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financial vanguard july 23th edition
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CMYK
JULY 23 , 2012
Continues on page 18
There are indications that CentralBank of Nigeria (CBN) mayhave compelled five banks to sell
their performing loans worth N275billion to Asset ManagementCorporation of Nigeria (AMCON),which statutorily is only meant to buynon-performing loans from banks.
Vanguard gathered that the five banksthat were affected by the new move ofthe CBN to sell their performing loansagainst their corporate plans includeFirst Bank Nigeria Plc, Diamond BankPlc, Access Bank Plc, Guaranty TrustBank Plc, and First City Monument
N275bn performing loans sale: 5 banksallege CBN, AMCON inducement*It's not justifiable — Stakeholders
Bank (FCMB).Specifically, it was gathered that
First Bank sold N100 billion debtowed by Seawolf Industries;Diamond Bank sold N25 billion debtowed by Geometric Power, whileconsortium of Access Bank, GuarantyTrust Bank and FCMB sold N150billion debt owed by ZenonPetroleum to the banks.
The sale of some performing loansat a loss to Asset ManagementCorporation of Nigeria (AMCON) bythese banks partly explained thehuge loan loss provisioning postedby banks for the operating yearended December 31, 2011. The hintthat the CBN compelled banksagainst their corporate plans to sell
performing loans to AMCONemerged at the 44th Annual GeneralMeeting (AGM) of First Bank Plcrecently, where the Group ManagingDirector/Chief Executive Officer, Mr.Bisi Onasanya, explained toshareholders how the apex bankcompelled the bank to sell N100billion performing loans to AMCONat a 10 per cent loss.
“Our headline loan growth rate ofjust 9.2 per cent does not take intoaccount active switching of asubstantial portion of intra-group andmoney market lines into corporateloans and the sale of over N100 billionof eligible performing loans to theAsset Management Corporation ofNigeria (AMCON), including 100
per cent of our exposure to SeawolfOilfield Services (an action driven atreducing portfolio concentration andaddressing single obligor concerns).Consequently, we recordednormalised loan growth of around40.6 per cent year on year”, he saidwhile reviewing the operations of thebank in the operating year endedDecember 31, 2011.”
When pressed by a shareholder onthe Seawolf Oil Services transaction,he explained that the company wasdoing well and that the loan wasperforming but the CBN insisted thatthe loan should be sold to AMCOMdue to its size because of the possibleimpact on the bank and the industryif the loans become non-performing.“So they forced us to sell the loan toAMCON and we took a haircut (loss)of 10 per cent. The loan was soldwithout recourse to First Bank,” hestated.
Stakeholders’ Position
CURRENCY BUYING CENTRAL SELLING
CBN Exchange rate as at 20/07/2012
106.31 -1.49
91.21 -1.45
188.55 -0.40
2,233.00 +3.00
23.88 +0.63
CFA 0.2684 0.2784 0.2884
KRONER 25.3798 25.4618 25.5437
EURO 188.8795 189.4893 190.0991
POUNDS 242.7123 243.4959 244.2795
RIYAL 41.2943 41.4276 41.5609
SDR 233.1878 233.9407 234.6935
FRANC 157.2125 157.7201 158.2276
DOLLAR 154.87 155.37 155.87
WAUA 231.7188 232.4669 233.215
YEN 1.9706 1.977 1.9833
RENMINBI 24.2962 24.3751 24.454
From left: Lagos State Commissioner For Commerce and Industry, Mrs. Olusola Oworu; Minister of Trade and Investment,Mr. Olusegun Aganga; Director-General, Small and Medium Enterprises Development Agency of Nigeria, Mr. Muham-mad Umos; and Statistician-General of the Federation and Chief Executive Officer, National Bureau of Statistics, Dr. YemiKale, during a two-day retreat of the Strategic Micro, Small and Medium Enterprises Policy/Programmes Technical andImplementation Committee in Lagos on Thursday.
BY PETER EGWUATU,MICHAEL EBOH &
NKIRUKA NNOROM
18 — Vanguard, MONDAY, JULY 23, 2012
Cover Story
CMYK
,
,
Continued from page 17
THE words ‘youth’ and‘restiveness’ have become
so commonly used together inthe last couple of years that itseems to have taken on a lifeof its own. In the last decadeand more, there has been a pro-liferation of cases all over thecountry and indeed the world,of youth agitations which havetons of people dead and valu-able infrastructure as well aspersonal properties lost anddestroyed.
A sustained protestation em-barked upon to enforce a de-sired outcome from a constitut-ed authority by an organisedbody of youths, fits the label ofyouth restiveness. It is also acombination of any action orconduct that constitutes un-wholesome, socially unaccept-able activities engaged in bythe youths in any community.
It is a phenomenon which inpractice has led to a nearbreakdown of law and order,low productivity due to disrup-tion of production activities,increasing crime rate, intra-ethnic hostilities, and harass-ment of prospective develop-ers and other criminal tenden-cies.
This scourge has beenaround for a long time and itlooks as though it is defyingsolutions. Maybe the questionthat needs to be asked is whatis truly responsible for this ex-pression of dissatisfaction bythe youth? Have their com-plaints over the years not beenheard or attended to? Is theremore to the killings and de-struction than just drawingattention to the needs theywant met? Are the youths try-ing to draw society’s attentionto themselves more than theissues they appear to be front-ing? These and more are thequestions we would try to tack-le head on today.
In Nigeria for instance, theNiger-Delta region which isunarguably the bedrock of theoil industry in Nigeria perme-ated the news for a lengthyperiod of time as the youths ofthat region tried various meansof getting government and oilcompanies to pay attention totheir dire conditions of livingand alleviate their sufferingssince according to them, theresources which is building thenation is flowing from their
Youth restiveness andunemployment in Nigeria:The way out
land so by virtue of that, theyshould also be partakers of itsbenefits. This strife led to a risein kidnapping and vandaliza-tion of oil pipelines as well asother vices that were beingperpetrated. After someperiodof time, the Nigerian govern-ment intervened and theAmnesty programme was cre-ated to help deliver some of thepromises which governmenthad made to the youths in thoseareas.
The baton was soon handedover to Eastern Nigeria.Increase in the rate of armedrobbery attacks, kidnappingsas well as unbridled thuggerybecame the order of the day.
Today, the Northern part ofNigeria has literally eruptedwith unrivalled violence. Bomb
blasts, kidnaps and killings ofNigerians and others havebecome the prevailing trend.Despite beefing up of securityin these areas, the problemsstill loom. This situation begsthe questions, ‘’what is thegovernment of the day willingto do to put a permanent endto these problems?
STATISTICSThe National Population
Commission (NPC) has saidthe country’s population hasrisen from the 140,431,790 itwas five years ago when thelast national headcount wastaken, to 167,912,561 as atOctober 2011.This representsan annual population growthrate of 5.6 million people.
The Ministry of Youth Devel-opment, said recently thatthere are 68 millionunemployed youths inNigeria.
The Ministryof Youth
Developmentsaid recentlythat there are
68 millionunemployed
youths inNigeria
Stakeholders that spoke toVanguard on the issue wereunanimous in theirsubmission that it was outsideAMCON’s core mandate tohave taken over performingloans from those banks.
Chief Sola Abodunrin,Chairman, Ibadan zone ofShareholders' Associationsaid that AMCONoverstepped its bounds whenit decided to leave its coremandate to take upperforming loans from thebanks.
“AMCON was set up withthe objective of purchasingthe non-performing loans ofbanks so as to stabilise thebanks. That was what wasdone to the eight ailing banksand that brought stability tothe ones that survived CBNand NDIC nationalisation.However, if AMCON is nowbuying up performing loans,it means it is going outsideits mandate and should bestopped,” he stated.
Also lending his voice, Mr.Johnson Chukwu, ManagingDirector/CEO, Cowry AssetsManagement Limited, notedthat there was no justificationfor AMCON to take overperforming loans, saying thatit was completely outside theCorporation’s mandate.
“How would AMCON valuethe performing loans andwhat would be the motivationor incentive for the banks tosell such loans? I think it willamount to convertingAMCON into a conventionalbank or “a factor” if they starttaking over performingloans,” he explained.
“I don’t think that it is partof AMCON’s mandate topurchase performing loans. Inthe first place, AMCON ismeant to be a bad bank, toassume the non-performingloans of banks. This is torelieve them of the burden of
toxic assets, restore theirliquidity as well as re-flatetheir balance sheet. There istherefore no justification forAMCON to take overperforming loans,” Chukwuargued.
On his own part, Mr. DavidAdonri, the ManagingDirector/CEO Lambert Trustand Investment Limitedobserved that although thelaw setting up AMCONmandates it to purchase acertain percentage of non-performing loans from banks,nothing precludes theCorporation from factoringany performing loan bymutual consent with thebanks.
Already, the House ofRepresentative’s Ad-HocCommittee that probed thenear collapse of the capitalmarket has asked AMCON toreverse the transactionsinvolving the Corporation,Seawolf and Geometric,saying that there wasviolation of extant regulationsand laws in carrying out thetransactions. As part of theirobservation, the House said:“Even performing loans arealso being acquired ratherthan toxic assets as requiredby law particularly intransactions pertaining toSeawolfs, Geometric and themethod of acquisition ofperforming and non-performing loans of UnityBank Plc.” They also observedthat most of AMCON’stransactions are fraught withinconsistency andmanipulation of the processand there are no uniformstandards being followed.
AMCON’s ExplanationWhile explaining the
rationale for buyingperforming loans, ManagingDirector of AMCON, MustafaChike-Obi, told Vanguardthat the action was taken tostave off further risk to thebanking system. Heexplained that under the
CBN’s guideline, the apexbank can designate loans tobe systemically impotent andask AMCON to buy it. Hefurther told Vanguard thatnone of those debtors washappy to go from the banksto AMCON which is anotherthing that people say that isso ridiculous. Nobody isbetter off with AMCON thanthey were with the banks.When we did it, every one ofthose debtors came and said,‘why did you do it’ and wesaid ‘it is none of yourbusiness; it is for the financialsystem stability.’
“After we bought the non-performing loans, we wentand looked at every large loanin every bank and we boughttheir performing loans at adiscount. The banks didn’tlike it because they look likea loss. They didn’t like it butwe are not interested in thebanks; we are interested inthe financial system. Theytook a big loss. If you go backand look at the Year-on-Yearlosses the banks have in theirbooks, it is because of someof those performing loansthey had in their books andwe took them at a discount,”Chike-Obi affirmed.
According to him: “TheAsset ManagementCorporation of Nigeria(AMCON) acquired theloans of Zenon Petroleum,Seawolf Industries andGeometric Power Industries.The three firms owe overN275 billion to various banks.Chike-Obi said that thoughthe loans were performing,the Corporation decided toacquire the loans to take it offthe books of the banks. Hesaid, “Zenon is owing N150billion, Seawolf is owing N100billion and Geometric PowerN25 billion. These are goodbusinesses, but the loans aretoo large and may posesystemic risk. These are notloans that are problematic. Wejust think they could be andwe just want to guard againstthat.”
N275bn performing loans sale: 5 banksallege CBN, AMCON inducement
*From left: Area Director, British American Tobacco West Africa, Beverley Spencer Obatoyinbo,keynote speaker and Chairman, Access Bank, Gbenga Oyebode at the 2012 annual Women inManagement and Business (WIMBIZ) CEO/Policymaker Interactive series held in Lagos.
Vanguard, MONDAY, JULY 23, 2012 — 19
CMYK
BUSINESS & ECONOMY
’ ’
TODAY, we publishsome of thefeedback received
on this column. We willpublish others as opportu-nity arises. We welcomereactions to this column.Keep your reaction shortand please be civil in yourlanguage.
Elder Otugo B. O Warri08067557717
Please I read yourBroken Links in FinancialVanguard of July 9, 2012at page 19 with thecaption: This governmentis walking on a tightfinancial rope. The writeup is encouraging. Thequestion is, how manyNigerians care as youhave taken the pains toanalyse the financialstatus of the country?These miscreants andmyopic leaders in the NLCand TUC are after the totalcollapse of the economyand Nigeria as a nationorchestrated by the thenNLC President, ComradeGovernor AdamsOshiomhole of Edo State.He fought Petroleumsubsidy removal bymobilising organisedlabour against the FederalGovernment. He is now
Some feedback on
this column
the executive governor ofEdo State without aneconomic je ne sai quoi.Today, the trouble lingers.Where is Nigeria now; acatastrophic moment,purposeless, corrupt; andbad leadership? Well,people like you and I shallcontinue with the gospel ofeconomic revival andsurvival.
Ogundare aged 7408033231735
Dear Gabriel, to acceptderegulation from thisgovernment is going to besuicidal to the poor. Topgovernment functionariesknow where the billionsare. Let them go andrecover them. It cannot beworse than this for a poorman.
Presidential audit panelfor already wasted lives? Ifwe have useless leadersand armed robbers asleaders, there is no way
you can expect anything towork in Nigeria now.
Honourable J. U. Obak-polo 08055536773
Dear Omoh Gabriel, yourarticle on page 19 ofFinancial Vanguard of 21May, 2012 refers. Iappreciate your contribu-tion especially the open-ing paragraph. This nationNigeria urgently needstransformation in varioussectors including aviation.
Therefore, every effort ofany individual in everysector to improve on theeconomy should be en-couraged and supportedwith more ideas/facts andnot to be discouraged,suspected nor opposed soas to hurt such initiator.Nigeria will be better forit.
08035990022Mr. Omoh, it is a pity in
the Nigerian way of doingthings that the Aviation
Minister was not given thecorrect picture of what isobtainable in the first andbusiness class fare dispari-ty of British Airways andVirgin Atlatic in Ghanaand Nigeria. May be shenow has the true picturethat these foreign airlinesgive bribes in complemen-tary tickets to some bigguns in government to flyfree of charge. She nowknows she is fighting alost battle.
08133738287Your article, Bill to
castrate the CBN in whoseinterest? in the FinancialVanguard of May 14, 2012refers. It is a beautifulwork, but your headlineand opening paragraph inmy opinion, tend toportray you as taking sideswith one of the partiesinvolved which should notbe. The Central Bank ofNigeria has failed inseveral areas of its coremandate. Legislators aremeant to amend laws seennot to be promoting theeconomy of the nation.Therefore, such steps onthe part of the legislatorsshould not be seen asrevenge except if suchauthor is trying to intimi-
date the legislators.
08098160022Dear Sir, it is a pity that
members of the NationalAssembly always decide todance naked and bringopprobrium to themselves.While the Senate will wantto curtail the NLC becausethey championed the causeof the masses during thepetrol price hike, membersof the House ofRepresentatives want tocut the CBN Governor tosize because he let Nigeri-ans know the insatiablegreed of these members ofthe National Assembly.What Nigerians demand isworthy representation.
Hassan Balogun.Mr. Omoh, I just read
your beautiful piece titled:Hear this, bickeringgovernors in the FinancialVanguard of Monday,April 16. 2012. But I thinkit should have been moreappropriately titled: Hearthis Mr. President andBickering Governors.Obviously, the Presidentand most governors do nothave any plan B in casethe ocean (sorry oil), runsdry someday. God saveNigeria.
THE Canadian High Com-missioner to Nigeria, Chris
Cooter has disclosed that bi-lateral trade volume betweenNigeria and Canada has risenwell above $3 billion (N480billion), just as Foreign DirectInvestment, FDI from Canadato Nigeria has also tripled giv-ing the same figure.
Speaking during a courtesyvisit to the National Chairmanof the Peoples DemocraticParty, PDP, Alhaji BamangaTukur, the Canadian HighCommissioner who noted thatthe relationship between thetwo countries was very good,stressed that plans were on byhis country for the nation’shealth sector especially in thearea of maternal and childhealth where over $40millionhas been earmarked for assist-ance, up from about $10
*From left: Mr. Sam Akerele, Secretary-General, Aviation Round Table; Captain Dele Ore,President and Mr. Chuks Iwelunmo, Chairman, League of Aviation and Airports Correspond-ents (LAAC) during a press conference by the Aviation Round Table held in Lagos on Wednes-day. Photo by Lamidi Bamidele.
Nigeria, Canada: Trade volume nowN450 billion- High Commissioner
By HENRY UMORU million.Meanwhile, Alhaji Bamanga
Tukur applauded the relation-ship between Nigeria andCanada, even as he expressedoptimism that the relationshipwill get stronger with the es-
tablishment of a bilateral com-mission between the two coun-tries.
He, however, appealed tothe Ambassador to worktowards reducing thedifficulties faced by Nigerians
in obtaining Canadian visa toenhance free movement ofpersons between the twocountries and for business andinvestment to flourish.Ambassador Cooter who alsotold the PDP National Chair-
man that Canada was interest-ed in investing in the area ofmining in Nigeria, stressedthat as a country which engag-es in that sector, it has over 350mining companies.
