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SEPTEMBER 10, 2012
Continues on page 18Controversies trail NSE’sproposed delisting ofcompanies
BY PETER EGWUATU
Controversies have continued totrail the proposed delisting ofalleged moribund companies
on the Nigerian Stock Exchange (NSE),even as Proactive ShareholdersAssociation of Nigeria (PSAN)threatened to sue the NSE if it goesahead to delist the firms.
The NSE had announced its intention
… Shareholders' group threatens to sue NSE
to delist nine companies that havenot been meeting its post-listingrequirements in November, 2012. Tobe delisted from the daily official listin November, this year, according tothe NSE, are the shares of AluminumManufacturing Company of NigeriaPlc, Capital Oil Plc and W.A. GlassIndustry Plc. Other companies are;Union Dicon Salt Plc, HallmarkPaper Products Plc, Nigeria WireIndustry Plc, Rokana Industry Plc,
Lennards Nigeria Plc and UdeofsonGarment Factory (Nig) Plc.
According to NSE’s notice toinvestors recently, the resolve to delistthe companies was endorsed by itscouncil on May 31, 2012, “due to theirpersistent non-compliance with thepost-listing rules of the Exchange.”
Reacting to the proposed delistingplan, Mr. Oderinde Taiwo ofProactive Shareholders Association ofNigeria (PROSAN) said the action is
tantamount to destroying the market.According to him, “The NSE is
poised to destroy the market throughits obnoxious policies. Our group isset to sue NSE if it goes ahead todelist these companies. Delistingthese companies is to destroy theefforts most of us are making towardsattracting more investors to themarket. We are calling on theSecurities and Exchange Commission(SEC) not to approve such plan butto call the Exchange to order.”
He suggested that rather thandelisting the companies, theExchange should try to find out theirproblems and offer usefulmanagement tips that will help thecompanies meet the post-listingrequirements. “The NSE needs toencourage those that are alreadylisted so as to attract new ones thathave growth potentials.”
According to him, “We, at PROSAN,have been spending our own moneywithout government’s support to carryout enlightenment programme at thegrassroots. Even at one of ourenlightenment programmes, oneinvestor who had invested over N2million in equities threatened towithdraw his money from one of those
*The 52nd
AGM of Bank of Industry: MD/CEO, Bank of Industry, Ms. Evelyn Oputu (middle), BOI’s pro tem Chairman, Mr. Mohammed Dikwa of the Ministry of Finance Incorporated and the bank’s Secretary, Mr. Waheed Olagunju at the52nd Annual General Meeting of Bank of Industry at the Transcorp Hilton Hotel.
CURRENCY BUYING CENTRAL SELLING
CBN Exchange rate as at 07/09/2012
112.45 -1.04
94.94 -0.59
162.00 +3.80
2,685.00 -6.00
19.23 +0.36
DOLLAR 154.8 155.3 155.8
POUNDS 246.3487 247.1444 247.9401
EURO 195.2802 195.911 196.5417
FRANC 162.0433 162.5667 163.0901
YEN 1.9692 1.9756 1.982
CFA 0.2793 0.2893 0.2993
WAUA 235.2715 236.0314 236.7913
RENMINBI 24.4036 24.4828 24.5621
RIYAL 41.2723 41.4056 41.5389
KRONA 26.2026 26.2873 26.3719
SDR 236.3332 237.0965 237.8599
18 — Vanguard, MONDAY, SEPTEMBER 10, 2012
Cover Story
Continued from page 17
,
,
The focus is on the rolesof technology and
vocational education inenhancing entrepreneurialskills that will equip studentsfor entrepreneurshipeducation in Information andCommunication Technology(ICT)-driven technologicalenvironment. The world hasbecome globalized and thefuture prosperity depends oncomparative advantage. Thiscomparative advantagehinges on people and theirtechnical or technologicalsophistication. Towards this,some crucial entrepreneurialand technical skills needed bythe students in colleges ofeducation (technical),polytechnics and universitiesto meet the trends in a globaleconomy is analyzed.
Technology education is tobe considered as the keyagent of technologydevelopment, either as a wayof developing humancapacity, increasing theshield work force form o d e r n i z a t i o n ,i n d u s t r i a l i z a t i o n ,environmental developmentor as a matter of personnelfreedom, developingcapability and empowerment.Technology education isincreasingly recognized to becentral to both the origins oftechnological developmentand challenges and to theprospects for successfullydealing with them (Alam,2009). Decision makers at alllevels, need timely, reliableaccess to knowledgegenerated by technology andtechnical education tointroduce rational policiesthat reflect a better globalunderstanding of complextechnical, economic, social,cultural and article issuesconcerning the society, andour environment. Technicaldecision making and prioritysetting is an integral part ofoverall developmentplanning and formation oftechnology developmentstrategies. Above all,technology education is ahuman right and, as such,should receive priority in theallocation of nationalresources. It has become verynecessary not to only keeptechnology education boundto the role of manufacturingskilled manpower but also toeconomic development andglobal economy. In Nigeria,technology education was
Vocation and technicaleducation – A key toimproving Nigeria’sdevelopment (4)
previously not seen asfundamental for nationaldevelopment, or for theeconomic development, butfor the school dropouts, andother social and politicaldevelopment within thenation and for individuals.Hallak (1990) argues thattechnology education is alsolinked to human resourcesdevelopment and that thishas an impact on more thanjust economic growth, butalso an impact on the widerdevelopment of individualsand societies. According tohim, it contributes to:
(a). Individual creativity,
improved participation in theeconomic, social and culturalroles in society.
(b). Improvedunderstanding of anindividual and heir respectfor others, thus promotingsocial cohesion and materialunderstanding
(c) Improvement in healthand nutrition.
(d). Improved chances ofeconomic development.
(e). Improved technologicaldevelopment.
(f). Socio-cultural change.(g). Democracy and equality(h).Ecological development/
quality of life (increasingpeople’s awareness of theirenvironments).
From our analysis so far, itis clear that modernizationand economic development,depends on investment andappreciation of moderntrends in technologyeducation.
Towards this,some crucialentrepreneurialand technicalskills neededby the studentsin colleges ofeducation(technical),polytechnicsanduniversities tomeet the trendsin a globaleconomy isanalyzed
companies flagged off fordelisting this year.
“This is not good for ourmarket. Furthermore, duringour enlightenmentprogramme in Ibadan whereover 1,000 people werepresent, we even invitedregulators to come and deliverspeeches to the grassrootswould-be investors but theydid not show up. So, how isthe NSE encouraging theexisting shareholders? TheNSE is just after the foreigninvestors; travelling roundthe world and spendinginvestors’ moneyunnecessarily. It will berecalled that at the last publichearing by the NationalAssembly, it was noted thatthere was need for aggressiveinvestor education and that iswhat the regulators should bedoing.”
In similar manner, theChairman, ProgressiveShareholders Association ofNigeria (PSAN), Mr.Boniface Okezie, argued thatdelisting of companies wouldnot improve the fortunes ofthe stock market. He saidregulators should ‘first andforemost’ find out why thesecompanies are defaulting intheir respective post-listingrequirements.
According to him, “theyshould know what is wrongwith these companies before
Controversies trail NSE’s proposedde-listing of companies
delisting them, but they don’tcare what the companies arepassing through; they careabout money. They should goout and ascertain if it isgovernment’s policy regimethat is affecting thesecompanies or whether thereis any political interferenceand not to be in a haste todelist them because at theend of it all, we, theshareholders, will be the onesto suffer, not the Exchange.
He further said, “Let us tryto use dialogue to resolveissues of this sort and notmaking haste to delistcompanies. It is notencouraging at all.”
In his reaction, the GeneralSecretary, IndependentShareholders Association ofNigeria (ISAN), Mr.Adebayo Adeleke, saiddelisting had never been thebest option and strategy toprotect investors’ interest andencourage more patronagefor the market.
“Is delisting the best optionand strategy? Has it yieldedpositive results? Has it everhelped Securities andExchange Commission andthe NSE in protectinginvestors’ interest? This is notthe best to do at the momentwhen there is already apathyin the market. Thesecompanies should beencouraged at this moment inwhatever form,” he stated.
Meanwhile, the Chairman,Advancement of Rights of
Nigerian Shareholders, Dr. Farouk Umar, in an interviewwith Vanguard commendedthe move, adding thatshareholders suffered lossesduring the global financialcrisis due to failure on the partof the NSE to take proactivemeasure by delistingdefaulting companies beforethe saga.
Explaining further, Umarsaid, “I commend NSE. I amin full support. We wouldn’thave lost money. They havea time limit to tellshareholders, even NSE, whatthey are doing but they failed.If they are delisted, it meansthey have a problem.”
The National Chairman,Supreme ShareholdersAssociation, Mr .OwolabiPeters argued that majority ofthese companies lack goodfundamentals. According tohim, “Most of the companiesare no more in operationswhile those that managed tosurvive have continued torecord losses in theirfinancials.
“The way these companiesare going, it is better for themto be de-listed. Most of themare not even producing againwhile others are not callingfor yearly general meetingsand these are companieswhere we invested ourmoney. They are better de-listed and anybody that hasissues with them should sorthim or herself out.”
The Honourable Minister of State for the Federal Capital Territory (FCT), Oloye OlajumokeAkinjide (Third from Left) with the Chairman of Bwari Area Council, Hon. Peter Ushafa (right),during an inspection of farm projects of the Millennium Development Goals Project Support ofthe FCT Administration in Kuchibuyi and Guita Communities of Bwari Area Council.
Vanguard, MONDAY, SEPTEMBER 10, 2012 — 19
BUSINESS & ECONOMY
By KINGSLEY OMOSE
The announcement bySanusi Lamido Sanusithat the Central Bank
is to introduce a new N5,000note and make changes to thesecurity features in all theexisting denominations, hasbeen attracting a lot ofnegative comments with theSenate Committee on Bankingcoming out with a directive tothe CBN to halt the policy,while the House ofRepresentatives hassummoned Sanusi to come andbrief it further on the move.
However, to introduce acashless policy limitingindividual cash withdrawal orlodgement in banks to N150,000 and then initiate changesin features of all currencies incirculation while introducinga new N5,000 note, means adeadline will be given withinwhich hoarders of cashoutside the banking systemhave to trade their oldcurrencies for the new ones,which they can only dothrough banks and thecashless policy will be waitingfor them.
SLS’s objective in using theintending changes to be madein the features of all ourexisting currencies and usingthe introduction of the N5, 000as a sweetener, is to bring allthe cash outside the bankingsystem to the deposit moneybanks thus effectively forcingthe informal sector of theNigerian economy to embracebanking and merging theformal and informaleconomies.
To be mostly affected will behoarders and dealers of hugecash outside the bankingsystem who will now be forcedto bring their cash to thedeposit money banks, andwhen they are restricted by thecashless policy to depositingN150,000 a day, we are goingto witness a mad dash to thebanks by holders of huge cash,that will be more chaotic than
Last week, this column carried an article titled “CBN currency redesignmove is self seeking, no foreseeable gain”. There were several reactions.Today, we bring you one of those reactions. We believe the readingpublic has right of reply.
Lamido Sanusi’s Trap
when Buhari and Idiagboneffected a currency changepolicy in 1984.
The changes in the nationalcurrencies implemented byBuhari and Idiagbon, and theshort time frame given for theexchange of the old notes fornew ones caused massivedisruptions to the economy ascompanies and Nigeriansrushed to banks to beat thedeadline, and we witnessedmassive Naira flowing intoNigeria from different parts ofthe world, includingbriefcases from Saudi Arabia.
Also to be severely affectedby the new policy on changesto the Naira will be millionsof Nigerians in the informalsector, which is over 60 percent of the Nigerian economy,who do not have bankaccounts or have never doneany banking transactionsbefore, whose fates will besealed unless conscious anddeliberate efforts are made bythe Central Bank and deposit
money banks to mobilize themto embrace banking to avoidbeing cut off from the newsingular Nigerian economy thatis soon to emerge.
With the massive inflow ofcash into the deposit moneybanks that the trading of oldcurrencies for new ones willengender, the introduction of anew N5,000 note is to ensurethat the banks are not buriedunder mountain loads of cashand moderate the cost ofhandling cash so as not tointroduce another demon thatwill shackle the banks whileattempting to solve an existingproblem.
It is not difficult to imaginewhat changes the cashlesspolicy and the new policy onchanging all our currenciesand introducing a N5,000 notewill make, especially when theformal and informal sectors ofthe economy have beenmerged. All the cash outsidethe banking system have beendeposited with the banks,
Nigerians of 18 years andabove now having bankaccounts, and the cashlesspolicy is fully implementedacross Nigeria. Guess whoalready has access to viewbanking transactions anddetails of bank customers?You guessed right, CBN,EFCC and ICPC, meaningthat it will now be easy totrack down those with hugebank deposits who cannotexplain why they have suchhuge funds in their accounts(elected politicians andpublic/civil servants), it willalso be easy to track bankingtransactions of dubious natureand to have records offinancial infractions making iteasy to prosecute wrongdoers.
Federal, state and localgovernment tax authoritiesand agencies will also haveaccess to the banking recordsand transactions of Nigeriansand their businesses,effectively making it easier to
access their true net worth fortaxing and other purposes thatwill in turn generate trillionsof Naira for government at alllevels which explains why thepolicy on issuing taxidentification numbers to alleligible tax payers is alreadyin place.
My counsel to those who aresitting on mountains of cashin their respective homes oroffices is to begin immediatelyto pay in these monies intotheir various bank accounts soas not to be caught with theirpants down when this newpolicy is implemented despitethe protestations and the bestefforts of the NationalAssembly to halt, limit or slowdown this train that hasalready left the train station.
My admonition to the tensof millions of Nigerians in theinformal sector of our economyis to begin immediately toopen bank accounts withdeposit money banks, andeven better, register businessnames and incorporatecompanies to give recognitionand identity to theirbusinesses and make themmore compliant for theinevitable changes that arecoming. Ultimately, the gainsof these new policies beingimplemented by SanusiLamido Sanusi outweigh thepains as increasedaccountability andtransparency is injected intothe Nigerian economy. Thatsignals our desire to be keyplayers on the world stage,but great effort must be madeto carry all stakeholders along,especially Nigerians in theinformal sector to reduce to thebarest minimum, the pains oftransiting to the formaleconomy.
*Kingsley Omose, a PublicAffairs analyst, writes from 25Warehouse Road Apapa.
The Federal CapitalTerritory Administration
(FCTA) has provided aboutN250 million communityempowerment agriculturerevolving loan for 385 poorcommunities across the sixArea Councils of the FCT.
The Honourable Minister ofState for FCT, OloyeOlajumoke Akinjide, disclosedthis while on inspection tourof farms in Kuchibuyi andGuita communities of BwariArea Council and meetingwith farmers in the twocommunities. The CommunityEmpowerment Agriculture
Agric Devt: FCTA provides N250m revolving loan for farmersInitiative is the MillenniumDevelopment Goals (MDGs)Project Support of the FCTAunder the Department ofEconomic Planning, Researchand Statistics (EPRS).
