JUNE 2, 2014

Continues on page 18

Hard times ahead fortobacco industry, smokers•Fines, imprisonment await makers, users of tobacco•We won’t accept gifts from tobacco firms — Minister•BAT, other stakeholders react

HARD times loom ahead for thetobacco industry in Nigeria, includingusers of its products — smokers — asthe Tobacco Control Bill 2014 becomeslaw soon.

When passed, the law comes with

stiff penalties for companies andindividuals who violate theregulations in the country.

In 2004, Nigeria along with othernations of the world signed the WorldHealth Organisation (WHO)Framework Convention on TobaccoControl, FCTC.

The objectives were to ensure tobaccofree environment for their citizens,promote healthy lifestyle andproductivity.

According to WHO, smoking kills sixmillion people globally every year andif this trend persist, by 2030, theannual death toll from smoking will

climb to more than eight million. WHO also predicted that smoking

will have taken 1,000,000,000 lives bythe end of the 21st century.

In order to address this problem,over 190 countries have so fardomesticated the 2004 FCTC andbanned smoking in public places.

Brazil is one of them. Since 15December 2011, Brazil Federal Law12546 (Article 49) forbids smoking inpublic spaces in the entire country,

By FRANKLIN ALLI

FINANCIAL LITERACY: Group Managing Director/Chief Executive of First City Monument Bank (FCMB) Lim-ited, Mr. Ladi Balogun (second left), presenting a computer to the Principal of Community Secondary School, Aka-Offot in Uyo, Akwa Ibom State, Mr. Jones Obobikpe, as part of the bank’s support for financial literacy amongstudents. They are flanked, left, by the Senior Prefect of the school, Master Joshua Tom and another student, Miss.Rachael Dickson.

CURRENCY BUYING CENTRAL SELLING

CBN Exchange rate as at 30/05/2014

109.54 -0.43

102.85 -0.73

177.50 -4.5

3,059.00 +13.00

17.37 0.11

DOLLAR 154.73 155.23 155.73STERLING 259.049 259.8861 260.7232EURO 210.6494 211.3301 212.0108FRANC 172.5357 173.0932 173.6508YEN 1.5219 1.5268 1.5317CFA 0.3021 0.3121 0.3221WAUA 237.6395 238.4074 239.1753RENMINBI 24.7611 24.8415 24.922RIYAL 41.2547 41.388 41.5214KRONA 28.2158 28.307 28.3982SDR 238.3616 239.1318 239.9021

Cover Story

18 — Vanguard, MONDAY, JUNE 2, 2014

,,

At the administrativelevel, Nigeria needsradical changes in

fiscal, monetary and industrialpolicies to both promote newenterprises and aid existingones. The bulk of the problemis the impaired access for smalland medium enterprises tocapital markets. To improvethis situation, lawmakers havemade it mandatory forcommercial banks operating inNigeria to keep aside 10 percent of pre-tax profits for equityinvestment in small businesses.While it was a reasonablysensible move, it failed to meetavowed targets because therate of actual disbursement wassignificantly lower thanexpected. In the context ofcultivating a wholesomeentrepreneurial spirit, policychanges can often besuperficial unless followedthrough with flexibleimplementation and constantmonitoring. An effectiverevamp of Nigerian financialpolicy initiatives must focus onthree key objectives:

*Enhanced regulatorymechanisms to oversee micro-financing operations.

*Increased capacity andmotivation for financial aid tosmall businesses.

*Improved coordinationbetween various government,private sector and donoragencies.

Engineering a country-wideentrepreneurial spirit also callsfor simultaneous and massivesocial restructuring in a waythat correctly reflects Nigeria’shistorical imperatives and thepoverty that blights both itsurban and rural landscapes.Even though the countryearned an estimated $600billion in oil revenue in the lasthalf century, it’s GDP per capitaof $1,501.72 ranks among thelowest in the world. Added tothat are deep-set symptoms ofrural illiteracy and genderinequality, both of which areproving acutely detrimental tosustainable enterprisedevelopment.

