they wereportrayed and they could stillhave been saved even if theirchief executives were clampedin jail. It is the economy thatsuffered as the number of theunemployed swells by theday. What the government didnot ask the CBN governorthen was what was thesupposed role of the apexbank as the bank of last resort?Was it not supposed to bail outailing banks and save theeconomy? Were those banksnot paying their customer asat when due? If the bankswere given due opportunitywould they not have been ableto recapitalise?

Further, if the Sanusi’s letterdid not unnerve the president,and cause an inter ministerialreconciliation of revenueflows, Nigerians would havetaken up arms against theNNPC, and if it were a privatesector driven company, itwould have been liquidatedjust as some of those bankswere. Is it not time thegovernment considers takinga second look at the famousbanking reform spearheadedby Sanusi Lamido Sanusi nowthat we know that his figuresare always not correct andsometimes exaggerated?

When the governor of the Central Bank of Nigeria, Mallam SanusiLamido Sanusi, September 2013 wrote informing the president that

t h eNigerian National Petroleum Corporation (NNPC) had not remitted

$49.8 billion of oil revenue to the Federation Account over a 19-month period,it was meant to be a wake up call for the government to act on what many

BUSINESS & ECONOMY

a stable currency isabsolutely critical for pricestability and financialstability in general, addingthat it is not in the interest ofthe country to devalue thenaira, because it will not haveimpact on the country’scurrent account balance,given the highly inelasticnature of imports and thedominance of oil. He said thatthe Excess Crude Account(ECA) has now fallen to just$2.5 billion, compared with$11.5 billion a year ago,noting that until it isreplenished, there would belittle room for a reduction inthe Monetary Policy Rate,MPR, below the current 12

Continues from page 18 Financial haemorrhage: Nigeria bleeds as $1.7bngoes out weekly — $18.3bn paid out in 12 weekspercent benchmark. He said,“We should continue to seeka stable exchange rate for aslong as the reserves andmonetary conditions cansupport this.”

Sanusi said he has no fearsof tightening monetary policyfurther to keep inflation downand to stabilise the currency,noting that, if needed, theCBN will increase itsMonetary Policy Rate from 12percent and the Cash ReserveRequirement on public sectorfunds to 100 percent.

President of LagosChamber of Commerce

and Industry, Alhaji RemiBello, had said “We aresatisfied with the apex bank’sefforts at ensuring exchangerate stability and we hope thatthis is sustained in 2014. Ourconcern is the continuedprotection of the exchangerate on the back of highinterest rate with theattendant negative outcomesfor businesses, output,employment and growth. Thenaira exchange rate alsofluctuated within the set

bound of N160 per dollar plusand minus five percentthroughout the year.

Managing Director/ChiefExecutive, RTC AdvisoryServices Limited, Mr.Opeyemi Agbaje, said, “Thereare some significant negativesthat we would also be takinginto 2014. Most importantly isthe management of the oilsector, vis-a-vis the absenceof Petroleum Industry Bill,PIB, divestment ofmultinationals, and thegeneral state of uncertainty inthe industry, oil theft, oil

piracy, and decliningproduction. “Now if you gointo 2014, I see several levelsof uncertainty, and for me,that is the defining concernfor 2014. We have uncertaintyin the foreign exchangemarket because oil sectoroutlook is not clear. Two, ourdomestic oil sector is notsettled because of issues Imentioned earlier, and that iswhere we get 85 percent ofour foreign exchangeearnings. So, there is doubt


Sanusi was certainly notsaying anything new, but themagnitude of the figure iswhat was alarming

CMYK


Business & Economy

Smuggling: OPS seeks stiffer penaltyagainst importers, shipping firmsBY FRANKLIN ALLI

The Organised PrivateSector, OPS, says

Nigeria can halt smugglinginto the country within the nextsix months if the CustomsServices and other lawenforcement agents policingthe nation’s borders (airports,seaports and land borders)embark on the destruction ofconfiscated banned itemswhich importers and shippingcompanies are bringing intothe country.

Smuggling is importing andexporting products illegally.

The OPS strongly believes ifgovernment can adoptconstant destruction over thenext six months, stricterenforcement and harshpenalties of this nature willwipe smuggling activities in itstotality or reduce it by 70 percent. Speaking through itsDirector General during aseminar on‘ The Menace ofSmuggling in Nigeria’organised by the Commerceand Industry CorrespondentsAssociation of Nigeria, CICAN,in Lagos, OPS said, beyondchasing smugglers here andthere and seizing contrabandgoods, the Customs and otherlaw enforcement agents shouldgo further by burning seizeditems again and again.

"By the time you confiscateand destroy goods worth N500million, the importer and theshipping company will befrustrated and they won’t’ liketo continue in the business.

"Fighting smugglingrequires seizure and burningof the items. When you destroythe products, you havedestroyed the investment; ifyou lost N500 million six timesnobody will tell you before youopt out of the business, andothers will be deterred to gointo it,” said Mr. RasheedAdegbenro, the Acting DirectorGeneral of MAN.

John Isemede of NACCIMAnoted that another aspect ofsmuggling is faking of importdocument and under-invoicing.

“If you are bringing in 20containers and your invoicedeclared five containers, it issmuggling; if you are bringingin chemical A and declared itchemical B, it is smuggling,”he said.

In his presentation, titled:‘Impacts of Smuggling on theeconomy’, Muda Yusuf ofLagos Chamber of Commerceand Industry, cited the closureof BEREC battery, Dunlop andMichelin tyre, Afprint andother textile companies andrevenue loss to government

due to evasions of import duty,as amongst the economicimpacts of smuggling on theNigerian economy.

He said that the key drivers ofsmuggling are trade policy thatis not sustainable; high importtariff and levy; porosity of thenation’s borders, tariffdifferential between Nigeriaand neighbouring countries inECOWAS; weak infrastructurewhich increases cost ofproduction, including foreignexchange policy.

Dr. Joseph Odumodu, DirectorGeneral of StandardsOrganisation of Nigeria, SON,asserted that, "beyond the lossin value of transaction, asmuggling–free is possible ifand only if people who are

bringing in products do theright things, there won’t besmuggling. I support the OPScalls for heavy sanction ofimporters and their shippingfirms or agents. Smuggling isaffecting our mandates at SON.I have said at several fora thatdoing the wrong thing affectsthe whole economy."

Mr. Sola Dosumu, Head ofRegulatory Affairs, BAT WestAfrica, painted a bigger pictureof the economic impacts ofsmuggling on manufacturingindustries, governments anddistributors when he saidtobacco sector across the globeloses a total of £17 billionannually to smuggling. Hegave the breakdown as follows:“Governments lose £12 billion

annually in terms of revenue,tobacco manufacturers lose £3billion annually and otherstakeholders in the trade lose£2 billion annually tosmuggling across the world.”

He said Nigeria currentlyloses $200 million annually toillicit tobacco trade.

He noted thatillicit cigarettes worthapproximately $10 millionwere seized and destroyed byregulatory agencies in Nigeriabetween 2008 and 2013. Headded that the major reasonillicit trade exists is theeconomic opportunity it offersfor the smuggler and illicitvendor to make money andalso for the consumer to savemoney.

The FederalGovernment has said it is

collaborating with CementManufacturers Association,CMAN, in rigid pavements forroad networks across thecountry. The cementmanufacturers compriseDangote Cement Plc, LafargeWAPCO Nigeria Plc, includingCement Company of NorthernNigeria, Ashaka Cement andUnited Cement CompanyUniCem, Calabar.

The Minister of Works, ArchMike Onolememen, whoreceived an audience of LafargeWAPCO Cement managementled by the company’s ManagingDirector, Mr Guillaume Roux,in Abuja, said it is part of theongoing process to identify

FG parleys cement manufacturerson rigid pavementsBY FAVOUR NNABUGWU

good solutions for the federalroads in the country,Onolelemen said the ministryof works would startexperimentation on rigidpavements in the country.

“The Minister said, “We wantto know what themanufacturers are bringing tomake the projects realistic. Wehave identified cementcompanies as one of the sourceof the excessive overloading ofour roads. We would carry outlaboratory test on the productsto ensure that they are goodas we prepare to begin theconstruction of rigid pavementcarriageway in Nigeria.

“We have identified majorroad works where we want toexperiment rigid pavementdesign and consultants werecommissioned and they told methat one of those roads is the

Kachie-Ajie road to connectthe Federal Capital Territoryto Baro Port in Niger state.

“The second one is theIkorodu-Shagamu road. Wehave completed the design ofthe rigid pavement and wehave commenced procurementfor the two roads. Once the2014 budget is approved, theprojects will come on stream”.

“They are projects whereyou have to showcase cementfor road works. We are lookingforward to collaborating withyour organisation in bringingthat experimentation to asuccessful end. We believethere are certain terrains inour country that areunfriendly to asphalticconcrete. So we have todesign this solution for thoseterrains so that they can lastlonger."

From Left: Area Head of Regulatory Affairs, British American Tobacco West Africa Area, Mr.Sola Dosunmu; Assistant Comproller General of Nigerian Customs, Edema CN, Director General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf at the forum on the Menace ofSmuggling in Nigeria, organized by the Commerce and Industry Correspondents Associationof Nigeria (CICAN) sponsored by BATN in Lagos.

Continues from page 19

Financialhaemorrhage:Nigeriableeds as$1.7bngoes outweekly

over our foreign exchange. Isee a very high probability ofnaira devaluation, and thepressure is already building.

In the financial sector, thereis also some uncertaintyaround liquidity; the CBN’sCRR policy and expectation insome sectors that they aregoing to raise the CRR. WithCBN’s determination tocurtail inflation in the face ofpolitical spending in 2014, sothere is going to be furthersqueeze in liquidity andpressures on inflation.

Samuel Durojaiye,President, Finance HouseAssociation of Nigeria, said,“Then for the economy ingeneral, the challenges weforesee has to do withrevenue generation and theexpenditure profile. In termsof revenue generation, youwill discover that over the lasttwo years, we have beenlosing between 300,000 and400,000 barrels of crude oilper day to oil theft andbreakage of pipeline. So, howwill the government be ableto curb all these, knowing thatwe have a deficit of almostN1 trillion. Also is the factthat this is an election year,the expenditure pattern islikely going to be above thebudget. The deficit will gobeyond the budgeted N1trillion.

And oil prices, you will findout that, because of shale oilin United States anddiscovery of oil in otherplaces, and peace in theMiddle East, and Iranthreatening that it would gobeyond its OPEC quota; thismight flood the market withoil and this might force downthe price. If you look at ourbudget price, which is above$70 per barrel, if oil price fallsto $90 per barrel, we wouldhave serious problem with thebudget.

These are the things I amlooking at, and I am saying Ionly hope that things will notget worse in terms of foreignexchange generation and therate of the naira.”

— $18.3bn paidout in 12 weeks

CMYK



CMYK

Banking & Finance

(L-R): Executive Director, Lagos, Sterling Bank Plc, Puri Davendra; Business DevelopmentAssociate, 234give Limited, Rita Igbhofose; CEO/MD, 234give Limited, Sola Fatoba and ExecutiveDirector, South, Sterling Bank, Mr Lanre Adesanya, at the presentation of cheques to charitieswho benefited from the Sterling Bank’s “Raise a child project,” in Lagos.

The Central Bank ofNigeria (CBN) hasremoved the limit of

$250,000 that banks can sellto each Bureaus De Changeper week.

This move is aimed ataddressing the N15 differencebetween the official andparallel market exchangerates. The official rate closedlast week at N155.74 perdollar while the parallelmarket closed at N171 perdollar.

The removal of the limit wasannounced by Alhaji BatariMusa, Director, Trade andExchange department of theCBN, via a circular titled,“Developments in the ForeignExchange Market: ForeignExchange sales to BureauxDe Change operators bybanks”.

The circular stated, “Furtherto the Circular ref: TED/FEM/GEN/FPC/01/009 datedSeptember 26, 2013 on theabove subject, we write toinform all Authorized Dealersand the general public thatthe provisions of paragraph(1) of the circular underreference has been reviewedwith immediate effect.