She disclosed that the sumof N60 million was providedin 2010 in the communityempowerment agricultureloan scheme, N120 million in2011 and N60 million in 2012.Of the N250 million availablefor farmers, including womenand youth, the sum of N120million has been accessed bythe beneficiary communitiesthrough four Micro-Finance
Banks (MFBs). The MFBsinclude: EWT MicrofinanceBank, Fims Microfinance Bank,Hasan Microfinance Bank andCredit Link Microfinance Bank.
”We are supporting the poorand rural communities throughcapacity building in modernfarming techniques and agric-businesses to address theissues of poverty,unemployment and genderequality among the ruralpopulace, thereby improvingtheir income and quality of life.This initiative started with 60communities across the six Area
Councils in 2010 and by 2011,the initiative was scaled up to180 communities with FCTUNDAF II supporting 60communities. Presently, thescheme is in 236 communitiesacross the six Area Councilsand the remainingcommunities will be coveredbefore the end of 2013,” saidAkinjide, who supervises theFCT MDGs Project Support ofthe FCTA. The EPRS Director,Ari Mohammed, said thescheme was designed to boostagricultural production,create employment and
reduce poverty in the FCT. He stated that under the
scheme, agricultural inputssuch as tractors, improvedseed, pesticides and fertilizersare provided for thecommunities for cultivationwhile extension workers arealso deployed to thecommunities to supervise thevarious stages of production.“The scheme will helppromote value additiontechnology in agro processing,packaging and quality controland also revitalize the ruraleconomy in thesecommunities,” Mohammedsaid.
20 — Vanguard, MONDAY, SEPTEMBER 10, 2012
BRIEFS
Business & Economy
By GODWIN ORITSE
THE Nigerian PortsAuthority (NPA) and
terminal operators havecommenced moves to appealthe new traffic law passed bythe Lagos State Governmentrestricting the movement ofarticulated vessels to certaindestinations.
At a meeting with someterminal operators recently,NPA’s General Manager incharge of Western operations,Alhaji Mohammed Bulango,asked all operators ofterminals to provide detailsand figures of containerdelivery before the law cameinto effect.
Already, the terminaloperators are counting theirlosses as a result of the newtraffic law as containers do notleave the ports until certainhours of the day and thedevelopment has broughtabout congestion at thevarious ports in Lagos.
Speaking to Vanguard onthe development, MrEmmanuel Ogbor, said thatterminal operators are alreadycollating the delivery dataand gathering all necessarydocument with which to tacklethe state government over thetraffic law which theydescribed as obnoxious.
Effort to speak with thePresident of the SeaportTerminal OperatorsAssociation of Nigeria(STOAN), Princess NikkyHastrrup, was abortive as shewas said not to be in the office.
STOAN spokesman, Mr.Bolaji Akinola, however,condemned that law, sayingthat it is inimical to the
NPA, terminal operators move to appealnew Lagos traffic law
progress of not only the ports,but the nation’s economy.
It would be recalled that aseasoned freight forwarderand logistics expert, Mr LuckyAmiwero, had told the LagosState House of Assembly thatthe move to restrict themovement of containers inand out of the ports wastantamount to bringing thenation’s economy to a halt.
Besides Amiwero’sopposition to the law, theNational Union of RoadTransport Workers (NURTW)had also kicked against thelaw and have been discussingwith government on how best
to manage the situation.Although the new law
restricts the activities ofmembers of the NationalUnion of Road TransportWorkers to their offices, andforbids the extortion of moneyfrom commercial vehicleoperators in Lagos,investigations show that thelaw has not stopped gangs ofextortionists at nearly everybus stop in Lagos, as thisgroup of people still operatein different parts of themetropolis unchecked.
At Onipanu Bus Stop, somemembers of the NURTW inuniform were seen operating
outside their offices,collecting levies, andforcefully selling tickets tocommercial bus drivers.
A similar scenario replayedin Fadeyi and Ikeja areaswhere touts were busyextorting money from busdrivers.
Some commercialmotorcyclists popularly calledokada riders, have asked aLagos High Court in Ikeja tovoid a section of the newLagos State Traffic Lawprohibiting their operationson major highways.
The plaintiff, through theircounsel, Mr. Bamidele Aturu,filed the suit under the aegisof Incorporated Trustees of AllNigerians AutobikeCommercial Owners andWorkers Association.
By FAVOUR NNABUGWU
The Consumer ProtectionCouncil (CPC), said that
it has resolved a total of 2,760complaints brought to it bydifferent consumers betweenJanuary and June.
CPC disclosed that a total of3,550 complaints wereresolved in 2011. Thecomplaints, according to theagency, were lodged by end-users of goods and services invarious sectors of theeconomy.
The resolved complaintswere captured in thedocument entitled; Data ofSectorial Analysis ofComplaints resolved by CPCfor the first half of 2012.
The analysis of complaintsresolved were classified into
Consumer Protection Council resolves 2, 760 complaints
various categories whichinclude: telecommunications,financial services, health,food, alcohol and beverages.
Others are aviation, roadtransport, automobile,education, broadcast, land,electricity, electronics,accommodation and rent,general products and generalservices among others.
According to the data,financial services sectorrecorded the highestcomplaints with 339 in thefirst six months of the yearcompared to the 475 that wasrecorded in the first half of2011. This was followed byelectronics which had a totalof 292 complaints in the firsthalf of this year as against 253recorded in the first half of2011.
The number of complaints ontelecommunications servicesand products during theperiod under review was 209compared to 144 recorded lastyear.
Aviation had a total of 184complaints in the periodunder review compared to 139recorded in the first sixmonths of 2011.
In the data, generalproducts, general servicesand food, drinks andbeverages had 114,113,113complaints in the first sixmonths respectively asagainst 141, 16 and 53recorded in the first sixmonths of 2011.
In the first half of 2012,a c c o m m o d a t i o n / r e n t ,education, road transport,health had 42, 42, 20 and 7
complaints compared to 71,29, 4 and 3 in the period underreview.
Other classificationsinclude: automobile, utilities,and other unclassifiedareas which recorded 50, 31and 1,111 complaintsrespectively between Januaryand June this year comparedto 37, 16 and 198 recorded inthe first half of 2011.
However, Broadcast andland which recorded 40 and24 complaints respectively in2011, had yet to record anycomplaint this year.
Ifeyinwa Umenyi, Director-General, CPC, whilecommenting on the data, saidthe number of complaintsrecorded showed thatconsumers were beginning toassert their rights.
Fuel scarcity topersist tillJanuary, 2013—OIL MARKETER
By ABAYOMI ADESHIDA
An oil marketer hasimplored Nigerians to
brace up and be prepared tolive with the occasionalscarcity of petroleum till thenew year, even as he insistedthat the approach of theFederal Government to theproblem of distribution ofproducts in the country is notthe best for the masses. Themarketer who spoke toVanguard on a condition ofanonymity disclosed thatthough petroleum marketersare businessmen and womentrying to maintain theirbusinesses, they feel thepains and losses Nigerianssuffer due to the problemsassociated with the scarcity ofproducts, especially petrol.
According to the source,“Nigerians should just beprepared to live with thisproblem of occasional scarcityand return of long queues atfuel stations across thecountry till January next year.
“There are issues onground and the authoritiesare aware that the earliesttime the clog can be clearedis by January 2013.
AABSDPconfab holdstoday
ALL is set for the 17thconference of the
Association of AfricanBanknotes and SecurityD o c u m e n t s P r i n t e r s(AABSDP ) billed for the 9th -12
th September, 2012, in
Lagos.The conference with theme,
The Use of Cash in Africa andits Integration with MobilePayments, will be declaredopen by the Central Bank ofNigeria’s Governor, MalamSanusi Lamido Sanusi, whois also the Chairman of theassociation.
Over 20 exhibitors and 200delegates are expected from50 countries, just as hot-topicconference papers will bepresented in the areas of payment platforms in Africa;mobile payments,identification, banknotedesign anda u t o m a t i o n . A f r i c a nBanknotes SecurityDocuments Conference, thelargest exhibition and a high-level Security Print in Africais a forum where operatorswill meet, interact and discusswith key industry players witha view of harmonizingpayment platforms in Africa.
*From left: Hon Olaitan Ogidan, Chairman, Lekki LCDA; Dr. Olajide Ayinla, Value ChainLeader, Fishery, Federal Ministry of Agriculture; Senator Bareehu Gbenga Ashafa, SpecialGuest of Honour and Prince Gbolahan Lawal, Hon. commissioner for Agriculture andCooperatives during the distribution of complete fishing gear for the people of Orimedu Beach,Ibeju Lekki on Thursday in the on-going Artisanal Fishing Inputs service delivery programmeby the Lagos State Ministry of Agriculture and Cooperatives. Photo by Lamidi Bamidele
Vanguard, MONDAY, SEPTEMBER 10, 2012— 21
BRIEFS
Banking & Finance
Private equity firm,Carlyle Group (CG.O )
said its $1.4 billioninfrastructure fund agreed tobuy U.S. power plantdeveloper Cogentrix EnergyLLC from Goldman SachsGroup Inc (GS.N ).
Terms of the deal, which isexpected to close in the fourthquarter, were not disclosed.
Carlyle, the world’s No. 2alternative asset manager, hasbeen exploring a new initiativefor energy investments andusing its other funds to investin the sector after it ended itsenergy funds joint venture withRiverstone Holdings LLC.
The transaction includessignificant ownership stakes incoal-fired power plants inJacksonville, Florida (CedarBay) and Hopewell andPortsmouth, Virginia; solarpower facilities in Daggett,California (Sunray), andAlamosa, Colorado.
*From left: President and Chairman of Council, Institute of Directors (IoD), Nigeria, ArchitectThomas Awagu; Hon. Minister of Trade & Investment, Mr. Olusegun Aganga and Legal Director,British American Tobacco West Africa, Mrs. Sade Morgan at the Institute of Directors, NigeriaAdvocacy Roundtable Forum on Cost of Doing Business, held in Lagos.
Nigeria’s economy at riskover composition ofreserves — Analysts
The increasedcomposition of foreignportfolio investment in
Nigeria’s foreign exchangereserve buildup will put theeconomy of the country at riskand leave the countryvulnerable to volatility in theglobal financial markets,according to analysts at Assetand Resource ManagementCompany Limited, ARM.
BY MICHAEL EBOH &RITA OBODOECHINA
The Analysts, in theirEconomic Update for themonth of August 2012, alsostated that if the trendcontinues, the Nigerianeconomy will be exposed tothe ever-changing marketperceptions, especially aboutsocio-political stability in thecountry.
The analysts are also of theview that the country ’sinclusion in the JP MorganGovernment Bond Indexwould likely alter the bond
market dynamics and outlooksignificantly.
According to the analysts,based on the criteria forinclusion, the 2017 bondcould become a strongcontender after theimplementation of the bondswitch programme, especiallyas Nigeria’s yieldssignificantly exceed thebenchmark’s 5.8 per centaverage, which suggests thatit could attract capital inflowsthat are likely to be
disproportionate to its 0.59 percent or $1 billion capitalisationweight in the index.
“Moreover, along with morestable currency outlook and arally in the country ’sEurobond to an all time lowyield of 4.84 per cent at theend of August, thisdevelopment points to a muchstronger impetus for overallbond yield declines and couldsubstantially alter marketoutlook in the medium term,”the analysts declared.
In their analysis for themonth of August, the analystssaid, “Sustained high energyprices and an increase involume of oil exports with itsattendant accretive value onforeign reserves, which grewby six per cent from the endof July to $38.6billion overAugust 2012—has seen theofficial exchange rate remainflat at N155.5 to a dollarthrough half year 2012.
“At the interbank, the nairaappreciated by two per centfrom N160.74 to the dollar atthe end of July to close atN158.1 to the dollar as at theend of August, but had beensubject to significant bouts ofvolatility with changingenergy price and globalinvestment outlook.
“Official market salesdipped over the three weekperiod supported byincreased autonomous supplyto the interbank market.Reuters’ reports that thissupply is as a result of foreigninvestor purchase of Nigeriandebt which we believe islinked to the country ’sinclusion in the J.P Morganbond index.
“However, we are also of theview that increasedautonomous supply reflects ashift away from speculativebets on the naira among localinstitutions in view ofimproving crude sales—anddollar revenue outlook.
“We believe marketexpectations for the naira onthis basis should remainpositive into the mediumterm.”
ABCON warns against patronage of illegal BDCsBY MICHAEL EBOH &NKIRUKA NNOROM
Association of Bureaux DeChange Operators of
Nigeria, ABCON, has warnedNigerians against patronizingillegal and roadside BureauxDe Change, BDC, saying thatpeople who patronize theseillegal BDCs, risk losing theirmoney.
According to a statement byABCON, signed by itsPresident, Mr. EmmanuelBalogun, licensed BDCs don’toperate on the streets but inoffices known and approvedby the Central Bank ofNigeria.
He said people who operate
illegally in areas heavilypopulated by licensed BDCsare fraudsters and are notlicensed by either the CBN orABCON.
Balogun disclosed that theCBN regulation mandatesBDCs to operate only indesignated and recognizedoffices and makes it illegal forany BDCs to operate from thestreets or on the roadside.
He, however, warnedlicensed BDC operators toensure that no individual isallowed to loiter around theirbusiness premises.
He said, “In recent times,we have received reports ofpeople duped by fraudsterswho pose on roadsides as
BDC operators. “We want to categorically say
that these fraudsters, whousually operate in areas withheavy population of licensedBDCs, are not licensed by theCentral Bank of Nigeria(CBN) and ABCON.
“Licensed BDCs aremandated by CBN regulationto operate only in designatedand recognised offices andthey must notify the apexbank and ABCON wheneverthey change office location.
“Consequently before theCBN and ABCON license anyBDC, their officials visit andinspect the proposed office ofthe BDC and ensure it hasand comply with all the
administrative and securitymeasures requirementstipulated in the operatingguidelines of BDCs.
“Also by extension of thisrequirement, it is illegal forany licensed BDC operator tooperate or transact businesson the streets or by theroadside.
“This requirement ismandated by the CBN inrecognition of the fact that theBDC business, like everybusiness activity is vulnerableto the activities of fraudsters,who may want dupeunsuspecting members of thepublic under the pretence ofrendering that service.
Big banks weighrisks, rewards ofCalifornia’s newCO
2 market
Major banks areweighing whether to
wade into the Californiacarbon market, which expertsbelieve could grow into a $40billion a year market by 2020,but one that is also loadedwith risk and uncertainty.
Following last week’ssuccessful test of the state’sauction platform, the reality isstarting to settle in: Californiacarbon trading has overcomelegal and political challengesto position itself a mere 10weeks away from its firstofficial CO
2 permit sale.