The Nigerian EconomicPolicy for 1999-2003 envisagedfar reaching promises onuniversal basic education,adult literacy and a slew ofrelated programmes aimed atleap-flogging in order to shortcircuit the longer span ofdevelopment. Part of thereason these and otherobjectives have since been

Developing EntrepreneurialSpirit in Nigeria - Part 2

frustrated is the hugedifference between policy andexecution, a problem ofdeveloping nations ingeneral. In Nigeria, it is a keyconcern area because of itsclose relation to anothernational catastrophe: rampantbureaucratic corruption. Thestate of Nigerian corruptionis so insidious that it comeswith its own name –prebendalism, essentiallydefined as massmisappropriation of publicassets by bureaucratic andpolitical agents. Internationalaid agencies owe much of the

failure of Nigeria’s economicand poverty alleviationinitiatives to an intractablebureaucracy that has steadilyresisted efficient and fairpractices.

Creating an aggregatesocio-economic environmentthat is conducive toenterprise development inthe fullest sense, throughfiscal, monetary andindustrial policy changes.

*Removing conditions thatcreate high business costs byaddressing systemicdeficiencies in terms ofinfrastructure, policy andimplementation.

*Attracting local privatesector finance and equity withthe specific objective ofcreating a mass base of viablesmall businesses.

*Revamping the educationsector to provide vocational,administrative and skillsdevelopment training to ruraland urban youths.

*Maintaining politicalstability and building socialconsensus to ensure broad-based success ofmacroeconomic policies.

In the context ofcultivating awholesomeentrepreneurialspirit, policychanges can oftenbe superficialunless followedthrough withflexibleimplementationand constantmonitoring

LAUNCH: From left: Head, Corporate Communications Division, Diamond Bank PLC, Mrs.Ayona Trimnell; Deputy Managing Director, Diamond Bank PLC, Uzoma Dozie; Chief Exec-utive Officer, Wakanow, Obinna Ekezie; and Executive Director, Diamond Bank PLC, VictorEzenwoko at the launch of the Wakanow Prepaid and Corporate card in Lagos.

Continued from page 17

Hard times ahead for tobaccoindustry, smokers

prosecution.”“The Bill also proposes to

ban advertisement andcorporate sponsorship bytobacco companies of anypublic event such as sports,seminar and so on. “We willnot accept gift from anytobacco company. Gifts suchas school building, etc, willnot be accepted. Some stateslike Lagos and Cross Riverhave passed their owntobacco Bill into law. Now wewant to make it national,”said the Minister.

Financial Vanguardinterviewed stakeholders in

Rights Action/ Friends ofthe Earth Nigeria (ERA/FoEN), noted, “We see theExecutive Bill as a welcomedevelopment; it shows thatthe Federal Government isbeginning to take the issueof tobacco in its entirety veryseriously and thatdomesticating the FCTC isnow paramount ongovernment’s agenda.

“Our take is that theNational Assembly shouldfast-track the passage of theBill into law so thatNigerians can have theenabling environment to livea healthy life style.

“We are optimistic that theBill will be passed this year.The Bill had been delayedfor so long. We can’t affordto delay it again. So webelieve that with thecommitment we have beenseeing from the Executivearm of government, the Billwill sail through this timeand that President GoodluckJonathan will also appendhis signature to it since it iscoming from the FederalExecutive Council, FEC.”

Corroborating this,Gbenga Adejuwon,

Alliance Manager, NigeriaTobacco Control Alliance,noted that the law whenpassed will not only reducedemand and supply oftobacco products in theeconomy, it will alsoencourage smokers to quit,”he said.

Philip Jakpor, Head ofMedia, ERA/FoEN, alsopointed out that the law willdrastically reducegovernments’ spending onhealthcare, especiallytobacco related diseases.

“It may interest you toknow that Lagos state alonesaid it was expending overN2billion on tobacco

the industry on the issue.Here are their comments:

Freddy Messanvi (Director,Corporate and RegulatoryAffairs, British AmericanTobacco West Africa), said“We remain committed to thepassage of a tobacco controllaw that is balanced andworkable. We believe thatregulation is key for theindustry and as such wesupport the passage of aworkable bill that will achievethe intended objectives of thehealth advocates and notpromote illegal trade in thesector, to the detriment of thelegal industry.”