Consequently, the limit of$250, OOO.00 as themaximum weekly forex salesto a BDC is hereby removedin order to shore up liquidityin that segment of the foreignexchange market. AuthorisedDealers are therefore free to

CBN moves to address N15exchange rate difference*Removes limit on banks’ forex sale to BDCs

By BABAJIDEKOMOLAFE

sell forex to BDCs subject tocompliance with theprovisions of extant AMUFTlaws and regulations in thedisbursement of forex.

Furthermore all transactionsbetween Authorised Dealersand BDCs as well as the latterand end-users must besupported with appropriate

documentation.In addition, Authorized

Dealers and Bureau DeChange Operators are tocontinue to render weeklyreturns on their transactionsto the CBN and other relevantregulatory agencies, failingwhich, appropriate sanctions,including revocation of

operating license shall beimposed.”

Recently, while announcingthe decision of the MonetaryPolicy Committee (MPC),CBN Governor, MallamLamido Sanusi expressedconcern over the gap betweenthe official and the parallelmarket exchange rates. Hesaid, “The Committee notedwith satisfaction that theyear-on-year headlineinflation remained within theindicative target range of 6-9% in the second half of 2013.However, the Committeenoted the underliningpressure on core inflation,which may not beunconnected with thewidening spread betweenofficial and BDC exchangerates. In order to head off thespectre of rising inflation in2014, concrete actions will beneeded to stabilize thecurrency and minimize thedivergence between the twosegments of the foreignexchange market.”

President, Association ofBureaux De ChangeOperators of Nigeria(ABCON), Alhaji AminuGwadabe, however attributedthe wide gap to therestrictions on foreignexchange supply in themarket. In an interview withjournalists last week, he saidthe $250,000 limit on banks’forex sale to BDC and ban onimportation of foreigncurrency are examples of therestrictions causing thedivergence between theofficial exchange rate, and theparallel market rate.

Mainstreet Bank is set to increase itslending to agriculture sector to N20

billion in 2014. Group Managing DirectorMainstreet Bank, Faith Tuedor-Matthewsdisclosed this at the formal flag-off of the 2013/2014 Dry Season Farming Support Programmewhich held at the banquet Hall of theInternational Conference Centre Abuja.

She also commended the current AgriculturalTransformation Agenda (ATA) of the FederalGovernment as a revolutionary initiative whichhas accelerated the nation’s quest for foodsecurity.

The ATA initiative, she noted, has furtherencouraged Nigerian banks to brace up to thechallenge of lending to the agricultural sector.

Highlighting the experience of the bankingindustry prior to the introduction of theinitiative, she noted that bank lending to theAgricultural sector was below 1 per cent of totalbank lending, however within two years, thisfigure has grown to N368bn which is a growthposition of 4.29 per cent. She further notedthat the banking industry has set a target togrow lending in the Agricultural sector to 7per cent and subsequently to 10 per cent by2017.

Sharing her industry experience of GrowthEnhancement Support Scheme (GESS) in thelast two years, Faith Tuedor-Matthews noted

Mainstreet Bank targets N20bn lendingto agriculture in 2014

that Total Bank lending under the GESS hasgrown from N4 Billion in 2012 – N20 Billionin 2013.

Through the Federal Ministry of Agricultureand Rural Development programme; the Nigerian Incentive-based Risk Sharing Systemfor Agricultural Loans (NISRAL) the GESSinitiative has been able to successfully mobilisefertilizer agro-dealers, farmers, suppliers, seedcompanies to create an effective distributionmechanism that eliminates middlemen and theattendant corruption which existed in the inputdistribution chain

Under the scheme, Mainstreet Bank lentN10bn to 30 Agro-dealers in 2013 and recordedzero default. She maintained that whilstpreviously the Bank would not deal with Agro-dealers because they lacked the structure toqualify for borrowing, today the story ischeering as all the loans to the dealers areperforming whilst through the scheme, overone million farmers have been reached andthis translates to more jobs as a result of theadditional hands who have been employedthrough this initiative. She further maintainedthat following from the experience ofMainstreet Bank, many banks have nowrealized that lending to Agriculture is a viablebusiness, noting that there is great optimismthat the target of N60bn lending to the GES

Ecobank unveils card4 prizes promo toboost e-payment

Ecobank Nigeria hasunveiled card 4 prizes

promo being part of efforts inpromoting the use ofalternative payment channelsby customers and alsostrengthening the CentralBank of Nigeria (CBN)’scashlite initiative. The promowhich will run for threemonths, will see customers ofthe bank winning prizes thatincludes sedan cars, all-expense paid trip to Brazil andscholarships valued at N300,000 each for different sets ofwinners to be drawn fromdifferent parts of the country. Announcing the draws inLagos, Ecobank Head, Cardsand e-banking, Mr. TundeKuponiyi said there will bethree monthly draws and agrand Finale draw to be heldin Lagos, Port Harcourt andAbuja simultaneously.

He disclosed that 15 winnerswill emerge monthly from thedraws. Each of these winnerswill take home smart phones;LCD TVs; air conditioners;home theatres and powergenerating sets. There is alsoinstant reward for customerswho walk into any of the bankbranches, pick up debit cardsand activate them instantly.

On the modalities for thepromotion, Mr. Kuponiyiexplained that “a point basedrating” will be utilized inchoosing winning customers.

Information SecurityConsulting firm, Global

Info Swift (GIS) has partneredSecurity Technology GroupSTG in a bid to strengtheninformation security controlsof financial institutions in thecountry.

This is against the backdropof the mandate from theCentral Bank of Nigeria to allbanks to get their informationsecurity management systemscertified by 2015.

According to Mr. AfolabiOke, Executive Director, GIS“In the wake of cashlesssociety, we have to startembracing technology whichcomes with a lot of risks, thesesecurity certificationprocedures ensures that weprotect the information accesswithin our financialinstitutions. It means we haveto standardise tointernational practices.”

GIS partners STGBank securitycertification

By CHARLES MGBOLU


CMYK


CMYK

Corporate Finance

Access Bank Conference:Stakeholders react onsustainable economicleadership

In a bid to addresssustainable leadershipissues in the various

sectors of the economy, be it incapital market, banking,insurance etc, the Access Bankconference has providedinsightful commentaries frominvestors and otherstakeholders from both localand international community.

For the first time in Nigeria,the conference hosted by a firmin the banking industryaddressed the issue ofleadership from a holisticperspective, as it presentedoutstanding success storiesfrom a variety of internationallyrecognized speakers.

With over 800,000shareholders spanning severalNigerian and InternationalInstitutional Investors, AccessBank has enjoyed what isarguably Africa’s mostsuccessful banking growthtrajectory in the last ten years.It ranked amongst Africa’s top20 banks by total assets andcapital in 2011.

In terms of embracingsustainable leadership, theconference, hosted by AccessBank Plc, brought togethersome of the world’s brightestminds, who paid tribute to thedeparting Chief ExecutiveOfficer of the bank, Aigboje Aig– Imoukhuede. In just a fewyears ago, Aig - Imoukhuedesucceeded in transforming thebank from a small player in theNigerian financial landscape,

•Ngozi Okojo-Iweala, Coordinating Minister of Economy& Minister of Finance.

,

,

PETER EGWUATU

to one of the most prominentand respected bank in thecountry. This remarkabletransition can be attributed,among other things, to theexceptional qualities ofleadership he displayed overthe years. The Access Bankconference aspired to capturethe essence of good,sustainable leadership,highlighting what it means tobe a leader in today’s world.

The event which wasessentially to discuss and shareideas on how to embracesustainable leadership in arapidly growing economy drewhigh profile delegates,including former GhanaianPresident, John AgyekumKufuor (2001-2009), Presidentof Carbon War Room andformer President of Costa Rica,Jose Maria Figueres (1994-

1998), Minister of Finance andCoordinating Minister for theEconomy, Dr. Ngozi Okonjo-Iweala, Governor of the CentralBank of Nigeria, MallamSanusi Lamido Sanusi,Initiator, Chairman and Pilot,Sola Impulse Project, BertrandPiccard, Managing Director,Bank of Industry (BOI), Ms.Evelyn Oputu, OlympicChampion and Chairman ofLOCOG, Sebastian Coe,Chairman, and host of others.

During panel discussionsat the conference,

exceptional leaders and world-renowned thinkers guidedparticipants through theprinciples of good leadership,and explore their multiplefacets.

President George W. Bush,the 43rd President of the UnitedStates of America stated in hisremark, reasons hisAdministration supported aidsto Africa. According to him“There is need for resources inAfrica. It’s a US interest toencourage economic growth inAfrica. This is strategic for theUS because it also createsopportunities for Americanentrepreneurs. Passion for livesinfluenced decisions to put inplace a strategy that achievesresults. In order to achieveresults, it is important to setgoals. The initiative was aimedat improving the livingcondition in Africa.”

Commenting at theconference, Fola Adeola, aformer Chief Executive,Guaranty Trust Bank Plc, and

Chairman, Fate Foundationsaid, “The Mandelaphenomenon is one ofprovidence: reaching the soulsof the people towardsproducing. Leaders mustrespond to issues that cometheir way. The response of aleader to an issue willdetermine his greatness orfailure. The purpose of theleader is to engenderleadership across theorganization down to thebottom. As the saying goes,leadership emanates from thetop but does not reside there.”

Mr. Sebastian Coe, OlympicChampion and Chairman ofLOCOG said, “The challengeof leadership is the time andspace needed to makedecisions. Leaders should beable to answer the question of‘Why’ behind their leadershiprole or task.”

In his own remark, Mr.Christopher Meyer, Founder,NERVELLC and Senior LegalAdviser Deloitte said “Somespecific skills peculiar to sectorscan be learned. Managementis technical and Leadership isnot. The practice of leadershipcomes with tradeoffs. A leaderis always perceived to have allthe answers. Active leadershipis continuous conversation andbeing conversant with change.The information age is aboutinnovation which requires anew set of skills.”

On his own part, MagatteWade, Founder and CEO,Tiosanno said, “There isleadership crisis in Africa. A lotof the times leaders areexpected to know it all, to haveall the answers. People tend towait for someone to dosomething for them. The youngpeople find it difficult toadequately communicate thechallenges they face. Thedevelopment of minds andnurturing is also there. Thereis a downside of traditionaleducation in Africa anddevolution of power is critical,while Gender bias is alsoanother issue. Inspired peopleshould believe in themselves.There’s a Mandela ineveryone.”

Mr. Gbenga Oyebode in hisown remark said, “The conceptof sustainable leadership,which Mandela epitomized,was evident in the fight for unityin diversity, his resourcefulnessand his conservatism. All theseare in line with the theme ofthe event. Access Bank iscommitted to sustainableleadership, which can only beachieved by buildingsustainable leaders across thecountry ’s landscape.Sustainable development mustbe an integral part of anyeconomy for it to succeed. Withthe diversity of the world, weneed to understand what ittakes to be leaders. A muchbroader intervention would berequired to drive sustainableleadership.

“Leaders mustrespond toissues thatcome theirway, theresponse of aleader to anissue willdetermine hisgreatness orfailure”

Trade Fair Servicespresents: 'largestpackaging &processing'

Trade Fair ServicesLimited, the West African

regional representatives officesfor Messe Dusseldorf(organisers of the fair) arefacilitating Nigerian businessinvolvement at the most pivotalmeeting place for the packagingsector and related processingindustries, INTERPACK 2014.

A presentation and pressbriefing platform will occur atSheraton Hotel & Towers on the12th of February 2014. Thescope of the fair as well assupport services will bediscussed. As in previouseditions, from 8 to 14 May 2014about 2,700 exhibitors areexpected from industriesranging from food andbeverages, confectionary andbaked goods to pharmaceuticalsand cosmetics, non-foodconsumer goods, industrialgoods and related services. Atthe last event in 2011, there were2,703 exhibitors and 165,000visitors, of whom 84 percentindicated that they wereinvolved in decision-makingprocesses in their companies. Ahost of ancillary programmeswill also be presented at the fair.

“Components for processingand packaging” is an eventbeing staged for the first timein 2014 as an additionalexhibition for suppliers to thepackaging industry. During thefirst three days from 8 to 10 May.INTERPACK visitors andexhibitors will have direct accessto “Components for processingand packaging”.