The carbon market’s successor failure will sway U.S.environmental policy for yearsto come, and early-movingCanadian banks like Bank ofNova Scotia (Scotiabank) andthe Royal Bank of Canada, aswell European banks likeDeutsche Bank and Barclays,could play a critical role inthat outcome.
Banks facilitate thepurchases and sales of carboncredits for their clients, advisecompany executives on howto keep their costs down, andultimately help them meettheir environmental goals.
But so far, most brand-nameinvestment banks have eitherkept their distance or alreadywalked away, wary ofpumping precious capital intothe nascent market, especiallyin light of their tumultuousexperience in the Europeancarbon market.
Carlyle to buyCogentrix fromGoldman
22 — Vanguard, MONDAY, SEPTEMBER 10, 2012
BRIEFS
Corporate Finance
Spot gold was higher lastweekend, on news of the
European Central Bank’splans for a potentiallyunlimited bond-buyingprogram although positiveU.S. economic data temperedbullion’s gains.
While holding just above thekey $1,700 an ounce mark,bullion was knocked off six-month highs by jobs data thatsignaled a tentativeimprovement in the U.S. labormarket.
Payrolls processor ADP saidthe U.S. private sector inAugust added the most jobssince March and a separatereport from the governmentshowed jobless claims fell lastweek.
Signs of a stronger economycould weaken the case for athird round of quantitativeeasing by the Federal Reserveand derail the rally that haspushed gold up 8 percentsince mid-August.
WONDER BANKS:
Onitsha investors lament ordeal,seek SEC’s intervention
BY PETER EGWUATU
Investors in Onitsha,Anambra State, have
continued to lament theirordeal with wonder banks inwhich millions of naira wasillegally collected from themunder the pretence ofinvesting the money inprivate placement.
The Onitsha investors whowere at the Securities andExchange Commission(SEC)’s investors’ outreachheld in Onitsha city recently,after narrating theirexperiences called on theCommission to intervene andbring the fraudsters to bookto enable them recover theirmoney.
While narrating their ordealwith the wonder banks, theinvestors who were mostlytraders said, “For over threeyears that we invested ourfunds in one of the illegalfund managers, named MegaAssets Limited, we have notreceived any information fromthe company. Our moneyrunning into millions of nairais still hanging and nodividend or any other formsof returns have been paid.However, we have gone to thecompany’s office and beholdthe place was locked withkeys and nobody could betraced.
“So when we heard thatSEC was holding aninvestors’ outreach, we cameto narrate our ordeal and seehow the Commission canhelp us to recover our money.Now we were told that theMega Asset was notregistered with theCommission. How can weinvest money in the Nigeriancapital market when we don’tknow the outcome of theformer one we invested? theyqueried.
While responding to theplea of investors for SEC’sintervention, Director-General of SEC, ArunmaOteh warned the Onitshainvestors not to patronizenon-registered capital marketoperators to execute theirinvestment needs.
She noted that the totalclaims against the wonderbank had risen to N106billion, and warned investorsto be wary of people whocome to them offering mouth-watering returns that are nottenable.
The Director-General, whilegiving the warning at aninvestors’ outreach inOnitsha recently said, “TheCommission does notrecognise non-registeredcapital market operators who
they don’t have their trackrecord and may not be able toprosecute in case they goagainst the rules andregulation guiding the capitalmarket.
According to the Director-General, “Investors shouldpatronize registered capitalmarket operators that are dulyregistered by SEC, NigerianStock Exchange (NSE) andalso are licensed by Instituteof Chartered Stock Brokers(CIS). If you want to invest inthe mutual funds, make sureyou verify from theCommission if such operatoris duly registered. Just visitour website to know if suchoperator is registered or cometo our office either in Onitshaor Abuja. The Commissionhad in the past issued publicnotice, warning investors onthe activities of wonder banks.The problem with some of theinvestors in Onitsha is thatyou don’t read newspapers.You should spend little moneyto read papers on daily basisso that you can getinformation about businessesin which you had investedmillions of naira.”
Continuing, she said, “TheSEC is the apex capital marketwhose primary role is toregulate and develop themarket. It has responsibilities
to protect investors and thatis why we are advising themto patronize registered capitalmarket operators that we caneasily apprehend wheneverthey defraud investors orcommit other malpractices.We have dragged some ofthem to Investment andSecurities Tribunal (IST) sothat they can be punished fordefrauding innocentinvestors.”
While explaining thefraudulent practices in thecountry, she said a Ponzischeme is a fraudulentinvestment operation thatpays returns to its investorsfrom their own money or themoney paid by subsequentinvestors, rather than fromprofit earned by the individualor organisation.
In her words, “Ponzischemes usually attract newinvestors by offering higherreturns, in the form of short-term returns that are eitherabnormally high or unusuallyconsistent. The perpetration ofthe high returns requires anever-increasing flow of moneyfrom new investors to keep thescheme going."
She revealed that the Ponzischeme is otherwise known asWonder banks in Nigeria,noting that since early 1990’sillegal investment scheme
had continued to exploit thenaivety of investors, in theirquest to become instantmillionaires.
She further told investorswho were victims of thewonder banks, “The SEC willtry to see if the fraudsters willbe apprehended because theCommission is there to protectinvestors, though by theInvestment and Securities Actlaw, the SEC regulates onlyregistered operators in themarket.”
For investors whose shareswere illegally sold byregistered stockbrokerswithout their consent, Otehadvised them to make formalcomplaints, stressing that theCommission will ensure theyare restituted.
Meanwhile, the Chairman,Consolidated ShareholdersAssociation of Nigeria,Barrister Arinze Anyiwo, whospoke on behalf of theinvestors, commended Otehand her team for theinvestors’ education broughtto Onitsha.
According to him, “This isan eye opener for investors inthis region. For me, I havebeen in the capital market andbenefited immensely. Mymentor in this business is thelate Akintunde Asalu whostarted investment in shareswhile at school in KingsCollege. So I am encouragingeveryone of us including thechildren that just concludedthe quiz competitionorganised by the Commissionas part of its enlightenmentprogramme, to patronizegenuine operators and to joinshareholders’ association sothat collectively, we can tackleissues whenever they arise. “
Arunma Oteh, D-G, SEC
,,If you want to invest in the
mutual funds make sure youverify from the Commission ifsuch operator is dulyregistered
Dollar falls onweak U.S. jobsreport, sharestrim gains
The dollar fell and U.S.stock futures lost ground
after a smaller than expectedrise in nonfarm payrolls forAugust ,last weekend, denteda rally in risk assets thatfollowed the EuropeanCentral Bank’s new plan totackle the region’s debt crisis.
Nonfarm payrolls increasedby 96,000 last month,compared with forecasts for125,000 new jobs, while theunemployment rate droppedto 8.1 percent from 8.3 percentin July, raising expectationsthat the U.S. Federal Reservemight be pushed into easingmonetary policy.
The greenback fell to 80.48against a basket of majorcurrencies .DXY from around80.7 immediately before thedata emerged, and reached afour-month low against theeuro, which was up over 1.1percent at around $1.2767.
“Last weekend reportsuggests that the economyisn’t strengthening socertainly builds the case forQE (monetary easing,” saidJames Knightley, senioreconomist at ING.
The futures market pointedto a mixed start on Wall Streetafter the data, with S&P 500index futures up 1.3 points,the Dow Jones industrialaverage futures flat andNasdaq 100 futures down 1.75points.
Gold teetersabove $1,700per ounce afterECB bond plan
Vanguard, MONDAY, SEPTEMBER 10, 2012 — 23
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24 — Vanguard, MONDAY, SEPTEMBER 10, 2012
BRIEF
Homes & Housing Finance
Stories by YINKAKOLAWOLE
Protacted disconnectbetween real estate
developers and policy makersin the housing sector havebeen identified as one of theproblems militating againsthousing development inNigeria.
President of the Real Estate
Developers blame disconnect withpolicymakers for housing woes...hold stakeholders’ parley with FMBN
Developers Association ofNigeria (REDAN), ChiefOlabode Afolayan, made thisassertion during aninteractive session betweendevelopers and themanagement of FederalMortgage Bank of Nigeria(FMBN) led by its ManagingDirector Mr. Gimba Ya‘uKumo, to fashion out ways oftackling the challenges facing
housing development in thecountry.
He said that the Nigerianhousing sector is confrontedwith a myriad of problems,stretching from frustratingland acquisition system to agrossly underfundedmortgage finance sector,which is made worse by aprotracted disconnect
between developers of homeand policy makers.
According to him, theparley with the managementof FMBN was to facilitate thebridging of the long existinggaps between developers andhousing policy makersthrough periodic strategicmeetings. “Choosing themanaging director of theFederal Mortgage Bank ofNigeria on this debut editionof the Developers BenefitLuncheon (DBL) wasdeliberate and mostinstructive. In the Nigerianhousing sector, besides landacquisition, the bulk ofchallenges faced bydevelopers are mortgage andfinance related.
“This edition of DBL tagged:“the score card” will betterinform existing and intendingbeneficiaries of EstateDevelopers Loans (EDL),developers needing assistanton offshore loan and thosehaving issues with PrimaryMortgage Institutions (PMI),among others,” he said.
In his comment, Ya’u Kumosaid every effort was beingmade within the limited fundsavailable to FMBN to assistdevelopers to build morehouses in the bid to bridgethe huge housing gap in thecountry.
He emphasised the needfor adequate governmentfunding for the bank to enableit meet up with the hugefinancial demands ofdevelopers in delivering morehouses for the teemingNigerian populace. Heassured that the bank willonly deal with developerswho registered with REDAN.
Professional bodies in thebuilt environment
comprising of surveyors, townplanners, estate surveyorsand valuers, architects,engineers, quantity surveyorsand builders have agreed tocome together under theauspices of Building CollapsePrevention Guild (BCPG) totackle the recurring incidenceof building collapse acrossthe country.
Chairman of the Guild, Mr.Kunle Awobodu, said thegroup has concludedarrangements to set upmonitoring teams in Lagos toensure that minimumprescribed standards inconstructions are met to test-run the scheme. “Builtenvironment professionalschose to embark on avoluntary, humanitarian andfree service under theumbrella of Building Collapse
Realtors move to tackle building collapse
Prevention Guild to layemphasis on mitigation oflosses, and promotion ofpreemptive measures that willavert collapse of buildings,”he said.
According to him, Lagoswas selected as thecommencement point for theinitiative because it has beenidentified as the bastion ofconstruction activities in thecountry as well as the statewith highest incidents ofbuilding collapse in Nigeria.
Awobodu stated: “Over 90per cent of buildingsconstructed in Nigeria,especially in Lagos State wereproducts of these concretecasting gangs. Names andaddresses of interestedprofessionals from all theseven professional bodieshave been collated. Todiscourage professionalsegregation and promote
unison for better results, thevarious professionals from thebuilt environmentprofessional bodies mustconstitute a cell team. In thisstructure, we have zonal
coordinators and teamleaders. A member ’sresidence or place of workdetermines the cell or localityhe or she belongs.
A university don has declared that affordable housing inthe real sense of it is presently non-existent in Nigeria.
Professor Abel Olorunnisola, the Dean of Post GraduateSchool, University of Ibadan, stated this in a lectured hedelivered at the university titled, “Looking beyond thechallenge of affordable housing development in Nigeria:Capitalising on the engineering opportunities”. He explainedthat the concept of affordable housing was used to describedwelling units whose total housing costs are deemed affordableto a group of people within a specified income range.
His words: “There is virtually nothing like affordable housingin Nigeria as the system stands today. A key factor that hasled to the high construction cost in Nigeria is the cost of cementwhich constitutes about 40 per cent of building materials. Thelocal consumption of cement in 2009 alone was estimated at19 million tonnes. Only 9.6 million tonnes was produced locally,
Affordable housing does not exist inNigeria – Varsity don
‘Housingshortageencourageillegal buildings’
The upsurge in thedevelopment of illegal
buildings and cases of non-compliance of town planningprocess has been attributed tothe problem of grossinadequate housing in thecountry.
Chairman, Abuja Chapter ofthe Nigerian Institute of TownPlanners (NITP), Mr.Nathaniel Atebije, said thisduring the Chapter ’s 2012Town Planners Day in Abuja.“It is unfortunate that peopleare building spontaneouslywithout going through thedue process because of thechallenges ofaccommodation,” he said.
Atebije said the institutehas been engaging people onthe need to get approvalbefore building a house,adding that it has been ableto enforce the use ofprofessional stamps and sealas part of measures tominimise the operation ofquacks in the practice. Hesaid the chapter contributed80 out of almost 400candidates that attained theprofessional status in thecountry this year.
Goldman to facemortgage debtclaims
A federal appeals court inNew York has revived a
lawsuit accusing GoldmanSachs Group Inc ofmisleading investors aboutthe risks associated withmortgage securities offerings.
The 2nd U.S. Circuit Courtof Appeals in New York saidlead plaintiff NECA-IBEWHealth & Welfare Fund, whichowned some mortgage-backed certificatesunderwritten by Goldman,may pursue claims on behalfof a class of investors incertificates backed bymortgages originated by thesame lenders. It also said thefund need not allege an out-of-pocket loss to pursue aclaim that an illiquid securityhad lost value. The decisionreversed parts of rulings byU.S. District Judge MiriamGoldman Cedarbaum inManhattan, and reinstatesclaims related to sevensecurities offerings in 2007. Itis a setback for Goldman,which like its rivals, faceshundreds or thousands oflawsuits by mortgage debtinvestors. These investorstypically seek to recoup losseson securities they bought byclaiming they were misledabout the risks.
•A refabricated housing, roadmap to affordable housing
Vanguard, MONDAY, SEPTEMBER 10, 2012 — 25
BUSINESS & ECONOMY
“No man can get wise on anempty stomach.” GeorgeEliot, I8I9-I880. (VANGUARDBOOK OF UOTATIONS p274).
To this, NapoleonBonaparte,I769-I82,added, “An army
marches on its stomach”.Either as civilians or asuniformed men and women,Nigerians are heading for theworst food crisis in overhundred years. Few peoplealive in this country todayhave never experienced suchdeprivation as is nowbecoming increasinglyimminent; not only in Nigeria,but globally as well. Naturaldisasters, arising out of twogifts of God to man - waterand sun - now threatenmankind on a scale, perhapsunprecedented since the iceage. Let me summarise theworldwide predicament – forthose who have either ignoredinternational news broadcastsor/and those who have failedto grasp their significance.
“China’s food problems willsoon become a global foodcrisis”, warned theWorldwatch Institute, an NGObased in Washington D.C, inthe I990s. At the time, Chinawas not the world’s secondlargest economy and its abilityto pay for large food importswere in doubt. Today, Chinais the second largest economyand its ability to pay for anyamount of food is no longerin doubt. The government ofChina will soon be shoppingfor food –worldwide – to feedI.3 billion people. Nigeria’scassava will be one of thetargets. The poor people ofNigeria cannot compete withthe newly rich of China. Ifcare is not taken, a fewcassava exporters will, fortheir own benefit, sendhundreds of thousands totheir graves as serious faminetakes hold.