Akinbode Oluwafemi,Director, CorporateCampaigns, Environmental

,

,

Continues on page 19

We will notaccept gifts

from anytobacco

company; giftssuch as schoolbuilding, etc,

will not beaccepted

including restaurants andbars.

Similarly in Bulgaria, acomprehensive smoking banhas been introducedprohibiting smoking in allpublic places including bars,restaurants, clubs,workplaces, stadiums, etc. Itcame into effect on 1 June2012.

However, ten years afterNigeria signed the FCTC,government couldn’t pass thelaw due to severalamendments to the Bill byNational Assembly.

The Federal Government ishowever ensuring the Bill ispassed into law.

Investigations conductedby Financial Vanguard,showed that when the Bill iseventually passed into law,the operating environmentmight not be easy for tobaccocompanies in the country, letalone smokers.

Financial Vanguardgathered that for defaultingcompanies, the fine variesfrom N1 million to as muchas N5 million whileimprisonment of the ChiefExecutives of offendingcompanies vary from one yearto two years if they break thelaw.

Whereas for individual, thatis a smoker who goes to aplace clearly designated non-smoking area, the fine is N50,000 or imprisonment of up tosix months.

Addressing newsmen inAbuja, Professor

Onyebuchi Chukwu,Minister of Health, said, “Wewant to produce hundred percent tobacco free environmentfor people who do not wantanything to do with tobacco.So places will be clearlydesignated as non smokingarea. If a smoker breaks thelaw, he will be liable for

CMYK

Vanguard, MONDAY, JUNE 2, 2014 — 19

Re-organising Nigeria'sunorganised private sector

,

,Today, the so-called South-

South Economic CooperationNigerians were told the

council was out to promote,got no where; the bilateral

chambers that the diplomacyencouraged to spring up are

as good as dead

members of Lagos Chamberof Commerce and Industry orMAN? Why in the world dothey need a new platform ifthey have a genuine interestof the private sector at heart?Were these same people notthe promoters of the Nigeri-

an Economic Summit? Arethey tired of the various bod-ies that they are part of?

The proposed council asthey claim will work to arousethe interest of the Nigerianbusiness community towardstaking collective action for asustainable future for socie-ty.

What has been the roleof the various cham-

bers of commerce and indus-try in the country? Will it nothave been better for thesemen to join and strengthenthe existing bodies and re-duce the discordant voices inthe private sector?

In other countries where theprivate sector is taken serious-ly, they have one body thatspeaks for the organised pri-vate sector. These bodies else-where have well funded insti-tutions that provide alterna-tive source of data on the

economy. They can generatereliable data from membersacross board and can authori-tatively challenge governmentdata. This is the situation inthe US where the US Cham-ber of Commerce and Indus-try can authoritatively chal-lenge government on trendsin the economy. It is the samein Britain, Germany and theNetherlands to mention a few.

Why is the Nigerian privatesector so fragmented thatnothing serious can come outof it? The only reason is be-cause almost all the success-ful businesses in Nigeria en-joy government patronage and

the advantages it confers onthem through waivers andconcessions.

The Managing Director ofShell Petroleum DevelopmentCompany of Nigeria Ltd(SPDC) and Country Chair,Shell Companies in Nigeria,Mutiu Sunmonu, had hostedthe roundtable to introducethe idea to the CEOs. He said:

"There is no doubt that Ni-gerian companies support sus-tainability programmes intheir respective areas of influ-ence quite adequately, how-ever, no platform currently ex-ists for businesses across allindustries to share experienc-es, best practices, and advo-cate for business positions thattransform lives and communi-ties from what they are todayto the greatness they can be,tomorrow. If there is one areawe do not need to compete asbusinesses, it is in the good-ness of our heart to our socie-ty and environment."