Global stocks, emergingmarkets swoon onChina data; euro upGlobal equity markets

sold off on Thursday ondisappointing Chinesemanufacturing data and weakcorporate earnings, while theeuro jumped against the dollarafter mostly encouraging surveyresults from the euro zone’sprivate sector. MSCI’semerging markets equitiesindex .MSCIEF fell 1.2 percentto a nearly two-week low asemerging sovereign debtspreads widened nine basispoints over U.S. Treasuries afterfactory activity in Chinacontracted in January for the firsttime in six months.

A decline in the flash Markit/HSBC Purchasing Managers’Index was the first indication ofsentiment in the world’ssecond-largest economy, andreinforced concerns aboutglobal growth, especially incommodity-sensitive emergingmarkets.

CMYK


26 —Vanguard, MONDAY, JANUARY 27, 2014

Vanguard, MONDAY, JANUARY 27, 2014— 27

Commodity Index

Jan. 17-Jan 23., 2014

CMYK


CMYK

Interview

BY BABAJIDEKOMOLAFE & JONAHNWOKPOKU

The difference(margin) betweenthe official exchange

rate and the parallel marketexchange rate has alwaysbeen a challenge in theforeign exchange market. In2006, and for the first time,the Central Bank of Nigeria,CBN, succeeded ineliminating this gap, byincorporating bureaux dechange to access the officialforeign exchange, which issold to end-users withregulated margin. But as atlast week, this gap haswidened to N16.26 with theofficial exchange rate atN155.74 per dollar and theparallel market rate at N172per dollar.

In this interview, AlhajiAminu Gwadabe, President,Association of Bureaux DeChange Operators of Nigeria(ABCON), umbrella body ofthe over 3000 licensedbureaux de change in thecountry, speaks on factorsresponsible for this wide gap,the challenge of illegalforeign exchange traders(black market operators) andefforts of the association toimprove capacity of itsmembers.

There are confusionsabout bureaux de changeoperators, and how todifferentiate them in theforeign exchange market

You see, there are differentsectors in the foreignexchange market anddifferent players. You havethe Central Bank, thecommercial banks, and youhave the BDCs. And then youhave the unlicensed BDCsthat also operate in themarket. The activities of theunlicensed BDCs - the socalled BDCs that operatealong the streets areunfortunate. They are not ourmembers; they have existedlong before the emergence oflicensed Bureau De Changein Nigeria. It is a traditionalbusiness too for those thatare into it. It has to do withthe enforcement agenciesbecause they are also ourcompetitors in the market.You see, we are regulatedeven in terms of thecommission we charge. Wewere licensed before webecame Bureau De Changeoperators, and before we getaccess to the CBN, we haveto register with the CorporateAffairs Commission. Part ofthe requirement is even the$20, 000 that I mentioned

earlier. Our members have tokeep that with the CBN,meaning it’s a buffer, in caseany member of the publiccomplains. That is why we aresaying that people shouldpatronise the registeredBureau De Change.

For instance, you walkinto my office, do a

transaction, you find out thatthere is something dubiousabout my transaction, you canquickly go back to CBN andreport, and CBN will take thatmoney from that my $20, 000and refund you for thebusiness that I could notdeliver. There are lots ofdisadvantages in patronisingillegal BDCs. We agree thatthe black market is a menaceand we are calling on theenforcement agencies to lookat their activities, because ifthe so called black market canbe eliminated, it will help ina long way for the CBN andthe federal government inmonitoring foreign exchangeinflows and outflows in theeconomy. So, it will not onlyhelp the BDCs, but also thegovernment and the economy.

So, how many licensedBDCs do we have in Nigeria?

As I am talking to you today,tentatively, we have CBNlicensed BDC members, anaverage of 3,500 membersacross the country. In Lagosalone, we have about 1,500active members; in thenorthwest zone, we haveabout 700 active members; inthe North West zone, we haveabout 500 active members andin the south east zone, wehave active members of about500.

On our part, before youbecome a member, there arecertain steps you must follow.One, you must have a licencefrom the CBN. Two, you musthave a CAC certificate. So, wehave registration andidentification systems. Theregistration involves theserequirements. On theidentification, each BDC mustprovide identification of twodirectors or shareholders, andthen we do not stop at that, wealso have a compliancedepartment at the secretariat.The work of this department isto monitor all our members tomake sure they are guided, to

regulatory authorities. Therewas a sensitisation programmeorganised last week by CBN;there is another one coming upthis week in Kano. There is alsothe NFIU sensitisationworkshop that is coming up nextweek in collaboration with theassociation. So we are makingsure that the basic priorities ofthis leadership is transformingthe BDC operation in thiscountry and by making them100 percent compliant.Thepresent leadership of ABCONhas made severalrepresentations to themanagement of the CBN.

We met the CBN governoron behalf of our

members to appeal to him onbehalf of our business. We metwith the Deputy Governor,Economic Policy, Sarah Alade,all in respect of how we canhave a better relationship, howwe can improve our business,how they can use us becausethe BDC sector is one of themajor monetary tool of the CBNto achieve the convergence ofthe exchange rate in Nigeria.So, we are interacting withstakeholders and we believe inthe role that we are playing. Theassociation has been meetingwith different organisations,even to the chairman of FederalInland Revenue. We met withthe Inspector General of Police,so we are expanding ourtentacles; we are making theassociation to be known so thatour members can be protected.

The CBN has severallyexpressed concerns over the

believe are responsible for thehuge gap. I want to makecertain clarifications,sometimes, there is confusionbetween the BDC market andthe parallel market. Thelicensed BDCs are controlledby the CBN, we are not allowedto charge more than twopercent margin. And I tell you,report any BDC to me if youenter his office, just get theCBN rate, what he is allowedto charge on his margin is twoper cent. If you are doing yourPersonal Travel Allowance(PTA), and you have yourpassport and visa, and youenter a BDC office and theoperator charges you more thantwo per cent, report thatoperator to us. We will give youthat dollar free and also punishthat member. That is thedifferentiation I want to makebetween the parallel marketand the licensed BDCs.

Now on what is causingthe margin, every price

is a function of demand andsupply. The recentdevelopment in the marketwhereby the CBN banned theimportation of dollars by thebanks, and also set the limit ofautonomous transactions perBDC per bank to $250,000limits supply; it caused drasticshortage in the market.

And in so far as there is drasticshortage in the market, theprice of that product woulddefinitely go up. Also, is thedepletion in the foreign reservein 2013 from $45.98 billion to$43.61 billion dollars. Inexcess crude account, there isdepletion from $11 in 2012 to$2.5 in January, 2014 and theseare the buffers that willdetermine the currency valueof any country. This fuelsspeculations, as it signals topeople that we don’t have thedollars to meet supply. Theseare the major factors causingthese gaps in exchange rates.Another challenge is theactivities of the banks. They buyat N159 and sell at N167; theCBN has addressed this lastyear when they said that nobank should sell their moneyabove one percent margin. Butwhat the banks decided to dois to even stop selling.

What is obtainable rightnow?

What is obtainable right nowis that the CBN sells to eachBDC $50, 000 every week.Selling $50, 000 at official rateswhich some of our members arebuying. Some banks, (few ofthem) are selling and then weare also buying from customersin over the countertransactions.

,

,

Difference in exchange rates caused byrestrictions in forex supply—ABCON President

make sure that they areresponsible and to make surethat they do not abuse theprivilege given to them by theCBN. Also, we have publishedthe first edition of ourOperational Manual that willbe launched very soon. Itcontains all the dos and don’tsfor dealing in foreignexchange. These are part of thethings that we are doing tomake sure that our memberscomply with regulationrequirements. Finally, webelieve in training. Very soon,we will be training ourmembers nationwide incollaboration with the

wide gap between the officialand parallel market exchangerate.

In the communiqué of themonetary policy committee, theCBN governor said that we area small segment of the market.But you see, there are so manyplayers when it comes todetermination of rates. Everyprice is a function of demandand supply. Late last year whenthe rates started going up, andany time this kind of thinghappens, it is easier to pass thebulk to the BDCs. But we havemade our position known to theCBN. We pointed out somecertain factors, which we

•Alhaji Aminu Gwadabe

The activities of the unlicensedBDCs - the so called BDCs thatoperate along the streets areunfortunate


CMYK

Economy

BY CHRISTINE LAGARDE

The global economy in2013 remainedsuspended between

the poles of hope anduncertainty. While recoverygained momentum,particularly in someadvanced economies, theworld economy is not yetflying on all engines – and islikely to remainunderpowered next year aswell.

The International MonetaryFund’s latest forecast putsglobal GDP growth at 3.6% in2014, which is decent, but stillbelow potential growth ofaround 4%. In other words,the world could still generateconsiderably more jobswithout fueling inflationarypressure.

This means that the IMF’smembers – whetheradvanced, emerging-market,or developing economies –have more work to do. Astrong and lasting recoverythat lifts all countries and allpeoples requirespolicymakers to press aheadon all fronts – fiscal,structural, and financial. Atthe same time, theinternational community mustreinvigorate its efforts tostrengthen cooperationthrough the G-20, the IMF,and other actors. Indeed, onlythrough such collaborationcan we overcome thelingering impact of the globalcrisis.

We have certainlyavoided the worst-

case scenario (GreatDepression II) over the pastfive years, thanks to the effortsof global policymakers –particularly the determinationof central banks to keepglobal interest rates low andto support the financialsystem, coupled with fiscalstimulus in some countries.But the time has come to pushfurther, including by usingthe room created byunconventional monetarypolicies to implementstructural reforms that canjump-start growth and createjobs.

What happens in advancedeconomies is central to globalprospects; and, despite theirstronger performancerecently, the risks ofstagnation and deflationcontinue to loom large.Central banks should returnto more conventional

What lies ahead forthe economy in 2014?

monetary policies only whenrobust growth is firmly rooted.

The United States has longbeen the main engine drivingthe global economy, andprivate demand there hasregained vigor. But keychallenges lie ahead. Forexample, it is vitally importantthat policymakers followthrough on the recent budgetagreement and end thepolitical wrangling over thecountry ’s fiscal future.Greater certainty about the

at a key juncture. Theeurozone is finally showingsigns of recovery, but growthis uneven and unbalanced.While many countries aredoing well, demand ingeneral remains weak,and unemployment in thep e r i p h e r y r e m a i n sobstinately high, particularlyfor young people.

One area of uncertaintyfor Europe is the health

of its banks. The forthcomingstress tests and asset-qualityreview can help restoreconfidence and advancefinancial integration, but onlyif they are conducted well.Europe also needs to boostdemand, strengthen itsfinancial and fiscalarchitecture, and put in placestructural reforms to ensuresustained growth and jobcreation.

Over the past half-decade,the emerging markets havebeen in the vanguard ofeconomic recovery: togetherwith developing countries,they have accounted for three-quarters of global GDPgrowth. But these economies’momentum slowed in 2013, asuncertainty about the timingof monetary-policynormalization in the UScoincided with doubts aboutthe sustainability of theirgrowth path.

While the worst fears havefaded, the emergingeconomies face new policychallenges. In responding toslower demand, policymakersmust be wary of financial

excess, especially in the formof asset bubbles or rising debt.They should also focus onstrengthening financialregulation, in order to managecredit cycles and capital flowsmore effectively, and onreestablishing fiscal room formaneuver.

Low-income countries havebeen a bright spot for theglobal economy over the lastfive years as well. Theyproved resilient in the face ofcrisis, and many – especiallyin Africa, where annual outputrose by about 5% in 2013 – areenjoying strong growth. Nowis the time to build on thesegains, primarily bystrengthening these countries’capacity to raise revenues.With demand from emergingmarkets weakening, low-income countries shouldbolster their defenses againsta serious downturn, even asthey continue to focus theirspending on key socialprograms and infrastructureprojects.

Middle Eastern countries intransition face additionalchallenges in the form ofsocial instability and politicaluncertainty. These problemsshould be addressed bylaying the groundwork fordynamic, transparenteconomies, promoting moreinclusive growth, andensuring continued supportfrom the internationalcommunity.

While challenges vary bycountry and region, manycommon problems must beaddressed in the years ahead.Too many countries face alegacy of high public andprivate debt, fiscal andcurrent-account imbalances,and growth models that areunable to generate enoughjobs. The internationalcommunity also needs tocomplete the regulatoryreforms required to create asafer financial system thatbetter supports the needs ofthe real economy.