According to him, Canadaplans to build a huge vocation-al training centre in Nigeria asthat will help train the youthin line with the vision of Pres-ident Goodluck Jonathan toprovide more employment op-portunities for the people.
The Envoy, however, praisedthe positive role of Nigeria inworld affairs especially what ithas done in the resolution ofthe crisis in Cote D’Ivoire andLibya as well as its present ef-fort in Mali and the nation’sstand on human rights anddemocracy.
The High Commissioner whodisclosed that Nigeria willsoon witness the visit of morehigh profile Canadians in thecoming months and years,however, called for more coop-eration between the two coun-tries, adding: “I hope you willremember Canada eventhough a lot of countries arecompeting for your attention.”
To accept deregulation from thisgovernment is going to be suicidal
to the poor
20 — Vanguard, MONDAY, JULY 23, 2012
CMYK
BRIEFS
Business & Economy
From left Mr. Benson Evbuomwan, Director, Marketing, Honeywell Flour Mills Plc; Dr. NinoOzara, Production Director; Mr. Babatunde odunayo, Executive Vice-Chairman/CEO and Mr.Rotimi Fadipe, Director, Logistics and Supply during the Honeywell Flour Mills Plc BakingSchool Certificate Award Ceremony held in Lagos on Friday. Photo by Lamidi Bamidele.
Nigeria’s competitive busi-ness environment; instill fairand transparent business op-erational procedures;enhance the image of theeconomy and build investors’confidence. The committeesare expected to meet twice amonth to review their per-formance.
He said that members ofthe two technical committeeswere selected by the Headsof their respective MDAswhich constitute the DoingBusiness and Competitive-ness Committee and Inves-tor-Care Committees respec-tively.
Aganga said: “We haveassembled very bright
and seasoned officers fromvarious ministries,departments and agencies who were selected by theChief Executives/Heads torepresent their MDAs in theTechnical Committees of theDoing Business and Compet-itiveness, and After-CareCommittees.The respectiveTechnical Committees areexpected to address policyissues inhibiting our compet-itive business environment;instill fair and transparentbusiness operational proce-dures and enhance the im-age of the economy and buildinvestors’ confidence. TheDoing Business and Compet-itiveness, and After-CareCommittees were alreadyinaugurated by the Secretaryto Government of the Feder-ation few months ago after wegot the approval from Mr.President. So, we thought itnecessary to have the Tech-nical Committee of the twocommittees.”
Aganga stated that the in-auguration of the committeescame in the wake of varioussocial and economic reformsbeing embarked upon by theFederal Government to trans-form the nation’s economy.He, therefore, charged mem-bers of the committees towork assiduously to ensurethat the country significant-ly improves its investmentclimate and Doing BusinessRanking as soon as possi-ble.
He said: “Suffice it to saythat the downturn in the glo-bal flows of Foreign DirectInvestment in recent yearsand the associated competi-tion among various locationsfor FDI, and countries step-ping up their efforts to attractFDI in-flows, Nigeria cannotafford to be left behind inthis race.
Doing Business: FG inauguratestechnical committees to tackleinvestment bottlenecks
THE Federal Governmenthas inaugurated two
technical committees for theDoing Business and Compet-itive Committee and Investor-Care Committee to tackle theproblems militating againstthe ease of doing business inNigeria; inflow of Foreign Di-rect Investment; and ultimate-ly improve the country’s rank-ing in theGlobal Competiveness Index.
The Minister of Trade andInvestment, Mr. OlusegunAganga, who performed the
inauguration ceremony inAbuja said that the exercisewas a follow-up to the earlierinauguration of the DoingBusiness and Competitive-ness Committee and After-Care Committee(formerlyknown as Committee on Prob-lems of Investors), by theSecretary to the Governmentof the Federation few monthsago.
The two committees havethe Minister of Trade and In-vestment as the chairman. Butthe membership of the com-
mittees were drawn fromministries, departments andagencies of the Federal Govern-ment including Finance; Power;Mining, Justice, the CentralBank of Nigeria, Nigerian Na-tional Petroleum Corporation,Nigeria Immigration Service,Federal Inland Revenue Serv-ice and Nigeria Customs Serv-ice, among others.
However, Aganga ex-plained that the newlyi n a u g u r a t e d t e c h n i c a lcommittees were expected toaddress policy issues inhibiting
THE Central Bank of Ni-geria, CBN in collabora-
tion with the InternationalLabour Organisation, ILO, ispreparing a “IinancialInitiative Inclusion” that willmake available aboutN1billion with a single digitinterest rate to womenentrepreneurs in Nigeria.
Director-General of NigeriaEmployers Consultative Asso-ciation, NECA, Mr. SegunOsinowo who announced thissaid NECA’s Network of En-trepreneurial Women,NNEW, would be one of thebeneficiaries.
NECA NNEW was made amember of the task force at themeeting with the CBN Gov-ernor, ILO director and other
CBN, ILO to raise N1bn for womenentrepreneurs
By VICTORAHIUMA-YOUNG
stakeholders including D-G,NECA
The Director-General spokeat a meeting of NECA’swomen group that brain-stormed on networking asstrategy to business growth.
He challenged women to bemore committed and ensurethey go through the ILOcapacity-building trainings toenhance the growth and sta-bility of their businesses be-cause the “only beneficiariesof ILO financial inclusion willbe women who belong to anassociation like NECA’s Net-work of Entrepreneurial Wom-en.”
The President of the womengroup, Mrs Lola Okanlawonadvised the women to lever-age on the NECA platform, doface-to-face networking andsocial networking.
According to her, SMEs thatcould not afford high advertcost should not limit the growthof their businesses but shouldnetwork at any given opportu-nity, saying ILO is spearhead-ing an initiative on the finan-cial inclusion of women entre-preneurs in Nigeria. This ini-tiative aims at enhancing thecapacity of financial institutionsto address the specific and pe-culiar needs of womenentrepreneurs.
”It is hoped that this initia-tive will assist in increasing theawareness of policy makersand the private sector, includ-ing commercial banks to under-stand that women entrepre-neurs are not only a potential-ly lucrative untapped marketbut will also contribute to theeconomic growth and develop-ment of Nigeria.”
FG, Taraba partnerIFDC to launchroots, tuber cropsfertiliser blend
THE International Centrefor Soil Fertility and Agri-
cultural Development (IFDC),in partnership with the Fed-eral and Taraba Stategovernments has launchedthe first fertiliser blend forroots and tuber crops. Astatement by the IFDC madeavailable to newsmen inAbuja, said that the new inputwas launched in Wukari LocalGovernment Area of TarabaState under the cassava inputinitiative programme. Thestatement, signed bythe IFDC CountryRepresentative, Mr ScottWallace, said that the blendincluded a higher ratio of po-tassium, which is critical forwater retention. It said thatthe new input would go along way in assisting cassavaand yam farmers to increasetheir yields and maintain ad-equate soil fertility for futureyears.Wallace said that thenew input would allow thestate’s cassava farmers to takeadvantage of the Dutch Agri-cultural Development & Trad-ing Company (DADTCO)guaranteed market. DADTCOis a Netherlands-based com-pany with branches in Niger-ia and whose primary goal isto initiate a rural developmentrevolution by creating guar-anteed markets for cropsgrown by small holder farm-ers in the West-African region.
UNCTAD ratesNigeria 1st onFDI in Africa
THE UN Conference onTrade and Development
(UNCTAD) has rated Nigeriaas first in Africa and 23rd glo-bally in the flow of ForeignDirect Investment for 2011. The Minister of Trade andInvestments, Dr OlusegunAganga, made this known inAbuja while briefing StateHouse correspondents afterthe Federal Executive Coun-cil (FEC) meeting. The meet-ing, presided over by Presi-dent Goodluck Jonathan atthe Presidential Villa, was at-tended by Vice-President Na-madi Sambo, ministers andother aides. Aganga said thatthe UNCTAD Report 2012stated that Nigeria rankedfirst among five hosteconomies for FDI in Africa at$8.91 billion in 2011 comparedto $6.09 billion in 2010. Thereport said that Nigeria wasfollowed by South Africa with$6.9 billion and Ghana with$3.2 billion.
Vanguard, MONDAY, JULY 23, 2012 — 21
CMYK
Business & Economy
THE Central Bank of Ni-geria (CBN) on Wednes-
day advocated that Develop-ment Finance Institutions(DFIs) in Nigeria be grantedoperational autonomyand repositioned to performthe role envisioned for them.Mallam Lamido Sanusi, CBNGovernor made the call inAbuja in a keynote addresspresented at the 3
rd Public-
Private Partnership (PPP) fo-rum for private and public sec-tors stakeholders. The gover-nor also urged that the funds
CBN seeks more funds, autonomy for DFIsrecovered from petroleumsubsidy removal be divertedto strengthen government-owned banks to enable thempartake in infrastructure fi-nancing.
The forum, which was or-ganised by the InfrastructureConcession Regulatory Com-mission (ICRC) has thetheme: Development FinanceInstitutions and Long-termcapital for InfrastructuralTransformation and Nation-al Economic Development.Sanusi in his paper entitled:
What Nigeria can learn fromBrazilian Development Bank(BNDES) and Indian Infra-structure finance company,said that Nigeria should con-sider sustainable ways of sup-porting DFIs that could sup-port the financing infrastruc-ture. He noted that Brazil andIndia had demonstrated thatan approach based on estab-lishing an infrastructure bankcould help unleash the re-quired finance.
While giving an insight intowhat Nigeria should consider
as a sustainable way of support-ing DFIs, Sanusi said: “Niger-ia could pursue such a model,whereby a new government-owned bank could raise tax-free bonds to fund projects.
“Alternatively, the mandateof an existing government-owned bank such as Bank ofIndustry could be expanded toenable it to partake in infra-structure financing. The bankcould be financed from fundsrecovered from petroleum sub-sidy removal, and equippedwith professional and quali-
fied management recruitedglobally.” The governor saidthat the DFIs in Nigeria facedsome challenges which in-clude poor corporate govern-ance, low capitalisation, inad-equate skilled manpower andpoor business models.
“DFI in developing countriesexist traditionally to addressmarket failures and tocomplement government re-sources and market financing.The dual roles of these insti-tutions involve financing de-velopment projects and actingas facilitator of finance in thebroader industrialisation andeconomic development strat-egies of countries."
22 — Vanguard, MONDAY, JULY 23, 2012
CMYK
BRIEFS
Banking & Finance
*From left: Vice-President and Secretary-General, African Development Bank, Ms CeciliaAkintomide; Executive Director, New Faces New Voices, Ms Nomsa Daniels; and Founder/Executive Chairman, Mandela Institute for Development Studies, Dr Nkosana Moyo at theWorld Press Conference organised on the second African Women’s Economic Summit held inLagos by New Faces New Voices
THE Federal Governmentshould establish a special-
ized company that wouldidentify and develop infra-structure projects to enhanceplanning and financing ofsuch projects, says Mr. TaiwoAdeniji of Africa Finance Cor-poration (AFC).
He made this call in a pres-entation on Developing anAppropriate Framework forEnergy Infrastructure Financ-ing in Nigeria, delivered atthe 2012 Lagos Bankers'Night organised by the Lagosbranch of the Chartered Insti-tute of Bankers of Nigeria(CIBN).
Emphasising the importanceof long-term planning to in-frastructure development, hesaid there is need to strength-en the infrastructure planningfunction in the country.
He said: “It is all about plan-ning. It takes time to developinfrastructure, and private in-vestors need data for long-term decision-making.
“Nigeria needs a clear inte-grated least-cost infrastructuredevelopment plan (15-20years, with 5-year rollingplans), with an attendant in-tegrated financing policy. Planto be project-based, and pri-oritized based on sectorneeds, inter-sector linkages,scale/expected impact. Specif-
Expert calls for specialisedagency for infrastructuredevelopment
By BABAJIDEKOMOLAFE &AHMED OLAWALE
ic projects to be allocated forprivate sector participationshould be identified. If possi-ble, government should insti-tutionalize a mechanism tolimit/eliminate political inter-ference and ensure timelycompletion of projects.
“An example is the IndianProject Development Compa-ny (IPDC). It was establishedas a fully government-ownedentity charged with develop-
ing projects across the differ-ent infrastructure sectors, al-most to the point of bankabili-ty; with other specialized in-stitutions such as Infrastruc-ture Development Companyof India (IDFC) and PowerFinance Corporation provid-ing requisite financing (debt,mezz and equity) at marketterms. Projects slated for PPPimplementation are then pro-cured accordingly, while oth-
ers are sold to investors for fullprivate sector financing. It isworth emphasizsing that Indiaplans to invest $1 trillion overthe next five years, with 50 percent expected to come from theprivate sector!
A similar model could alsobe adopted for Nigeria
in the name of Nigerian In-frastructure Projects Develop-ment Company. The newcompany will be backed byspecialised financing institu-tions (Africa Finance Corpo-ration, Nigeria InfrastructureBank, National InfrastructureFund, etc). This would alsoensure the utilisation of a uni-form approach to appraiseprojects and test their readi-ness for financing and imple-mentation.”
Adeniji, who is the Director,Financial Institutions and Ad-visory Services for the AFC, also called for regulatorymeasures from the CBN andSecurities and ExchangeCommission (SEC) to en-hance ability of banks to fi-nance infrastructure projects.He said: “Given the long-termnature of infrastructure invest-ments, it is critical that thefinancial system be able toprovide appropriate types offinance. Infrastructure projectsrequire long-term capital atrelatively low and stable rates.Nigerian commercial banksare limited in their ability toprovide long-term loans forinfrastructure projects, largelydue to the short-term natureof their liabilities.
“The CBN should thereforeinstitute deliberate measuresto enhance maturity transfor-mation in the banking indus-try, to encourage commercialbanks to lend to infrastructureprojects.
THE dynamic nature ofmonetary policy especially
sale of government securitiesto mop up excess liquiditymakes it difficult to subject thebudget of the Central Bank tolegislative process for approv-al, says Dr. Okwu JosephNnanna, former Director-Gen-eral at the West Africa Mone-tary Institute, Accra.
Nnanna made this point ina paper titled: The Imperativeof the Central Bank Independ-ence: An analytical Frame-work- A case Study of the CBN,presented at the 17th annualseminar for financial journalistsin Akure.
He said that 80 per cent ofthe budget of the CBN goes
'Why CBN budget should not undergo legislative process'
By BABAJIDEKOMOLAFE
into the sale of government se-curities through open marketopetarions (OMO). He saidthe amount spent on OMO, topay for interest rate on govern-ment securities, is determinedby the fiscal operations of theFederal Government. He saidif the spending of the fFederalGovernment causes excess li-quidity or it wants to borrow tofund its budget, the apex bankwould have to mop up the ex-cess liquidty by selling treas-ury bills or borrow for the gov-ernment by selling bills. Hesaid the challenge, however, isthat the apex bank cannotdetermine in advance howmany times it would selltreasury bills rather, this isdetermined as required by thespending acitivities of theFederal Government.
He said the implication is that
if the CBN submits a budget tothe National Assembly and thebudget is approved, it willhave to go back to the lawmak-ers everytime the need arisesfor it to spend money to con-duct OMO beyond what is con-tained in the approved budg-et.
This, he said, will lead to de-lay in conduct of monetary pol-icy with severe implication forthe economy.
Corroborating Nnanna, Prof.Sam Olofin, an independentdirector on the Board of theCBN said: “The apex bankcannot possibly know its budg-et sum ex-ante because it couldnot possibly know how manybanks it might need to bail outand how much mopping up itwould need to do after each‘inappropriate spending’ bythe government.
FRC certificatenow mandatory forgovt jobs
PR O F E S S I O N A L Swho intend to transact
business with Federal Govern-ment agencies must produceevidence of registrationwith the Financial ReportingCouncil of Nigeria (FRC).This is to deepen corporategovernance in the public andprivate sectors accountingand facilitate registration ofprofessionals. Chief Execu-tive of the FRC, Mr. JimObazee, disclosed this dur-ing a visit by a team from theFiscal Responsibility Commis-sion to the corporate head of-fice of the FRC in Lagos. Also,he added, the FRC has estab-lished regional offices in Abu-ja, Enugu and Port Harcourtto fasttrack the process.
According to Obazee, this isin compliance with the provi-sions of the FRC Act 2011which charged the FRC withthe responsibility of register-ing professionals who renderservices for remuneration to public interest entities.
He also disclosed that theFRC IFRS Academy whichwill be taking off in the Fed-eral Capital Territory willhelp bridge knowledge gapsthat exist between the practiceof financial reporting in thecountry and the demands ofInternational Financial Re-porting Standards (IFRS),saying universities and otherhigher institutions' lecturerscoming for the course wouldhave their bills picked by theFRC.