This coming from Shell executive should be taken

with a pinch of salt. The Ni-gerian private sector operatorsshould hide their faces inshame, come down from theirhigh horses and come undera single private sector umbrel-la that will have the capacityto affect Nigerians positively.This they can do by poolingresources together to set upstructures that can generateaccurate data on the progressmade in the economy.

Cover Story

Hard times ahead for tobaccoindustry, smokersContinued from page 18

patients. The state governmentcarried out the survey in 11state-owned hospitals and thatthere were over 9,000 patientsand each was gulping N222,000 from tax payers’ moneyplus another N70, 000 that thepatients themselves mustexpend. That was 2006 andthat is only Lagos State. If wereplicate this across thefederation then you canimagine the trillions of nairathis country is spending onpatients with tobacco relatedsickness,” he said.

A smoker, Obinna Mbamalu,

however dismissed theproposed Bill. He said he hasbeen smoking two packets ofcigarette daily for ten years andhe will continue to smokebecause, he said “Passing thelaw is not the issue but makingit work.

Since Governor Fasholapassed the law in Lagos, howmany people have beenarrested for violation? Go toOshodi under-bridge, go toOjuelegba or Ojota Garage andsee things for yourself. Howmany of them have beenarrested by government? Thelaw can work in othercountries, but not here.”

DRAW: From left, Kachikwu Kandozie, Principal Accountant Consumer Protection Council(CPC); Tunde Kuponiyi, Head, Cards and E-banking Business, Ecobank Nigeria; MayowaOkuyiga, Senior Executive Officer, Legal, Lagos State Lotteries Board; and Nike Kolawole,Regional Head, Mainland, Ecobank, at the Ecobank Card 4 Prizes Promo Grand Draw held inLagos.

TWO weeks ago, some31 Nigerian companychief executives and

business owners got togetherto form a council that will en-able them jointly promote sus-tainable development acrossthe country. This was the out-come of a round table discus-sion held in Lagos. Ordinari-ly, this would have been awelcome development. How-ever, the claim by membersthat they lack the platformthrough which they could in-tervene in the economy is spu-rious, suspicious and very du-bious. The fact that it waschampioned by Shell Manag-ing Director makes it worse.

Shell operations globally areknown to have adverse spillo-ver effect on the community itoperates and in almost everysituation, it required litigationfor it to respond to the cries ofthose affected adversely by itsoperations.

The leaders of these companies — Accenture,

Coca-Cola, Empretec NigeriaFoundation, Etisalat, FirstBank, Flour Mills of Nigeria,Heirs Holdings, Intel Corpo-ration and Interswitch, Stand-ard Chartered Bank, Unilev-er, the First Bank CSR Cen-tre, BusinessDay Newspa-pers, Emzor PharmaceuticalIndustries Ltd, MTN Nigeria,Guinness, Oando Gas andPower, UBA Group, SeplatPetroleum, Chevron, StanbicIBTC, Afren Nigeria, AccessBank and Nigerian Breweries,are well aware of the existenceof the three arms of the organ-ised private sector. For years,Nigerian organised privatesector had operated throughManufacturers Association ofNigeria, MAN, Nigerian As-sociation of Chambers of Com-merce, Industry, Mines andAgriculture, NACCIMA, andNigerian Employers Consult-ative Assembly, NECA. In re-

cent years, the Nigerian Smalland Medium Enterprise Asso-ciation, NASSI came into ex-istence. This is aside the nu-merous bilateral chambers ofcommerce that dot the nation'seconomic landscape.

The great challenge facingthe Nigerian economy is thediscordant voices coming out ofthe so-called organised privatesector.

Every so often, instead of theoperators in the sector to pooltheir resources together to fos-ter the growth and develop-ment of the sector, sectors thatare looking to government fora particular favour team upunder some name to approachgovernment. Once the need ismet, the leader ditches the or-ganisation.

In the heydays of the Ba-bangida administration, in thename of promoting economicdiplomacy, several private sec-tor organs sprang up. The onethat is worth mentioning is theG15 council. That body was theeyes and ears of the military ad-ministration. Today, the so-called South-South EconomicCooperation Nigerians weretold the council was out to pro-mote, got nowhere. The bilat-eral chambers that the diplo-macy encouraged to spring upare as good as dead.