WATER“All life is water” , wrote
Thales,640-546 B.C, the
,
,Famine, Nigeria and global food crisis
Greek philosopher; and sincemankind developed the skillof organized farming, waterhas played a prominent role.It was not by coincidence thatplanned agriculture startedaround the world’s riversbefore moving upland andeven into deserts. Withoutadequate supplies of water,civilization, as we know itwould have been impossible.With increasing population,mankind, more than ever,depends on water providedmostly by rivers and rainfall.Farmers, worldwide, have, forcenturies planned theircultivation programmesaround the, formerly,predictable rainy season.Each year, the season broughtformerly predictable volumesof water for planting atpredictable periods. Too littlewater accounts for loweryields and food supply.Abundant water generallymeant increased harvests; butexcessive water results ininundation of farmlands andcrop losses. Optimum yield isachieved when a balance isachieved. That balance hasbeen, and may remain,forever, out of human control.
Today, all over the world, onaccount of climate change,about which scientists haveissued warnings for decades,neither season nor volume ofwater is predictable anymore.The level of rainfall, this year,might be the highest inseveral hundred years insome countries. Some nationsare experiencingunprecedented volumes ofrainfall resulting in massivecrop losses. China, theworld’s most populatednation, with I.3 billion peopleto feed, is one of them. But, itis not the only one. Nigeria,with an estimated populationof I67 million people is alsoexperiencing flooding andfarm inundation in thenorthern part of the country,which account for close to 75per cent of food production.
Adamawa, Plateau and Nigerstates have been particularlyhard hit. Adamawa, inparticular, has suffered adouble tragedy. In additionto unprecedented highdownpour, swelling thebanks of the Benue River,farmers in the state have alsobeen wiped out by floodcaused by the release ofwater from a dam inCameroun. Granted, thedam would have collapsed,anyway, if the water was notreleased, still, it exacerbatedthe calamity in the state.Certainly, Adamawa, Plateauand Niger will contributeless to the national foodproduction this year than in20II. The same might be trueof a lot of northern states andsome southern statesdepending on major riversfor food production. But,globally, close to I2.5 percent reduction in yield isexpected this year. Yet,Nigeria is still an importdependent nation withrespect to food. We expect toimport food from nationsstruggling to feed their own
people.SUN The sun, as any old school
boy knows from our NatureStudy, which is no longertaught in primary schools, isnot up there just to demarcateday from night. It is a vitalcomponent of the agriculturalprogramme as it promotesphotosynthesis aiding plantgrowth and food production.It becomes indispensable atharvest time for fruitproduction especially. Tooshort a dry season results inlower yields and too long alsoreduces output of farmproducts.
However, there is anotherdimension to the input of thesun – heat. Plants need thesun, especially for heat, buttoo much heat, if prolonged,leads to drought and cropfailures. Until a few weeksago, the United States ofAmerica, the world’s largestfood producer and exporter,had been experiencing lowrainfall and excessive heat inwhat is called its “corn belt” –the Mid-West – which feedsAmerica and the world.Wheat, corn, soya beanshave shriveled on farms onaccount of drought. Thesame is true of parts ofCanada, Spain and somestates of Nigeria.
Already, a sharp rise inthe price of food is predictedfor the US as well as for therest of the world on accountof the American experiencealone. It is not just crops thatwill suffer price increases,prices of processed fooditems and animal feeds willalso escalate. Whetherimported or bred locally,livestock prices will jumpdramatically everywhere onaccount of the combination ofcrop failures globally anddrought in the US inparticular.
The Outlook for Nigeria Nigeria has been most
unfortunate this year – our
misfortune has only beenmitigated by the fact thattotal drought has eluded us,but we have had acombination of flood in thenorth and insufficient rain inthe south. The mostdependable barometer offood production has alwaysbeen vegetables. Usually,from May to September,there has been anabundance of vegetables inthe south. That was becausethe rains started slowly inFebruary/March; increase inintensity through April toJune; and peak in July. The“August break” then follows.September and October rainsround up the wet seasonbefore the sun takes over.This year, we haveexperienced one long“break” since the third weekof June. There has been littlerainfall. Crops havesuffered, vegetables most ofall. Given a bleak July forvegetables, it is clear that therest of the year is a write off.
Nigeria has now been listedamong the ten countries mostat risk of famine this year andthe next. Unfortunately, thecalamity brought by naturehas been compounded bygovernment policy.
Two months ago, the Federalgovernment of Nigeriaannounced an increase inimport duty for wheat –from35% to 65% — in a bid toencourage the shift fromwheat bread to cassava bread.Even the government and theMinister of Agriculture, whoaggressively promotes thisinitiative, know that theaggregate output of cassava,at the moment, is insufficientto support a massive shiftfrom wheat to cassava forbread. But, it is expected thatthe incremental demand forcassava will stimulate moreproduction. That, in theory,would have been the resultin another year or period. AsI predicted, earlier in theyear, the most likely, shortand medium terms,repercussion will beincreases in prices of breadand other wheat basedproducts while theanticipated cassava outputwill take years to materialize.
Today, the allover the world,on account ofclimatechange, aboutwhichscientists haveissuedwarnings fordecades,neither seasonnor volume ofwater ispredictableanymore
Arik Air and LufthansaTechnik of Germany
have sealed a newpartnership deal that willensure safe operations andsupport further growth of theNigerian airline. Lufthansais West and Central Africa’slargest carrier and worldrenowned aircraftmaintenance service provider.A statement issued by Arikairline’s spokesman, OlaAdebanji, said the agreementwas sealed during a meetingheld at Arik Air corporatehead office in Lagos where
Arik Air, Lufthansa seal partnership dealthe organisations agreed tostrengthen their partnershipconcluded about five yearsago. Under the newpartnership, LufthansaTechnik and LufthansaCityline will continue toprovide technical support toArik Air in the areas of linemaintenance, basemaintenance, and materialsand pool spare parts for thenext five years. It saidLufthansa Technik would alsoassist Arik Air in the area ofpersonnel training and theestablishment of a
maintenance, repair andoverhaul facility in Nigeria.The leader of the Lufthansateam, who is also the Salesand Marketing Director, MrClemens Schrettl, said hewas impressed with theoutcome of the meeting,describing the deliberationsas fruitful.
“Lufthansa is happy with thepartnership we have had withArik in the last five years andthat is why we are here todayto renew that cooperation andseek further areas of
cooperation with theairline.We are looking attaking this partnership to thenext level,” the statementquoted Schrettl as saying. Mr. Chris Ndulue, Arik Air'sexecutive vice-president andmanaging director, who ledthe airline’s team to themeeting, thanked Lufthansafor its technical support overthe years.
“Our association withLufthansa Technik andLufthansa Cityline has beenof great advantage in the
maintenance of our youngaircraft fleet. It alsounderscores our commitmentto ensuring safety of ourpassengers at all times.” The statement added thatboth Technik and Citylinehave a combined workforce of50 engineers dedicated toArik Air ’s aircraftmaintenance. It also statedthat all expendables andconsumables had beencertified by Lufthansa Technikand Cityline who maintainoperations in the Arik Airhangar.
26 —Vanguard, MONDAY, SEPTEMBER 10, 2012
Insurance
BRIEFS
Insurance college openswindow of opportunity foradmission seekers
STORIES BYROSMARY ONUOHA
The CharteredInsurance Institute ofNigeria, CIIN, said it
set to fill the admission gapcreated by higher institutionsin the country when theCollege of Insurance andManagement becomes fullyoperational.
Director General of theInstitute, Mr. AdepegbaAdegboyega, who disclosedthis to Financial Vanguard atthe Institutes Head Office inLagos, said that the Collegeof Insurance andManagement will be awindow of opportunity forindividuals who havedifficulty entering higherinstitutions.
Adepegba said “We havediscovered through researchthat Nigerian universitiescannot admit 15 per cent ofthose who qualify to be givenadmission. We have seen awindow of opportunity in theadmission gap. If somebodycannot go into the universitydirectly instead of writing theexamination year-in-year-out,the individual can start aprogramme we designed forschool leavers. With fivecredits including English andMathematics, an individualcan enroll for the programmethat will run for nine monthsand obtain a certificate thatwould cover the first stage ofthe professional exam of theinstitute. Once that is done,the student would start withexemptions of six subjects
from 12 subjects. We arestarting the college with theschool leavers’ programme.”
Adepegba also said that thereare various levels in thecollege and one of them is theschool levers programme forthose who have finished theirSenior Secondary CertificateExamination (SSCE) and aretrying to go into the university.“We still have refresherprogramme that allows peoplehave lectures before the mainexamination. The programmeis designed to help prepareour students for the institutes’exam. We also have refresherprogrammes for middle levelmanagers,” he said.
The CIIN DG said that theCollege of Insurance andFinancial Management isevolving and that its blue printis ready. “I do tell people thatthe college is not the building– the number of classes wehave, but the blue print whichwe have been able to developand within the next fewmonths, we would beadmitting students. Whetherwe admit them in thepermanent site or somewhereelse, would not be the mostimportant thing now, but theimportant thing is that we havea blue print and we arebringing in people that wouldrun the college.”
Adepegba said that theywould be bringing expertsfrom the industry that wouldform the faculties of thecollege.
According to him, theadministrative block of thecollege is completed, therestaurant is 90 per centcompleted, and seven chaletshave also been completed.“With the complement ofbuildings we have in there,we can start. We have madetremendous progress on thecollege. We have completedthe administrative block thathouses the class rooms andcan sit about 2000 students. Wehave admin offices for thecollege rector and other staff.We have a restaurant andseven chalets for people whomay want to stay overnight.The next stage is for us to buildthe halls for residents and thatI think before the end of theyear, we shall lay thefoundation for that.”
Adepegba said that as manyprofessionals gradually ageand retire from the insuranceindustry, the institute hascontinued to educate youngpeople to take its examinationsto boost their performance.
“We have improved on ourawareness drive and there aremore people coming in toregister for our examination,but there is still the need tofast track it. I believe we mustbe able to match the numberof people coming in two timesover and above those goingout. However, we have notbeen able to achieve that.There is a danger if we havefor an example 30 peopleretiring every year and wecannot find about 40 or 50people replacing them by wayof qualification. Exit can be asa result of death, retirement,loss of jobs and other factors,whereas, the only entranceinto the profession is the CIINwhich monitors those whocome into the industry. “
Guinea Insurance to institutionaliseglobal best practice
The Board andManagement ofGuinea Insurance Plc
has said that it is determinedto institutionalise a global bestpractice risk managementframework that aligns to itsbusiness strategy and isconsistent with the businessphilosophy.
In achieving this, AkintolaWilliams Deloitte has beenengaged to develop a riskmanagement framework thataddresses the full spectrum ofrisks faced by the company.The implementation of theframework will be internalisedsuch that it will align with our
strategy, values, attitudes andshared beliefs across thecompany and this will resultin profit for the shareholders.
According to the company,the concept of Enterprise RiskManagement framework hasbecome a tool for businesssurvival, a benchmark formeasuring operationalefficiency as well as enhancingprofitability of any entity. Thepursuit of such initiativeshould be consistent with agenuine desire to embedsustainable practices towardspreserving the value of anentity. “We live in a worlddriven by risks and
uncertainties and we mustcontinually ask “What can gowrong? Risk is anything thatcan go wrong,” the companysaid.
The Board and managementof Guinea said that they areconfident and moreimportantly committed toensuring that effective riskmanagement framework isimplemented to mitigate anygoing concern threat anduncertainties so as to achievesustainable growth andprofitability throughcontinuous improvement inoperations and processes.
Insurance Commissionerfor California, Dave Joneshas announced that
Alvin Leroy Black, 75, of PennValley, was sentenced in theNevada County SuperiorCourt to 180 days in CountyJail and five years ofsupervised probation, forviolating Penal Code Section487(a), Grand Theft. Blackmust also participate in theftcounseling and has beenordered to pay $204,777.93 inrestitution. Black pled guilty toa single felony count of grandtheft in March of this year.
According to investigatorsfrom the CaliforniaDepartment of Insurance (CDI)Investigations Division,between July 2001 and August2004, Black sold his 80 year-old victim seven annuitypolicies with a deposit amounttotaling $1,535,000 withoutfully disclosing the terms of theannuities and without her fullunderstanding of what she waspurchasing. Black earned$87,336 in commissions fortransacting the annuities.
The investigation revealedthat in March 2003, Blackformed a California non-profitcorporation, in the name of thevictim, without the knowledgeor consent of the victim.
Former annuityagent sentencedfor grand theft
*From right: President of the Nigerian Council of Registered Insurance Brokers, Barr. LaideOsijo, decorating Mr. Anthony Randle, Senior Financial Sector Specialist of the World Bank,during his visit to the NCRIB Secretariat in Lagos, recently. With them is Mr Ayodapo Shoderu,Deputy President of the Council.
The Lagos Area Committeeof the Nigerian Council of
Registered Insurance Brokershas elected new executives torun the affairs of the AreaCommittee in the next twoyears.
In an election held recently,Mr. Patrick Ikponwosaemerged as the Chairman ofthe Committee while Mr.Ayodele Akande became theVice Chairman. Mrs.Olubukola Ifemade emergedas the General Secretary.
The post of Assistant GeneralSecretary was won by Mr.Ejindu Ijekpa while Mr. WaleAfilaka became the HonouraryTreasurer. The post ofFinancial Secretary went toMr. Olusegun Kafaru. Mr.Bestman Abumere emerged asPublicity Secretary, while thepost of Internal Auditor waswon by Olusegun Ikuyonbo.
In a post election speech, thePresident Barrister of NCRIB,Laide Osijo challenged thenew executives to addresstheir minds to the challengesof sustaining the tempo ofprofessional and ethicalstandards of the NCRIB.
She commended theimmediate past executivesunder Mr. Tunde Oguntade forpromoting the growth ofinsurance broking in theLagos Area. She specificallyapplauded the immediate pastexecutives for their positiveroles in the area of effectiveinformation disseminationamongst its members.
NCRIB Lagos AreaCommittee getsnew executives
Vanguard, MONDAY, SEPTEMBER 10, 2012 — 27
Micro-Finance
BRIEFSSmall tradersshun loans frommicrofinanceinstitutions
Expensive microfinanceloans in Kenya are
driving small-scale businesspeople away from the sameinstitutions that are supposedto boost businesses and helpin eradication of poverty.
Most business persons areshunning loans from theinstitutions due to highinterest rates and strictrepayment conditions, whichmake the loans hard to service.Most micro-financeinstitutions in Kenya chargeinterest rates that range frombetween 1.8 per cent to 2.5 percent per month. Others, on theother hand, charge at least 0.5per cent per week.