CIBN inauguratescommittees to driveactivities
THE Chartered Institute ofBankers of Nigeria has in-
augurated various committeesmade up of high profile indi-viduals and experts fromwithin and outside the bank-ing profession to drive theactivities of the institute
The committees which wereapproved by the GoverningCouncil will have the respon-sibility of driving the affairsof the institute for the next twoyears by meeting on regularbasis to articulate new initia-tives, ideas and strategiesaimed at transforming theinstitute and its activitieswhile makingrecommendations that willenable the institute remaincommitted and focused on hervision of becoming “a world-class institution in bankingand finance education, ethicsand professionalism.”
Vanguard, MONDAY, JULY 23, 2012 — 23
CMYK
24 — Vanguard, MONDAY, JULY 23, 2012
CMYK
BRIEFS
Corporate Finance
*From left: Ojeikere Aikhoje, organisers, Sports Brand Nigeria Award; Funmi Oshineye, BrandManager, Nestle Milo, Nestle Nigeria Plc, receiving the Best Sponsorship of Schools SportAward from Mrs. Braimah. MD/CEO, Neo Media & Marketing and Ehi Braimah at the awardceremony in Lagos.
He added that the companyhas appointed a new Manag-ing Director for its Food Divi-sion, Mr. Ed Jackson, whowill oversee the food manu-facturing division and be re-sponsible for flour and ricemilling, sugar refining, pastaproducts and other processedfoods; all wholesale and retailsales, distribution and logis-tics operations including theoperations of Nigerian BagManufacturing Company Plc,BAGCO, operations.
According to him, Ed bringsto the job, 30 years experiencein developing and imple-menting strategies in the foodindustry.
He further stated that thecompany has deployed someof its most talented executivesto drive its various invest-ments, due to its realizationthat building its upstream val-ue chains that link Nigerianfarmers with industrial proc-ess is becoming more impor-tant to Nigeria’s future pros-perity.
He disclosed that thecompany has appoint-
ed Mr. Paul Gbededo, as thenew Managing Director ofFlour Mills’ Agro-Allied busi-ness, adding that he will beresponsible for handling allfertilizer, animal feeds, oilcrushing, poultry and farmingactivities, including backwardintegration schemes at Kabo-ji, Sunti and other locations,as well as the processing ofcassava into flour, sweetenersand starches.
According to Ukpabi, Paul’sextensive agro-allied experi-ence and track record in cre-ating value in this importantsector makes him the idealperson to drive our efforts insupport of the Government’sAgricultural TransformationAgenda.” He said, “we havespent N10 billion over thepast 10 years in agro-allied in-vestments and have plans toinvest another N30 billionover the next five years.
“With 40 per cent of the Ni-gerian GDP in agriculture and70 per cent of all Nigerianemployment in this sector, itis our top priority to drive.
“The future of Nigeria de-pends on those companieswilling and able to invest inthis sector and Flour Millswill lead the way.”
The company said Mr. EdJackson, the new ManagingDirector, Food Division andMr. Paul Gbededo, the newManaging Director, Agro-Al-lied Division, will be report-ing to Ukpabi, Group Manag-ing Director of Flour Mills ofNigeria.
Flour Mills to invest N100bn inNigeria in five years
By MICHAEL EBOH
FLOUR Mills Nigeria Plcsaid it will invest N100
billion in Nigeria within thenext five years.
The company, in a statementannouncing its neworganisational structure andinvestments, said N30 billionwould be invested in the agro-allied segment within the nextfive years to boost its manu-facturing capacity andoperations.
The company stated that ithas reviewed itsorganisational structure andmade a series of investmentsaimed at bolstering its strongmarket position in the Foodand Agro-Allied sectors.
Mr. George Coumantaros,Chairman, Flour Mills Group,said the company is commit-ted to delivering on its prom-ise to provide its customersand consumers across all ofNigeria and throughout WestAfrica with the highest quali-ty food products at affordable
prices.“To this end, we have invest-
ed N70 billion over the past10 years in food manufactur-ing assets and have plans toinvest another N100 billion inthe next five years.”
Also speaking, Mr. Em-manuel Ukpabi, Group Man-aging Director, Flour Mills,said as part of the company’songoing strategic review, itnow focuses on establishingprofitable ventures that arecrucial for the Nigerian econ-omy and society.
THE Board of Conoil Plchas announced a profit of
N4.4 billion for the financialyear ended December 31,2011, just as it recommendedpayment of N1.73 billion toshareholders as cash divi-dends for the period underreview.
The dividend recommenda-tion was contained in the au-dited report and accounts ofConoil Plc for the year endedDecember 31, 2011 releasedby the Nigerian StockExchange (NSE). The grossdividend recommendationimplies increase in dividendper share from N2 for 2010business year to N2.50 for the2011 business year. The 25per cent increase in cash pay-outs was reflective of the im-pressive performance of thecompany during the year as
Conoil records N4.4bn profit, declaresN1.7bn dividend
By PETER EGWUATUnet earnings per share rosefrom N4.02 in 2010 to N4.25in 2011.
With these, Conoil hasemerged as the best-returnstock in the petroleum mar-keting sector with current div-idend yield of about 12 percent and earnings yield ofabout 20 per cent. These alsoplaced the stock within thetop-bracket of dividend pay-ing stocks on the NSE.
The report showed that thecompany grew sales by 53 percent from N102.88 billion in2010 to N157.51 billion in2011. It further consolidatedits profitability with profit be-fore tax rising from N4.02 bil-lion to N4.4 billion. Profit af-ter tax rose from N2.79 billionto N2.95 billion. The reportalso showed a stronger bal-ance sheet as retained earn-ings boosted shareholders’funds to N16.82 billion in 2011compared with N15.26 billion
in 2010. Total assets rose by49 per cent to N61.84 billion in2011 as against N41.49 billionin 2010.
Market analysts said theimpressive dividend and prof-it and loss accounts perform-ance were in line with market’sexpectations given Conoil’sconsistent growth over theyears.As earnings per shareincreased from N2.62 in 2008to N3.33 and N4.02 in 2009 and2010 respectively, Conoil hadincreased cash dividend pershare correspondingly from N1in 2009 to N1.50 and N2 in2009 and 2010 respectively.
In his comments on the re-sults, Chairman, Conoil Plc, Dr.Mike Adenuga (Jnr), said theresults were indicative of thecommitment of the Board andManagement to growingshareholders’ value irrespec-tive of the operatingchallenges.
Guinness Nigeriahosts ICCN’S AGM
IN fulfillment of its support
for global economicgrowth, Guinness Nigeria,one of Nigeria’s foremostbreweries, has sponsored the13th Annual General Meetingof the International Chamberof Commerce (ICC) Nigeria,which included theintroduction ceremony of itsnew members recently, at theMetropolitan Club, VictoriaIsland in Lagos.
The International Chamberof Commerce (ICC) is a rep-resentative body that speakswith authority on behalf ofenterprises from all sectors inevery part of the world. Thefundamental mission of theICC is to promote trade andinvestment across frontiersand help business corpora-tions meet the challenges andopportunities of globalisation.In Nigeria, the ICC is madeup of business leaders andblue-chip companies whocome together to set globalstandards and move thenation’s economy forward.
TEF launchesLegacy prize toreward academicexcellence
THE Tony Elumelu Foun-dation (TEF), a not-for-
profit institution committed tothe economic transformationof Africa by enhancing thecompetitiveness and growthof the African private sector,has announced that it will of-fer annual prizes in perpetu-ity to top performing gradu-ating students at several uni-versities across Nigeria.
The annual prizes will befor top undergraduate andgraduate (where relevant)students at the various uni-versities in Economics,Business Administrationand Medicine. An annualprofessional prize will alsobe provided through theChar tered Ins t i tu te o fBankers o f Niger ia toencourage excellence inthe banking profession.
The benef ic iaryinstitutions are AmbroseAlli University, Edo State;Delta State University;University of Jos, PlateauState; University of Lagos;University of Benin, EdoState; Usman DanfodioUniversity, Sokoto State;University of Port Harcourt,Rivers State; University ofMaiduguri, Borno State;Univers i ty o f Niger ia ,Nsukka, Enugu State; andBenue State University.
Vanguard, MONDAY, JULY 23, 2012 — 25
CMYK
BRIEFS
Corporate Finance
By PETER EGWUATU
Against the backdrop of servicing banks' loan,
shareholders of Oando Plchave called on the Board ofDirectors of the company toraise fresh funds byincreasing its share capital.
The shareholders at thecompany’s Annual GeneralMeeting (AGM) held at theweekend in Lagos, noted thehuge investment embarkedupon by the company in itsdiversified strategy.
Speaking at the AGM, SirSunny Nwosu, NationalCoordinator, IndependentShareholders Association ofNigeria (ISAN) said,“Information must get to thestock market at the right timeso that the price of thecompany ’s share can beadequately priced even withthe unfortunate challenges we
*Ecobank Regional Head, Domestic Bank (North West), Saidu Umar presenting booksdonated by the bank to schools in Katsina State to the Deputy Governor, Alh. Barrister AbdullahiGarba Faskari and Commissioner for Education, Prof. Aminu Kado Kurfi (middle) as part ofthe bank’s corporate social responsibility activities.
Equities value appreciates by N90bnBY MICHAEL EBOH,CHINEDU IBEABUCHI& WILLIAM JIMOH
The upward trendwitnessed in the
Nigerian Stock Exchange,NSE, in the last couple ofdays continued last week, asthe value of listed equitiesappreciated by N89.73billion.
Specifically, equities value,represented by the marketcapitalization, rose by 1.24per cent to close the week atN7.349 trillion, from N7.259trillion at which it opened.
The All-share index,another major performanceindicator, appreciated by1.56 per cent or 345.25 basispoints to close the week at23,095.31 points.
Equity trading alsoappreciated by 11.99 percent, as a turnover of 1.634billion shares valued atN11.897 billion was recordedin 22,412 deals, in contrast topenultimate week’s turnoverof 1.459 billion shares valuedat N9.618 billion in 18,276deals.
The Financial Servicessector recorded the highesttransaction with 1.217 billionshares valued at N6.881billion in 12,971 deals. Thiswas followed by theConglomerates sector with130.220 million sharesvalued at N182.074 milliontraded in 909 deals.
The turnover volumerecorded in the top sectorswas largely driven by activityin the shares of United Bankfor Africa Plc in the Bankingsub-sector; AIICO InsurancePlc, in the Insurance carriers,brokers and services sub-sector and TransnationalCorporation of Nigeria Plc inthe Diversified Industriessub-sector.
Trading in the shares of thetop three companies
accounted for 546.536 millionshares, representing 40.78per cent, 40.57 per cent and33.45 per cent of the turnoverrecorded by the sub-sector,sector and total equities forthe week, respectively.
Guinness Nigeria Plc led 38other companies on the pricegainers’ chart, recording themost share price gain, withN11.40 to close at N239.40 pershare from N228 per share atwhich it opened; Nigerian
Breweries Plc followed with again of N5.99 to close at N116per share and Nestle NigeriaPlc garnered N5 to close atN500 per share.
Other share price gainersinclude: Conoil Plc N4.40,Okomu Oil Palm PlcN3.39,Total Nigeria Plc N3,Lafarge Cement WAPCO PlcN2.50, Glaxo SmithKlineConsumer Plc N2.05, FlourMills Nigeria Plc N2.00 andUAC Nigeria Plc N1.63among others.
On the contrary, Mobil OilNigeria Plc led 29 othercompanies, recording the
most share price, with N6 pershare to close at N125 pershare, from N131 per share atwhich it started the week;Seven-up Bottling CompanyPlc followed with a loss of N2per share to close at N40.12per share and NigerianEnamelware Plc shed N1.80to close at N34.39 per share.
Other share price losersinclude: Cement Company ofNorthern Nigeria Plc N1.14,Arbico Plc N1.05, DangoteCement Plc N1.00, Presco PlcN0.76, Berger Paints PlcN0.42, Union Bank NigeriaPlc N0.39, Learn Africa PlcN0.31 among others.
Oando shareholders seek increase in share capital
CITIC to pay$310m forCLSA stake
CITIC Securities hasagreed to pay $310.3million for a near-20
per cent stake in French bank,Credit Agricole’s CLSAbrokerage unit, with an optionto buy the rest, underscoring theglobal ambitions of China’sbiggest listed brokerage.
CITIC has the option to buythe remainder of the brokeragefor $910.7 million, which thebanks said in a statement theyexpect it to exercise by June 30,2013 at the latest.
The Chinese brokerage hadplanned to buy into U.S.investment bank, Bear Stearnsduring the global financial crisisbut later cancelled the deal.Chinese investment banksincluding CITIC Securities,China International CapitalCorp and Haitong SecuritiesCo are stepping up expansionabroad as growth in thedomestic market slows, whileChina’s growing internationalclout creates opportunitiesoverseas.
“The investment in CLSA willenable CITIC to partner itsstrong franchise in China withCLSA’s established globalclientele and bring capitalmarket products and servicesfrom China to internationalclients,” CITIC chairman, WangDongming said in a statement.
are facing in the capitalmarket and economy ingeneral. With informationabout the company moreshares will be bought from themarket and this will raise theprice of our shares.”
On the issue of increase inshare capital, he said, “ It isnecessary for the company toraise fresh funds either byway of rights issue or scriptissue. If the company wantsto float rights issue, theremust be attractive pricing,because the existingshareholders who hadinvested in the past should beable to reap bountifully fromsuch transactions.. In fact,there is great future for Oandoand we shareholders shouldrally around it and be patientbecause it takes three or moreyears to reap from hugeinvestment in buildingsubsidiaries.”
Chief Sola Abodunrin,Chairman, Ibadan ZonalShareholders Association,commended the company’sdiversification drive, saying itis good thing for the economy.According to him, “Theinvestment by the company isa good one but it should beable to lead us to somewherethat the shareholders canbenefit no matter how small.With Earning Per Share (EPS)of 165 kobo, the companyshould have been able to partsomething to theshareholders.
Mr. Boniface Okezie,Chairman, ProgressiveShareholders Association ofNigeria (PSAN), equallycommended the company forthe huge investment, saying,“We hope to reap in thenearest future. Furthermorethere is need for the companyto raise fresh funds because
we cannot continue to work forthe banks by paying hugeinterest to them.”
In response, GroupManaging Director, OandoPlc, Mr. Wale Tinubu,commended the shareholdersfor their loyalty and supportfor the company. According tohim, “Despite the challengesfaced in 2011, we havepositive outlook on 2012,especially with the expectedadditional production streamsanticipated in the year.Furthermore, we arecautiously optimistic towardsa resolution to the currentimpasse with the muchanticipated passage of thePetroleum Industry Bill (PIB)by the National Assembly.Following our write-downs in2011, we anticipate a robustperformance in 2012, havingdealt with all costs that couldnegatively impact futureperformance.”
Morgan Stanleymay sellcommodity staketo Qatar — CNBC
Morgan Stanley (MS.N)
is in advanced talks overselling a stake in itsm u l t i b i l l i o n - d o l l a rcommodities trading divisionto Qatar ’s sovereign wealthfund, CNBC reported onFriday, citing people familiarwith the matter.
Talks have recently focusedon the Qatar InvestmentAuthority buying a minoritystake, according to one of thepeople, CNBC reported on itswebsite. It said a deal might beimminent, but cautioned theexact terms could not bedetermined and thatdiscussions could still fall apart.
A Morgan Stanleyspokeswoman declined tocomment. Morgan Stanley,whose commodity unit wasone of the original “Wall Streetrefiners” that pioneered theenergy derivatives market twodecades ago, was firstreported to be consideringselling a stake a month ago.Earlier it was believed to bein talks with private equityfunds, including BlackstoneGroup LP (BX.N).
26 —Vanguard, MONDAY, JULY 23, 2012
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Vanguard, MONDAY, JULY 23, 2012 — 27
Homes & Housing Finance
BRIEFS
•Beautiful prefabricated house – roadmapto affordable housing?
A Committee set up by President Goodluck Jonathan
on the review of the nation’sconstitution has recommendedan amendment to the 1999 thatwill compel government to pro-vide housing for Nigerians asa fundamental right.
The Presidential Committeeon the Review OutstandingIssues on Recent Constitution-al Conferences headed by aformer Chief Justice of Niger-ia (CJN), Justice Alfa Belgore,wants Nigeria to join theleague of welfare states likeSouth Africa and countries inEurope where citizens can en-force provision of housing,health care and education associo-economic rights.
Presently, Nigerians do nothave the right to invoke thecourts to find government lia-ble should it fail to provide thesocial services, since the rightsare contained in Chapter 11 ofthe constitution titled Funda-mental Objectives and Direc-tive Principles of State Policyand are not justifiable. But theBelgore committee has recom-mended that these rights bemerged with the fundamentalhuman rights contained inChapter 1V which are enforce-able.