Nigerians are good at an-swering president and leaderbut not in service delivery.

The 31 business leadersagreed on the establish-

ment of a common platform thatwill enable them to jointly pro-mote sustainable developmentinitiatives and programmesacross the country. At theroundtable in Lagos, the CEOsdecided to set up a council forsustainable development whichwill be affiliated to the Gene-va-based World BusinessCouncil for Sustainable Devel-opment (WBCSD).

Are these 31 leaders not

20 — Vanguard, MONDAY, JUNE 2, 2014

CMYK

Business & Economy

AWARD: From left: Mr. Joseph Okomah, Chairman, Nigerian Institute of Public Relations(NIPR), Lagos Chapter; Chief Keith Richards, Chairman, Promasidor Nigeria Limited; andAmbassador Patrick Dele Cole, Chairman of the Panel of Judges of the Promasidor 2014Quill Awards; at the Promasidor Quill Awards presentation ceremony held in Lagos.

BY PROVIDENCE OBUH

The Organised PrivateSector (OPS) and theUnited Nations Industrial

Development Organisation(UNIDO) have resolved to worktogether to make Nigerianproducts meet domestic, regionaland international standards. Theresolution was reached during ameeting on ‘QualityInfrastructure’ in Lagos organisedby UNIDO.

UNIDO Representative, Dr.Patrick Komawa, said that theprivate sector has recognised theproblems and hasshown willingness to work withUNIDO, EU and the FederalMinistry of Industry Trade andInvestment, so as to increase thecompetitiveness of locally madeproducts in the internationalmarket place.

Komawa said that they haveagreed to use five mechanismswhich are: Quality Policy,establishment of NationalAccreditation Body and NationalMetrology Institute for productscertification which does not existat the moment.

He said that the othermechanisms are to build thecapacity of the ConsumerProtection Council so that it cancreate awareness for theconsumer to ask for qualityproducts.

“It is one thing to producequality product but if theconsumers themselves do notknow the difference between highquality and low quality productsthey will not demand for it.

“The consultation with the OPSwithin the national qualityinfrastructure project is an EUfunded project but implemented

OPS, UNIDO work oncompetitiveness ofNigerian productsby UNIDO with the support of theFMITI. The project has theobjective of improving on thequality of products made inNigeria so that they can be soldinternally and in internationalmarket.

“The time frame for this projectis four years and we have alreadystarted, we are now half a yearinto the programme and a lot ofconsultations have been taking

place both within the public andprivate sector,

“You cannot improve on yourGDP if we do not produceproducts in Nigeria and sell themin the international market. Wealso will not provide the neededjob in this country if we are notable to manufacture productshere and trade them in theinternational or regional market.

“But for us to be able to trade

we need to at least meet basicquality requirement, most of theproducts that are made in thiscountry are rejected because theydo not meet certain basic qualityrequirement,” he said.

Also, Executive Director,Business Development, Bank ofIndustry, Mr. Waheed Olagunju,added,”The markets are used tostandards and there is no wayyou can export in particular, ifyou do not adhere tointernational standards orinternational best practice.

By NKIRUKA NNOROM

Sterling Bank Plc hasunveiled strategic planto deepen its market

penetration and expand its retailfoot print in the remaining part ofthe year.

The bank revealed that it willcommence massive roll out ofconventional and alternative inorder to increase it productsoffering, as well as rolling out ofagency banking model to drivefinancial inclusion.

The Managing Director/CEO,Mr. Yemi Adeola, said effortswould be geared at upgrading thephysical infrastructure of the bankto reflect the retail look and feel,while private banking businesstargeted at the high net worthindividuals will be commencedduring the period.

According to him, Sterling Bank

Sterling Bank unveils plan to deepen market penetrationwill deploy a new core bankingapplication to fully enhanceservice delivery to the bank’scustomers. Already, he said thebank has one million activecustomer base with 168branches, 300 ATMs and 5,000Point of Sales (PoS) machinesspread across its branchesnationwide.