This translates to between21.6 per cent and 30 per centper year. The institutions haverepayment periods of weeklyand monthly depending on thesize of the loan, lending rulesand how one agrees with othermembers of the group ran bythe micro-finance institution,who jointly act as guarantorsof the loan. Moreover, sincemost of the loans offered by theinstitutions do not have graceperiod, borrowers startservicing the loans as soon asthey receive them.
BoG urged onregulatingmicrofinanceindustry
The Ghana Association ofMicro-finance Companies
(GAMC) has expressed worryover the process of licensingmicro-finance companies underthe Central Bank’s newregulatory guidelines.
National President, CollinsAmponsah-Mensah, observedthat a number of firms areventuring into the sector withoutdue consideration to theregulations. He therefore wantsthe regulator to tighten entrancefor new businesses in the sectoruntil it completes the licensingand regularization of thosealready in operation.
“As it is now, as they [Bank ofGhana] try to process those whoare already in operations, othersare coming in and so thenumber gradually becomesoverwhelming and that makesit very difficult for the regulatorto work on”, he observed. Mr.Amponsah-Mensah alsocharged the Central bank to bebold in closing down firmsflouting the regulatoryguidelines early enough toprotect public interest andimage of the sector.
He suggested thatcommencement of operationsshould be suspendedtemporarily after businessincorporation at the RegistrarGeneral’s Department.
Academy addresses unemployment asYabatech enjoys entrepreneurial programme
The Academy forEntrepreneurial Studies
(AES) has embarked onenlightenment initiative toaddress unemployment, as theYaba College of Technology(Yabatech) students enjoyedits Operation 500 Studentsentrepreneurial programme.
Speaking during theAcademy’s Operation 500Students entrepreneurialprogramme per campus, heldin Yabatech premises in Lagos,President of the Academy, Dr.Ausbeth Ajagu said that theprogramme initiated by theAcademy is basically toredirect students of theNigerian Tertiary Institutionsto their innate wealth creatingpotentials, explore the vastwealth creating opportunitiesthat abound in their respectivecommunities and engagethemselves in productiveeconomic endeavours while oncampus, in preparation for theworld of work outside thecampus.
Ajagu, represented byChairman Caniz Limited, Dr.Austin Izagbo, said, “Povertyis a factor of poor economyand that is why we arecompelled to generate aprogram like this aimed atpoverty eradication in ourland. Strictly speaking,poverty in Nigeria is a silentkiller, a daily growingcankerworm that is graduallydrowning our nation.
“The problem ofunemployment has also beentraced to the inability of oureducational system to produce
graduates who can discoverthemselves and convert theiracquired knowledge and skillsinto entrepreneurial ventures.This challenge is the basis forthe Federal Government’sdirective, that every TertiaryInstitution in Nigeria shouldincorporate EntrepreneurshipEducation in their curricula atall levels.
“As Nigeria’s foremostentrepreneurial developmentinstitution, we believe that ifthe avalanche of wealthcreating potentials dotting theentire landscape of our dearfatherland - Nigeria, are wellharnessed by the citizenry, wewould be having over
employment rather than thedebacle of underemploymentor unemployment as the caseis today.
“Imagine if about 150,000graduates leave schools aswealth and employmentgenerators rather than jobseekers, the advantage is thatthey automatically becomecatalysts in our employmentgeneration drive.”
Meanwhile, the programmeis aimed at the following: toinculcate entrepreneurialskills and culture in thestudents, create and stimulateentrepreneurial awarenessand culture in institutions andin general, promote self
discovery, self developmentand self expression inentrepreneurial activitiesamong students.
He emphasized that the highmoral decadence amongstyouths today is a product ofpoor upbringing as well asnegative peer influence thatexists in tertiary institutions.
He noted that to achieve avirile and productive Nigeriaand Nigerians, there is thestrong need to re-orientateand inculcate best practiceprinciples in the future leaders“our today’s student via totalpositive mental transformationbecause “as a Man thinks, so
Apart from major airportsand airlines that enjoy
Conoil's aviation fuel supply,the small aircraft owners alsoenjoy from the millions oftonnes supplied in theindustry, Vanguard gathered.In a statement from thecompany, the supply is madeto small aircraft owners all yearround to enhance the flyingexperience of local andinternational air passengers.
Conoil Aviation, leadingfueller to leading airlines ofthe world said, “The role ofConoil Aviation in theNigerian civil aviationindustry is historic and critical,as the nation’s largest supplierof aviation fuel, Conoil ispresent at major airfieldsacross the country, providingmillions of tonnes of fuel toairports, airlines and smallaircraft owners all year roundto enhance the flyingexperience of local andinternational air passengers.
The statement explained thatthe company is described asfueller to the leading airlinesof the world as a result of itssophisticated laboratory,
Small aircraft owners benefit from Conoil aviation fuel
reputed for testing andcertifying Jet-A 1 in thecountry and also due to trustreposed in the company by itsairline customers.
According to the statement,“We continually upgrade ouraviation depots and invest inmodern infrastructures,including state-of-the-artbowsers and dispensers witha pump speed of 3,500 litres
per minute. In addition tohigh-tech facilities ofinternational standard, wehave a technical agreementwith MS Flightline SupportLimited for the purpose ofenhancing service deliveryand building personnelcompetencies throughtraining.
“We remain the trail-blazer
in the sector, with the largestspread of aviation fuel depotsand an enviable comparativeadvantage in terms of nationalpresence, storage capacity,quality control, well-trainedfuelling operators, round-the-clock engineering andmaintenance support, andprompt, efficient servicedelivery.”
Gas and Steel Limited(NGSL), has called on
stakeholders in the buildingsector (architects, structuralengineers, fabricators andconsultants) to consider costadvantage when usingbuilding material for clients.
Speaking during a pressparley, Managing Director,Mr. Hasib Moukarim, said thatusing the right steel for theconstruction of warehousesand buildings, the client getsthe cost saving and theprofessionals get the credit.
Moukarim explained that theright steel as described by the
Steel firm advocates cost effectiveness for construction projects
Steel Tube Institute of NorthAmerica is a ´HollowStructural Sections´ (HSS), atype of steel tube that hasgreater strength to weightratios than wide flange beams.
He stated that the steel, adesign material of the 21
st
Century is a replica of thatproduced by his company,pointing out that NGSL is acompany known formanufacturing and marketingof steel pipes and tubes for theconstruction and furnitureindustries.
He, however, said that allthe new airport terminals and
shopping malls in the worldare built by HSS, because ofits cost saving and superiorstrength, saying “since lesssteel is needed to do the samejob, then less weight and lesscost, he exclaimed.
“HSS have excellentcompression characteristicsand exceptional forcibilityadded that it is available forthe construction ofwarehouses, terminals,billboards, bridges, malls andtowers and also used in casingboreholes and for piling softgrounds.
*From left: Olu Ajayi, one of the frontline artists received Joe Obiago, an art collector andbusinessman to his studio at the National Arts Theatre, Iganmu, Lagos
Stories byPROVIDENCE OBUH
28 — Vanguard, MONDAY, SEPTEMBER 10, 2012
Interview
’
’
Mr Segun Odusanya is FirstCity Monument Bank'sDeputy Managing Director
/ Executive Director. He joined FCMBin August 2011 with over 18 years ofexperience garnered across keybanking functions, including ClientRelationship, Sales, CorporateBanking and Operations. His mostrecent experience prior to joiningFCMB was as the Regional ExecutiveDirector, Client Relationship:Standard Chartered Bank, East Africa,covering Uganda, Kenya andTanzania, a position he had heldsince 2009, with major responsibilityfor driving the group’s agenda andstrategy for Client Relationship in EastAfrica. Prior to attaining theaforementioned role, Segun hadoccupied different positions inStandard Chartered Nigeria, ZenithBank and erstwhile Chartered Bank.Segun holds a bachelor’s degree inBanking and Finance, as well as amaster’s degree in Finance from theUniversity of Lagos. He has attendedvarious managerial courses,including The General Managementand Leadership Course at SaidBusiness School, Oxford University. Inthis chat with Financial Vanguard, hespoke on various issues.
Excerpts
If somebody meets me somewhereand says ‘do you know the DMD ofFCMB?’ Who will I say he is?
Segun Odusanya is a very simple,honest, highly professional andsolution driven banker. I have beenaround for about 20 years. During thisperiod, I have worked in fourinstitutions starting with CharteredBank for about two years, Zenith forabout five years and StandardChartered Bank for about 12 yearsbefore I moved to FCMB mid last year.My last posting in StandardChartered Bank was as RegionalExecutive Director for WholesaleBanking for East Africa (covering threepresence countries and about 4 non-presence countries).
Why FCMB?
I had always admired FCMB. One,because of their history and two
because I always looked at FCMB asa highly solution-driven bank(especially within the Corporatespace); a bank that is able to offersolutions at the upper level ofCorporate customer ’s pyramid ofneeds. For example, Mergers andAcquisition, Capital raising,Structured Trade Finance, etc. Thesewere complex transactions that notevery bank could provide. The bankwas also able to create a niche for itselfwithin the high networth and uppermiddle market space. With my longyears of experience as a corporatebanker both in and outside the country,I wanted to work in a bank with a clearfocus/strategy of providing solutionsto this segment of the industry.
We want to deliver solutions to small busBy OMOH GABRIEL,
Business EditorFCMB used to be a merchant bank
and its niche is corporate banking,so you fit into corporate banking oris FCMB changing focus now?
What we are doing is expanding ourfocus to create a more robust andstable bank. We want to drive solutionsacross the various segments(corporate, commercial, smallenterprises and consumer segments)of the economy. We have been doingthis organically in the last five years,and have seen steady growths in allthese segments. The acquisition of FinBank is expected to give two/threeyears leap (especially in the area ofbranch network, liquidity, and balancesheet size). With the acquisition, wehave been able to double our branchnetwork, more than double ourcustomer base, improved the liquidityposition of the bank, and also create avery good platform to be able toprovide more client-centric productsin the consumer space. We also willnow be able to provide our expertiseto more commercial and smallenterprises. We will be able to helpthese clients grow their businesseswith not just the banking products weoffer, but also with our expertise incorporate and financial advisory. Wewant to help create more Dangotes inthis country and the opportunity to dothis is enormous.
Not looking at the retail side of themarket?
As I said, our focus cuts across allthe segments. We are
aggressively driving retail, but indoing this, we are not de-emphasizingcorporate. We have made a lot ofinvestments in people, products,systems and branches (from theacquisition) in both segments. Weunderstand that both segmentscomplement each other, and for us tocontinue to survive as a universalbank, we needed to provide servicesacross all the segments. When you lookat it, majority of the retail customers
are key stakeholders of the corporates.They are suppliers, distributors, staffetc. of the corporate. Our focustherefore is to provide services to allthese stakeholders. We are alsocurrently having discussions with thecentral bank to further extend theseservices to the mass market.
How equipped is the FCMB to dothis?
As a commercial bank, we have thelicence to do all these and over thelast five years, we have been steadilyexpanding our business to cover all
these segments. The acquisition justprovided an opportunity for us to fast-forwardby two-three years. With the doubling of ourbranch network, we are now able to servemore customers, we now have the scale tolaunch more value added products to ourcustomers, and we are now also able tooperate more efficiently as a bank. All thesedefinitely will translate into overall savingsfor our customers.
Let’s come to the merger itself. What isthe stage of the merger? Have youconcluded or when are you concluding it?
I will say we are 95 per cent complete.Hopefully, the two banks will be fully mergedby end of October. Our initial target wassecond quarter of the year, but we gotdelayed by issues around the Capital marketprobe and the sacking of the SEC Board.Things are now back to normal, and most ofthe approvals have been obtained.
All regulatory approvals on the acquisitionhave been sorted out?
Most of it.
An acquisition like this usually has costimplications. What are the cost implicationsfor FCMB and what value has it actuallyadded? When you talk about yourcustomers, what value are the customersactually expecting from this acquisition?
This and the other two (Access andEcoBank) acquisitions were highly
supported by Central Bank. So we got a lotof comfort especially around the bad assetsand contingent liabilities in the balance sheet.Specifically on our acquisition, I think wechose the right bank both in terms of scaleand value addition for all our stakeholders.Whilst driving the acquisition, we alsoneeded to ensure that we did not create
•Segun Odusanya...As I said, our focus cuts across all segments.
With theacquisition wehave been able todouble ourbranch network,more than doubleour customerbase, improvedthe liquidityposition of thebank, and alsocreate a very goodplatform to beable to providemore client centricproducts in theconsumer space
•Segun Odusanya
Vanguard, MONDAY, SEPTEMBER 10, 2012 — 29
Interview
sinesses to make them bigger
distractions to our normal business. The keyis to ensure we create value for all our keystakeholders: for shareholders by ensuring abetter return on equity; for customers byoffering a compelling proposition and for staffby creating a great company to work for thatprovides solid career aspirations. In essence,we must aim to be simply better than the rest,build on that and then become the best.Specifically for customers, the merger willprovide the customer with increased touchpoints to the bank – more branches, more ATMsand a wider range of alternative transactionpoints.We will be a stronger bank withincreased liquidity and the ability to supportclient activities through increased loans. Wewill offer better products, better service levelsand an outstanding client experience. Fromthe efficiencies and synergies created, we willbe able to deliver our services and products athighly competitive pricing to the customers.
I do know that FinBank used to have a verygood product, the Flash me cash and peoplewere running after it so how do you intendto deal with that. Is that part of the thingsyou are going to cash in on?
Absolutely! FinBank had that product and Itell you, the product was well received butbecause of the issues in the bank,, they werenot able to take advantage of the product. Withthe acquisition, one of the things we did wasto audit all the products and processes inFinBank and I can tell you categorically thatFlash me cash is one of the products we willbe enhancing to improve its efficiency in termsof delivery and reach.
From all the acquisitions we have seen inthe industry, any bank that has acquiredanother usually has issues with staffing ie,staff redundancy, overlapping functions etc.For FCMB in particular, in the head office
here, do you have such issues andhow are you dealing with them?
If you look at the two banksseparately, there are two managingdirectors but you can only have onein a company so definitely, a lot offunctions will go and ours is not anexception. We have, however, doneours in a very transparent manner,and with a lot of empathy. Theredundant staff were adequatelycatered for – both in cash and non-cash benefits (such as medicals andentrepreneurial training). So ours wasa win-win for everyone. Win for usbecause we have been able to reduceoverlapping functions and therefore,come next year, the bank will not haveto pay huge salaries. There will alsobe huge savings in operatingexpenses as a lot of overlapping andexcess assets and costs will beeliminated.
The lasting benefit for us, will behow we are able to leverage thecombined business to improve serviceexperience and cost of doing businessto customers, achieve sustainableprofit for our shareholders andbecome a great place to work for ourstaff.
What mechanism are you puttingin place to ensure lower charges tocustomers. There is talk aboutunnecessary charges in the industryso in terms of value addition,customers don’t like unnecessarycharges or higher charges. So howwill FCMB tackle this?