Section 16(2) (d) of the Con-stitution which falls under theFundamental Objectives andDirective Principles of StatePolicy states: “The state shalldirect its policy towards ensur-ing that suitable and adequateshelter, suitable and adequatefood, a reasonable national
Presidential committee advocateshousing as fundamental right for Nigerians
Stories byYINKA KOLAWOLE
minimum living wage, old agecare and persons, and unem-ployment, sick benefits andwelfare of the disabled are pro-vided for all citizens.”
But in Section 6(6), the con-stitution provides that “the ju-dicial powers vested in accord-ance with the foregoing provi-sions of this section shall not,except as otherwise providedby this constitution, extend toany issue or question as towhether any act or omission byany authority or person or as
to whether any law or any ju-dicial decision is in conformi-ty with the Fundamental Ob-jectives and Directive Princi-ples of States Policy set out inChapter 11 of this Constitu-tion.”
However, the Presidentialcommittee recommended thatthese rights be taken out ofChapter II and taken intoChapter IV which contains en-forceable rights. “The commit-tee adopted the recommenda-tion of the 2005 Conference
that the Fundamental HumanRights in chapters II and IV ofthe 1999 Constitution shouldbe merged, where possibleand should be made enforcea-ble. “It further decided that as-pects of Chapter 11, whichunderscore the fundamentalobjectives of the constitution,should be transferred to thegeneral provisions whilst thosethat aggregate rights should betransferred to Chapter IV,” theBelgore committee recom-mended.
LAGOS State governmenthas reiterated its desire to
reduce the number of ownersof landed property in the statewithout registered titles.
Governor Babatunde Fasho-la made this known recentlyin Lagos during the presenta-tion of registered sub-lease ti-tle documents to 1,000 prop-erty owners in governmenthousing estates across thestate, adding that governmentwas concerned about the largenumber of properties in thestate without titles.
The beneficiaries constitutethe second batch of propertyowners to be issued with reg-istered titles among those whobought their properties fromgovernment agencies like thestate Ministry of Housing,Lagos State Development andProperty Corporation (LSD-
Lagos moves to tackle propertieswithout titles*1,000 landlords get title documents
PC), and Lagos Building In-vestment Company Limited(LBIC) before the year 2000.
Represented by the Commis-sioner for Housing, Mr. BosunJeje, the governor said themove is meant to ensure theregistration of the propertiesand confer on their ownersproper land titles.
He noted that the benefici-aries had purchased the gov-ernment properties before year2000, but most of the allotteeshad only letters of allocationand other documents not le-gally recognised as documentsof title. “On assumption of of-fice for the first term in 2007,government decided to do anumber of things to reduce thelarge number of propertieswithout registered titles. Thisis not for economic benefit, butgeared towards poverty alle-
viation and financial empow-erment of the citizenry. Anowner of property who fails toperfect his title is sitting on adead asset. Such propertieswith registered titles, being le-gally recognised, can be usedas security to obtain loans toraise needed finance,” hesaid.
Fashola added that the Di-rectorate of Land Regularisa-tion was strengthened to ena-ble it process more applica-tions for regularisation of ti-tles to land. “Let me say thatthe concern of this governmentin all of these efforts aimed atreducing the unacceptablenumber of properties withoutregistered titles is not for eco-nomic benefit, but geared to-wards poverty alleviation andfinancial empowerment of thecitizenry.
A Lagos-based real estatedevelopment company,
Propertygate Development andInvestment Plc, says there is ahuge economic opportunities tobe tapped in Nigeria’s real es-tate market.
Managing Director of thefirm, Mr. Adetokunbo Ajayi,disclosed this at the firm’s thirdannual general meeting heldrecently in Lagos.
He said in 2011 alone, thecompany recorded a start-up of44 housing units of varioustypes, despite challenges likethe violation of the global econ-omy, difficulties at the homefront and constraints in the realestate industry.
According to him, cash in-flows for the year rose to N434million from N263 million in2010; total current assets stoodat N370 million compared toproceeding year’s N331 mil-lion; while gross earnings roseto N287 million in the year fromN276 million.
Ajayi said in 2011 the compa-ny recorded the highest numberof development starts in a yearsince its commencement ofbusiness operations, while itspast endeavours yielded start-ups and completion of 15 hous-ing units with a market valueof over N600 million.
Firm sees growth ofreal estate market
By EMMANUELELEBEKE
Nigeria set forfastest constructiongrowth
A report by Global Construction Perspectives and
Oxford Economics has forecast-ed that in the next ten years,construction growth in Nigeriawill be the fastest of all markets.
The report says Nigeria re-mains the market where thefastest growth will happen as itwill be the global hotspot fromnow to 2020 as the nation’s con-struction growth have risenhigher than India’s, which re-flects increased wealth.
Head of Conference Pro-grammes, The EconomistGroup, Dougal Thomson, in hisintroductory remarks at the TheEconomist’s Conference on Fu-ture Cities, predicted that Afri-can population is going to sur-pass that of China by 2050, cit-ing International MonetaryFund (IMF) projection, whichsays that African GDP growthat the moment is 5.4 per centper annum. He however, point-ed out that Africans are stillstruggling to get going, notingthat so much money is neededto transform cities in the conti-nent.
CMYK
28 — Vanguard, MONDAY, JULY 23, 2012
CMYK
Tax Platform
Why is the Servicemigrating from governmentassessment to self-assessment?
The Service is not migratingbut strengthening self-assessment because the Servicedid not get the policy right atthe beginning.
What is the differencebetween AdministrativeAssessment and Best ofJudgement?
Administrative Assessmentmeans an assessment raised bya relevant tax authority wherea taxpayer has failed to filereturns and pay taxes due onor before the due date or wherethere is an understatement oftax in the returns filed. Best ofJudgement (BOJ) is anadministrative assessment,however, in issuing it, it shallbe based on spot audit, thirdparty information to identifymaterial fact upon which theassessment will be raised.
Is Spot Audit provided forin the tax law?
Spot Audit and third partyinformation is provided for bySection 26 of the FIRS(Establishment) Act.
What is the differencebetween AdministrativeAssessment and GovernmentAssessment?
There is no differencebetween AdministrativeAssessment and GovernmentAssessment. They areterminologies usedinterchangeably as assessmentraised on behalf of governmentby the relevant tax authority.
Will an objection arise undera self-assessment system?
Ordinarily, under a self-assessment system, thetaxpayer may not object againsthis own assessment, however,he may object against anassessment raisedadministratively.
How does an AssessmentProgram differ from a FilingCompliance Program?
Assessment program is usedto raise assessment fortaxpayers who fail to file on duedate. However, FilingCompliance Program is used toenforce compliance to ensureall taxpayers file their taxreturns and make payment oftax due on or before due date.
What should be therelationship between RPP/Audit/RAU?
There must be collaborationbetween them and the chainmust not be broken. RPPreceives returns; carries outarithmetic checks and passesthem to Tax Audit for RAU- asubunit of Tax Audit to carryout analysis for case selection.
What are the KPIs forRAU?
The Key Performance
,
,
Frequently asked questions about self-assessmentIndicators shallbe set in line withthe RiskA s s e s s m e n tbenchmarks andagreed from timeto time. The timespent on riskprofiling oftaxpayer data; thereport generatedon weekly basisnot later 2-dayafter a week; thetax yield of thereport.
What should youdo when younotice the basisperiod is notcorrect?
It is RPP’sresponsibility tocorrect the basis
period, re-compute and notifythe taxpayer for payment.
Should all tax returns be riskprofiled?
Yes, all tax returns shouldautomatically be risk profiled.After data entry, the taxpayerfile is forwarded from RPPU tothe Head of Audit for theSelection Criteria Analysis.
Should RPPU becommunicating directly withtaxpayers?
RPPU can communicatedirectly to/with taxpayer bynotifying him when an error isobserved during the review ofreturns.
What action is to be takenwhen tax returns are notsubmitted on due date?
FDAEU should visit thetaxpayer immediately with ademand for the returns andinform the taxpayer of theconsequences of having failedto comply with the due date.Administrative assessmentprocedure will commence afterthe visit.
What happens to the seizedbooks of a Taxpayer who wasdistraint; at what point do youreturn the books that wereseized?
Make copies of the seizeddocuments and ensure it isendorsed by the taxpayer thenreturn the books immediately inline with the provisions ofSection 26 and 30(2) of FIRS(Establishment) Act, No 132007.
When an AdditionalAssessment is raised, should itbe back-dated to the due dateof filing/payment?
Yes, it should be effective fromthe time the payment was due.
The penalty for late returnsand penalty for late paymentdo not appear to be equitable.Could this be reviewed?
A recommendation has beenmade for the review to makeit a percentage of tax due.
How do you encourage
taxpayers to file in theirappropriate Jurisdiction?
If the taxpayer haspreviously filed in a wrongjurisdiction, the taxpayer’s fileshould be moved to thejurisdiction within which hisaddress falls. Then thetaxpayer should be advisedaccordingly.
What is the workingrelationship between FilingDebt Arrears EnforcementUnit (FDAEU) and theReturns Payment ProcessingUnit (RPPU)?
RPPU conducts arithmeticchecks of a tax return, capturesdata and refers a list of non-compliant taxpayers to FDAEUfor further actions including a
visit to the taxpayer to find outwhy he failed to file and remindhim of the consequences of lateand non-filing.
When is a Tax ClearanceCertificate issued to a taxpayer?
A Tax Clearance Certificate isissued only when tax liabilitiesincluding penalty and interestfor the relevant assessmentyears are paid.
The focus of Self-Assessmentappears to be on only CIT. IsVAT not part of the Self-Assessment Process?
Self-Assessment is a regimeand covers all tax types
After the risk assessments of
returns have been done, are allthe returns then passed to theAudit Unit?
Yes, the Audit works on theresult of the risk analysis to drawup its audit program for furtheraction. In any case, RAU is asub-unit of Audit.
Presently there are no AuditUnits in some ITOs what willhappen to the audit functionsin these offices?
All offices are expected to haveAudit Units by the time Self-Assessment is fullyimplemented. However, wherethere are no Audit Unit, theRegional Audit shall perform theaudit.
What is the process forapproving a request forinstalment payment of tax?
Where a taxpayer intends toconclude instalment paymentsnot later than due date of filing,the taxpayer is required to notifythe tax office of his intention.However, where a taxpayerintends to conclude instalmentpayments beyond the due dateof filing, he shall request forapproval. In any of the cases,the taxpayer is expected tocommence instalment paymentsbefore due date such that thefinal payment is made not laterthan due date.
What are the conditions forgranting extension of time forfiling returns?
Written application to besubmitted before due date offiling returns and to showgood cause for taxpayersinability to file by the duedate. If the Board is satisfiedwith the cause, it may grant
approval under the followingconditions; upon suddendeath of any PrincipalOfficer of the Company; andWhere the Companyexperienced Naturaldisaster. The approval toextend the t ime withinwhich to file returns will notalter the time within whichpayment of tax is to bemade.
The law allows twomonths grace from duedate of filing, does this nowmean the grace period iseight months?
With respect to Companies
Income Tax, a taxpayer isrequired to file tax returnsand make payment of taxdue not later than 6 monthsafter the accounting yearend. However, he has theoption to make instalmentpayments of tax due in amanner that the f inalinstalment is paid not laterthan 2 months after duedate.
What about the incentivefor self-assessment filing,will taxpayers who file stillenjoy this incentive?
The incentive for self-assessment f i l ing thatexisted up to 2007 wasabolished by CompaniesIncome Tax (Amendment)Act 2007.
Considering the non-compliant culture ofNigerians, do you think thatself assessment as a meansto achieving voluntarycompliance will work inNigeria? Put in anotherway; are we ripe forvoluntary compliance?
The self-assessment taxregime is concerned withthe provision of properenablement for taxpayersand enforcement actions thatwill ensure compliance.
My understanding is thatthe first instalment of taxpayable should be paid ondue date and the remainingmaximum of five (5)instalments paid after duedate but not later thanNovember 30, 2011.
In accordance with theself-assessment regulations,instalment payments maycommence before due dateof filing provided the finalpayment is made not laterthan due date. In addition,the regulation only providedfor three (3) instalments.Note that the CompaniesIncome Tax Act does not saysix (6) instalment paymentsmust be granted.
When was the TaxpayersService Policies, Processesand ProgrammesDepartment (TSPPPD)created and what is thepurpose of creating thedepartment at theHeadquarters whenTaxpayers Ser vice Unitalready exists in all theIntegrated Tax Offices?
TSPPPD was created inApril, 2011. TSPPPD at theHeadquarters is responsiblefor generating proceduresfor delivering uniformtaxpayer service,formulating the annualoperating plan andproviding headquarterssupport to ensure taxpayerservice is effectively carriedout in order to targetcompliance gap.
FDAEU should visit thetaxpayer immediately with ademand for the returns andinform the taxpayer of theconsequences of havingfailed to comply with the duedate; administrativeassessment procedure willcommence after the visit
*Ag. Executive Chairman, FIRS, AlhajiKabir Muhammad Mashi
CMYK
Vanguard, MONDAY, JULY 23, 2012 — 29
Insurance
BRIEF
Insurers torestrategise forbetter clientsservices
INSURANCE operators inthe country have com-
menced move to re-strate-gize their operations in or-der to serve their clientsbetter and more effectively.
President of CharteredInsurance Institute of Ni-geria, CIIN, Mr. Wole Ade-timehin, disclosed this dur-ing the institutes’ 2012 in-ternational education con-ference held in Abuja re-cently.
He said “There is a gen-uine quest by all operatorsto seek ways and means ofrethinking both governanceand business modelsthrough fresh strategies.”He also added that in allcircumstances, includingthe pervading instances ofcorruption and greed ingovernance, the pendulumof good reasoning mustcontinue to swing in the di-rection of finding lastingsolutions to the avoidablewastages in the systems.
Continuing he said, thepresent atmosphere of inse-curity in the country mustbe of concern to operators,adding however, that oper-ators should exercise re-straint in their reactions tothe existing situation.
He assured that the Insti-tute will continue to striveto ensure that it achieves inall spheres of its statutoryresponsibilities. He said,“We shal l continual lystrengthen the relevance ofinsurance education in Ni-geria by means of the ex-isting platforms such as theConferences. Seminars,Workshops and exchangeprogrammes, successfulconduct of the professionalexamination in all the cent-ers across the country andthe offshore centre in Ban-jul, and Gambia.
According to him, “Theinstitute will sustain the in-ternational outreach pro-gramme for CEOs, reinvig-oration of the MandatoryContinuing ProfessionalDevelopment (MCDP) pro-gramme.
Furthermore, he said,there shall be repositioningof the Institute’s secretari-at through strategic rea-lignment of the staff orga-nogram, expansion of theInstitute’s revenue gener-ation bases, as well as pro-gressive construction workon the College of Insur-ance.
*From left: Mr. Kunle Ahmed, Executive Director, GTAssurance now Mansard Assurance;Mrs. Yetunde ILori, CEO; Mr. Victor Osibodu, Chairman and Mr. Tosin Runsewe, Chief ClientOfficer, during the official unveiling of the new corporate identity of Mansard Insurance inLagos. Photo by Lamidi Bamidele
By ROSEMARY ONUOHA
GT Assurance Plc isnow MansardInsurance Plc.
The new name wasunveiled at the CorporateHead Office of the companyin Lagos last week.
Chief Client Officer of thecompany, Tosin Runsewe, whounveiled the new brand saidthat Mansard is another wordfor a roof and a roof is asymbol of protection.
He said “The concept of aroof speaks to the consistencyand dependability that ourbrand has with our customers.GT Assur has evolved intoMansard Insurance today,yet the same companycontinues with the samepeople and the same values.”
It will be recalled that theCentral Bank of Nigeria,CBN, two years agomandated banks to divestfrom all non-bankingsubsidiaries in the country.
As a fall out of this,Runsewe said that GT Assurwas acquired by a consortiumof five investors known asAssur Africa Holding whollyregistered in Mauritius.
He said “We have toconclude this whole processby re-branding, by coming upwith our own brand which isa brand that we expect to notjust step out with in Nigeriabut to roll out eventuallyacross West Africa in the nextfew years and we expect that
GT Assurance transforms into
Mansard Insurancethis brand will become aleading brand in Nigerianfinancial services sector andnot just in the insurancesector.”
Runsewe said that thecompany needed to re-brandbecause it has changedownership, stating “We nowhave the opportunity to buildan independent leadingbrand for ourselves. For aslong we are subsidiary of abank we are always going to
NKIRUKA NNOROM &RITA OBODOECHINA
The board of NigerInsurance Plc hassaid that the company
is repositioning itself to moveto the top of the industry inthe years ahead.