He explained that the bank isin a strong growth phase andcontrols three percent marketshare by assets, adding that it hasbeen delivering shareholders’value having consistently paiddividend since 2011. To improvestaff productivity, Adeola saidthe bank will concentrate onstrengthening its performancemanagement system for salesand back-office workforce.

On the bank’s financialperformance, he explained thatits loan book grew by five percentto N344.785 billion in the firstquarter ended March 31, 2014

driven by growth in lending to thecorporate and commercialsegments of the economy.

Corporate lending, according tohim, accounted for 68.2 percentof total loans, while retail andcommercial lending accountedfor 12.6 percent and 13.1 percentrespectively.

Decline in institutional loans,which accounted for meager 6.1percent as against 8.6 percentwas due to pay-down of existingfacilities,” he said. Sector-by-sector breakdown of the loanstructure showed significantexposure in oil and gas industry,which accounted for N111.119billion of the bank’s total loanand advances for the period, 11.4percent growth over N99.733billion accruing to the sector inthe same period in 2013.

This was followed by real estateand construction, whichaccounted for N79.550 billion ofthe bank’s total loan within the

period. “Gross earnings rose by24 to N24.6 billion in the firstquarter of 2014 from N19.8billion in the first three monthsof 2013, driven by interestincome, which rose by 31 percentand accounted for 76 percent onthe back of increase in lendingactivities.

“Net interest margin improvedby 240 basis points from 5.2 percent in first quarter of 2013 to7.6 per cent driven mainly byincrease yield on earning assets”.Despite a high interest rateenvironment, funding costsmoderated by 30 basis points to5.6 percent,” he said.

He further explained thatdeposits declined marginally byfive percent year-to-date toN540.0 billion reflectingmanagement’s focus on balancesheet efficiency, saying that retaildeposits accounted for 66 percentof deposits, while wholesalefunds accounted for 34 percent.

South-EastMAN lamentspower supplychallenges inNigeria

The ManufacturesAssociation of Nigeria

(MAN) in the South-East zonehas expressed displeasure overthe nation’s increasing electricitygeneration and supplychallenges in spite of the FederalGovernment promises. MANexpressed its displeasure inAwka at its 26th AnnualGeneral Meeting (AGM)attended by Anambra, Enuguand Ebonyi states.

The association also identifiedmultiple taxation and levies bythe Local, States and FederalGovernment as another majorobstacle facing its members.

Earlier, Gov. Willie Obiano ofanambra said that the statewas reviewing its entire revenuebase. Obiano represented bythe Commissioner for Industry,Trade and Commerce, MrIfeatu Onejeme, said trade andcommerce would boom againin the state.

Fitch affirmsAfren at B+,stableoutlook

Fitch Ratings hasaffirmed Afren plc’s Long-

term Issuer Default Rating (IDR)at ‘B+’. The Outlook is Stable.A full list of rating actions is atthe end of this release. Afrencontinues to generate solidoperating cash flows, which aresufficient to finance itsambitious exploration anddevelopment programme.

In the past the company hasdemonstrated its ability to meetambitious production targets asit significantly boosted oil outputin Nigeria in 2012 and 2013.Afren’s profitability is supportedby the tax holiday in place atEbok, its largest producing field.However, Afren’s productionremains highly concentrated,which gives rise to elevatedgeological, country and tax risk,and its scale of operations issmall.

We view the possible oilindustry reform in Nigeria as arisk, as its timing and keyparameters, including taximplications, are unclear. Thesefactors constrain Afren to the‘B’ rating category.

Vanguard, MONDAY, JUNE 2, 2014 — 21

CMY

Business & Economy

Africa must tackle poverty to sharebenefits of strong growth —IMF

Africa is “taking off ”with strong, steadygrowth but poverty is

unacceptably high. As such,governments need to buildinfrastructure and institutionsand educate people to sharethe benefits more widely, sosays the head of theInternational Monetary Fund,IMF.