Occasionally, systems orprocesses do fail, and this
could sometimes mean frustrationsand extra costs to customers. However,we have developed a robustfeedback/tracking mechanism in thebank to take care of this. In additionto the internal tracking system, wehave also recently launched acustomer feedback process called Netpromoters scores). This enables us toget regular feedback from ourcustomers on all our touch points. Thefeedback is used to improve ourservice, process and also introducenew products.
The margin between interest ratecharged by banks and deposit rate isvery wide. You are charging 22 percent interest rate and paying 5 percent for deposit. That is what peopleare complaining about. They aresaying that the regime of interest rateis very unfavourable to the realsector of the economy...
The interest rate is always a functionof the structure of the economy. It is afunction of government monetarypolicy, a function of cost of doingbusiness, inflation rate, among others.People complain because they don’thave full information on all these. Theamount banks spend on poweringtheir branches 24 hours and the costof moving cash around, amongothers, are enormous. So, interest rateis dependent on the structure of theeconomy. If power is stable 24 hours,the cost of doing business will crash
by about 30 or 40 per cent. Ifinsecurity is tackled, cost of movingcash will be reduced. Thecombination of all these affect the waybanks charge. Banks are not out tokill businesses because we need themto survive to sustain our operationsand profitability.
I read a report by Fitch on Nigeriabanks that banks declare dividendsin order to placate shareholders and
that non-performing loans are alsogoing soon after AMCON bought thenon-performing loans of banks. Whatdo you have to say?
Dividend payment is a decision ofdirectors and shareholders.
Directors and shareholders have to puta lot of things into consideration beforedeciding to pay or retain. Such decisionswill normally be driven by regulatoryrequirements on capital, dividendpolicy, growth opportunities and theopportunity costs of funds. The goodthing about Nigeria is that there is somestatutory retention that banks mustmake unlike some other countrieswhere banks are allowed to have a 100per cent payout as long as they havemet the regulatory capital.
On bad loan, I think Nigerian bankshave learnt some lessons and you couldsee some restraints in the way loans areanalysed and disbursed. For us inFCMB, we are doing somethingdifferent because we are not over-concentrating our portfolios. We arediversifying our portfolios andspreading our risk. That is expandingmore into commercial and SME space.We appreciate that the individualcompany risk in these segments may behigher than corporate, but it is betteron a portfolio basis. Also, we aredeveloping a robust risk managementmechanism to help control and managethe risks.
Why are banks not lending much tomanufacturers?
We are actually lending. There isalways room for improvement. Also,some of these manufacturers also haveto help themselves. Some of them arenot business savvy. They need toimprove on their corporate governance.One of our core businesses is lending,but in doing this, we also must ensurethat the borrowers are of good character
’
’
and also have the capacity torepay.
Where do you want to see thisbank in the long run?
We want to see this bank in thetop three in the creation of valueto all our key stakeholders(customer, staff, community,shareholders). Our focus is noton size, but in value creationacross the spectrum.
What are the opportunitiesavailable to take you to yourdestination?
The opportunities are internaland external. We just did anacquisition. So there are a lot ofefficiencies that will improveservice delivery to our customers,give higher returns to ourshareholders, make FCMB agreat place to work for staff, andmake us good partners with thecommunity and also thegovernment. Those are theinternal. Looking at the external,there are massive opportunitiesin this country. This is a countrywith a potential GDP growth ofover 10 per cent per annum if thebasic infrastructural gaps can befixed. Fixing power alone canadd over 40 per cent to theeconomy. There is absolutely noreason why manufacturersshould be moving their plants toGhana, with a population of just20m. We have the population,and the market. So fixing theinfrastructure gaps will creategrowth potential all across theeconomy.
The mergerwill providethe customerwithincreasedtouch pointsto the bank –morebranches,more ATMsand a widerrange ofalternativetransactionpoints
•Segun Odusanya
30 — Vanguard, MONDAY, SEPTEMBER 10, 2012
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34 — Vanguard, MONDAY, SEPTEMBER 10, 2012
Vanguard, MONDAY, SEPTEMBER 10, 2012 — 35
People in Business
’’
At 24, Al-HassanMohammed, aGhanaian, popularly
known as Classic, came toNigeria in search of greenerpasture.
He was optimistic that hisdesires would come to passand that his mission would befruitful. He wouldn’t give achance for distraction of anykind and so, he embarked ona lonely journey. He came toNigeria without his family.
In what could be describedas “survival of the fittest,” hestarted his life in Nigeria asa barber under the CMSbridge in Lagos. Perhaps, hewas fulfilling one of thescriptural texts, Zachariah 4vs 10a which says, “Do notdespise these smallbeginnings..”
He started his barbingprofession with the sum ofN70 and today, he is anentrepreneur. He has trainedmany young people on thejob. Currently, he is buildinghis school in Ghana, allthanks to the nobleprofession.
In an encounter withVanguard, he explained whyhe came into the professionand what he has been able toachieve for himself.Excerpts:
“I came to Nigeria in 1986in search of white collar job.This was during the regimeof General Ibrahim BadamosiBabaginda. I graduated as anaccountant and a certifiedbook keeper. I thought thatwith my level of educationand exposure, I could securea job in Nigeria. I wentthrough all the nooks andcrannies of Lagos in search ofjob but all efforts to no avail.
“I was frustrated and didn’tknow what to do. People thatcould have helped me turnedme down and so, life wasmiserable.
“And because it was a taboofor me to engage in someviolent acts, I picked up thisbarbing profession. At first, itwas ridiculous. There was notenough money to kick off.There was no money to rent ashop. I became a wanderer onthe streets of Lagos looking forwhere to work. Then, I got tothe CMS Bridge wheresomeone introduced me tothose who were managing theplace.
“There, I was given a spaceto start up my business and Iinvested all the money on meinto it. I started with the sumof N70. I rented a space underthe bridge and used the restof the money to purchasesome tools including blades,hand clippers, powder,combs, scissors, chairs, mirroramongst others.
“At first, it was tediousbecause I had to convincepeople that I am an expert inthe profession and so, I wasrendering both free and bonusservices to people. It took awhile before I could stabilisebut I was optimistic.
“I proceeded to acquire
Unemploymentforced me into barbing--- Al-hassan Mohammed
more knowledge on theprofession so as to boost mycareer and so I became anexpert.
“Today, I have trained somany young people who arenow experts on their own.Some of them havetravelled out of the countryand are living comfortably,”he said.
Asked why he didn’t bringhis family with him toNigeria, he said, “I was just24 years old, a young manwho was full of life. I wantedto know what it was to beindependent. Although Iwas married, I wanted togive my family the best oflife.
“I know what it is to bepoor, I don’t want mychildren to go through whatI had gone through. And so,I came to Nigeria to get thebest of life and I thank Godthat I am fulfilled. This is my26th year in the profession,I give glory to God."
On why he couldn’t go
back to Ghana to start up thebarbing profession, he said,“Life in Ghana is good butbecause of the population
r ight now, I am in theprocess of building.
I have been living in thiscountry for the past 26 yearsand I have no regretswhatsoever.
Nigerians are respectfulprovided you reciprocate."
Asked about the price hepaid to own a shop in apopular place like CMS, hesaid, “I am a man of honourand respect. For 26 years, Ihad no cause to engage inphysical combat with peopleand that is what is requiredof you.
“I do my job with all senseof dignity and I respectcustomers’ opinion. Since Istarted this business, I havebeen using one blade on oneman. I don’t use clipper so asto prevent contraction of
By EBUN SESSOU
contagious diseases. I chooseto use blade for convenience.I only use manual orautomatic clipper based onrequest by customers.
“It is cheap to have a nicecut in my shop depending onthe individual. I have peopleof high calibre who patroniseme. And that is why I choseto be called Classic Ultimate.I don’t condone any act ofindiscipline in my shop andeverybody knows me for that."
On what it takes to have ashop under the bridge, hesaid, “Life under the bridgehas been interesting. Itdepends on the individual.Anyone who wouldn’taccommodate indisciplinemust be disciplined in return.I can live with differentpeople from differentbackgrounds. I am a peace-loving man, I don’t appreciatecruelty within myenvironment and that is myprinciple and I don’t keepgrudges.
“I am acquainted with thisjob and that is where I derivemy satisfaction now. At myage, there is limit to theamount of stress I can engagein.”
Asked on the challenges ofliving without his family inNigeria, he said, “Out of sightis not out of mind. Thedistance between Nigeria andGhana is just a stone throwand I don’t have anyproblem living alone inNigeria. Communication hasalso helped in building thebond. I visit my family on aregular basis. I have a wifeand she is everything to meand I don’t intend to get asecond wife. I cannot stopthis profession because it islucrative and profitable. Iintend to inculcate it into myschooling business. I can’tdo without this barbingprofession. This job gave mea new life and today, I amcomfortable.”
On profit made so far, hesaid, “It is difficult to statethe exact profit but I thankGod, although I still needmore money to move on.”
Lamenting the challenges,he sa id , “Present ly,hous ing in Niger ia i sexpensive. An individualcan use the same amounto f money in rent ing ahouse in Nigeria to builda befitting house in Ghana.A jobless man in Nigeria isdead. And that is what theeconomy has caused.
“Things are no longer thesame as it used to be in thepast. People are no longerconcerned when it comes tolooking good. There is nomoney and everybody ismanaging.”
On how he entertains hiscustomers, he said, “I havea t ransis tor radio thatkeeps the environmentlively. We listen to news ona daily basis . I startedusing transistor about tenyears ago. And tocomplement my business, Ialso engage in chargingphone bat ter ies ,” heconcluded.
in Nigeria, I decidedto stay in Nigeria. Thisbus ines s i s morelucrative and profitablethan what is obtainablein Ghana. I have plansto go back to Ghanabecause I have aproject at hand. I ambuilding a school inGhana although it isno t easy t o bu i ld as tandard schoo l . I ttakes determinat ionand lots of money toown a standard schoolin Ghana.
"Acquisition of landin Ghana i s easyprovided one has them o n e y. I t i s moreaffordable than what isin th i s coun t r y.Anyone with N50,000can acquire land inGhana and I haveacqu i r ed the l and ,
I was frustrated and didn’tknow what to do. Peoplethat could have helped meturned me down and so,life was miserable
*Al-Hassan Mohammed at work
*Al-Hassan Mohammed
36 — Vanguard, MONDAY, SEPTEMBER 10, 2012
BRIEFS
*Special Technical Assistant, NCAA, Group Capt. Sola Adetu addressing Air Nigeria's protestingstaff at the Murtala Mohammed Airport Ikeja, Lagos on Friday.
Aviation
Stories byLAWANI MIKAIRU& DANIEL ETEGHE
There was a mild drama atthe Murtala Muhammed
International Airport (MMIA),Lagos last Wednesday whenofficials of the State SecurityService (SSS) stationed at theairport impounded thepassports of about 50Nigerians, includingjournalists who werereturning from the 18thAviation and Allied BusinessLeadership Conference inWindhoek, Namibia via Accrafor about one hour.
Daily Independentcorrespondent who was an eyewitness observed that afterpassengers arrived at thearrival hall of the MMIA, onboard Overland SpecialFlight at about 12.10 a.m,the two entrances leading towhere the NigeriaImmigration Service (NIS)stamps passports werelocked and it took more than20 minutes for the FederalAirports Authority of Nigeria(FAAN) AVSEC, to open thegate.
According to thecorrespondent, when thedoor was finally opened, theNIS responded swift ly,stamped the passportswithout delay having carriedout their checks. When theNIS officials completed theirjob, the SSS officials, whosenames could not beascertained because they hidtheir identity cards from thepassengers, told theImmigration officers to handover the passport to themthat they want the data pageof all the passports.
DANA CRASH: Foreignerssue airline over accident
Over 20 relativesof foreignersinvolved in the Dana
Air ill-fated flight on June 3rd2012 that killed all 153passengers on board and 10on the ground, have sued theairline in their differentcountries for negligence.
The Director-General of theNigerian Civil AviationAuthority (NCAA), Dr. HaroldDemuren, who disclosed thisdevelopment to newsmen lastweek at the NCAAheadquarters in Lagos,pointed out that theforeigners involved were fromthe United States, UnitedKingdom, China amongstother countries.
Dr. Demuren noted thatsome of the foreigners andsome Nigerians had draggedDana Air to court to presscharges against the airlineadding that until that wassettled, the families could notbe compensated.
Asked whether he knowsthe outcome of the litigation,Dr. Demuren declined tocomment on it.
Dr. Demuren, however,stressed that apart from theforeigners dragging theairline to court, Dana Airlineswas expected to pay the sumtotal of $350m ascompensation to the familiesof 153 victims onboard theairline noting that theamount of money to be paidexcludes those who werekilled on ground by theaircraft.
According to him,”themeeting we are holding today
is about Dana Air, althoughas you know money cannotreplace lives that were lostdue to the crash, people havelost their loved ones. The lawis very clear that we need topay the money that isrequired.”
Debunking some mediareports, not Vanguard, thatthe airline was not adequatelyinsured, Dr. Demureninsisted that the airline was
adequately insured as at thetime of the crash.
He, however, explained thatonly 62 families had been paidso far due to the stringentmeasures involved inassessing the funds stressingthat there were multiple claimsfrom some family memberswhich dragged the processbackward.
He said, “The aircraft wasadequately covered by
insurance and I can tell youthat the whole money for thesettlement of the familiesaccording to the law, is onground, but we have to say ithere that money cannotreplace lives because so manypeople have lost their lovedones. Money is the smallestthing and the law is very clearon compensation.
“We had to do a lot of DNAtests to know who to pay to incase of multiple claims. It isvery important for us to moveforward. That was why wecalled Dana management,NAICOM andrepresentatives of LloydsInsurance Company.”
Meanwhile, the DeputyCommissioner, Technical,National InsuranceCommission (NAICOM),Mr. Ibrahim Hassan alsoaffirmed the statement of theD- G, NCAA that DanaAirlines was adequatelyinsured as at the time of thecrash adding that they hadbeen insured even beforethe said crash.
According to him, ”30 percent of the risk wasdomiciled in Nigeria byvarious insurancecompanies while Llyods ofLondon bears the remaining70 per cent risk.The issue of70 per cent has already beenresolved. You really have tocarry out who the next-of-kinis. Again, some people havealready gone to court tochallenge the airline on theamount of money they arebeing paid.
“The compensations ofthose people who lost theirlives and properties onground have not evencommenced. We should notsensationalise the issue, butbe responsible. However, Ican assure you that all theissues would be settled,” Mr.Hassan added.
Make workplace safe foremployees —Owolabi
The Managing Directorof Skyway AviationHandling Company
Ltd (SAHCOL), Alh. OluropoOwolabi, has urgedemployers in the aviationindustry to make theirworkplace safe for theiremployees by safeguardingtheir health. This was alsocorroborated by the Managerof Safety and QualityDepartment of AeroContractors Airlines, Mr.Victor Dauda who said thatfor safety to be in all aspectsof aviation business, airlineoperators must co-operate insharing vital information toenhance safety of theirpassengers as well as itsworkers.