Addressing shareholders atthe company’s 42nd annualgeneral meeting in Lagos lastweek, Chairman of thecompany, Alhaji BalaZakariya’u said that thecompany ’s focus in thecoming year will be to expanddistribution channels, andimprove product offering forbetter marketing of thecompany’s products.
Zakariya’u said, “Our focusis on creation of specialmarkets for NationalInsurance Commission’s(NAICOM) compulsoryinsurance policies andMarket Development andRestructuring Initiative(MDRI) programme as well
be subject to what they do butnow we are independent andwe want to build our ownbrand that will compete notjust in the insurance sectorbut across Nigerian financialservices industry and not justin Nigeria but hopefullyacross West Africa region.”
Runsewe said that over theyears they have seen thecompany grow rapidly and atthe end of last year, businesshad grown by 33 per cent andat the end of the first quarter
this year, had also grown by22 per cent.
Runsewe added that the re-branding has enabled thecompany to developbancassurance relationshipwith other banks, adding“Hitherto other banks couldnot close this relationship withus due to they taught we werethe subsidiary of a bank. Sobecoming independent hassuddenly made us veryattractive to other banks whoare now doing business withus in a much closer way, sowe are having the opportunityto expand withoutcompromising the existingrelationship that we hadbefore.”
Niger Insurance to expand distribution channels, products offerings
as acquisition of modern toolsfor effective operations. Wewill also develop and deployelectronic platforms andfacilities to all our regions andbranches nationwide for quickand reliable service delivery.”
He added that the companywill rebuild and refocus itsinvestment portfolios bytaking advantage ofopportunities in the fixedincome securities for safe andguaranteed returns, adding“We will equally diversify intooil and gas,telecommunications and othersafe areas to grow ourinvestment income.”
Meanwhile analysis of thecompany’s results for the yearended December 2011 showsthat profit after tax stood atN1.23billion showing animpressive result from a lossposition of N124millionrecorded in 2010.
Gross premium income rosefrom N7.04 billion in 2010 toN7.81 billion in 2011, while
shareholders funds increasedfrom N4.3 billion in 2010 toN5.5 billion, and total assetsstood at N21.1 billion.
During the year underreview, the companyachieved an underwritingprofit of N1.54 billion, whileits profit from depositadministration increasedsignificantly from N120million to N1.53 billion.
Managing Director of thecompany,Mr. Justus Urantasaid that the companyrecorded marginal profit,which is a modestachievement despite theharsh global economicclimate.
He said, “There is a hugeuntapped market here thatwill provide a dependablesource of new businessthrough development of newproducts and outreachprogrammes. The insuranceindustry stands to benefitfrom the needs created by thecountless of challenges in thecountry.
Talking on the company’stransformation, he stressedthat the company is still in tonewith its human capitaldevelopment by way ofsending key staff to both localand international training,adding that the trainingschool at Anthony village hasbeen giving a face lift inreadiness for more enhancedin-house training.
According to him, thecompany’s former investmentdepartment has been enlargedand renamed treasury andinvestment department with asenior management staff asthe new head.
He said “Our recent move toinject fresh funds via thecapital market came outsuccessful, with over 75percent subscribed, addingthat the company also has tore-lunch some key productsinto the market, expandbranch network andinformation technology, buildbusiness alliances, andembark on more aggressivemarketing.
30 — Vanguard, MONDAY, JULY 23, 2012
CMYK
Aviation
Lagos international airport to have larger car parkStories By LAWANIMIKAIRU & DANIELETEGHE
Mu r t a l a
MuhammedInternational
Airport, Lagos will soon havea larger car. This wasdisclosed by the DeputyGeneral Manager, PublicAffairs, Federal AirportsAuthority of Nigeria (FAAN),Mr Victor Arisa.
Speaking to newsmen atMMIA in Lagos, Mr. Arisasaid that the management ofFAAN was awaiting anapproval of the new design ofa larger capacity car parkwhich was part of FederalGovernment’s remodellingexercise taking place at theairport.
“FAAN management isworried and is not unaware ofthe over-stressed parks. Wehave come up with a design.We are awaiting the approvalof the Ministry of Aviation tocarry out a new constructionand expansion that will havea larger capacity for parking,”he said.
He said that the current carparks at the airport premisesare safe to park cars, althoughcars are meant to be parkedat owners' risk as it wasobtained outside the airport
premises.Mr. Arisa further noted that
the airport management hassecurity outfits, includingarmed policemen that patrolthe parks every hour of theday, including at nights.
“We try as much as possibleto patrol the parks. We have
the policemen, aviationsecurity personnel and theNigeria Civil Defence Corpsthat patrol there every hour.We have never heard of cartheft in our car parks andtravellers often park their carsovernight, even for days, totravel and come back to pick
the car at the park,” he said.He said that the airport has
a structure for cars to beparked overnight and fordays. He noted that travellersmaking use of the specialarrangement pay more thanthose parking on hourly basis.
The manager, however,
noted that drivers pay aminimum of N100 per carwhenever they make use ofthe parking facility at both theinternational wing and theGeneral Aviation Terminal ofthe airport, (GAT).
The Director-General,Nigerian Civil AviationAuthority, NCAA, Dr
Harold Demuren hascanvassed for all airlinesoperating in Africa to haveIATA Operational SafetyAudit,IOSA compliance.The IATA Operational SafetyAudit (IOSA) programme isan internationally recognisedand accepted evaluationsystem designed to assess theoperational management andcontrol systems of an airline.IOSA’s quality auditprinciples are designed toconduct audits in astandardized manner, reducecosts and audit resourcerequirements for airlines andregulators and continuousupdating of standards toreflect regulatory revisionsand the evolution of bestpractices within the industry. Dr Demuren who made thecall at last week's five-day
Demuren calls for IOSA mandatory compliance for airlines
Africa Aviation MinisterialConference on Safety in Abujaexpressed shock at the crashof two Nigerian carriersrecently which has left the
country in mourning mood.He revealed that the currentNigeria Civil Aviation Act of2006 that created anautonomous civil aviationagency and domestication ofthe Cape Town Convention forthe acquisition of modernaircraft and other safetyinitiatives has resulted inenhancing safety measures,and Nigeria passing the ICAOaudits and attainment ofAmerican FAA CAT 1certification.
He noted that four monthsfrom celebrating sixuninterrupted years of zerofatalities in domesticscheduled flight operations,disaster struck involvingAllied Air in Ghana and DANA Airlines in Lagos, bothcarriers in Nigeria.
According to him, theseaccidents occurred aftersuccessfully carrying out 50
million passengers, operatedmore than one million flightsand grown the traffic by almost40 per cent in the last fiveyears.
The D-G described thecrashes as devastating blowto the industry and a majorsetback to the reform agendathat was being pursued .
Dr Demuren urged Africamember-states to adopt theAFI safety improvement planwhich will give them tools toimprove the picture of safetyin Africa, adding that towardsthis, the country wasconsidering IOSA mandatorycompliance for its airlines.
In his words:”We must notrelent. We must not blink, wemust remain focused, we mustforge ahead, above all, wemust not be discouraged.Collaboration and cooperationamong African states mustcontinue.”
•Dr. Harold Demuren
Vanguard, MONDAY, JULY 23, 2012 — 31
CMYK
IT does not matter if the catis black or white as long
as it catches rats.” Malaysianproverb. (VANGUARD BOOKOF QUOTATIONS, p 26).
The Malaysian proverb wasoffered to Nigerians at the sec-ond Nigerian Economic Sum-mit in Abuja by the Guest Lec-turer, a Malaysian, who hadworked on that nation’s Vision2020 programme. Unlike thetwo fraudulent Nigerian ver-sions – VISION 2010 and VI-SION 2020 – the speaker madeit clear that Malaysia, whichwas already light years aheadof Nigeria, planned to achievethe objectives of VISION 2020in a generation – defined asthirty years. Unfortunately, theguest speaker was in thewrong country for his message.Nigerian policy fraudsters firsthooked unto it to proposeVISION 2010. Predictably, itflopped. Then another groupof jokers drummed upVISION 20:2020. Even a foolknows that failure stares us inthe face again. But, PresidentJonathan does not yet knowthat he is being deceived – justas Obasanjo merrily signed onthe dotted line for theMillennium DevelopmentGoals, MDGs; which we aresure to miss. At least, the goodMalaysian professor of eco-
DIVERSIFICATION:
Missing the boat on rubber – 1nomics left us with materialfit for the BOOK OF QUO-TATIONS – for which I amgrateful.
The NES II focused ondiversification of theNigerian economy in order toavert the negativeconsequences of being a
mono-product economy. Thatwas in 1995; and the fact thatwe are still a mono-producteconomy, almost 20 years af-ter, is a testimony to our re-sistance to change – evenwhen it is generallyacknowledged. One of themost profound papersdelivered at the NES II wasfrom a fellow from Michelin,the tyre manufacturingcompany which left Nigeria,in disgust, several years ago.The message from Michelin,if I can be permitted to call itthat, was simple. Nigeriashould concentrate on grow-
ing more rubber because therevenue from that commoditywill eventually exceed Nige-ria’s income from crude oil;and, more importantly, it willbe more sustainable. In 1995,the presenter estimated that ifwe moved quickly, as a na-tion, and increased produc-
tion by 10 per cent annually,we would by 2015 be earningabout 50 per cent of crude oilrevenue from rubber alone.Mr. Michelin, called that be-cause I cannot readily locatethe documents pertaining toNES II, was also speaking tothe wrong audience and in thewrong country. Nigerians, in-cluding those in the privatesector, are not interested inlarge scale farming and long-term economic prospects. Thebillionaires here prefer the for-warding and “backwarding”of fuel and the enormousgains from “subsidy” scams.
Yet, the opportunity is stillthere for Nigeria to becomeone of the leading world ex-porters of rubber-based inter-mediate and finished products– if we reject exporting rawrubber.
It is estimated that about 15billion kilograms of rubber areproduced globally annually;out of which five billion arenatural rubber. Low produc-tion of raw rubber providedthe incentive for the produc-tion of synthetic rubber, whichnow accounts for two-thirds ofrubber production. Yet, thereis still a growing demand fornatural rubber which Nigeriacan tap into.
Benign neglect of rubber asnational policy
Before embarking on writingthis two-part series of articleson rubber, I undertook astudy, together with paidreaders, to go through themajor Nigerian newspapers,for the last three years, withone objective in mind – to findout how often top governmentofficials, including thePresident, had mentionedrubber, in their publicstatements. As a corollary tothat, the quick study was de-signed to find out what ournational policy on rubber pro-duction is. Little was expect-
ed; but the result was shock-ing. There was nothing onrubber – a product, which ifwidely cultivated can earnmore foreign exchange thanoil in the near future; and cer-tainly more than cassava.
No Minister of Agriculturehas mentioned it; perhapsnone has even thought aboutit. The incumbent Minister ofAgriculture, Dr Adesina, hasfocused attention on the hugefood import bill and the needto reduce it. That is a quarterof a step in the rightdirection. He has also raisedalarm about the impend-ing food scarcity whichmight resu l t in wide-spread famine. That is an-other quarter step in thepositive direction. But, hispromotion of the cassavabread, at this time, repre-sents a turn around fromthe steps taken. Substitu-tion of wheat with cassa-va i s not our pr ior i ty.Growing more food local-ly, and a variety of fooditems including the lowlyvegetables, is more of ourneed than the cassavabread option. More impor-tantly, encouraging great-er output of cash crops,rubber especially, will helpto offset the food importbill. Fortunately, Nigeria,has a competitive advan-tage in rubber production– which we are not ex-ploiting at the momentand have no plans to ex-port in the future.
“
IN March 2012, I wrote in
a narticle in the Vanguard “Al-
legation against Arunma Otehwrong” that efforts were madein my commentary not to com-promise the task facing thead-hoc committee of theHouse of Representatives in-vestigating the matter be-tween Herman Hembe, Arun-ma Oteh and the collapse ofthe Capital Market. The rea-son was to allow the Housethe opportunity to conduct anunbiased and uninfluencedinvestigation with the hope ofreaching a balanced and in-formed decision. Unfortu-nately, this is not the casewith the report from theHouse of Representatives. Itis a shame and most embar-rassing that the House of
BUSINESS & ECONOMY
House of Reps must stop vendetta on Arunma Oteh*Recall by Presidency is good judgment
By TONY NAVAHOKONMAH
Representatives would col-lectively exhibit clear vindic-tion against the DG SEC,Arunma Oteh in a high classmatter that also attracts theinterest of the internationalcommunity.
The report of the House ofRepresentatives could notprove its case beyond reason-able doubt and could findnothing of inappropriate be-haviour or case of fraudagainst the DG SEC. Thesewere the key notes of theirinvestigation and they failedto prove them. Instead, theHouse of Representatives hascome out to tell Nigeriansthat Arunma Oteh should bedismissed because she didnot meet the 15 years expe-rience required for her ap-pointment into the position ofthe DG, Security ExchangeCommission of Nigeria(SEC). Was this what they
were asked to investigate oris it in any way connected di-rectly or remotely to the crashof the capital market and thealleged case of fraud againstthe DG?
The reason for the recom-mendation by the House todismiss Arunma Oteh as DGSEC, was it what they wereasked to do? It is sad that theHouse of Representatives ei-ther for lack of understandingof their scope of inquiry or adeliberate conscious exerciseon a jamboree to spend taxpayers' money on an issuethey were very clear of their
position from start.I commend the report of the
independent auditors (PriceWater House/Coopers) fortheir courage to conduct aclear and unbiased investi-gation and for exoneratingArunma Oteh of any inap-propriate behaviour or fraud.I also commend the Presi-dency for the boldness tomake the right decision byre-instating the DG. TheHouse of Representativesand other detractors shouldplease allow Arunma Oteh toconcentrate on the task ofcleaning up the mess she in-
’
herited at SEC and restorethe market to acceptablestandard.
Now that this matter hasbeen conclusively decidedfairly by the presidency,Arunma Oteh must focus onthe job and not allowherself to be distracted. Shemust restore both local andforeign investors ' andtraders' confidence in theNigerian capital market.She must extend “oliveleaves” to both her support-ers and detractors alike.She must swiftly conduct thehealing processes vital forunity and team work. Arun-ma Oteh must not indulgein vendetta. I congratulateher for this victory. But it isvictory for justice and truth.
•Tony Okonmah, a finan-cial and economic analystwrote from London.
Nigeria should concentrate ongrowing more rubber because therevenue from that commodity willeventually exceed Nigeria’s in-
come from crude oil
’
I commend the report of the inde-pendent auditors (Price Water House/
Coopers) for their courage to conduct aclear and unbiased investigation andfor exonerating Arunma Oteh of any
inappropriate behaviour or fraud
32 —Vanguard, MONDAY, JULY 23, 2012
CMYK
Interview
’’
By PETER EGWUATU
With the Nigerian
capital market
making a gradual
recovery in the aftermath of
the financial meltdown, Mr.
Oladele Sotubo, Chief
Executive Officer, Stanbic
IBTC Stockbrokers Limited,
one of the ten market makers
appointed by the Central
Bank of Nigeria to stabilise
and restore liquidity to the
capital market, speaks on the
significance of the
development as well as other
salient issues affecting the
financial services industry in
this interview in Lagos.
Some operators have saidthe Market Makers (MMs)will have little impact becausethe secondary market isshrinking and there are nonew issues coming into thesystem. Also, it is widelybelieved that liberalisation ofthe market was pursuedwithout the right financialinfrastructure, and theresultant capital inflowscontributed in disorientingthe health of the localfinancial system. Will you saythat the steps taken so far bythe regulators have beeneffective in strengtheningand deepening the capitalmarket?
Regulators are doing a greatjob in deepening the marketand this is seen in the recentreview of the listing rulewhich now accommodateseven companies whichordinarily will not have metthe previous requirements inthe areas of years of operation,free float and some otherrequirements. As we have itnow, NSE has established aunit that will not only see tolisting but work with thecompany to ensure theycontinue to benefit from beinga listed company.
One of the requirements isalso that any new companyseeking listing will appointamong other professionals amarket maker. With the newregime, I believe we will seemost of the companies that didPrivate Placement couple ofyears ago coming on board.
Stanbic IBTC was recentlynamed by the Nigerian StockExchange at the head of a ten-member list of marketmakers. How will youdescribe the development?
This is a welcomedevelopment and a move inthe right direction as it willhelp boost the liquidity levelin the market and also helpremove any form of tradeimbalance in any stock.
For the sake ofenlightenment, what exactly
Regulators are dogreat job in deepthe stock market—Stanbic IBTC Chief
’
’will be the role of the marketmakers?
A market maker is a liquidityprovider and the major roleperformed by any MM isensuring a balance ismaintained between the bidand offer volume and price ofthe stock they are market-making in.
Each of the market makerreportedly met the minimumnet capital requirement ofN570 million, besides otherpre-conditions. Do you thinkthis requirement is enough toensure liquidity of themarket?