Sub-Saharan Africa isexpected to grow by around5.5 percent this year - wellabove the global average -with some of its poorestcountries expanding by closerto 7 percent, ChristineLagarde, InternationalMonetary Fund (IMF)managing director, told anIMF conference in theMozambican capital Maputo.

But the IMF chief saidalthough the region hadbecome a growing investmentdestination for both advancedand emerging economies, witha record $80 billion of inflowsexpected this year, theeconomic benefits of thegrowth surge had yet to bewidely distributed across theregion’s population.

“Poverty remains stuck atunacceptably high levels -still afflicting about 45 percentof the region’s households,”Lagarde told the meeting ofAfrican finance ministers anddevelopment experts.

Despite forecasts ofcontinuing strong expansionfor the region, its positiveoutlook has been darkenedthis year with flare-ups ofconflict, insurgency andviolence. This has ranged fromcivil war in the world’s neweststate, South Sudan, aninsurgency waged by radicalIslamist Boko Haram group inAfrica’s largest economyNigeria and attacks byIslamist militants hurtingtourism and business inKenya. As African countriestap new sources of fundsthrough natural resourcediscoveries and internationaldollar bonds, questions havealso arisen about howgovernments are managingthis money in fast-growingeconomies like Ghana andZambia. Lagarde said thatwith the international recoverystill looking weak and uneven,Africa’s positive outlook alsofaced risks from slower growthin the world’s advancedeconomies and in emergingmarkets, which are theregion’s main trade partners.

Other risks included lowerprices for some commodities,tighter external financialconditions and marketvolatility.

The IMF head

recommended three prioritiesto ensure the region’s growthcan be wide, inclusive andsustained: “Buildinfrastructure, buildinstitutions, and buildpeople.”

Infratructure, jobsLagarde said Africa still had

big infrastructure gaps, whichrepresented huge costs tobusinesses and to people.

She cited as an example thefact that over the past threedecades, per capita output ofelectricity in Sub-Saharan Africaremained virtually flat. Only 16percent of all roads were paved,compared with 58 percent inSouth Asia. The investmentneeds to address this in theregion were estimated at about

$93 billion annually, she said.The IMF chief said Africa also

needed to improve governance,transparency and create soundeconomic frameworks for growth- she called this “buildinginstitutions.”

This would ensure thatrevenues and benefits from thecontinent’s mineral riches -Africa has more than 30 percentof the world’s mineral reserves- could be better captured fornational budgets andgenerating more jobs.

Lagarde said Africa needed to“build people” to reap thedividends of its rapidpopulation growth. She citedestimates that a one percentagepoint increase in the workingage population could boost GDP

growth by half a percentagepoint.

“For this to happen, however,‘good’ jobs need to be createdin the private sector. Today, onlyone in five people in Africa findswork in the formal sector,”Lagarde said. “This mustchange. With wider access toquality education, healthcareand infrastructure services, it canchange.”

Technology could extendaccess to financial services tomillions, and this was alreadyhappening in several countries,such as Kenya.

“Africa Rising will benefit thelives of people on the continent.Beyond that, Africa Rising willbenefit the world,” Lagardesaid.

BY JONAH NWOKPOKU Aulic Nigeria Limited, the promoter of

specialised trade fair Fair, has said that itsinternational trade exhibition coming up nextmonth is intended to bring local and foreignbusinesses together and inspire a mutualpartnership that would make for Nigeria’seconomic growth.

The Managing Director of the company, Dr.Chika Eze made this known during a pressbriefing to announce the exhibition in Lagos.

She said that about 148 firms from Europe haveindicated interests in taking part in the thirdspecialised trade exhibitions kicking off by 6th

of June.She said that out of the 148 firms, 129 will be

sending representatives while twenty-nine willbe present on their own.

According to her, “The exhibition is basicallyorganised to match upcoming businesses withsuppliers. It’s an exhibition where we plan tobring into this country, services and products,which have not been here. Some who traveloverseas will know that there are a lot of beautifulproducts and services that we need which are

Aulic drives local, foreign businesspartnerships through trade exhibition

still not here. So we considered how best wecan bring these services and products intothis country, and then we decided that thebest way to do it is to try to match theNigerian business community and theproducers of these products and services.