These are not abstractchallenges. Only byaddressing them can weensure future prosperity at atime when billions of peoplehave rising aspirations – tofind jobs, to rise out of poverty,and to one day join the globalmiddle class.

In 2014, we need to take thesteps that would help makethis dream a reality. The IMFis committed to working withits 188 member countries todefine and implement thepolicy measures that canpower the engines of growth– and lift all people torenewed prosperity.

Christine Lagarde isManaging Director of theInternational Monetary Fund.She is participating in theWorld Economic Forum’sAnnual Meeting in Davos.

“Abenomics .”This is ani m p o r t a n tdevelopment .The challengenow is to agreeon medium-termf i s c a ladjustments andimplement thes t r u c t u r a lreforms –i n c l u d i n gderegulation ofproduct andservice marketsand measures toboost the share ofwomen in theworkplace – thatare needed togive growth afirm foundationand finallybanish thespecter ofdeflation.

Europe is also

,

,

•Christine Lagarde

direction of policy couldrestore growth to a level thatwould lift the entire globaleconomy.

In Japan, recovery has beenspurred by the mix ofaggressive monetary andfiscal policies known as

Procter and Gamble Coposted second-quarter

profit that topped analysts’estimates, helped by sales inemerging markets.

Net income fell 16 percent to$3.43 billion, or $1.18 a share,from $4.06 billion, or $1.39, ayear earlier, Cincinnati-basedP&G said today in a statement.Excluding some items, profitwas $1.21 a share, exceedingthe $1.20 average of 20analysts’ estimates compiled byBloomberg.

Chief Executive Officer A.G.Lafley has said developingmarkets with increasinghousehold incomes will be a“significant” driver of growth.Those gains have helped P&Govercome weakness in the U.S.,where it is trying to recapturemarket share in key categoriessuch as detergents.

“With soft consumption in thedeveloped world, we expect thecompany’s growth to be drivenby the emerging markets,”John Faucher, an analyst atJPMorgan Chase & Co. in NewYork, said in a note before theresults were released.

P&G Profit TopsEstimates asEmerging MarketsHelp Sales

Unilever’s Close-Upgives out two carsat ‘Natural NaijaSmile’

Close Up Herbal, theherbal toothpaste from

Unilever Nigeria Plc has givenout two cars to in the just ended‘Natural Naija smile’ contest.

The contest was a digitaldriven campaign, tagged ‘Thesearch for Best ‘Natural NaijaSmile’. The competitionencouraged consumers to sharetheir Naija smile by uploadinga picture of their smile unto anapplication on CloseupFacebook page, invite friends tovote for their entries.

The contest kicked off in thelast quarter of 2013, with overone thousand five hundred andthirty one (1531) entries. Eightwinners finally emerged, withIdowu Azeez and Obi Oliviacoming first and secondrespectively winning the grandprize of two brand new Hyandaii10 cars. Other winners wenthome with Ipads, Iphones,Blackberry phones, UnileverPureit and digital cameras asconsolation prizes.

The Marketing Director,Unilever Nigeria Plc, Mr DavidOkeme, while presenting thegift, said the brand stands forSocial Confidence expressed inpeople getting close and a smileis always the end product ofsuch closeness.

Centralbanks should

return tomore

conventionalmonetary

policies onlywhen robust

growth isfirmly rooted


CMYK

Homes, Housing Finance

By UDEME CLEMENT

The FederalGovernment recentlylaunched the

mortgage re-finance schemeaimed at ensuring easyaccess to loans for housingdevelopment. In thisinterview, a real estateexpert, Mr. Robert Umoette,Managing Director/CEO,DURAN IntermediariesLimited (DIL), speaks on thechallenges of the housingfinance sector and otherissues. Excerpts.

Major challenge impedingthe growth of housing financein Nigeria

The major challenge is lackof sufficient finance to boostthe growth of this sector andmake it work like what

48 FCT48 FCT48 FCT48 FCT48 FCTresidentsresidentsresidentsresidentsresidentsbenefit frombenefit frombenefit frombenefit frombenefit fromsocial housingsocial housingsocial housingsocial housingsocial housingschemeschemeschemeschemescheme

Minister of State,Federal Capital

Territory (FCT), Mrs.Olajumoke Akinjide, haspresented keys ofcompleted houses to 48residents of the FCT.

The houses were amongthose conceived under thesocial housing programmeto mark the 30thanniversary of Abuja, andconsist of 28 one-bedroomand 20 two-bedroomapartments.

Akinjide said the houseswere allocated at 50 per centdiscount, with one bedroomunits offered at the cost ofN1.3 million and N1.6million for two bedroomunits. •The houses will begiven under the •eRent andOwn Scheme payable within11 years, with an initialpayment of 25 per cent oftotal price.

According to her, theproject is a palliativemeasure for low incomeearners, whose houses weredemolished at Idu-Karmo.She said the housing unitswere specifically meant forwidows, vulnerable andother less privileged.

The minister said theFCTA was partnering withinternational non-governmental organisations(NGOs) to provide moreaffordable houses forresidents. •The NGOs areout to help not to make profit,and we will ensure thescheme is not hijacked bypolitical office holders or therich.

Earlier, the ManagingDirector, Abuja PropertyDevelopment Company,Alhaji Bishir Haiba, saidsocial amenities like roads,schools and water wereprovided in the village. Hecommended the FCTA forthe opportunity given tocompany to manage theproject, and urged thebeneficiaries to maintain thehouses and amenitiesprovided.

Two beneficiaries, Mr.Idris Baba and Mrs. KateOkon, who spoke on behalfof others, expressedhappiness over the gestureand promised to maintainthe environment and live inharmony.

Property acquisitions inAbuja used for moneylaundering —EFCCStories by YINKAKOLAWOLE, withAgency reports

Property acquisitionsare fast becomingmeans of money

laundering for fraudsters inthe Federal Capital Territory(FCT), according to theChairman of the Economicand Financial CrimesCommission, EFCC, IbrahimLamorde.

Lamorde disclosed thisduring a courtesy visit to theMinister of the FederalCapital Territory, BalaMohammed, in Abuja. Hesaid the Commission hasuncovered moneylaundering schemes in theFCT in which theperpetrators disguised theproceeds of crime byinvesting in properties.

The EFCC boss said that theunscrupulous persons

involved in the nefarious actsprefer to pay for theiracquisitions with cash ratherthan purchase the propertieswith bank instruments.According to him, thelaundered funds werefrequently converted intoforeign currencies throughBureaux de Change beforethe purchases were made. Hefurther noted that in order tomake it difficult to verify theidentities of the new owners

or the sources of fund, theperpetrators don't bother to dochange of ownership aftersuch acquisitions.

Lamorde said over 270cases of land scam werereported to the Commission inthe last three years, addingthat the Commission suspectsinsider abuse in some of thecases being investigated andcalled on the minister to beprepared to initiatedisciplinary action againsterring officers.

The FCT Ministercommended EFCC on itseffort to stamp out corruptionparticularly in the territory,noting that the Commissionhad supported the FCTadministration in curtailingthe scourge of corruption andleakages in the FCTespecially on land premiums.•"It is sad that the capitalterritory as a jurisdiction isused as a citadel of corruptionand also for perpetuating actsof corruption. People from thestates and local governmentillegally acquire money andcome to get it hidden in theFCT through acquisition ofproperties that are notregistered and that is a bigconcern because it isdepriving the FCT of therevenue needed andincreasing corruption in theTerritory. It is also increasingsecurity challenges becausemost of the houses acquiredare left vacant and we haveno means of knowing whoowns them," he said.

Mohammed further statedthat the FCTA was workingwith the Abuja GeographicalInformation System, AGIS, toupgrade their system in sucha manner that it would bedifficult for anybody toimpersonate, manipulate orforge land documents.

'NMRC will attract attention to housing sector'obtains in advancedeconomies. Now, with thelaunching of the refinancescheme, I believe governmentwill turn attention to thisimportant sector of oureconomy.

Are commercial banks notgiving enough support to thissub-sector in terms of creditfacility for capital projects?

What we have in Nigeria isdeposit banking, wheremoney is kept in the banks.Nigerian banks do notencourage entrepreneurshipby giving credit facility forlong term development. Also,the interest rate is very highand even close to 25 per centnow. With this high lendingrate, how can theentrepreneurs improve theirmargin and still stay afloat inbusiness?

What is the solution to high

lending rate in the financialsector?

The Central Bank of Nigeria(CBN) needs to intervene anddo something to reduce thelending rate to at least 10 percent. Projects in the housingsub-sector are capitalintensive and require longgestation period, but banksare not willing to give longterm funding that can last fora minimum of 5 to 10 years.They can only give about twoyears, which is too short forany tangible output from thebusiness.

What is the role of themortgage system in thisregard?

Our mortgage sub-sector isalso facing numerouschallenges. At present, thereare a lot of people who do noteven know that somethinglike the mortgage institution

is existing in Nigeria, becausethe sector is rapidly goingunder. For this problem to betackled, there must beincreased funding for thefederal mortgage system toensure funding of capitalprojects for long term growthand sustainability.

What•fs your outlook forthe economy in 2014?

I believe there is prospect forNigeria's economy this yearbecause the major issue,which is power is beingaddressed pragmatically. The moment government isable to fix this sector fully theentire economy will berepositioned for greaterprosperity. Governmentshould also put moreemphasis on the housing sub-sector, which is capable ofcreating thousands of jobs forthe people.

•Brick houses


CMYK


CMYK

“Ye Gods, what Cypris, orwhat love divine took part inthis? Sophocles, c495B.C-c406B.C

When he finally died inmilitary detention in

1998, the curtains fell on oneof the characters on theNigerian stage whose life storywill remain part of the nationallegend for as long as there is anation called Nigeria. M.K.O.Abiola’s life story went beyondthe rags-to-riches which havebecome repetitive in Nigeriaand the world. Born intorelative poverty, never mindthe gloss that Juju musicianslater attempted to put on hishumble beginning. Yet, thosewho knew him remember theyoung Kashimawo as verylikeable. What he lacked inphysical charm, for he was farfrom handsome, he made upfor by having the warmestpersonality anybody canpossess. Despite not having alot of money, he was stillgenerous with the little he had.His best attribute was his brain;because he was reputed to bea brilliant student.

Later, he studiedAccountancy and might haveremained an obscureaccountant until fortunebeckoned on him to apply for

The inheritors: Why Nigerian one-mancompanies never last –2. Chief M.K.O. Abiola

a job with the InternationalTelephone and Telegraph, ITT,then headed by a fellow calledHal Genene who ran thecompany by the numbers andwho treasured “bean counters”,as Accountants were called andnumber crunchers, as FinancialAnalysts were dubbed. Veryquickly, ITT climbed thecorporate league ladder tobecome a Fortune 500company. Thousand of MBAstudents in the USA, at the timewanted to be like the ITTPresident. One of myclassmates in Boston had his

enormous good fortune. As itturned out, the FederalGovernment was owing ITT alot of money which nobody hadbeen able to collect and whichITT in the US wanted collected.So MK went to the office of theFederal Commissioner forCommunications, late GeneralMurtala Mohammed, then aColonel, to collect the debtowed. The Commissioner wasnot in the office when MKarrived; so he decided to wait– with over a hundred others.When Murtala finally arrived,everybody stood up but MK.Murtala was curious; so

stopping in front of the onlyman sitting, he asked: “Don’tyou know I am here?” MKreplied, still sitting, “Yes, I knowbut you are my debtor and Ihave come to collect.” On thatdemonstration of hutzpah orunmitigated gall, friendshipstarted between MKO Abiolaand the top ranks of themilitary. When Murtala becamemilitary Head of State, thenation’s treasury was virtuallyopened to M.K.O. Abiola to takeas much as he wanted.

One big, and questionablecontract followed another; suchthat by 1980 Abiola wasperhaps the richest man inNigeria. ITT continued toobtain contracts; indeed, ITTgot whatever it wanted and atits own price. Later M.K startedto diversify his business toinclude a newspaper, a bakery,bookshop, radio station etc. but,the Federal government wasstill the cash cow.Simultaneously, the man wassquandering the money almostas fast as it came in. He wasgenerous to a fault and well-

liked even by people who neverreceived a kobo from him.