It’s one of the manyrequirements considered forthe selection of the MarketMakers (MMs). It isimportant but not enough.Market makers will requiremuch more to play their rolehence, access to credit is veryparamount.
In operation, how will thisdevelopment pan out? Inother words, will the marketmakers operate as one unitintervening when the needarises or each is allowed toact as it deems fit?
Rightly put, their role is thatof intervention and ensuringthat any imbalance on anystock is taken care of.However, they have a setvolume and price limits withinwhich they are permitted tointervene.
Even though theappointment of marketmakers has been welcomedin many quarters, somepeople also believe that theintervention is belated given
that investor confidence inthe market has ebbedconsiderably. What is yourreaction to this?
We cannot say because theconfidence has ebbed weshould fold our hands and donothing. At this point, what weneed to guarantee anyinvestor is that; there willalways be someone in themarket to sell to or buy fromat the prescribed price and
The need for anew product isclear to allstakeholders;recently, ETFwas introducedand soon, weshall have MM,short selling,SecuritiesLendingopportunitiesintroduced to themarket. By thetime we have allthese wellgrounded in themarket; othersophisticatedproducts will beintroduced
We have continued to see gradualreturn of capital into the capitalmarket especially from the offshoreplayers; any investor that wants toenjoy that return should takeadvantage of the attractivevaluations in the market having along-term view
•Mr. Oladele Sotubo....The market is a global village; any company that is seriously interestedgrowth must be a listed company
Vanguard, MONDAY, JULY 23, 2012 — 33
CMYK
’
’
Interview
doingpeninget
volume limits. This alone is aconfidence booster.
Do you think that theappropriate infrastructure,structures and processesnecessary for the effectiverunning of the new regimehave been put in place?
The answer is no. All thestakeholders still have a lot todo in the area of infrastructure,legislation, knowledge andprocesses. But I can say allhands are on deck to ensurethat this programme succeeds.
A report claimed that theappointed 10 market makerswould account for about 65per cent of the entire markettransactions, with the balancestill largely exposed to theindifferent state of themarket. Do you share thisconcern?
This might not necessarily bethe case as the role is majorlythat of intervention. However,as the market grows, marketmakers will play a major rolein determining volume andprice movement.
Banks have a pivotal role toplay in providing the fundingwith which the market makerswill execute their briefs. Doyou believe the banks will bewilling to provide the desiredfunding? Do you see theincentives for them to do so?Are you looking at otherfunding options?
As you’ve said, a good credit
line is a prerequisite for theeffective functioning of anymarket maker. There is aninitiative by the NSE, workingwith SEC and CBN to look atthe CBN credit policy as itaffects capital market. Thethree regulators must worktogether to open up this linefor operators in the CapitalMarket especially MMs .
Do you think there is meritin the agitation to compelmultinationals to enlist on the
Nigerian Stock Exchange?Compel? I don’t think so
but Encourage, yes. For thefact that these multinationalsdo their businesses inNigeria, there should beopportunities given toNigerians to share in thegoods of these companies. Weshould go the way of moralsuasion, tax holiday andother concessions that willencourage them to list. WeMUST not go the way ofnationalisation as this willspell doom for the currentdrive for FDI into Nigeria.
Assuming there are indeeda lot of unlisted companies,what precisely will you sayto their owners to make themhave their companies quotedon the Exchange?
The market is a globalvillage. Any company that isseriously interested in growthmust be a listed company. Itgives access to capital, makesvaluation possible, enhancesgood corporate governanceand ensures that the businessoutlives the founders.
Prior to the global financialmeltdown, internationalrating agencies including theRenaissance Group, Fitchand Economist IntelligenceUnit rated return oninvestment in Nigeriaamong the highest in theworld. Have you seen anysigns that investors wouldsoon start seeing the returnsthat used to be a majorattraction of the Nigerianmarket?
The answer is yes. Going bythe dividend yield from someof the results published bysome listed companies, itranges from 5 per cent up to20 per cent. We havecontinued to see gradualreturn of capital into thecapital market especiallyfrom the offshore players.Any investor that wants toenjoy that return should takeadvantage of the attractivevaluations in the markethaving a long-term view.
Both investors andoperators would have learnta number of useful lessonsfollowing the downturn inthe capital market. Based onyour experience, whatlessons have been learnt onthe side of the market?Specifically, have younoticed any changes ininvestor behavior?
If there is any lesson learnton the downturn, I think it’sthe need to play the gameaccording to the rule. In myown view, any player thatwants to cut corners cannotlast in this new regime as thelevel of awareness has greatlyimproved from what it usedto be. Also, I believe all must
have learnt to curb their greedand do some portfoliodiversification.
As currently structured, theNigerian capital market ispredominantly equity-driven,a situation that limits thenumber of asset classes
available in the market. Whatmeasures will you suggest toexpand the marketofferings?
The need for new productsis clear to all stakeholders.Recently, ETF was introducedand soon, we shall have MM,
short selling, securitieslending opportunitiesintroduced to the market. Bythe time we have all these wellgrounded in the market, othersophisticated products will beintroduced.
Private placement inunquoted companies wasrecently fingered as beingresponsible for the plunge ofthe capital market. To whatextent is this true?
This is one of the problemsfaced by the market as wehave lots of investors' fundslocked up in these PrivatePlacements. Themanagement of NSE is doingeverything possible to getthese companies on board.
With almost 18 per centshare of the market last year,Stanbic IBTC StockbrokersLtd was widely celebrated asNigeria’s largeststockbroking firm. What isyour current market share?
We currently have a marketshare of 19.05 per cent.
What is Stanbic IBTCStockbrokers Limited doingin the area of human capitaldevelopment as it affectsyour industry since you’rethe market leader and youhave a responsibility toenhance skill in the sector?
Apart from our effort inensuring that our staff getadequate training andexposure both locally andinternationally, as anorganisation, we sponsor acouple of academic awards ofThe Chartered Institute ofStockbrokers and also ensurethat our staff participate in anyknowledge-sharing exercisein the industry.
The Stanbic IBTC Group iswell known for its leadershiprole in organising public forawhere initiatives andstrategies that could help allstakeholders, especiallyinvestors and operators, arecanvassed. The last forumorganised by your Groupheld in March this year. Howwould you assess theoutcome?
The Stanbic IBTC Investorsconference has become amust-attend conference inWest Africa. This was thethird year of the conferenceand another tremendoussuccess, with 87 investorsfrom 48 individual fundsmeeting with 31 corporatesover the two days. At the endof the conference, theparticipants were unanimousthat the prospects of Nigeria’seconomic rebound are verybright as the economicfundamentals remain strongenough to sustain medium tolong-term growth anddevelopment.
Investors eagerly lookforward to this conference asthe quality of the organisationand content can compare withinternational standard.
This is one of the problemsfaced by the market as wehave lots of investors' fundslocked up in these PrivatePlacements; themanagement of NSE is doingeverything possible to getthese companies on board
rested in
•Mr. Oladele Sotubo
34 — Vanguard, MONDAY, JULY 23, 2012
CMYK
BRIEFS
Apointment & Promotions [email protected] 08033348923
THE Managing Directorof Staco Insurance Plc,
Mr. Sakiru Oyefeso, has beenelected Assistant Treasurer ofthe Nigerian InsurersAssociation, NIA.
Oyefeso, whose electionwas ratified during the 41stAnnual General Meeting,AGM, of NIA inLagos, succeeds Mr. SegunBalogun, Managing Director,Intercontinental WapicInsurance Plc.
NIA, the umbrellaassociation of all insurancecompanies registered tooperate in Nigeria, wasfounded in 1971 as a non-profit-making organisationand later incorporated as acompany limited by guaranteeunder the Companies Act1968.
Oyefeso graduated from theSchool of Management &Business Studies Departmentof Insurance, Lagos StateCollege of Science andTechnology, now Lagos StatePolytechnic in 1983 andqualified as Chartered Insurer
Oyefeso now NIA governing memberduring his NYSC Programmein 1984.
He is a seasoned insurancepractitioner with more than30 years experience in thefield of insurance.
Oyefeso started hisinsurance career in NationalInsurance Corporation ofNigeria, NICON, in 1978 andhe has been active in theinsurance sector since then.
He worked with RivbankInsurance Company Limited,Prudential Union AssuranceCompany Limited andLeadway AssuranceCompany Limited beforejoining Financial AssuranceCompany Limited asAssistant General Manager(Operations) in 1992.
Oyefeso left the company inAugust 1994 as DeputyGeneral Manager(Operations) to join Standard
Trust Assurance Plc (nowStaco Insurance Plc) as itspioneer Managing Director.
He has a Master ofBusiness Administrationdegree (MBA) from theLagos State University.
Oyefeso is on the GoverningCouncil of CharteredInsurance Institute ofNigeria, CIIN and NigerianBritish Chambers ofCommerce, NBCC, and onthe board of Trustees of theLASUMBA Heritage, also amember of the NigerianInstitute of Management(NIM) and the Institute ofDirectors, IOD.
He is a fellow of theChartered Insurance Instituteof London.
AFRICAN UnionCommission, AUC, has
appointed South Africannational, Nkosazana Dlamini-Zuma to lead the commission.She is the country’s HomeAffairs minister and the firstwoman to be elected to thecontinent’s coveted post.She was elected at a summit ofheads of states andgovernments in Addis Ababa,Ethiopia.In her response as the newAUC leader, Dlamini-Zumasaid: “South Africa and thewhole African continent ishappy about the appointment.”Chichi Maponya, Chairman ofthe Board of Brand South Africa,in her congratulatory messagesaid: “South Africa has forseveral years made the Africanagenda a central component ofits foreign policy. The electionof Minister NkosazanaDlamini-Zuma as chairpersonof the African UnionCommission thus places SouthAfrica in a leading position tofurther promote the continent’srole and vision in contemporaryworld affairs.“Minister Dlamini-Zuma’sappointment will furthermoreimprove South Africa’s globalstanding and influence inmultilateral bodies such asthe UN. Africa’s robusteconomic growth in the pastdecade, and the significantrole it is yet to play in thefuture of the global economycalls for strong and capable
African Union Commissionappoints first woman leader
leadership at the helm of theAfrican Union."
AIRTEL Nigeria hashonoured its Director of
Regulatory and GovernmentAffairs, Osondu Nwokoro,and the Director of Corporate
Airtel honours two directors, 18 others for long service
Communications andCorporate SocialResponsibility, CSR, EmekaOparah, alongside 18 otheremployees for 10 years ofdedicated and meritoriousservice.At an event in Lagos,hundreds of Airtel staffgathered to rejoice with theircolleagues who have attainedthe one decade mark with thecompany.Speaking at the occasion, theChief Executive Officer andManaging Director of AirtelNigeria, Rajan Swaroopcommended the recipients ofthe Long Service Awards, fortheir commitment andcontributions to the growth ofthe organisation. According to him: “As anemployer of choice, we havedeveloped robustprogrammes to retain andmotivate our employees just
as we are committed tobuilding an organisation thatwill be managed by loyal andhighly motivated Nigerians.Today, we rejoice with ourcolleagues who have put in somuch effort and time inbuilding this company and wethank them immensely fortheir good work.”Among other recipients of the2012 Airtel Long ServiceAwards were Obianuju Kuye,Manager, InternationalCarrier Services; FolakeOgunbanjo, Senior Manager,Special Projects; EvelynEzomo, Manager, Voice VAS& Content; JosephEbhomielen, Officer, TalentDevelopment & Engagement;Folayemi Balogun, Manager,HR & Admin; Seun Keyede,Manager, Sales Logistics andDoris Okogwu, AssistantManager, KM&VOC,Operations.
*From left: Chief Executive Officer and Managing Director, Airtel Nigeria, Rajan Swaroopand Director, Corporate Communications & CSR, Emeka Oparah, who is also a long serviceaward recipient, during the celebration of loyal employees of the company in Lagos.
PENGASSANrewards longserving staff
NATIONAL Secretariatof the Petroleum and
Natural Gas Senior StaffAssociation of Nigeria,PENGASSAN, has rewardedits employees who haveserved the union for between10 and 25 years.
The presentation of theawards to the 18 servingemployees, was part of theStaff Synergy Workshop heldin Ogun State recently.
While the General-Secretary, Bayo Olowoshile,got award for 25 years ofservice, Sunny Onyemachi,Saka Quadri and TamunoDappu were honoured with20 years long service awardrespectively.
Serekara Nwikiabeh andLadi Daniel Saleh got 15years long service award
Those in the 10 yearscategories are ComradesWaziri Mohammed, PaulSeikigba Kpokporo, OlaoyeOlufemi, Abai Peter Idemefe,Urete Blessing, Stella-MarisBinotibo, Uche Godson-Nwankwo, Rachael EbunEnwereji, Regina Ewah,Faith Odibo, Chris Odin andOlawale Ajayi.
NDE recruits 80unemployedyouths foragriculturalProgramme
FOLLOWING the recentregistration of
unemployed youths inEnugu State, the NationalDirectorate of Employment,NDE, in the state hascommenced the recruitmentof 80 youths for employmenttraining in its RuralAgricultural DevelopmentTraining Scheme, RADTS.
A release by the NDE inEnugu said that therecruitment of theparticipants would cut acrossthe 17 local governmentareas of Enugu State.
The statement quoted theCoordinator of the NDE inEnugu State, NnamdiAsomugha as saying that theparticipants would be trainedin 12 areas of agriculturalproduction including arablefarming and livestockproduction as well asagricultural processing,management, marketing andentrepreneurship.
The training would last forfour months in theory andpractices of agriculture indesignated farms and theNDE Agricultural skillsTraining Centres.
“The school leavers and
*Nkosazana Dlamini-Zuma
*Mr. Sakiru Oyefeso
Vanguard, MONDAY, JULY 23, 2012 — 35
CMYK
People in Business
BRIEFSChina strengthensAfrica ties with $20bln in loans
CHINESE President HuJintao on Thursday of-
fered $20 billion in loans to Af-rican countries over the nextthree years, boosting a rela-tionship that has been criti-cised by the West and givenBeijing growing access to theresource-rich continent. Theloans offered were double theamount China pledged for theprevious three-year period in2009.
The pledge is likely to boostChina’s good relations withmany African nations, suppli-ers of oil and raw materials tothe world’s most populousnation. But the loans couldadd to discomfort in the West,which criticises China foroverlooking human rightsabuses in its business dealingswith Africa. “China and Afri-ca should strengthen politicalmutual trust,” Hu said in aspeech to African leaders inBeijing at a summit held eve-ry three years.
“We want to continue to en-hance our traditionalfriendship...rule out externalinterference and enhancemutual understanding andtrust.” Hu also pledged to“continue to expand aid toAfrica, so that the benefits ofdevelopment can be realisedby the African people.”
National IndustrialCourt to holdinaugural sitting inCalabar— Chief Registrar
THE National IndustrialCourt of Nigeria, Calabar
Division, will hold its inaugu-ral sitting on Friday at the Per-manent Court Complex, Mur-tala Mohammed Highway,Calabar, Cross River State.This is contained in a statementsigned by the Chief Registrarof the Court, Mrs Rakiya Haastrup, and made availableto the News Agency of Nigeria(NAN) in Calabar. It indicatedthat the inaugural sitting wouldbe presided over by thePresident of the court, JusticeBabatunde Adejumo. It stated that henceforth, thecourt would have its sittings atthe New Court Complex infulfilment of its constitutionalresponsibility as enshrined insection 254(C) of the 1999Constitution as amended. Ac-cording to the statement, theNigerian constitution “gives theIndustrial Court exclusivejurisdiction over matters arisingfrom employment, labour, tradedispute, industrial relations andenvironmental and conditions ofwork among others.”
We aim to be theleading energysolutions providerin Africa— CHINEDU OKONKWO
By EBELE ORAKPO
RIQUEST Oil and GasLimited is an indigenous
company with focus on pro-viding innovative energy so-lutions for the Oil andGas industry. The company isalso involved in haulage,environmental managementand consulting. In this chat withFinancial Vanguard, theManaging Director, RiquestOil and Gas, Mr. ChineduOkonkwo speaks of his jour-ney into Petroleum marketingworld and says the companyis committed to the down-stream sector of the Nigerianoil and gas industry. Excerpts:
The beginning:According to Mr. Chinedu
Okonkwo, Riquest Oil and GasLimited came into being inyear 2009.
“I was a fleet/transport man-ager for a company in Lagos.One day, I had a dream and inthat dream, I saw myself in PortHarcourt. I had a strongconviction and I was certainthat being in Lagos then wasnot God’s plan for me. At thattime, I was comfortable livingin a three-bedroom flat. I wokeup one morning, packed myluggage and left Lagos.Coming to Port Harcourt, Ilodged in a hotel at Akapajowith the limited fund I had. Godwas in control because on theday I exhausted my money, myex- boss called that I should as-sist him in loading his trucks.That was the beginning of myjourney into the petroleumbusiness.”