Alhaji Owolabi made thisdisclosure at the closingceremony of the company’sSafety Week at Ikeja.
He said that employersshould be highly committed toa safe work environment,which would go a long way toboost employees' moral andincrease effectiveness.”Webelieve that safety is amanagement function; wehave a responsibility to makethe workplace safer for ouremployees and thussafeguarding their health.This ensures that an employeecan feel secure aboutundertaking his routine taskswith complete determinationand confidence.”
He noted that most Nigerianorganisations overlook the factthat safety is vital in the workenvironment, urging them toimbibe a safety culture. Headvised employers to put inplace a well trained andsupported Safety Departmentin their organisations.
The National President ofthe Association of ForeignAirlines in Nigeria (AFAN)also noted that safety beginswith an organisationmanagement.
He said that the aviationindustry was like the medicalsector which safety and healthwere made supreme andmistakes were avoided at itsminimal level. ”We have to putourselves together to get itright and remind ourselves ifthey are not doing right in theworkplace concerning safetyand security. We must besafety-conscious ineverything we do, includingon the ramp and how wehandle our machinery,” hesaid.
He urged businessorganisations to apply theright solutions to safety.
Bi-Courtneyappoints newCEO for MMA2
Bi-Courtney AviationServices Limited (BASL)
has appointed a new chiefexecutive officer for theMurtala Muhammed AirportTerminal Two, Lagos. He is Mr.Christophe Penninck.
According to a statement bythe company, Mr. Penninck, aBelgian and Polish, is joiningthe organisation with a wealthof experience spanning overa decade in global aviation,including airport operations,passenger safety, as well asairline and safetymanagement in differentcountries.
The statement added thatPenninck, a graduate ofEmbry-Riddle AeronauticalUniversity, Daytona Beach,US and multiple awardwinner in the global aviationindustry, has a passion foraviation that has earned himseveral senior managementpositions in various airlines,such as Swissair/SabenaBelgian World Airlines, KenyaAirways, Aero Contractors,Lagos, among others.
SSS at MMIAimpoundjournalists'passports
Vanguard, MONDAY, SEPTEMBER 10, 2012 — 37
Agric
Edo StateCommissioner forAgriculture and
Natural Resources, Hon.Abdul Oroh, did not mincewords when he said the stateis moving away fromgrowing chickens and eggsfor government officials toeat or raise cattle forgovernment functionariesand individuals.
In a chat with JIMOHBABATUNDE weekend inBenin, he said as a way ofbolstering agric business inthe state, the government willno longer own farms but willencourage the private sectorto invest in the sector.
He also took time to speakon other agricultural issuesin the state. Excerpt:
On the state’s policy onagriculture
When we came in, wedecided that we needed todevelop a policy and strategicplan that will be a kind ofroadmap that will help usdevelop agriculture in EdoState so as to make agriculturea major employer of labourand guarantee food security.When the governor came in,he made it clear that hisvision for Edo State is that ofa state that will become aleading economic centre inNigeria, where the people willlive in dignity, powered by agovernment that is responsiveto the people.
He promised to fightcorruption in the state byusing a combination of toolsand one of them is to developagriculture which we knowhas the ability to employ a lotof people.
We also know that throughagriculture, we can developa lot of value chains throughprocessing, improved inputsand marketing through whichthe income of farmers willimprove greatly and alsodevelop an agro industrialbase.
Edo State has about1,156,916 hectares of arableland, and 584, 645 cultivableland for tree crops plus arablecultivation of 182, 170hectares and we have floodplains that are good forproduction of rice and othercereals that stretches to about73,000 hectares.
The weather in the state isgood, the rainy season hasbeen very consistent over theyears; we have notexperienced any period ofdrought; you see that this isprobably the best place youwant to invest .
In doing our strategic plan,we looked at the past. Beforenow, Edo State was involvedin direct farming, we had theAgbede-Wareke farm, theCassavita plant in Uromi, wehad farm settlements whichstarted from the Awolowodays. We created communalfarms under the military andother initiatives, but wediscovered that we were not
Edo State will no longer beinvolved in direct farming—Abdul Oroh
equipped to manage themand run them efficiently, aswe discovered that the mostsuccessful agro-basedenterprises in the state arerun by the private sector,especially those that havebeen privatized.
If you go to Presco oil, thatis one example, then therubber estate, Okomu Oil etc.,in these companies, thegovernment has less than 10per cent stake. We havewithdrawn from directparticipation substantially toencourage private initiatives.For us, that is the bestapproach, because those runby the private companies aremaking profit, sometimes,more than 100 per cent profitannually and they employthousands of people as wellas pay their taxes. What elsedo we want as government?We believe that is the way togo.
Edo State now has it as a
policy not to run new farms.We will not establish newfarms. What we can do underour private–public sectorarrangement is to join theprivate sector. We are not
pulling out of agriculture, butjust that we are not going tosay this is Edo State-ownedfarm where we will begrowing chicken and eggs forgovernment officials to eat orcattle for governmentfunctionaries and individuals.
We are going to partner withthe private sector, provide theland; if we have the means orif possible, construct accessroad to the farms and thengive the private sectorpractitioner C of O for freeand then expect you toemploy people to develop thefarm in full and develop thevalue chain.
On what the state is doingto encourage small scalefarmers in the state
In the state, the farmers arewell organised. We havefarmers' co-operative societiesin almost all communitieshere, not just general co-operatives. We have cassavagrowers, we have cocoagrowers, we have oil palmsmall holders association andthen we have another co-operative at the state levelthat is more like an umbrellagroup for all the co-operatives. So it is to bring allthe farmers in the statetogether.
They are very well organisedand this is an advantage forus. Right now, we haveregistered about 32,000farmers, we want to hit120,000 next year, so that wewill be able to reach themdirectly. We have their phonenumbers and we know theircommunities, their villagesand wards, includingfishermen.
We are now in a position togive them inputs directly orassist them to get inputsdirectly from genuine agro-based dealers.
The farmers we registeredare real farmers. Wedistributed forms to thefarmers. Initially they thoughtit was for tax purpose, butwhen they realised theobjective, they started comingout to register.
We have also launched thevarious growth enhancementschemes in the state and theyare running. We aresubsidizing to the tune of 25per cent. The FederalGovernment buys at 25 percent and the farmers buy at50 per cent once they keyedin; but before then, ourfarmers only heard offertilizers being bought bypoliticians who take themelsewhere to sell at prices
twice what they would sell inEdo State. So our farmers didnot know what fertilizer was.
So, for the first time last twoyears, we set up a committeethat created selling points allover the state, people werecoming to buy at those sellingpoints and paid straight to thebanks. They did not paythrough ministries andnobody was allowed to take atrailer-load of fertilizer out ofthe state. Now, our farmersare using fertilizers for thefirst time. Before, they had thenotion that if you usefertilizers, the yams will berotten; or the weather is good,so we don’t need it.
Now, they know that as youcultivate the land, the qualityof the soil depreciates and ifyou enrich it with fertilizers,you can regenerate it and gethigher yields.
We are also trying to revampour ADP to be able to provideextension services to farmersand we are working on thatright now. We used to havesome equipment and we areadvertising for procurementof more and this is on. Wehave about 15 functionaltractors and one bulldozer,these are not enough. Wewant to buy more and otherfarm implements.
We are also planning todevelop agro centres in thethree senatorial districtswhere the farmers can haveaccess to equipment providedby the private sector. What wehave will not be able to goround and we don’t have thecapacity to buy what will goround. Buying theseequipment that are notproduced here is not easy, sowe need to involve theprivate sector. That is the wayforward.
On his projection for thesector
My projection is that wewant to increase cocoaproduction in the state. Rightnow, it is about 52,000 metrictonnes per annum to about150,000 metric tonnesbetween now and 2020. Wewant to be number two if notnumber one. We want to alsoraise oil palm and be numberone in rubber.We are aimingto be number one in cassava.
We want to dominate thecassava sector and developthe value chain. We want toproduce high quality cassavaflour, starch, chips, etc.Nigeria spends about N1.3trillion importing flour, fish,rice etc. If Edo State canproduce a quarter of that oreven 10 per cent of that tohelp reduce it, it will be amajor boost to our economy.
Rice is also critical to ourstrategic plan. We want toproduce rice of 200-250,000metric tonnes in the next threeyears. From Agenebode toIlushin down to Ovia South-East, we can produce rice inmassive commercial quantity.This is one goal we want toachieve.
*Hon. Abdul Oroh
,
,
FromAgenebodeto Ilushindown to OviaSouth-East,we canproduce riceincommercialquantity
38 — Vanguard, MONDAY, SEPTEMBER 10, 2012
BRIEFS
ICT
THE two most importantdemands Nigerian sub-scribers make of their
service providers are tariffreduction and improved quali-ty of service. However, the twodemands would appear to bemutually exclusive, going by thecountry’s level of infrastructuredevelopment.
Meanwhile, as the operatorstry to yield to these demandswithout growing adequate ca-pacity, there is strain on servicequality, particularly when re-ducing tariff.
In fact, it is estimated thatGSM operators need to roll outadditional 50,000 base stationsto match the demand for serviceat the marketplace. This is evenwhen the challenging operatingenvironment inhibits the basestation roll out.
It is, therefore, no coincidencethat most massive slashes in tar-iffs by telecom operators in Ni-geria in the last few years havebeen attended by a period ofsub-par quality of service acrossthe nation. In most of these cas-es, the regulator wields thesledge hammer.
However, the operators havealso realised that satisfyingthese demands, hold the key totheir breakthrough in the evercompetitive Nigerian telecommarket and therefore have start-ed seeking cutting-edge solu-tions for local challenges.
Part of the innovative solu-tions they believe could meet thetwo topmost demands all atonce, is the Dynamic Pricingsolution.
Dynamic pricing makes it pos-sible for telecom operators toreduce tariff without necessari-ly compounding network con-gestion. It is a solution that of-fers subscribers generous tariffdiscounts in areas where de-mand on network resources islow, and offer marginal or notariff discounts in busy networkareas. That way, subscribers ina busy or high traffic networkarea will be encouraged to de-fer their calls till they get to lowtraffic network areas where theycan enjoy generous discounts.
In a nutshell, the solution triesto impress upon telecom usersthat making calls during busyhours from a busy businessarea, will make them pay morethan those who would delay thecalls till they get to less busy lo-cations.
With this message in mind,customers generally seek low
Network congestion getsdynamic solutions... as operators adopt special tariff slash methods
By PRINCE OSUAGWU traffic areas to make their calls,thereby helping to reduce con-gestion in busy network areas.
Consequently, this solutioncreatively avails subscribersthe much desired tariff reduc-tion, while creating an avenueto control the perennial issueof congestion in certain areaswithin the network. The solu-tion is a feature of Next Gen-eration Prepaid platform madepossible by the technologybackbone called IntelligentNetwork, IN.
Almost all the telecom oper-ators have adopted this solu-tion with different names andvarious tariff discounts. SecondNational Operator, Globacomtagged its own dynamic pric-ing platform as Glo Flexi, Etis-alat calls its own HomeZonewhile Airtel Nigeria said itsown is 2Good Time.
Just recently, MTN Nigeriaalso introduced its own.Tagged MTN Zone, the net-work said its own package cre-ates a slightly different scenar-io, giving subscribers as muchas 100 per cent tariff discount,depending on where they aremaking their calls.
Chief Marketing Officer,MTN Nigeria, Mr. Larry An-netts, described MTN Zone as“a product of our desire to con-tinuously delight our custom-ers and give them much morevalue for their money. The ser-vice offers attractive discountsto our customers depending onthe prevailing discount ratesavailable on the cell site fromwhich they receive signal.”
MTN said it had previouslyrun the service on a successfulpilot phase in select locationsin the country before fully de-veloping and activating it inLagos, Rivers, Imo, Anambra,Ogun and Bayelsa States.
Annets said that once activat-ed, the screen of the subscrib-er’s phone will subsequentlydisplay available discountswherever he or she moves to.The broadcast messages areupdated and transmitted reg-ularly to keep customersabreast of prevailing rateswhere ever they may go with-in the area of coverage of theservice.
Another interesting feature ofthe service is the ability of cus-tomers to receive discounts forcalls and short messages theysend to friends, business part-ners and loved ones on othernetworks and even on interna-tional lines.
The service allows customersto have control over their
spending on calls. They candecide to delay certain calls tillthey get to their homes or of-fices where they usually enjoygenerous discounts on calls.The service comes as an add-ed value to customers who arealready enjoying some level ofdiscounts on bouquets likePulse and Family and Friends.
Meanwhile the company’s
Corporate Services Executive,Mr. Wale Goodluck, said thatthe introduction of MTN Zoneand other dynamic tariff planshave proven that the serviceproviders are not leaving any-thing to chance when it comesto customer satisfaction.
*Telecom mast
NIGERIA’S SimtechTechnologies Ltd has
announced a partnership agreementwith l Siemens to sell its Softwaresolutions in Nigeria, Benin, Togo, andGhana. The agreement is expected tostrengthen Siemens PLM Software’smarket presence and customer servicein these West African countries.
Siemens said that the choice ofSimtech was for its depth of industryexpertise, adding that combining thatwith the Software’s lifecycle manage-ment technology, will provide custom-ers with high quality products andservices to maximize their investment.
According to the vice-president,Channels, EMEA, Siemens PLMSoftware, Mr Tony Jolly, “SiemensPLM Software is committed to usingour channel-centric strategy to con-tinually enhance customer access toour industry leading PLM technolo-gy. Our partnership with Simtech Tech-nology Ltd expands our reach and ex-ecution capability in West Africa tohelp customers leverage PLM solu-tions in an effort to capitalise on grow-ing market opportunities.”
This is also as General Manager ofSimtech Technologies, Mr OlusegunDogbey also said that the agreement “ is a great opportunity for our region’sindustrial development and we areexcited to be part of the momentum.Local engineering and manufacturingwill now have access to PLM toolsthat will help enhance innovation andreduce time to market,” said
According to the agreement,Simtech Technologies will now be-come a member of the Siemens Solu-tion Partner Programme.
Part of the solution Simtech Tech-nologies will offer include the Femapsoftware, a leading pre- and post-pro-cessor for engineering; Finite elementanalysis (FEA); NX software, thecompany’s fully integrated computer-aided design, manufacturing andengineering analysis (CAD/CAM/CAE) solution; NX Nastran software,a premium computer-aided engineer-ing (CAE) solution; Solid Edgesoftware, a complete hybrid 2D/3DCAD system for the mainstreammarket; and Tecnomatix portfolio fordigital manufacturing, automation andsimulation.