It was his legendaryphilanthropy which

eventually got him elected bya wide margin in 1993. If hisopponent, Alhaji Tofa, a Kanoindigene, wants to know whyMK won even in Kano, heneed not look beyond thelaunching of the Kano StateInvestment Fund, whichoccurred a few years earlier.While other were donating fivehundred thousand or onemillion, Abiola stood up andannounced N10 milliondonation; and while adeafening standing ovationwas still ringing in everybody’sears, he grabbed themicrophone and said, “Andthat is a first installment.”

While he was busyaccumulating great wealth andbuilding his financial empire,it was not clear then that Abiolahad failed to groom a successorwho would keep the “Flagflying” after his death – whichcame in the least expectedmanner.

room pasted allaround withpictures of theITT President.

Soon afterlanding thejob, M.K.O,was promotedto the positionof FinancialDirector. Thisposition was tobring him•M.K.O. Abiola


Tax Matters

• Kabir-Mohammed-Mashi , AgDG, FIRS

INVESTIGATION OF TAXOFFENCES BY FIRS:

The Black's Law Dictionarydefines the verb •'Investigate'

as: •"to inquire into a mattersystematically; to make a suspect thesubject of criminal inquiry...to makean official inquiry". It is often said thata good investigation begets a goodprosecution and vice versa. Thereforeit is best practice for the investigatorto compare notes from time to timewith the Prosecuting Counsel in courseof his investigation. Generally, TaxInvestigation is undertaken by the TaxInvestigation & Special EnforcementDepartment (TISED) of the Service.Specific offences arising from petitionsto the Executive Chairman•fs officeare investigated by the SpecialEnforcement Unit (SEU) of theService. Apart from regular staff ofFIRS, Special Purpose Tax Officers(SPTOs) are also utilized by the Serviceto undertake its investigations.

The Investigation process entailsreview of Petitions or Informationreceived from the ECFIRS or WhistleBlowers, interviewing Witnesses andsuspects, recording of statements fromwitnesses and suspects under caution,writing of letters to authenticatingbodies and writing InvestigationReports (Interim and Final reports) andapplying for approval of appropriateauthority to prosecute the allegationsarising from the said Petitions orComplaints. At the conclusion ofinvestigation, the duplicate copy of thecase file is sent from TISED to the LegalDepartment while the SEU refers itsDuplicate case files to its Legal Sectionfor Vetting, Legal Advice and possibleProsecution. By virtue of the currentorganogram of the Service, all criminalprosecutions are supervised by theLegal Department which is under theDirect Reports Group in the office ofthe Executive Chairman.

PROSECUTION:

Section 47 of the Federal InlandRevenue Act provides for the

prosecution of offences by the FIRS asfollows; "The Service shall havepowers to employ its own Legalofficers which shall have powers toprosecute any of the offences underthis act subject to the powers of theAttorney-General of the Federation."

Where the Legal Department arrivesat a conclusion that investigation isconclusive and offences are disclosedby the investigation and the proof ofevidence, then Counsel reviewing thecase subject to the approval of theExecutive Chairman, prepares andprefers charges against the namedAccused persons before the FederalHigh Court of Nigeria. Note that byvirtue of Section 33(2) of the FederalHigh Court Act Cap F12, Laws of theFederation of Nigeria 2004 (AsAmended) Criminal trials before theFederal High Court are Summary in

,

,

Tax enforcement: Investigation and litigation under Nigerian Tax Laws:Raising the standards and protecting rightsand responsibilities 2

nature as opposed to a Full trial beforethe State High Courts or the High Courtof the Federal Capital Territory as thecase may be. The prosecution is alsorequired to comply with the FederalHigh Court (Criminal Procedure)Practice Directory 2013 to engage the

provided under Section 215 of theCriminal Procedure Act Cap C41, Lawsof the Federation of Nigeria. On a datefixed by the court, the Charge is readto the Accused person(s) and they areasked by the Court to take their plea-Guilty or not Guilty. However there areexceptions to this rule where anIncorporated Company is involved.

Where the Accused persons pleadguilty to the Charge, the Prosecutionreviews the facts of the case, tendersCTCs of relevant documents in supportof the facts as Exhibits and applies fora Conviction. The Court will thereafterconsider the facts and Exhibits tenderedand give Judgments; Convicting theAccused Persons and sentence withappropriate punishments ranging fromfines or imprisonment or both. Wherehowever as in most cases the Accusedpersons pleads •gnot guilty•h to theCharge, the Prosecution applies for adate for trial to prove the case againstthe Accused person(s). At this pointthe Accused person(s) through theirCounsel applies for bail of the Accusedpersons pending trial. It is always goodpractice for the Prosecution to insist thatall applications for Bail pending trialbe brought formally. This would affordthe Court the opportunity to hear theBail application on the merits of theAffidavit evidence filed by the parties.But note that once a person has been

Federal High Court (CriminalProcedure) Practice Directory 2013which creates responsibilities for theProsecution and the Defence. Note thatSection 34 of the Federal High CourtAct provides that the Court shall givepriority to Revenue causes and matters.A community reading of FHC Act, theEFCC Act and the FIRS Act reveals thatRevenue matters have been placed inAccelerated Hearing by these statutesand Prosecuting Counsel must be alertin drawing the Courts attention torelevant Sections of these Laws incourse of Trial.

OREDR OF TRIAL:-PROSECUTION WITNESSES:

These are persons; theComplainant- Federal Republic of

Nigeria- intends to call to give evidenceas Prosecution witnesses in proof of theCharge before the FHC in a Criminaltrial. These must be persons who arevery conversant with the facts of the caseparticularly the areas they are to testify.It is good practice for the ProsecutingCounsel to have pre-trial meetings withthe intended witnesses and preparethem properly for trial. On a nameddate for Trial, the Counsel for theProsecution calls his witnesses to leadevidence in order to prove the variouscounts on the Charge against theAccused person(s). This process iscalled Examination-in-Chief. At theend of the Examination–in-Chief of eachProsecution witness, the Court inquiriesfrom the Defence Counsel whether hehas any questions for the ProsecutionWitness who has testified. If the DefenceCounsel does, he will engage thewitness in a process of Cross-Examination. There is no limit toquestions asked by way of Cross-Examination. The sky is the limit.Where the Cross-Examination bringsout issues that are nebulous orambiguous in Evidence, the Court willallow Counsel for the Prosecution to Re-Examine the Witness and/or thereafterstart the entire process all over withanother witness until all the ProsecutionWitnesses are taken. Note that there isno limit as to the number of witnessesfor the Prosecution, but it is goodpractice to include all materialwitnesses.

DEFENCE WITNESSES

At the close of the case for theProsecution, the Court shall call

upon the Defence Counsel to commencethe defence of the Accused persons.However, the Defence Counsel has oneof several options; He may take a dateto address the Court on a No CaseSubmission that the Accused person(s)have a no case to answer; urging theCourt to discharge him/her. Note that ifthe Defence Counsel makes a •eNoCase•f Submission and relies on it, thedecision of the court shall be a judgmenton the merit. If the no case submissionfails and Defence Counsel does not relyon it, the Court will ask the defence tocall its witnesses.

case in full throttle and minimizeunnecessary preliminary objectionsfrom the Defence.

By a letter of application to theRegistrar pursuant to Section 47 of FIRSAct, a Charge is filed along with theProof of Evidence and the list ofProsecution Witnesses. Every filingdone by the FIRS is official and neednot be accessed or paid for at theRegistry of the Federal High Court. Forcase of service, the Prosecution alsoprepares another letter applying to theRegistrar to allow it serve the Chargeon the named Accused persons who areusually in contact with the InvestigationPolice Officer (IPO). It is best practiceto do an internal memo to the SEUnotifying the IPO of the date ofarraignment in order to facilitate theappearance of the Accused personsthrough their Sureties before the court.

ARRAIGNMENT OF ACCUSEDPERSONS AND PRELIMINARIESOF BAIL PENDING TRIAL:

Arraignment and Plea of personsstanding Criminal Trial is for

properly arraigned before the Court,the Accused Persons shall beremanded in prison custody pendingthe Hearing of the application for Bail.However, in exceptional cases wherethe Charge was served late on theAccused person(s), the Courts havebeen minded to consider OralApplications for Bail. In suchcircumstance, the Court restrictsCounsel to Oral arguments on pointsof Law.

LAWS RELEVANT IN CRIMINALPROCEEDINGS:

Criminal trials before the FederalHigh Court of Nigeria is

regulated by four major legislations;Constitution of the Federal Republic ofNigeria 1999 (As Amended), theEvidence Act Cap E14, Laws of theFederation of Nigeria 2004 (AsAmended), the Criminal Procedure ActCap C41 Laws of the Federation 2004(As Amended) and the Federal HighCourt Act Cap F12, Laws of theFederation of Nigeria 2004 (AsAmended). There is in addition the

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It is best practice to do an internal memo tothe SEU notifying the IPO of the date ofarraignment in order to facilitate theappearance of the Accused persons throughtheir Sureties before the court


CMYK

Insurance

NCRIB advocatessupport for WAII

The Nigerian Council ofRegistered Insurance

Brokers, NCRIB, hasadvocated the support of allinsurance constituent bodies forthe West African InsuranceInstitute (WAII), to allow itmeet the mandate of producingthe required qualitative humanresource for the industry in theWest Africa sub region.

The President of the NCRIB,Mr. Ayodapo Shoderu madethe appeal during the visit ofthe new Director General of theInstitute, Mr. FrederickBowen-John to the Council inLagos. Shoderu opined that theinsurance industry in WestAfrica had not been able to liveup to its expectations becauseof insufficient human resourceor professionals who willrender creative and dynamicinsurance services to meet withchanges in consumer’sexpectations.

“For the dire challenges ofhuman resources to be met inthe Nigerian insuranceindustry, like its peers in otherWest African countries, alltraining institutions of whichWAII is inclusive, must begiven required support andpatronage by reputableprofessionals and bodies in thesector,” Shoderu stated.

Great Nigeria Insurance Plc has declared a profit after taxof N903 million in its 2012 financial year, according to

the approval that was recently received from the industryregulatory authority; National Insurance Commission,NAICOM.

In a statement, the company said that it is a commendableachievement when compared to the previous year PAT resultwhich stood at N399 million, adding that the 2012 performancerepresents 119 per cent leap for an insurance company.

The statement maintained that it is also remarkable when itis considered against the backdrop of the challenging businessclimate experienced in year 2012 and the need for strictcompliance with the International Financial ReportingStandards, IFRS, which had only taken off that year.

According to the statement, the result also showed a sustainedgrowth by the Cecilia Osipitan led organisation when appraisedby business analysts since the approval of the result wasreleased and have been commenting positively on it; that theresult showed an efficiently managed company that was ableto make this profit with this level of gross premium income.

GNI’s gross premium as at 31st December, 2012 stood atN2,881,139 billion as against the turnover of N2,403,889 billionof 2011, this shows a 16.5 per cent comparative increase.

Meanwhile, the total assets also experienced similar growthof 13.8 per cent at N8.432 billion as against the 2011 figure ofN7.265 billion.

Stories by ROSEMARYONUOHA

Immediate past President ofthe Chartered Insurance

Institute of Nigeria, CIIN,Mr. Wole Adetimehin has saidthat Nigerians should stopusing poverty as an excuse forshunning insurance.

Adetimehin said that peopleshould rather organisethemselves and cultivate thehabit of savings.

Adetimehin, who stated thisin an interview withVanguard, said that povertycould be a factor but cannotbe a tenable excuse, addingthat the poorest class wouldbe the ones that needinsurance most.

He said, “Poverty shouldn’tbe an excuse for not havinginsurance, rather we shouldbe preaching to people to getbetter organised as well as tobe operating a plan inwhatever they do.

“Yes poverty could be afactor but cannot be a tenableexcuse. The poorest classwould be the ones that needinsurance most, becauseshould anything happen tothem, should they suffer aloss, chances of their recoveryis lean, that is, if they will everrecover. But if they haveinsurance, their hopes arehigh.”

According to Adetimehin,some of these things have todo with the literacy level,adding, “What is the level ofeducation and knowledge thatpeople have? The insurance

“Poverty is no excuse to shuninsurance”

industry operators will needto do a lot more in educatingthe Nigerian public. Even theso called elites hardly canappreciate how insuranceworks or the benefits, and thismay be peculiar to ourenvironment because some ofthese elites, when they travelabroad or have anything to dooverseas they comply with thedemands over there. Somaybe a lot have to do withour belief, trust and faith inthe sector.