Success factor:Okonkwo hinges his success
on the grace of God upon hislife, accurate positioning, in-tegrity and customer satisfac-tion.
Said he: “For me, I am not thesmartest or the most intelligentin this business. I know that itis only God’s grace/favour thathas brought me this far.Secondly, I believe in accuratepositioning; that is being in theright place at the right time.What I mean is that today, I dofar better than many of myfriends in Lagos who havebeen doing the same businessfor a longer time. Lastly, I donot joke with some principleslike integrity and customer
’’satisfaction. For example, if a
customer pays and we assignhim to load, let’s say at Mas-ters Energy, if something hap-pens, we will re-assign thecustomer to load in anotherdepot just to make the custom-er happy.”
This has paid off becauseaccording to him, the companyhas received so many awardsfrom major companies thatimport petroleum products.
Awards:“We have been adjudged the
most valuable customer in themajor companies that importpetroleum products such asOando, Shorelink and MasterEnergy where we won theMaster Energy Best CustomerAward. These awards are basedon excellence and volume. Infact, in Master Energy Oil and
Gas Limited, the first runnerup by their rating came with3,000,000 litres behind us,” hesaid.
Mr. Okonkwo who saidhe is greatly bothered
by filling station operators whohoard products to create artifi-cial scarcity noted: “I don’t en-courage hoarding at all be-cause it makes consumers suf-fer so much, and they lose alot, including their lives, in-come, time and property. Thisis one of the errors we are com-ing to correct in the businesswhen we come into the main-stream later this year, Godwilling.”
Crude oil diversion:“I believe it is a deliberate
sabotage by corrupt elementsin government. We are still
loading petrol but there is nodiesel and kerosene. Youknow if there is no kerosene,the poor masses are affected.As a cushion to the delayedloading at PPMC depot,Riquest Oil and Gas sells pet-rol, diesel and kerosenethrough private tank farms toindependent marketers in theSouth-South and South-Eastregions. This has helped tomake the product available inthe two zones.”
Solution to fuel scarcity:The boss of company which
has about 30 people in itsemploy and lifts about one mil-lion litres of petroleum productsdaily, praised the Rivers StateGovernment for donating vastacres of land to build a park forpetroleum tankers. “The parkwill be built using PPP modelin Eleme Local Government,and interested investors shouldliaise with NUPENG or RiversState Ministry of Energy.Riquest Oil and Gas iscurrently open to partner in-vestors to build tank farms andrefinery in Port Harcourt. This,I believe, will provide apermanent solution to fuel scar-city in the region.”
*Mr. Chinedu Okonkwo...I do not joke with some principles like integrity andcustomer satisfaction.
I don’t encourage hoardingat all because it makes con-sumers suffer so much, and
they lose a lot, includingtheir lives, income, time and
property
36 — Vanguard, MONDAY, JULY 23, 2012
CMYK
BRIEF
Agric
‘Fisheries, aquaculture major employers of people’
The Food and Agriculture Organisation
(FAO) has revealed that sus-tainable fisheries and aquac-ulture play a crucial role infood and nutrition security.
Fisheries and aquacultureaccording to the report is asource of income for 55 mil-lion people, thus providingfor the livelihoods of millionsof people.
The body's latest flagshippublication on the state offisheries and aquaculturehighlights the sector's vitalcontribution to the world'swell-being and prosperity.
Theworld Fisheries andAquaculture report revealsthat the sector produced arecord 128 million tonnes offish for human food - an av-erage of 18.4 kg per person -providing more than 4.3 bil-lion people with about 15 per-cent of their animal proteinintake.
"Fisheries and aquacultureplay a vital role in the global,national and rural economy,"said FAO Director-GeneralJosé Graziano da Silva. "Thelivelihoods of 12 percent ofthe world's population de-pend directly or indirectly onthem.
Fisheries and aquaculturegive an important contribu-tion to food security and nu-trition. They are the primarysource of protein for 17 per-cent of the world's populationand nearly a quarter in low-income food-deficit coun-tries."
Árni M. Mathiesen, head ofFAO's Fisheries and Aquac-ulture Department, said:"Fisheries and aquacultureare making a vital contribu-tion to global food securityand economic growth. How-
ever, the sector faces an ar-ray of problems, includingpoor governance, weak fish-eries management regimes,conflicts over the use of nat-ural resources, the persistentuse of poor fishery and aqua-culture practices.
"And it is further under-mined by a failure to incor-porate the priorities andrights of small-scale fishingcommunities and the injustic-es relating to gender discrim-ination and child labour."
Boosting governanceFAO is urging governments
to make every effort to ensuresustainable fisheries aroundthe world. The report notesthat many of the marine fishstocks monitored by FAO re-main under great pressure.
According to the latest sta-tistics available, almost 30percent of these fish stocksare overexploited - a slight
decrease from the previous twoyears, about 57 percent arefully exploited and only about13 percent are non-fully ex-ploited.
"Overexploitation not onlycauses negative ecologicalconsequences, but it also re-duces fish production, whichleads to negative social andeconomic consequences," thereport says. "To increase thecontribution of marine fisher-ies to the food security, econ-omies and the well-being ofcoastal communities, effectivemanagement plans must beput in place to rebuild over-exploited stocks".
Strengthened governanceand effective fisheries manage-ment are required. The reportargues that promotingsustainable fishing and fishfarming can provide incen-tives for wider ecosystem stew-ardship and advocatesenabling mechanisms such as
the adoption of an ecosystemapproach to fisheries andaquaculture with fair and re-sponsible tenure systems.
Global fish productionCapture fisheries and aqua-
culture supplied the worldwith about 148 million tonnesof fish in 2010 valued atUS$217.5 billion.
Production growth fromaquaculture keeps outpacingpopulation growth, and it isone of the fastest-growinganimal food-producing sec-tors - trends that are set tocontinue.
Fish and fishery productsare among the most-tradedfood commodities worldwide.Following a drop in 2009,world trade in fish and fish-ery products has resumed itsupward trend driven by sus-tained demand, tradeliberalisation policies,globalisation of food systemsand technologicalinnovations.
... provides 4.3bn people with animal protein
Dr Ezekiel Oyemomu,P e r m a n e n tSecretary, Federal
Ministry of Agriculture andRural Development, has saidthat the Growth Enhance-ment Support (GES) Schemewill eradicate poverty in thecountry.
Oyemomu made the state-ment in Uyo on Friday at theinauguration of the GES pro-gramme and distribution ofseeds and fertilisers to farm-ers in Akwa Ibom.
"The scheme is expected tobring about increase in pro-ductivity and household in-come thereby reducing pov-erty in our rural communitieswhere majority of the re-source-constrained farmersreside.
GES scheme will eradicate poverty, says Perm Sec
"The flag-off marks the be-ginning of the distribution ofseeds and fertilisers throughoutthe redemption points in the statefor the next six weeks, "Oyemomu said.
He advised farmers who hadregistered to visit the redemptionpoint nearest to them for theirinputs while those yet to registerwere advised to do so.
The permanent secretary addedthat the GES scheme was initiatedby the Federal Government toaddress the challenges of thepast system of inputs distributionand subsidy administration in theagricultural sector.
According to him, this systemhas been inefficient.
He disclosed that under theGES scheme, 4.3 million farmers
had been registered in thenational farmers’ database,adding that, 20 million farm-ers were expected to registerover the next three years.
The permanent secretary saidthat fertilisers supplied tofarmers were subsidised by 50per cent by FederalGovernment, adding that StateGovernments contributed 25per cent while farmers paid theremaining 25 per cent.
In his speech, Gov. GodswillAkpabio of Akwa Ibom, saidthat agriculture was of interestand critical to the industriali-sation policy of government.
Akpabio, who was represent-ed by his deputy, Mr NsimaEkere, said the State Govern-ment had strengthened thesector to be one of the enginesto drive the industrialisation ofthe state.
Helpingdevelopnational ricestatistics inAfrica
Agricultural data can bedifficult information to col-
lect. However, the availabili-ty of accurate and detailed in-formation on agricultural pro-duction, processing and con-sumption is extremely valua-ble when planning agricultur-al campaigns, especially atthe national level, to increasethe overall availability of foodon the market.Since December 2007, Afric-aRice has led an initiative toimprove the timely availabili-ty, reliability and relevance ofrice statistics and informationneeded for quality rice re-search, evidence-based poli-cy formulation, and monitor-ing and evaluation of rice-re-lated investments in sub-Sa-haran Africa."We always work with nation-al partners, as it is the onlyviable route to cover thewhole continent," said Dr. Al-iou Diagne, AfricaRice Pro-gram Leader for Policy, Inno-vation Systems and ImpactAssessment.When the rice price crisisstruck Africa in 2008, Afric-aRice worked with many part-ners to develop an emergen-cy response and also tostrengthen the ability to de-velop policies so that thecountries could avoid similarcrises in the future.Its project to develop the na-tional rice statistics got sup-port from the Japanese gov-ernment through the Emer-gency Rice Initiative (ERI)launched in the wake of thecrisis to help countries withseed systems and policy sup-port tools. AfricaRice collabo-rated with the national agri-cultural research systems(NARS) and the national ag-ricultural statistical services(NASS) of 21 country mem-bers of the Coalition for Afri-can Rice Development(CARD) to collect large de-tailed rice statistics and infor-mation from nationally repre-sentative samples. CARD waslaunched by the Japan Inter-national Cooperation Agency(JICA) and the Association fora Green Revolution in Africa(AGRA) in 2008 as a consult-ative grouping of bilateraland multilateral developmentpartners and African and in-ternational institutions to dou-ble rice production in Africaby 2018. As part of ERI, Afric-aRice facilitated capacity-building workshops to guideNARS and NASS personnel inthe design and implementa-tion of surveys to collect de-tailed and reliable crop-spe-cific data.
*From Left: Mr. Jean-Louis Ekra, President of Afrexim Bank, Mr. Zhu ,Xianqiang,Vice-President,China Exim Bank, Mr.Emeka Ugwu-Oju,President,South-East South-South Professionals of Nigeria, Dr.Francis Mbroh, Director, Research and In-ternational Cooperation, Afrexim Bank during an investment forum with the theme: "Africa-China Partnership for EconomicGrowth and Long-Term Prosperity" was jointly organised by Afrexim Bank and China Exim Bank
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Technology News & Reviews
NASS tasked on Act backing telecom asnational infrastructure
By PRINCE OSUAGWU
The Senate Committee onCommunications last
week listened to appeals onwhy it should consider an Actthat makes telecommunicationinfrastructure strategic criticalnational infrastructure.
The committee listened to a24-page paper presentationby a media group, the ICTpublishers Alliance at itshearing in Abuja, onproblems associated withquality of service in mobilephone operations in Nigeriaand co-location.
The Committee chaired byGilbert Nnaji held for twodays and took both oral andpaper presentations fromstakeholders in the telecomindustry.
In a paper presented by itsChairman, Mr Aaron Ukodie,the Alliance said that telecomservices should be consideredas Strategic National Servicesso as to free it from thedebilitating effect of multipletaxation and regulation fromvarious government agenciesat the three tiers ofgovernment.
According to the Allianceperception today amongdifferent strata of governmentis that telecom operators arecash-cows that should bemilked to no end such thattaxations at even councillevels are notoriously andarbitrarily imposed in such away that continuous orseamless service deliverybecomes impossible.
This year alone, the NCChas had to intervene inseveral locations wheretelecom infrastructures havebeen shut down by councilofficials enforcing compliancewith imposed taxes by localcouncils, the Alliance said.
“Although cases of multipleregulation and taxation maynot be limited to Nigeriaalone; our position is thatNigeria can eliminate suchcases and become an exampleto other countries andregions.
“It is the responsibility oflawmakers, as the repositoryof the people’s destinies, toensure that laws made do notrun counter to the needs,desires and social wellbeingof the people they represent”,the Alliance noted.
The Alliance said furtherthat a situation where everyagency of government taxestelecom just because they seethe industry as the cash-cow,does not and will not augurwell for the country'sfledgling telecom industry.
“All of a sudden, forinstance, every stategovernment, every localgovernment, and everycommunity has become a lawmaker unto themselves,churning out one law afteranother nearly every month or
quarter of the year, alltargeted at milking telecomoperators”, according to theAlliance.
It said the NationalAssembly needs to put allthese in check - if the telecom
industry, especially mobileoperators - is to continue togrow and deliver qualityservices to the people.
The Alliance said that thegazetting of the Quality ofService Regulations by the
agrees that the challenges theoperators face in deliveringgood quality service arehuge, it believes however thatthe operators themselves stillhave a role to play to stem theincreasing poor state oftelecom services in thecountry by infusing moreresources into expanding thecapacity and optimization oftheir networks.
While aligning itself withthe view of the NCC and theI n t e r n a t i o n a lTelecommunication Union(ITU) the Alliance saidnetwork optimisation isfeasible so as to reducefrequent glitches in operators’networks.
“We are inclined to acceptthe viewpoint of theregulatory authority that“current mobile network inNigeria is not fully optimizedas the nation can derive morevalue from an enhanced andoptimized mobile network,especially in the area ofimproved Quality of Service”,the Alliance noted.
Operators can and shouldinvest more in NetworkOptimisation as this wouldreasonably address three keycomponents of good quality ofservice: network coverage,service accessibility andservice retain ability.
By OSALUMESE ANEGBE
Where does somebodybegin this story - the
story of the NigerianC o m m u n i c a t i o n sCommission (NCC) and theNational EnvironmentalStandard Regulatory Agency(NESREA) which festered fora time before medicationsbecame expedient?
The sealing up of aparticular base station inAbuja and the opening ofsame, and the re-sealing ofthat very base station seemedto have brought thedifferences between the twogovernment organisations tothe fore and of course alsoheightened the noticeableeffects of such differences onthe entire telecom industry.When you shut a base stationyou shut out phone usersdepending on that station tocommunicate.
However commonsenseeventually prevailed as thetwo ministries,Communication Technologyand Environment and theiragencies sat together toresolve what seemed anintractable relationship.
Mainly on issue was thedistance of base stations fromdwelling apartments. Whilethe NCC approval tooperators is five metres,NESREA says only tenmetres is safe enough forpeople living near base
Telecoms: When lawmakingendangers industry progress
stations. NESREA canvassesa position that harmful effectsof base station especiallyradiation could be a healthhazard and therefore has totake all actions includingshutting base stations in orderto protect the Nigerian people.The question could be asked,was the fears or concerns ofNESREA empirically based orbased on mere gut feelings?
Militant and near patrioticas NESREA action was, thatposition, from industryknowledge was based onignorance and makes thecountry a laughing stockbefore the internationalcommunity. From allindications, no research hasbeen able to link base stationemissions to radiation.
Thus it became more absurdand extremely laughable whenthe House of RepresentativesCommittee on Environmentwent into a dying fire of hateto invite the NCC to begin torelive all over, the trouble thatwas being conveniently laid torest. The Committee obviouslynursed a paternalisticprotection for NESREA.
Perhaps responding to somevexatious questions from theNational Assembly,the NCCEVC, Dr. Eugene Juwah ,explained that the regulatorfollows the Act setting it upand other internationalstandards to superintend thetelecommunications industry.
His remarks: “The majorcause of the conflict comesfrom the fact that NESREA Act
came four years after theestablishment of the NCC. So,adequate care was not takento harmonise certainconflicting issues that wereinherent then, but moves areon to resolve those issues.
“The issue of setback of fivemetres is not in any Act. Theyare contained in ourregulations. The lawempowers us as regulators tomake regulations and theybecome subsidiary laws.
It is just that inharmonising, we did not quiteagree, which is what iscausing this conflict. So, theissue of setback does notrequire any amendment.
“As a matter of fact, theradiation from atelecommunications mast isless than what we get fromour television. This isempirical that can bemeasured. So the issue ofpollution is very minimal.”
So many people includingthe former EVC of the NCC,Engr Ernest Ndukwe holdsame view as Juwah's thatemission from a base stationis far less than that of adomestic TV or radio.
But why would the HouseCommittee on Environmentgoad the activities of anancillary agency instead oftouching base with the HouseCommittee onCommunications andprobably compare notes?
•Mr. Anegbe writes from PortHarcourt, Rivers State
MTN, NCC joinforces againstsales of pre-registered SIMs
Part of the beauty ofN i g e r i a ’ s
telecommunications industryis the ability of stakeholdersto always overlook theirdifferences in order to forgea common front to pursuegrowth of the sector. Thisscenario is playing out nowas telecommunicationsoperator, MTN Nigeria, justrecovering from payment ofa huge fine imposed by theNigerian CommunicationsCommission, NCC, overquality of service, has joinedthe regulator in fightingthose selling pre-registeredSIM cards in the country.