SImtech to sellSiemens softwarein Nigeria, Benin,Togo, Ghana
Galaxy S3cruises past20M sales
Despite court actionagainst Samsung which
may see it cough out awhopping $1.05 billion to payApple for infringing on itspatents, the South Koreancompany has, however,managed to push Sales of itsGalaxy S3 smartphonebeyond 20 million units just100 days after the device wasfirst launched.
Advertising, Media & Marketing
Vanguard, MONDAY, SEPTEMBER 10, 2012— 39
Stories byPRINCEWILL EKWUJURU BRIEF
Digital Marketing: WSI-Axon offers new line
As Nigerian businessesare grapplingwith the reality of
digital marketing, WSI-AxonWest Africa has expressed itsreadiness to lend a helpinghand.
WSI-Axon, a Canada-basedinternet provider haspromised Nigerianbusinesses affordable digitalmarketing and innovativewebsite solution through anintegrated approach that willrob off on businesses' returnon investment (RoI).
The company indicated thatits interest is premised on theexplosive internetconnectivity and the growingpower of various gadgets,computers, smartphones andtheir applications.
The company through itsChairman, Mr. EdirinAbamwa, agreed that toaccess the web means thatmore businesses now takeplace online, for this reason,the company is now in Nigeriato give a helping hand.
Explaining further, Abamwasaid, “it is no exaggerationthat any organisation that hasno online strategy in theworld of today is not worthyof being taken seriously.
“You are aware as how thisis shaping the industry ofpublishing. But it is notlimited to that. The world’smost valuable companies arenot necessarily those in thetime honoured businesses ofbanking or the extractiveindustry. Companies such asApple, Google and Amazon
have become globalbehemoths by exploiting theamazing power of digitalmarketing to build their brandand push their products.”
He went on to explain thatthe traditional industries areleft behind, referring to the
last Olympic where he saidthe event was marketed somuch online that it had thesobriquet of internetOlympics.
Continuing, he said, “No,matter what business you areinvolved in or whether you
are a multinational or a one-stop shop, it is absolutelycrucial you have an internetstrategy. As a matter of fact, asmall operation that takesearly advantage of digitalmarketing will overhaul abigger organisation that hadno coherent online strategy.”
LOYALTY: Heineken takes distributors onOlympics tour
In celebration of itscustomers' loyalty for theHeineken brand in
Nigeria, marketers of thebrand; Nigerian Breweries(NB) Plc recently sponsoredfive of its distributors to thejust ended 2012 LondonOlympics to have a firsthandexperience of the games.
M r. Jacqueline VanFaarsen, Senior BrandManager, Heineken, to ldjournalists in Lagos that thecompany is not insensitive tothe brand’s success story inthe market and this hadnecessitated the massivesupport it has generatedovertime from its consumers,especially its trade partners.
Conversely, he saidHeineken was appointed theOfficial Lager beer andsponsor of the London 2012in a tier three sponsorshipdeal, which extended to the
Paralympics Games. “Tocelebrate this iconic status, weconsidered it necessary to co-opt our trade partners, whohave consistently stood by thebrand over the years,” hesaid.
Accordingly, the tradepartners, who embarked onthe journey include: Mr.Banjo Onanubi, Mr & Mrs.Obor, Mr. Nseobong DicksonIbanga, Mr. Sunday Afurobiand Mrs. Anulika PhiliminaAladinbili were all delightedwith the offer given to themby Heineken to be part of theexclusive hospitality andmarketing opportunitiesassociated with the journey.
Reacting to the gesture onbehalf of other beneficiaries,Onanubi said the experiencewas a unique opportunityprovided by NB. “They haveshown us why they wouldalways be the leader in the
market. I am delighted to bepart of the biggest sportingevent in the world because I
For Nigeria toflourish, leadersmust go back tobasics—Gov Akpabio
ESTHER ONYEGBULE
“If Nigeria must flourish,leaders must develop love forthe country.”
This was the advice ofChief. Godswill Akpabio,
Executive Governor of AkwaIbom State, while speaking atthe Nigerian Institute ofManagement (NIM) FellowsAward and Spouses Dayluncheon, where he urgedNigerian leaders to go backto basics if they have the loveof the country at heart andwant the country to flourish.
The governor who wasamong others inducted intothe Fellows fold of NIM, werecharged by the President/Council Chairman of theinstitute, Dr. MichaelOlawale-Cole to see theirinduction as a call to duty, towork for the upliftment of theprofession, Nigeria and Africaas a whole.
“As Fellows you are thereforeexpected to devote more ofyour time, talent, treasure andthinking to the service of theinstitute and mankind.” Hefurther reminded them that asintellectuals, their skills areneeded in the socioeconomicre-engineering of the nation.
Contributing, Sir. PeterEdeghon, guest speaker, whospoke on the topic, Thechallenge of a nation wherenature speaks the languageof Order and abundance,noted that Nigeria as a nation,is big and complex andrequires leaders that act in theconsciousness of regardingthe common man as both abeneficiary of governmentdevelopment programme aswell as co-drivers of theprocess of development. “It is,therefore, time for leaders toavail the common man thefreedoms that will enable himto contribute meaningfullyand positively to theadvancement of our nation.”
Others inducted as Fellowsinclude; Mrs Modupe AbibatAdekule, Brig.GeneralAbiodun Bashir Adewinmbi,Mr. Gabreil AdebayoAfolayan, Dr. Jacob OlusolaAgboola, Dr. Lambert Agua,Dr. Olusola Aina, ChiefMichael Kayode Ajayi, PastorOlufemi Michael Ajila, Prof.Ishola Rufus Akintoye, Mr.John Gbadewole Akinwande,Mr. Moday Daniel Akpan, Dr.Abdullahi Awelenje, Dr MuizAdeyemi Banire, Mr. IbrahimYaya Bawa, Chief FadijiFategbe, Engr. IsiakaBisiriyu, Princess InnehEkiuwa, Mr OlusolaIjitimehin, Mrs OlayinkaOjolape Kukoyi, Dr. LucyNewman and others.
X3M Ideas, a creativeadvertising agency has
opened shop. The acronymX3M stands for “Extreme”.The Steve Babaeko-led agency which opened foroperation in Lagos accordingto findings, is obsessed withthe vision to cause a creativerevolution in the Nigerianadvertising industry.
The agency located in Opebiarea of Ikeja, displaysyouthfulness and modernityin all its forms, with cuttingedge equipment and gadgetsin a seamless office setting.The promoter of the newagency, Steve Babaeko, whowears the tag of CEO/ChiefCreativity Officer, was not
X3M Ideas opens shop
never had the thought that oneday, this special opportunitywill come my way,” he said
available but it was gatheredthat the agency already hasits application with theAssociation of AdvertisingAgencies of Nigeria (AAAN).
The CEO/Chief CreativityOfficer has 17 years hands-onexperience in the industryworking on brands in some ofthe most challengingindustries like telecoms,pharmaceutical, Foods &Tobacco, broadcastingamongst others.
Babaeko started hisadvertising career in 1995when he joined the nowdefunct MC & A Saatchi &Saatchi working under thetutelage of Victor Johnson andBusola Williams.
*Chief Edirin James Abamwa, CEO, WSI West Africa flanked by Amara Nwankwo, Head,Digital Marketing (right) and Soyem Osakwe, Executive Digital Marketing Consultant, all ofWSI West Africa during a briefing introducing WSI-Axon to the media in Lagos.
40— Vanguard, MONDAY, SEPTEMBER 10, 2012
Omoh Gabriel - Group Business EditorBabajide Komolafe - Acting Finance EditorClara Nwachukwu - Energy EditorPeter Egwuatu - Head, Capital MarketYinka Kolawole - Snr Bus. CorrespondentFavour Nnabugwu - Insurance CorrespondentGodwin Oritse - Maritime CorrespondentGodfrey Bivbere - Maritime CorrespondentYemi Adeoye - Energy CorrespondentOscarline Onwuemenyi - Energy CorrespondentFranklin Alli - Industry ReporterMichael Eboh - Capital Market ReporterAmaka Abayomi - Money market ReporterEbele Orakpo - Energy ReporterIfeyinwa Obi - Maritime Reporter
CONTRIBUTORSPrincewill Ekwujuru - Media/MarketingNaomi Uzor - IndustryProvidence Obuh - Capital MarketLAYOUT - Graphics Department
0817 002 3569
BUSINESS & ECONOMY
The president ofMicrosoft Server and
Tools Business, SatyaNadella, has announced thegeneral availability ofWindows Server 2012 built
Microsoft releases windows server 2012 to power cloud OS
By EMEKA AGINAM from the cloud up for themodern datacenter. In hiskeynote speech at a globalonline event, Nadella statedthat Windows Server 2012was a cornerstone of theCloud Operating System(OS) that provides customers
with a modern platform for theworld’s applications.
”The operating system hasalways been the heartbeat ofIT and is now undergoing arenaissance in the new worldof continuous cloud services,connected devices and bigdata,” Nadella said, addingthat, “Microsoft’s uniquelegacy in the most widelyused operating systems,applications and cloudservices positions us to deliverthe Cloud OS, based onWindows Server andWindows Azure, helpingcustomers achieve adatacenter withoutboundaries.”
The software, Microsoftexplained, expands thedefinition of a serveroperating system and addssignificant newadvancements invirtualization, storage,networking and automation.Hundreds of new features,according to him, can helpcustomers achieve atransformational leap in the
speed, scale and power oftheir datacenters andapplications.
He added that WindowsServer 2012 empowerscustomers to manage anddeliver applications andservices across private, hostedand public clouds incombination with WindowsAzure and System Center.
He further explained thatcustomers can use theirexisting skills andinvestments in systemsmanagement, applicationdevelopment, database,identity and virtualization totake advantage of WindowsServer 2012 and realise thepromise of cloud computing.Many enterprise customersare already seeingtremendous value in earlydeployments.
“A survey of 70 earlyadopter customers fromacross the globe revealed thatthey expect, on average, 52per cent reduction indowntime, 41 per centreduction in workload
deployment time, and 15hours of productivity timesaved per year, per employee.About 91 per cent of thecompanies surveyed expect areduction in serveradministration labour, and 88per cent expect reduction innetwork administrationlabour,” he said. Already, theNigerian AirspaceManagement Agency(NAMA), the government’ssafety authority forcommercial flight operations,chooses Windows Server2012 to utilise the existing ITinfrastructure within theagency as well as create afully scalable and highdensity cloud environment.
“Deploying Windows Server2012 has enabled us to domore with less, therebyreducing cost and enhancingconsiderably the ICT ROI formy organisation and bringingefficiency in the use oftechnology to value-centricproportions,” said Mr.Ogochukwu I.F., CIO ofNAMA.
The Central Bank ofNigeria and its agentshave been very active,
as should be expected, inpromoting the merits of theproposed N5000 note. To thisend, the apex bank also setout to dispel what it allegesto be disinformationregarding the proposedexercise. In its widelypublished one-pageadvertorial titled, FalseRumours on CurrencyRestructuring, CBN refutesthe reported vote of N40bn setaside for this exercise. It is notclear why the CBN waited solong before it refuted thewidely quoted value of N40bnin the media; regrettably,however, the apex bank stillfailed to reveal the estimatedcost projection for the project,so that its cost/benefit can beappropriately publiclyevaluated.
Central Bank was alsoeager in its advertorial toconfirm that the contract forthe proposed currencyrestructuring has not beenawarded. In reality, the issueof contract award is neitherhere nor there, since CBNappears to have made up itsmind, in spite of publicopinion. In earlier pressreleases, CBN indicated thatthe concept and designs werecompleted locally at minimalcost. CBN’s cause mightprobably have been betterserved, if it had alsotransparently declared theoriginating cost as well as theexpected savings on the costof currency management inthe country.
Nonetheless, it will be hardto fault the public’s lack of
“N5000 note will reduceinflation!” says CBN
confidence on any promise ofbenefits from such costsavings; for example, theadoption of the cashlessprogramme was touted toreduce banks’ operation costby over 30 per cent, so thatultimately, the banks couldsupport the real sector withsingle-digit borrowing cost. Inexplicably, this expectationhas remained unfulfilled!
Incidentally, in theadvertorial under reference,CBN recognises that ourcurrency management costsare influenced by frequencyof usage and poor handling. However, CBN’s belief that apromo campaign would, on itsown, lead to greater respectfor the naira and bettercurrency handling, is
however, patentlyunfounded. In truth,adoption and respect forcurrencies everywhere isbased on the recognition ofthe purchasing value of thecurrency unit. In a situation,for example, where N50, theleast note denomination,under the proposedrestructuring, cannot evenpurchase one finger ofplantain, it is most likely thatthe funds spent in theproduction and promotion ofthe new N20, N10, N5, N2and N1 coins would bemoney down the drain!
It is also surprising thatCBN identifies the possibilityof more precise rounding upas an advantage of theproposed new coin profile;
this is, undoubtedly a tonguein the cheek claim, as thenew profile has alreadyinherently rounded upprimary kobodenominations!! Nigerianswho can remember clearlyrecognise that coins fell outof favour because they lostany meaningful purchasingvalue, and it was no surprisewhen they ultimately foundfavour with metal brokers. Besides, it is clear that theinitial cost of production anddestruction of the existingcurrency profile has not beenconsciously captured asadded cost to the projectedexpenditure on the newcurrency structure.
Furthermore, the apexbank’s advertorial maintainsthat “currency restructuringdoes not cause inflation inany form whatsoever, as it willnot increase money supply.” This observation, of course, isunassailable, if all thingsremain equal; in other words,so long as the velocity or thespeed of spending moneyremains the same, there willbe no increase in moneysupply. If on the other hand,the N5000 note, for example,is speedily offloaded onreceipt in order to unbundlethe value, there is no doubtthat the velocity of currency
in circulation would increaseand create the same impact asincrease in money supply; so,CBN’s claims that the N5000note will not induce inflationneeds to be qualified!
Inexplicably, the CBNadvertorial further stretchesthe argument on inflation,when it suggests that“currency restructuring mayactually help in tacklinginflation”! If indeed reducedinflation rates coincided withthe introduction of higherdenomination notes in thepast, the apex bank has notprovided evidence that thedrop was the direct result ofhigher denominationsintroduced. Indeed, anyinsistence of a causativerelationship will be anoutright contradiction ofCBN’s open admission thatinflation is the product ofincrease in money supply, asthe converse of that is thatlower inflation rate is theproduct of reduction in moneysupply. In other words, ifhigher denominations do notincrease money supply, CBNcannot also prove that higherdenominations will reducemoney supply and lower theinflation rate, especially whenit is incontestable that theproposed higherdenomination, in conjunctionwith the cashless programmeand coin profile, willultimately increase thevelocity of money incirculation with the sameresult as increasing moneysupply.
SAVE THE NAIRA, SAVE
NIGERIANS!
,
,
CBN’s cause might probablyhave been better served, if ithad also transparentlydeclared the originating costas well as the expectedsavings on the cost ofcurrency management in thecountry