“I was reading a book andit had to do with the richestman in Babylon. The lessontaught in that book has to dowith the fact that fromwhatever income you earn,there must be a plannedpattern of managing and

spending, and such plansmust include a level of savingfrom which you can always domore investment or do somany things, compared tosomebody that will be waitingfor manner from heaven oruntil he can access loan orfacility from the bank or afinance house before he couldstart a business or anyventure. So for non-contingencies, foremergencies there must be areserve.”

Adetimehin said that peopleshould cultivate the habit ofsavings, adding, “So if yoursalary is paid to you and youcould cultivate the habit ofsavings, then you couldconsider insurance becausethat’s a way of saving. So, if

you do that you are saving forthe future, for the training ofyour children (educationinsurance). If people couldcultivate that habit, in a way,you are inculcating insuranceculture. So my advice andappeal to the general publicis that we should shun ourapathy towards insurance. Itis one of those services inmodern times that can alwaysprovide a relief or a solutionto some of our problems andI can say emphatically, evenwithin the African continentNigeria cannot be seen aswhere we have the poorest setof people. How come thatinsurance penetration orawareness in some Africanstates is a lot better thanNigeria? Poverty cannot be afactor, so we should de-emphasise poverty,”Adetimehin said.

GNI achieves PAT of N900m in 2012Noteworthy also, is the fact that within the same period of

year 2012, the company paid out N833,122 million as claim toits various customers.

In the same vein the retail products of the company whichare sold under its eBusiness platform has also started growing;one of which is Fireproof to cover against possible loss ofproperties through fire, another is Great Savers Delight; whichis a savings investment scheme, Motorflex is an improvedversion of third party motor insurance policy and GNI PersonalAccident Insurance product is for injuries sustained inaccidents. Only few weeks back the company paid N1.6 millioninsurance claim to a fire victim customer; Victor Okosiemeafter he had purchased a Fireproof Insurance product fromthe Company with a premium of N4,000.

Commenting on the company’s performance, the ManagingDirector/CEO, Mrs. Cecilia Osipitan said “This is a testimonyto the process re-engineering and customer centric focus ofthe organisation and the consistent human capital developmentof our staff.” She said that the company had ensured that strictcompliances to ‘business ethics was paramount to thesustainability of all our goals.’

She revealed further that the company has initiated series ofplans which includes changes in the company’s IT software,adding that a new software has been purchased with staffundergoing both local and international trainings to guaranteepositive turnaround time impact.

(L-R): Captain Richard Hill, Chief Operations Officer of Etihad Airways; Jeffrey Johnson,President of Boeing Middle East; Fareed Mohammed Al Jaberi, Vice President Supply Divi-sion at Takreer; Bernard Clément, Senior Vice President at TOTAL New Energies; and Dr.Fred Moavenzadeh, President of the Masdar Institute of Science and Technology.

NAICOM saysinsurance coys GrossPremium Incomeclose higher in 2013

The National InsuranceCommission (NAICOM)

on Friday said that theenforcement of ‘No Premium,No Cover’ policy impactedpositively in Gross PremiumIncome (GPI) of Insurancecompanies in 2013. The “NoPremium, No Cover” policywas introduced by NAICOM toensure that all insurancepolicies are backed by paymentfor premium.

Mr Rasaq Salami, NAICOMDirector, Corporate Affairs, toldthe News Agency of Nigeria(NAN) in Lagos that theinsurance companies’ un-audited quarterly reportssubmitted to the commissionshowed great improvements.

“The exact figure of theindustry GPI will be releasedafter the accounts have beenaudited. The quarterly reportshelped the commission toassess how each of thecompanies is doing and whento intervene if any company ishaving problems. “So far, thecommission has not sanctionedany company for defaulting inthe enforcement of “NoPremium, No Cover” policy.


CMYK

Micro-Finance

Nutricima Limited, makersof Nunu, Coast and Olympicmilk has unveiled MegaCash Promotion, in order toreward its loyal customersacross the country.

Speaking at the launch ofNutricima Mega CashPromo in Lagos, ManagingDirector of NutricimaLimited, Mr. SuneelVasudevan said that linewith the company’s vision toreward its new and existingconsumers, came up with themega cash promo as a wayof expressing ourappreciation to millions ofits loyal customers,including kids, youths andadults who deservenutritious milk and fooddrinks which nutricimaprovides.

We all know that thefestive period has just endedand many Nigerians haveexpended so much during

Stories byPROVIDENCE OBUH

The Managing Directorof Nigeria Gas and

Steel Limited, Mr. HasibMoukarim, has called on theMinistry of Finance and theMinistry of Industry, Tradeand Investment, to properlyverify applicants for importwaiver before granting themconcession.

Moukarim said: “Forwaiver and concession to begiven to any applicant,thorough investigation mustbe carried out by the Federalministries of finance andtrade and investment toverify the authenticity of theitems in respect to whichapplicant is seeking waiveror concession.

Moukarim said that thefederal ministry of financemust contact relevant sectorslike ManufacturersAssociation of Nigeria forexpert opinion on the issueand Quantity Surveyors andCivil engineers to determinethe actual materials neededfor the project in question.

He also advised that thewaiver and concessionshould not be on importedfinished goods that havelocal substitute in Nigeria.

He stressed that the issueof waiver and concessiongiven to importers ofimported finished productswhich are locallymanufactured in the countrymust be stopped if customservice is to actualize the

Industrialist advocates proper verificationIndustrialist advocates proper verificationIndustrialist advocates proper verificationIndustrialist advocates proper verificationIndustrialist advocates proper verificationof imof imof imof imof imporporporporport wt wt wt wt waiveraiveraiveraiveraiversssss

projected revenue.His words: "When foreign

finished goods are broughtinto the country duty free, weare directly creatingemployment for workers of theforeign companies becausegoods imported with waiverswill be cheaper than locallyproduced goods and this willescalate the demand here andsales of the foreignmanufacturers will increase."

He continued: "Since thelocally produced goods willbecome more expensive,demand for them will shrinkand consequently result to

loss of sales which couldthreaten the continuedexistence of the localmanufacturers due torecurring of losses and this ispoised to worsen the menaceof unemployment in thecountry.

He lauded the ComptrollerGeneral of the NigeriaCustom Service, Alhaji DikoInde Abdulahi for hisintention to generate the sumof N1.2 trillion in 2014.

According to Moukarim,the decision to generate thesum of money is a welcomepositive development from

custom service if theamount can be generated asannounced by the serviceboss stressing further thatall genuine manufacturershould prepare to supportthe initiative to achieve thetargeted revenue.

For the custom service toachieve theirtarget, Moukarim said allstakeholders in theeconomy especially federalministry of finance, Budgetoffice and federal ministryof trade and investmentshould cooperate fully withthe custom service toachieve the target revenue.

Nutricima rewards customers with mega cash promoNutricima rewards customers with mega cash promoNutricima rewards customers with mega cash promoNutricima rewards customers with mega cash promoNutricima rewards customers with mega cash promothe season. But they need tohave some money to refilltheir accounts. So Nutricimathrough this mega cashpromo endeavour to enrichmillions of our consumers bygiving them opportunities towin millions of naira throughthis initiative.

Apart from that, we partakein various CSR and engagethe communities throughvarious platforms likegrassroot sporting activities,healthy living campaign inn e i g h b o u r h o o d s ,partnership with Lagos StateGovernment to drive drinkmilk campaign, partneringwith schools for kids withspecial needs like DownSyndrome Foundation ofNigeria (DSFN).

To participate, MilkCategory Manager, Mr.Ralph Agbaje, said thatconsumers stand the chanceof winning gifts and millions

of naira after purchasing anyof Coast evaporated milk,Olympic evaporated milkand family pack of Nunupowdered milk which has thepromo label.

Under the label, consumerswould find a unique six digitcode and serial code numberwhich is to be sent to adedicated phone number08093377802. The senderthen gets an auto responsewhich informs the consumerabout what he or she haswon.

Instant prizes to be won inthe Mega Cash Promoinclude N50 airtime e-top-up for thousands ofconsumers, cash prizes ofN500, N1, 000, N5, 000, N10,000 each.

Aside from the instantprizes, consumers can alsoqualify for a monthly raffledraw where they have theopportunity to win between

N50, 000 and one millionnaira.

Accion MFB retains ‘bestmicrofinance bank’ award

Accion MicrofinanceBank has again, for the

3rd year won the 2013 LagosState Enterprise Award(LEAD) for Best MicrofinanceBank of the year. AccionMicrofinance Bank wasdeclared winner based on asurvey conducted by anindustry research group forLEAD Awards.

The MD/CEO of AMfB, Ms.Bunmi Lawson describes this“3rd consecutive win as apointer to AMfB’scommitment to financialinclusion, its high standardsof corporate governance andstaff devotion to our mission.According to a statement

released by OluwayemisiMafe, the company ’sExternal CommunicationsOfficer “Going forward, AMfBwill continue to expand itsservices aided by technologyas we are driven by thepassion of ensuring a brighterfuture for our customers.”

Also speaking, Jide Peters,the Executive Director ofLEAD Africa Award saidAMfB is being selected forthe 3rd year running “as aresult of its uncompromisingstandard in promotingmicroenterprises anddelivering first class servicesresulting in povertyalleviation in Nigeria.”

The Central Bank ofNigeria (CBN) on Friday

said that 60 per cent or N132billion of the N220 billionMicro, Small and MediumEnterprises DevelopmentFound (MSMEDF) had beenearmarked for women. TheGombe Branch Controller ofCBN, Mr. Ishaku Jatau,disclosed this at a sensitisationworkshop in Gombe.

He said that the objective ofthe programme was to reachout to more than two millionoperators of MSMEs. “Therevised microfinance policy,regulatory and supervisoryframework provides that thewomen access to financialservices should increase by 15per cent annually in order toeliminate gender disparity. Inorder to achieve this, 60 percent or N132 billion of thefund, has been earmarked forproviding financial services towomen,” he said.

According to him, the CBNlaunched the MSMEDF onAug. 15, 2013 with a take-offseed capital of N220 billion forthe programme. He said thatthe peculiar challenges beingfaced by women in accessingfinancial services in Nigeriamade it imperative.

Mrs Huraira Sabo, CBNDeputy Director (DevelopmentFinance), said that theprogramme was for the 36states and the Federal CapitalTerritory (FCT). According toher, the aim of the programmewas to expose stakeholders tomodalities of accessing thefunds. ”We want them to lookat the guideline and see whereit affected them to try as muchas possible to access this fundwhen it is ready after thesensitisation,” he said.

CBN earmarksN132bn for womenentrepreneurs

FRom left: Director, Brands & Communications, Etisalat Nigeria, Enitan Denloye; ActingChief Executive Officer, Etisalat Nigeria, Matthew Willsher; Faces of Etisalat Easyflex, GenevieveNnaji and Hakeem Kae Kazim; Etisalat Ambassador, Olamide; Head Consumer Segment,Etisalat Nigeria, Idowu Adesokan and Director, Consumer Segment, Etisalat Nigeria, Olu-wole Rawa, at the Etisalat Easyflex New Bundles for High Value Segment, held inLagos.PHOTO;AKEEM SALAU.


CMYK

E-Commerce

Operators in the e-commerce space inthe country have

commended Nigeria’s onlineretailer, Konga.com forconsidering legal actionagainst the German basedinternet conglomerate, RocketInternet, over domainownership.

They said that legal actionappears to be the last resort,adding that the developmentshows a lack of legislation toprotect the strongly emergingtech scene in the country.

The Managing Director/Chief Executive Officer,Mobile Enterprise TechnologyNigeria Limited, PeterAkporume, told Vanguard, “Ifit is true that Rocket has indeeddone what Konga is accusingthem of doing then it is verywrong of them. The legalmeans is their last option asaccording to Konga they havecontacted Rocket who hasn’tresponded which if true meansthat, they are left with no otherline of action than this.”

“They may or may not winbut at least it will shed light onthe state of intellectual propertyprotection for technologystartups in Nigeria. I alwaysargue that innovation for Africabelongs to Africans as nobodyknows our clime better than us,so we are best suited to solvingour problems,” he added.