It could be recalled thatNCC had embarked on anenforcement action againstsales of pre-registered SIMcards following alerts in themedia. Several people havesince been arrested and theregulator said they wouldsoon be prosecuted.
MTN’s CorporateServices Executive, MrAkinwale Goodluck , whorevealed this partnership tojournalists in Lagos, saidthat MTN has zero tolerancefor the sales of pre-reregistered SIMs or anyactivity that contraveneslaid-down procedure asadvised by the NCC andtherefore has decided towork closely with theregulator and other relevantlaw enforcement agencies tostamp out this dangeroustrend.
Goodluck noted that forMTN, one of the benefits ofthe recently concludedsubscriber SIM registration,which is the process ofcapturing and recordingpersonal details of asubscriber, was helping thecompany to know itscustomers better and tosupport the government insafeguarding the publicagainst acts of insecurity .
Some of these acts,according to him, areperpetrated by elements whoseek to take advantage ofthe anonymity offered byprepaid mobile phones tocommit crimes.
He also revealed that withthe record of its subscriberdetails including name, dateof birth, gender, address,phone number, thesubscribers’ facial picture sand fingerprints, MTN hasbeen able to segment itscustomers better and todesign bespoke productsand services to further enrich
F e d e r a lMinistry ofJustice is a rightstep in the rightdirection tostrengthen theNCC to takesome severemeasures whens e r v i c eproviders arefound wantingand that theNCC must alsosustain its effortsin theengagement ofD r i v e - T e s tcontractors tocarry outc o n t i n u o u squality of servicedrive-testing inthe six geo-political zonesand Lagos.
The Alliancesaid howeverthat while it
•Telecom mast
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BRIEFS
*From Left: Nollywood actor, Mr. Tom Njemanze, winner, Mr. Chimezie Godwin, representativeof the Director-General, National Lottery Commission, Mr. Emmanuel Jeminiwa, Ag Director,Regulatory and Monitoring, ace comedian, Chief Chika Okpala and Mrs. Adline Okeke, Mas-terbrand Specialist, MTN Nigeria during the presentation of Hyundai SUVs to winners of theMTN Goodwill Automania in Enugu.
FOR 100 days, that’s threemonths and 10 days pre-
cisely, MTN Communicationsreiterated its resolve to rewardsubscribers with 100 ix35 Hy-undai cars, with 68 cars left,empowerment and reward forloyalty seems to have berthedwith the testimonies of Enu-gu winners where a total of 14cars were given to subscribersfrom different parts of thecountry.
Before now, this could nothappen but overtime, with theestablishment of regulatoryauthorities responsible for theregulation and monitoring ofpromotional games like MTNAutomania, things seem tohave changed, becauseregulators insist that gift itemspromised by promo organisersare delivered. With this,regulatory bodies now attendpromos to authenticate such,consequently, organisers areput on their toes by the powersvested on the ConsumerProtection Council (CPC) andthe National LotteryRegulatory Commission(NLRC) that ensures consum-ers are not at the receivingend.
Consequent upon this,consumers' confidence in pro-mos is beginning to return asa result of promo (s) monitor-ing by regulatory bodies andorganisers' knack to shore uptheir market share if they failnot in their bid to honourconsumers' loyalty.
To this end, Mr. EmmanuelJeminiwa, Ag Director, Regu-lation & Monitoring, Nation-al Lottery and RegulatoryCommission (NLRC) whostood on behalf of the Director-General of the commission,said the commission was dulycontacted before the com-mencement of the game, butpointed out that winners arenot selected, winners emergedthrough a process and thatprocess is very transparent. “Itis a computer thing, the sys-tem cannot be manipulated,how the winners emerged isa testimony on its own.
“Just like somebody said, itis the Lord’s doing. If a thingis destined for you, no one canchange it. I am standing onbehalf of the Director-Generalof the NLRC to declare toeveryone in this house and ofcourse, as many ears that arehearing me this afternoon,
MTN Automania:
Empowerment through loyalty reward...gives out 14 cars in Enugu
Stories by
PRINCEWILL EKWUJURU
that we are carriers of thismessage, that everything thathas to do with lottery business,if it is not properly regulated,such lottery business becomesillegal, you will never see thecommission standing in suchgathering to attest to what theoperator has done, instead, thelong arm of the law will catchup with such group. This is toattest that what MTN is doing,what they did before and stillgoing to do in future, as far as
this game is concerned, is verytransparent.”
However, at the delivery pointof the cars in Enugu for the triv-ia game, Mrs. Adline Okeke,MasterBrand Specialist, MTNNigeria, said that the MTNGoodwill Automania is a reiter-ation of the brand’s commitmentto constantly reward and delightits customers. According to her,MTN is seizing every opportu-nity to engage, delight and en-rich the lives of its customers.
Definitely, if anyone had toldEze .O. Kingsley that he wouldbecome a brand new car ownerin 2012 and a winner ofN10,000, he would have defi-nitely considered it far from pos-sible.
For Pastor Chimezie Donatus,one of the winners who sangpraises to God, said he is shortof words, whilst praying forMTN’s progress. It looks like adream , I had considered buy-ing as econd hand car, but to-day through MTN automania,am a proud owner of a brandnew car “It is only God that cando this.”
AFTER rewarding its con-sumers, the Legend Real
Deal promo organised by Ni-gerian Breweries Plc finallycame to a climax penultimateweek. The promo which kickedoff on May 1, 2012, may havegiven a new meaning to theconcept of consumer rewardschemes in the country.
From a phone repairer whowent to take delivery of N5,000pre-loaded ATM card he wonin the promo, only to winanother prize at theRedemption centre; to a wom-an whose home has practicallyturned into a cinema, to a bartender who collects Legendcrown corks, to a widow whonow goes by the moniker -‘Mama Legend’, the tales thattrail the Legend Real Dealpromo, will certainly make fora good story. So far, hundredsof TV sets, Blackberry phones
Legend promo winnersrecount experiences
and generating sets; as well asthousands of recharge cards, T-Shirts and face caps have beenwon in the consumer promo.
This was in addition to otherprizes including ATM cardspreloaded with N5,000 cash aswell as thousands of freedrinks. For customers of thefastest growing stout drink, ithas surely been a season tosavour as they smiled homewith prizes.
Take Bimbo Jegede, a Lagos-based phone repairer for in-stance. The Lagos State- bornnative is a double winner afterhe walked home with twoprizes courtesy of the promo.Jegede, is now the proudowner of N5,000 pre-loadedATM card he won earlier. “Iam so happy that I stayed withthis brand. I have been takingLegend for years and now myloyalty to the brand has been
rewarded,” Jegede stated.Indeed, the manner in which
he won both prizes was intrigu-ing. Having confirmed the firstprize, an ATM card preloadedwith N5, 000, an elated Jegedemade his way to theredemption centre to pick uphis prize. Little did he knowthat fate had another Legendprize in store for him. “I wasreeling from the joy of winningthe N5000 ATM card. I wentto the redemption centre topick up my prize when somestaff of Nigerian Breweries Plcjokingly advised me to drink abottle of Legend that I wouldget lucky again. For some rea-son that I really cannotunderstand, I bought the drinkand when I checked under thecrown cork, I saw that I hadwon a BlackBerry smart phone.I was speechless,” he said.
Oke emergesAAAN president
MRS. Bunmi Oke, Man-aging Director of 141
Worldwide, a creative Adver-tising Agency has become thepresident of the Association ofAdvertising Agencies of Niger-ia, the umbrella body of all ad-vertising agencies in Nigeria.
With her assumption of office,she becomes the second femalepresident of the association inits 39 years of existence. Okebefore her present position hadworked with LTC-JWT, workedas the media Director for theUS-Nigeria DevelopmentInstitute and eventually theNational Open University ofNigeria (NOUN) as the pio-neer Chief Public Affairs Offic-er before she moved to 141 in2005 as the pioneer Chief Op-erating Officer/Business Direc-tor and an Executive Directorin 2008. Bunmi has worked inseveral capacities in theassociation including theposition of vice-president,having proven her competenceas chairman of the LagosAdvertising and Ideas Festival(LAIF), an award organised bythe association to celebratecreative excellence within theindustry. The new AAAN pres-ident explained that herpriority is to engender continu-ity, consolidation and revitali-zation.
Seaman’sSchnapps partnersOsun OshogboFestival I
N line with its brand posi-tioning, Seaman’s Schnapps,
a spirit drink from the stable ofGrand Oak Ltd has concludedplans to sponsor this year’s OsunOsogbo Festival.
Making the disclosure at theformal media unveiling of thefestival held at the Ikeja AirportHotel, Category Manager ofGrand Oak Ltd, Mr. AyodejiAbiodun said the decision tosponsor the popular yearly festi-val was not unconnected with theimportance the brand attached toit.
Besides, he said Seaman’sSchnapps, the number one orig-inal prayer drink will bepartnering on the festival becausethe brand is about culture andtradition, and as such, the OsunOsogbo Festival providesrelevant platform to associate andbond with key target audience.
“If you look at the origin of theSeaman’s Schnapps in themarket, it is about culture, it isabout tradition, it is about asso-ciating with the lifestyles of theconsumers, and for Seaman’sSchnapps, the original prayerdrink, we want to celebrate withour consumers.”
48— Vanguard, MONDAY, JULY 23, 2012
CMYK
Omoh Gabriel - Group Business EditorBabajide Komolafe - Acting Finance EditorClara Nwachukwu - Energy EditorPeter Egwuatu - Head, Capital MarketYinka Kolawole - Snr Bus. CorrespondentFavour Nnabugwu - Insurance CorrespondentGodwin Oritse - Maritime CorrespondentGodfrey Bivbere - Maritime CorrespondentYemi Adeoye - Energy CorrespondentOscarline Onwuemenyi - Energy CorrespondentFranklin Alli - Industry ReporterMichael Eboh - Capital Market ReporterEbele Orakpo - Energy ReporterIfeyinwa Obi - Maritime Reporter
CONTRIBUTORSPrincewill Ekwujuru - Media/MarketingNaomi Uzor - IndustryProvidence Obuh - Capital MarketLAYOUT - Graphics Department
0817 002 3569
BUSINESS & ECONOMY
,
,
THE PricewaterhouseCoopers has projected
that by the year 2016, 30 per
Emerging markets to contribute 30% of global revenue by 2016 — PWC
By PROVIDENCEOBUH
cent of its global revenuewould come from emergingmarkets on the Africancontinent like Nigeria andother markets, given thatAfrica is an important part of
growth strategy, says Mr.Dennis Nally, Chairman ofPricewaterhouseCoopersInternational Limited.
Nally made these state-ments during a media parleywith Business Editors in La-gos, stating that governmentis responsible for creating theenabling environment andopportunities for business tothrive in any country.
According to him: “Govern-ment today is much more in-volved in business than everbefore, this trend will makeChief Executive Officers(CEOs) and government tocollaborate on understandingbusiness models.
“Private sector is partneringwith government on creatingrelationship on business-friendly environment in theworld. We know from experi-ence that a regional invest-ment strategy makes sense,not just in Africa but global-ly.” Meanwhile, Nally’s visit
to Lagos, Johannesburg,Capetown (South Africa) inthe week, is to announcethe next phase of PwC’sregional investment modelin Afr ica and also tosupport closer alignmentbetween PwC f i rms inAfrica through a new lead-ership structure.
On his par t , CountrySenior Par tner , PwCNigeria, Mr. Ken Igbokwesaid: ‘ In West Af r icanmarkets like Nigeria, weare seeing many local busi-nesses expanding region-ally. Their needs differsubstantially from an in-bound multinational.”
Igbokwe also noted thatNigeria’s problem goesbeyond corruption at alllevels , saying thatcorrupt ion is a globalmenace.
“You will accept with methat there is no countrywithout corruption, the real
issue is that we havemissed the point, and ourcorruption is in such ascale that it is holding usback from moving forward,and we have to address it.Corruption is holding usback because at the lead-ership level, we are notdoing what we should.
“We need to balance ouryearning to move forwardquickly, violence cannotsolve anybody’s problem,business cannot thrive inan envi ronment wherethere i s secur i tychallenge.”
Exceptional growth op-portunity
In Nigeria, confidence ishigher than in any othermarket. A survey by PwCshows that growthopportunities are unprece-dented in Africa, leadingto higher CEO confidencethan ever before.
Attrition, social stress andeconomic losses
experienced duringextended periods of fuelscarcity would makeNigerians pray that suchtraumatic situations do notarise. However, we recallthe media interview with Dr.Okonjo-Iweala, FinanceMinister and CoordinatingMinister of the Economy, inJune this year; in responseto a question as to whethersubsidy payments wereongoing, she confirmed thatout of N888bn budgeted forsubsidy in 2012, N451bn hadalready been paid out, wellbefore the end of the secondquarter!
Incidentally, the N451bnwas in addition to about N1trillion already paid to oilmarketers to settle part of2011 subsidy claims! TheMinister explained that therapid depletion of theprovision for subsidy hastherefore necessitated aslowdown in the payment ofclaims of marketers. Indeed,according to the Minister,only N17bn had so far beenreleased for 2012 claims! (See pg 19, Punch, 18/6/2012). Such reality can onlymake oil marketers jitterywith regard to commitmentfor future deliveries.
Besides, in spite of thecollateral of sovereignguarantee for fuel imports,banks are still concerned bythe very late liquidation ofloans by oil marketers. Marketers are also concernedthat these late payments
Is fuel scarcity inevitable this year?would increase their cost offunds, and may ultimatelyleave them with little or nomargin in this enterprise.
Worse still, crude prices inexcess of $100/barrel togetherwith naira depreciation in thelast four months may alsomake subsidy paymentspredicated on this benchmarkinadequate to cover importloans obtained by marketers,especially when repayment iscompounded with excessivecharges for almost sixmonths’ late payment.
In a media comment ondelayed subsidy payments, amajor oil importer confirmedthat “the banks give us loansbased on 21% and theyusually apply a default rateof 35%.... Many of us havenot been paid for importsmade in February 2012! A lotof marketers are still beingowed subsidy arrears for2011.” The spokesman ofanother major oil marketerdisclosed that “the banks arealready getting impatientwith delayed loanrepayments” (Punch, 19/6/2012).
What immediatelybecomes obvious from theabove is that if some marketersare yet to receive paymentsfor supplies made in 2011, itis just possible that much ofthe provision of N888bn in the2012 budget may be appliedfor settlement of last year’ssubsidy claims! It is
worrisome that the FinanceMinistry together with otherrelated agencies are yet tofully reconcile the actual dailynational fuel consumption norhave they fully identifiedthose who submitted falseclaims for subsidy. Moreworrisome still, is the fact thatthe relevant authorities failedwoefully to alert thegovernment on the
inadequacy of the 2011budget provision of less thanN300bn for subsidy.
Furthermore, theconstitutional illegality ofextra-budgetary spending ofover six times the approvedappropriation for subsidyseems to have been glossedover. In an attempt tomanage this awkwardsituation, Okonjo-Iwealaindicated that subsidypayments for 2012 would be
staggered; according to her,“we just slowed down thepayments; once we haveverified that paymentsalready made are genuine,we will commence paymentagain, but we will not bestampeded into makingpayments until we are sure ofthem”. Evidently, thingshave gone awry with fuelsupply and subsidy
management. In addition, the Minister
has now acted on apresidential recommendationto establish a company “thatwill certify the discharge andalso verify the payments thatwill be made for fuelimports”. The Ministerrevealed that the contract withthe erstwhile official auditorsof this process has now beenterminated. (Daily
Independent, 17/6/2012, pg.28). Presumably, the newcompany is an internaldepartment of the FinanceMinistry; even if this newarrangement allows for easierand direct supervision by theministry, it is not yet clear whywe should expect this internalaudit unit to do a better andmore transparent job than theteam of independent, privateauditors!
It is rather disconcertingthat 12 months or so after hersecond coming, Dr. Iwealastill does not know theaverage volume of fuelconsumption in Nigeria. It issad that under her purview,the fuel subsidy budget for2011 was brazenly exceededwithout as much as a whimperof protest from her ministryuntil after the bubble burst inthe first quarter of 2012!
The consequent stalematein imports because of abovefactors, will lead to a hugedrop in fuel importation, andit may once again be cryingtime nationwide, as fuelscarcity disrupts normal life. That notwithstanding, it willbe market day once again forthose nefarious hoarders offuel. Nonetheless, Nigeriansare keeping a close watch, tothwart the large-scale fraudand theft witnessed lately inthis commercial subsector.
SAVE THE NAIRA, SAVE
NIGERIANS!
The consequent stalematein imports because of abovefactors, will lead to a hugedrop in fuel importation, andit may once again be cryingtime nationwide, as fuelscarcity disrupts normal life