Another operator, JohnsonBenjamin, said, “It is good thatKonga is taking this up. And Iwant them to pursue this to alogical conclusion as it willdefinitely set the pace for otherissues that will emerge inonline business in the future.

“But it is also important thatgovernments wade into thismatter or probably begin tothink of putting up stronglegislations to protect local techfirms or else we may keephaving this kind of issue in thefuture.”

On his part, another operatorwho preferred anonymity said,“the matter is entirely a legalbusiness issue and it will be upto the lawyers to determinewho is at fault here. Butethically speaking, whatRocket has done is wrong butmay be business wise, they maybe right, and that is why I saidthe court would have thatdecision to make.”

Last week, Nigeria’s onlineretailer, Konga.com announced

E-commerce stakeholderscommend Konga’s litigation move•Calls for legislation to protect local firms•Rocket internet shuns press, remains silent

By JONAH NWOKPOKU

,

,

that it is set to engage RocketInternet in litigation overdomain name ownership, amove many say would set ajudicial precedence for onlinebusiness in the country.

Rocket Internet whichoperates several onlinebusinesses in Nigeriaincluding, Camudi.com,Jovago.com, Kaymu.com,Vamido.com, EasyTaxi.comand HelloFood.com is also theparent company of the popularonline retailer, Jumia.com.

Konga has alleged thatRocket Internet

registered Konga relateddomain names in ten differentcountries, areas that it wouldpossibly establish should itdecide on expansion outside ofNigeria.

According to a documentmade available to Vanguard,the list of the domain namesand the countries they areregistered include: Konga.cdfor Cote D’Ivoire, Konga.cm forCameroun, Konga.ly for Libya,Konga.mu for Mauritius andKonga.ma for Morocco. Othersinclude: Konga.mw forMalawi, Konga.sc forSeychelles, Konga.sh for SaintHelena, Konga.co.ke for Kenyaand Konga.co.za for SouthAfrica.

The implication of this is thatif Konga decides to set up shopin any of these countries,Rocket Internet has effectivelydeprived them of the benefit ofdomain localisation. The onlyoption that they may have leftwould be to buy the domain

names from Rocket Internet,for which, should RocketInternet decide to sell at anexorbitant price, Konga maynot be able to operate in thatcountry as Konga.

In internet business, thispractice is called cybersquatting and many countries,especially the United Stateshas enacted a law against it.According to the United Statesfederal law known as theAnticybersquatting ConsumerProtection Act, “It isregistering, trafficking in, orusing a domain name with badfaith,intent to profit from thegoodwill of a trademarkbelonging to someone else.The cybersquatter then offersto sell the domain to the personor company who owns atrademark contained within thename at an inflated price.”

The term is derived from“squatting”, which is the act of

occupying an abandoned orunoccupied space or buildingthat the squatter does not own,rent, or otherwise havepermission to use.Cybersquatting, however, is abit different in that the domainnames that are being“squatted” are (sometimes butnot always) being paid forthrough the registrationprocess by the cybersquatters.

Investigation has furtherrevealed that Rocket

Internet registered all thedomains in June, 2012 throughone Arnt Jeschke on behalf ofRocket Internet GmbH inBerlin, Germany. However, theintention of Rocket Internetover the move remains unclearas the company has refusedreleasing the names to Kongadespite subtle persuasion andhad even gone into renewalsnatching of some of thedomain names likeKonga.co.za which it renewedin June, 2013.

The date of theseregistrations is important tonote as it was just one monthbefore Konga officiallylaunched in Nigeria by July.

Following this development,some analysts have argued thatRocket’s snapping up tenKonga domains across Africajust one month before thelaunch of an ecommerce brandthat would compete with oneof their subsidiaries willobviously be interpreted as apreemptive strike to contain abusiness threat.

CORRIGENDUM:Our error inDPR Directorcaption

On the 20th of January,2014, Vanguard

published the photograph ofthe former Director ofDepartment of PetroleumResources, DPR, AugustineOlorunsola against the nameof the current director,George Osahon.We are sorry for theembarrassment this musthave caused the currentdirector. The error isregretted.

George Osahon, DPRDirector

E t i h a dAirways tosuppo r tdevelopmentof aviationb i o f u e lindustry inUAE

Etihad Airways, Takreer,Total and the Masdar

Institute of Science andTechnology have announcedthey will collaborate on a newinitiative, BIOjet Abu Dhabi:Flight Path to Sustainability,to support a sustainableaviation biofuel industry inthe United Arab Emirates.

BIOjet Abu Dhabi wasannounced a day after EtihadAirways conducted ademonstration flight with aBoeing 777 powered in partby the first UAE-producedbiokerosene from aninnovative plant biomass-processing technology. Thebiofuel was partiallyconverted from biomass byTotal and its partner Amyris.Takreer, a wholly ownedsubsidiary of Abu DhabiNational Oil Co. (ADNOC),did the final aviation biofueldistillation, adding the UAEto a handful of countries thathave produced and flown ontheir own biokerosene.

Sim Shagaya, CEO, Konga.Com Oliver Samwer, CEO, Rocket Internet

They may ormay not winbut at least itwill shed lighton the state ofin te l lec tualp r o p e r t yprotection fort e c h n o l o g ystartups inNigeria


CMYK

Aviation

NCAT acquires 360 degree Visual Tower Simulator for ATC trainingStories By LAWANIMIKAIRU

The NigerianCollege ofA v i a t i o n

Technology, NCAT, Zariahas acquired a 360degree Visual TowerSimulator for Air TrafficControllers training. Thiswas disclosed by theSpokesman of AviationParastatals, Mr YakubuDati, as one of themilestones recorded by

Aviation Committee assures Nigerians ofproactive aviation oversight

the college in theoutgoing year.

Dati also said thatanother achievement attained by the collegeis the reaccreditation ofthe institution to trainindustry professionals inaccordance withinternational standards.•To foster the smoothtraining of professionals,several aircrafts andaircraft engines lyingunserviced have beenoverhauled and are nowback in operation. This

development hasincreased the trainingcapacity for the college.•

According to him ,before the currentMinister of Aviation,Princess Stella Oduahcame into office, thecollege had no VisualTower Simulator for AirTraffic Control training,but in 2013, a 360 degreeVisual Tower Simulatorfor ATC training waspurchased and installed.Also, a Boeing 737-200for cabin crew training

was also procured in2013.

• In addition to thepositive changes made inNCAT, EADS SOCATATBM 850 single engineturbo prop trainer aircraft,two No Bell 2061-ivhelicopters and Gas

Turbine Trainers whichwere unavailable beforeJuly 2011were procuredin 2013 for the institutionfor the first time ever. AnARTMACS Pc-BasedRadar Simulator and anAuto pilot Training stationhas also been procured

and installed in theinstitution.

Another commendablemilestone recorded inNCAT is the renovatedbriefing room for pilotswhich has been in adeplorable state for manyyears.

The Chairman,House of

R e p r e s e n t a t i v e

Committee on Aviation,Hon NkeirukaOnyejeocha, has said that

the committee will bemore proactive in itsoversight function in theaviation sector in 2014.

Speaking in her hometown, Isiochi, in AbiaState shortly afterpresenting some giftitems to the people of herconstituency, HonOnyejeocha declared thatthere were so manycomplaints fromNigerians about theaviation sector in 2013 andthis will be drasticallyreduced by the committeethrough oversightfunctions in 2014.

She disclosed that theaviation committee will identify areas where theindustry has faired welland also failed with a viewto repositioning the sector.

"Nigerians shouldexpect more proactiveoversight meaning thatwhat most peoplecomplained about in 2013would be drasticallyreduced in 2014 Godwilling. So by thisJanuary we will go backto the field and go onoversight. Once onoversight, we will pointout those things that wethink are not right andthings they have donewell, so give and takeNigeria aviation sectorwould come out to be thebest," she said.

While commending theInitiative of the aviationminister for embarking onthe remodeling of airportsacross the country, HonOnyejeocha noted that alot needed to be doneadding that passengersstill sweat at the MurtalaMohammed InternationalAirport Ikeja stressing thatit was not the right thing.

• "I know that manypeople even this lastChristmas they enteredthis international airport inLagos, people were stillsweating, so it is not right,how much will it take usto get our air-conditioningsystem right and so manyother things, we have a lotof pluses and fewminuses, but I know thatby God’s grace in 2014


CMYK


Advertising, Media& Marketing

Stories by PRINCEWILLEKWUJURU

Beyond “Happy New Year!”(Part One)

Let me to begin this write-up by wishing you a(belated?) Happy New Year! I wish all ourreaders a wonderful year. I must also thank

those who have kept faith with this column, especiallythose who have found time to send feedback on theissues discussed here.

Once again, it’s that time of the year when peoplemake resolutions and renew their commitment to certainthings they hold dear. For us here, one of the thingswe hold dear is, of course, excellence in serving thecustomer. We’re totally committed to offering you tipsto help you improve customer experience in yourorganization and, thereby, improve profit. Hence, inour next three write-ups, we shall consider a few thingsyou may wish to do a bit differently to improve customerexperience. It’s a sort of 2014 agenda for you. Goingthrough the write-ups, you’d probably think that we’readdressing decision-makers only. I think everyonewhose work touches on customer experience will, mostlikely, find our advice useful.

Customer FocusThere’s no doubt that “customer focus” is a corporate

mantra that has gained much currency since the 1980s. It manifests in expressions such as “the customer is theking,” “the customer is always right,” “the customer isour greatest asset,” and so on. Indeed, it is politicallycorrect to talk about customer focus. If you wish toconfirm this, you may randomly scan through themission statements of some Nigerian companies. Manyof them have something to say about their commitmentto offering superior products and services to customers. After all, customers are the reason every organizationis in business. But beyond the great missionstatements, what happens in reality?

Customer focus means that you put the customer first.It means that the business is built around the needs ofthe customer. It means less red tape and more service. It means that everybody in the organization considersserving the customer as number one job. After all, thecustomer is the business – to borrow that gnomicexpression from Liz Jackson and Mick Spain (used intheir book for entrepreneurs, Start Up!) Please notethat we’re talking about customer (not prospect) focus. Too many of us are so obsessed with pursuing prospectsthat we ignore current customers.

How do you get everybody to focus on the customer? One way is to launch service improvement initiatives,but you need to realize that little improvements hereand there will have a greater long-term impact thansome fancy, flash-in-the-pan projects.

Lead by example. Don’t just preach customer focus.Do it!

To put the spotlight on customers, some organizationsparticipate in the Customer Service Week (CSW),usually celebrated in the first full week in October eachyear. Ever since the International Customer ServiceAssociation (ICSA) in 1988 came up with the idea of aCSW, the event has gained acceptance across the globe. In 1992, even the US Congress formally recognized itas a national celebration.

The CSW is usually a great time to put customerexperience issues on the front-burner, raise company-wide awareness on such matters and rewardoutstanding performers. It could be both serious andfun. But, wait a minute…October is still far off! Whosays you can’t celebrate yours earlier? It may be smartto make every interaction with the customer a celebrationof sorts by making them feel welcome. Let’s celebrateour own customer service week every day!

To be continued

From Left: Category Manager Oral Care, Mrs Oiza Gyang, WinnerClose-Up Herbal Natural Naija Smile Contest, Idowu Azeez,and Assistant Category Manager, Oral Care, Mrs. GraceOnwubueneli during the prize presentation of a Hyundai i10 in Lagosrecently.

Competition they say isgood for the market,because of its

tendency to boost economicactivities and provision of jobopportunities for the citizenry.

The present competition inthe Yoghurt market in Nigeriais revealing an interestingscenario in that segment, goingby the array of Yoghurtproducts seen in the market isa sign that the market isbuoyant for the manufacturers.

One thing is for the brand (s)to retain visibility on theshelves, another thing is for themanufacturers to register thebrand (s) on consumers mind.

What manufacturers do toretain consumer loyalty isanother thought, for the brandsto be accepted is another jobfor the marketingcommunications arm of themanufacturers. The IntegratedMarketing Communications,IMC tools employed bycompetitions in the market hasgiven much credence to thenature of competition brewingin the sector.

Recently, Fan and SuperYoghurt from the stable of FanMilk Nigeria Plc, SenaYoghurt and various otherimported brands haveheightened tempo in themarket which invariably hasbrought out the creativeingenuity in the local brands.

For instance, HollandiaYoghurt from the stable of ChiLimited has gone hay wire withits ongoing pomo, Refresh ‘n’Win, which began in December2013 to end February 28, 2014,has virtually increased themarket penetration of the brandwith its 360 degree adcreativity, likewise that ofothers.

According to the company,the promo is aimed atpromoting and deepening themarket presence of the brandacross the country. While alsocreating awareness for thebrand’s value propositions.

The Managing Director ofChi Limited, Mr. DeepanjanRoy said: “Hollandia YoghurtRefresh ‘n’ Win promo wasconceived to reward thegrowing population ofconsumers across Nigeria thathave made the Yoghurt theirloyal brand.”

On mechanics of the promo,he said that consumers are tobuy two 1-litre or 500 ml packsof Hollandia in any variant ofStrawberry, Plain Sweetenedor Pineapple Coconut to getone scratch card at the point ofpurchase, even though

Yoghurt market: Deepening penetrationthrough promo & reward system…As Hollandia, others stir competition

consumers are allowed toparticipate as many times aspossible.

He assured participants thatit will take less than fiveminutes for them to get aresponse after sending the textwhile presentation of a form ofidentification and the originalscratch card by prize winnerswill enable them to claim theirrespective prizes.

Continuing, he stated thatconsumers can also visit theHollandia Yoghurt Facebookpage to monitor progress onthe promo and leave anymessage on the page to enablethe company provide a promptresponse. A grand prize of atrip to London or Paris would

be announced at the end of thepromotion, he enthused.

An ipad winner, Pius Joy fromEnugu, shared her joy on how shewon: ‘I have always loved the uniquetaste of Hollandia Yoghurt. When I sawthe ad of the promo on TV, I said maybe this is my time. So, I startedscratching and texting. When I wasinvited for the draws, I didn’t believethat I will win but I still came. So,when I was announced as one of thewinners of an ipad, I was shocked.”

Also, Kalagbor Ruhoma from Riverssays that now that she has won, shewould not stop drinking HollandiaYoghurt. “I used to drink HollandiaYoghurt once in a while, but now thatI have won an ipad, I will drink moreand more Hollandia Yoghurt until I wina trip to London.

continuosly ttriving of the company todelight its consumers.

“Consumers are becoming morediscerning and are beginning to loseinterest in promotions because theybelieve there is little chance ofwinning.” Thurston said. Whileadding, “with Pepsi/Airtel Promo, notry again, games of chance, lotteriesor lucky draw.”

Commenting on the partnershippromo, the General Manager, ValueAdded Services Airtel Nigeria, Mr.Victor Bannerman-Chedid, said “thepartnership between Pepsi and Airtel,is one of the most exciting things tohappen to the Nigerian consumer inrecent time.

We are happy to begin the New Yearon a very promising and positive notefor the good of the Nigerian consumer.We recognize their importance and theimmense roles they play in the successor our businesses.”

Pepsi, Airtel promo rewardsconsumers with free airtime

Pepsi, a brand fromSeven-Up Bottling

Company, SBC Plc, inpartnership with AirtelNigeria, said that anyconsumer who purchases aglass bottle of either Pepsi,Mirinda, 7Up, Teem andMountain Dew in the next 60days will get a free airtime.

According to both companiesthe promotion is to rewardconsumers for their loyalty andensure they begin the NewYear on a high note.

Head of Marketing, SBC,Mr. Norden Thurston, said thepartnership with Airtel isaimed at giving the Nigerianconsumer the best of twoworlds: refreshing with Pepsi,talking with Airtel.

Thurston said Pepsi’sconsumer-centricism led to the

CMYK


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

Business & Economy

,,

Brent rose above $107 abarrel on Friday as bitter

cold in the U.S. boosteddemand for oil and drew downthe country’s crude stockpileand distillates. Distillate stocksplunged three-and-a-halftimes more than expected,driving US ultra low-sulfurdiesel futures, or heating oil,futures to their highest thisyear.

The situation helped the U.Scrude benchmark towards itsbest week in seven.

Brent, poised for its biggestgain in five weeks, alsoclimbed as European refinersshipped diesel to the world’sbiggest oil consumer. Brentcrude rose eight cents to$107.66 dollars a barrel,ending 69 cents lower in the

Brent oil holds above $107, set for biggest gain in five weeksprevious session followingweak factory activity data fromChina.

U.S oil increased 18 cents to$97.50 dollars, extending gainsafter settling 59 cents up.

“The U.S benchmark isdrawing support from the fallin heating oil stocks as a resultof the severe winter,” said TetsuEmori, a commodities fundmanager at AstmaxInvestment.

“It may be helping Brent asEuropean refiners exportheating oil to the United States,to the East Coast.” Refiners inAsia, Europe and Russia areshipping around half a milliontonnes of heating oil and dieselto the U.S this month.

At least a dozen tankers arebooked so far in January to

ship gas oil and diesel to theU.S. East Coast, according totraders and shipping data.U.S distillate stocks fell 3.21million barrels in the weekended Jan. 17, the EnergyInformation Administration(EIA) said, compared withanalysts’ expectations of a900,000 barrel draw. Distillatedemand over the past fourweeks rose 5.2 per cent froma year earlier to 3.46 millionbarrels, the EIA said.

“Distillates stocks decreasedby more than expected, withstocks remaining below thebottom of the five-year range,”analysts at BNP Paribas said ina note. These supportingfactors may result in the USbenchmark rising towards 98dollars a barrel and Brent

inching higher to around108.50 dollars, said Emori ofAstmax Investment.

In addition to the weekly EIAdata, a monthly report fromindustry group AmericanPetroleum Institute alsoshowed a rise in the U.Spetroleum product demand.

The Monetary PolicyCommittee (MPC), atits meeting last week,

retained Central Bank’sbenchmark interest rate at theindustrially destabilising levelof 12%, to avert the threat ofinflation. Furthermore, theMPC raised the Cash ReserveRequirement (CRR) forgovernment deposits withbanks from 50% to 75%, in orderto control systemic surplus cashand suppress a discomfortingprice spiral.

The huge leap in publicsector CRR from 12%, sixmonths ago, was the result ofCBN’s belated recognition of thefolly of sustaining the monetarystrategy, which enabled banksto profitably leverage on publicsector deposits in their custody,to lend hundreds of billions ofnaira back to the samegovernment every month, withdouble-digit interest rates.

This patently suicidalmonetary strategy has,according to some reports,rapidly increased our domesticdebt burden from N1tn tobeyond N7tn, with close to N5tnas debt service charges in thelast decade. It is regrettable thateven after Lamido Sanusi’sunforced confession of suchmonetary mismanagement,neither organised civil societynor Labour nor indeed, thelegislature, as electedrepresentatives of the people,raised an eyebrow at suchenduring recklessmisapplication of public funds.

In countries where publicofficers are accountable, therewould be immediate demand forinvestigation to determine howsuch an antisocial systemtranscended the tenures of Joseph Sanusi, Charles Soludoand the incumbent, LamidoSanusi, as CBN Governors. Certainly, these eminentgentlemen would never have

Futility of increasing CRRon government depositscondoned borrowing back theirown personal ‘idle funds’ withdouble-digit interest rates forwhatever reason.

Nonetheless, the recentincrease of CRR for publicdeposits to 75% will ultimatelybe largely as ineffective as ifCRR across the board remainedat the existing level of 12% forprivate deposits. Instructively,if public sector depositsremained stagnant in bankaccounts, CBN’s attempt toreduce excess cash and‘injurious’ credit expansion bythe banks may be successful;however, if the MDAs rapidlydrew down the cash balances

in their accounts and paidemployees’ salaries, orcontractors’ bills, the erstwhilesequestered public sectordeposits automatically transit toprivate sector accounts, and will,expectedly, ultimately stillinstigate surplus cash in thehands of the banks, with theattendant threat of liquidityexpansion, which could pushinflation rate uncomfortablybeyond tolerable limits.

Consequently, suggestionsthat government depositsshould be domiciled directlywith CBN may equally be

untenable as the funds willultimately end up in privatesector accounts, when MDAsbegin draw down their accountwith CBN. Similarly, even a100% cash reserve requirementfor public funds wouldregrettably also neither reducesystemic surplus cash, andrestrain inflation nor would itdiminish government’sborrowing to fund contrivedbudget ghost deficits and tomop up unyielding systemicsurplus cash.

Indeed, despite the increaseof CRR for government depositsto 50% in July 2013, evidencesuggests that CBN still mopped

up well-over N200bn from themoney market, while the DMO(read as Debt Creation Office)also borrowed billions more atover 10% interest from themoney market. It is worrisomethat the hundreds of billions ofnaira loans for which CBNactually pays double-digitinterest rates will never be putto productive or criticalinfrastructural enhancement, asthey are simply warehousedfrom use, to reduce so-calledexcess liquidity from the system,and avoid a worsening scenario,where too much money chase

increasingly fewer goods topush up inflation rate.

Incidentally, it is this belatedrecognition of gross folly inmonetary management thatspurred Lamido Sanusi and theMPC to adopt an equally foolishstrategy to reduce the scourgeof ever present surplus cash inour system, with increases inCRR for public deposits, whenin fact, a flat rate increase ofCRR to 25 or 30% for bothprivate and public sectordeposits would have beencertainly easier to control, withless possibility of abuse andwould also be more effective forreducing excess liquidity.

Nonetheless, a much moreelementary and sensible

approach to our monetarypredicament would be to firstidentify the cause ofcontinuously surplus cash in thesystem, and examine why suchsurplus cash exists,simultaneously with the inabilityand/or disinclination of thebanks to lend to the real sectorat lower interest rates, whichinduce industrial andentrepreneurial expansion withattendant increasing jobopportunities?

Indeed, a layman could alsoask “How can we complain oftoo much money, and yet we donot have enough money to buildbetter schools and hospitals oreven to repair our roads?” Intruth, CBN and MPC’s stridentmonetary policy propagandamay be seen as subterfuge todistract public attention fromfailure to bring about low costof funds to stimulate real sectorgrowth plus low inflation rate

to preserve the purchasingvalue of otherwise relativelypaltry incomes of workers

Nonetheless, the solution toour monetary predicament hasbeen in public domain for overa decade, yet, our economicexperts have inexplicablyrefused to recognize theineffectiveness and oppressivefolly of the existing monetarymanagement practice.

Evidently, the unyieldingburden of surplus cash is theproduct of CBN’s possibly“inadvertent” expansion ofmoney supply, whenever itcreates and substitutes freshnaira supply in place of dollarallocations for dollar revenue. Thus, the more dollars we earn,the greater will be the threat ofsurplus naira, which,paradoxically, cannot beproductively applied forinfrastructural enhancement orfor the reduction of ourgalloping debt burden.

However, the adoption ofdollar certificates for thepayment of dollar revenuewould not only save us from theunnecessary oppressive burdenof excess liquidity, but it would,in fact, become totallyunnecessary for government toborrow back its own idle, non-interest yielding funds, atridiculously high interest rates,while simultaneously crowdingout the real sector’s access tocheaper funds, and therebystalling the creation ofincreasing job opportunities andreal economic growth. So long,therefore, as the CBN and MPCremain in denial of this reality,our economic strategy willremain incapable of instigatingindustrial and economic growththat will support improvedsocial welfare of our people,with increasing employmentopportunities.

SAVE THE NAIRA, SAVENIGERIANS.

CMYK

Omoh Gabriel - Group Business EditorBabajide Komolafe - Ag. Finance EditorClara Nwachukwu - Energy EditorPeter Egwuatu - Head, Capital MarketYinka Kolawole - Snr. Bus.CorrespondentFavour Nnabugwu - Insurance CorrespondentGodwin Oritse - Maritime CorrespondentGodfrey Bivbere - Maritime CorrespondentMichael Eboh - Energy ReporterFranklin Alli - Ind./Agric. ReporterEbele Orakpo - Energy ReporterIfeyinwa Obi - Maritime ReporterRosemary Onuoha - Insurance Reporter

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

O U R T E A M

The recent increase of CRR for publicdeposits to 75% will ultimately belargely as ineffective as if CRR acrossthe board remained at the existing levelof 12% for private deposits

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