“I am very happy that when we introducedthis concept to our business partners andassociates overseas, they were very happyabout it. Some of them even went ahead tosource more companies in their variouscountries to come in and pick up partners inNigeria. We have informed the small andmedium scale business people in Nigeriaand they are also excited about the idea andhave indicated interest en masse to attendthe exhibition.”

She further explained that, “It is anopportunity for businesses to meetthemselves and establish partnerships thatwill not only help individuals but will alsoassist Nigeria in her developmentendeavour. It’s an exhibition where we expectto see new products and services. It’s alsoan opportunity for our businesses to learnnew ways of doing important things."

Nigeria endowedto benefit fromglobal economictrends —Institute

The McKinsey GlobalInstitute (MGI), an

international economic andbusiness concern, said thatNigeria was endowed andstrategically positioned tobenefit from global economictrends. The institute madethe disclosure in its reporttitled “Nigeria’s Renewal:Delivering Inclusive Growthin Africa’s Largest Economy”released in Abuja.

The report said Nigeria hadan estimated 17 millioncitizens living overseas,whose remittances backhome accounted for about 10per cent of its Gross DomesticProduct (GDP). It said thatthe country, with an oceanport, had a strategic locationwhich allowed it access otherdeveloping economies of theworld.

TOUR - From left:Danny Gunsham, Operation Manager, Chicken Republic; Mrs SusanRotimi, Head Marketing & PR; Gloria Negbenebor, Head Quality & Central Kitchen; AbiodunAyorinde, Human Resources Manager,Chicken Republic, at the Official tour of CentralKitchen of Food Concept PLC, owner of Chicken Republic in Lagos.

STARTIMES has announced plans to further

deepen the penetration of dig-ital television in Nigeria, mak-ing it affordable to a vast ma-jority of Nigerians within theshortest possible time.

To this end, the company isrewarding customers for theirpatronage, with the Extra TimePromotion, where 50 individu-als won 32 inch LED TV, whileone customer, Mr. David Abay-omi won the star prize of a brandnew Toyota Yaris 2014 car.

Speaking at the May editionof the promotion, Mr. AnetorIrete, Public Relations Manag-er, NTA-Star TV Network Limit-ed, said the decision of the com-pany to deepen digital televisionpenetration in Nigeria is com-ing on the heels of the planneddigital migration which is sched-uled to commence by 2015.

He said the company current-ly has 1.8 million subscribers andis presently in 32 cities acrossthe country, with plans to expandto 16 more cities within the nextcouple of months.

According to him, Startimes isworking to ensure that digitaltelevision is not seen as a luxu-ry item, but as a necessity andfor the pleasure of every one.

Irete noted that the companyis committed to offering the verybest to its customers and is re-warding them with various giftsto make them bond with thecompany.

StarTimes todeepen digitaltelevisionpenetration

22 — Vanguard, MONDAY, JUNE 2, 2014

Banking & Finance

By NKIRUKANNOROM

UNVEILING - From left: Former Chairman, Skye Bank Plc, Mrs. Morounkeji Onasanya;Chairman, Mr. Tunde Ayeni; Former Chairman, Princess Agnes Adeniran and ManagingDirector/CEO designate, Mr. Timothy Oguntayo, at the unveiling of Skye Plus Software bySkye Bank in Lagos.

“Every case that we had in2013 was peacefully resolved;that is why we have this typeof result. This shows that themanagement is top of theirgame,” he added.

“Non-payment of dividendnotwithstanding, the goodthing is that the bank has beenturned around. Having donethat, we implore themanagement not to rest on itsoars, but to continue to steerthe bank forward,” said Mr.Odoemena. He added,“Despite the challenges, Wema

Shareholders endorse WemaBank’s fresh capital bid

Shareholders ofWema Bank Plchave approved the

bank’s quest to raise freshcapital to support its growthplan.

The shareholders alsocommended the bank forsteering the bank back toprofitability despite thedifficult operatingenvironment.

At the 2013 AnnualGeneral Meeting, AGM, inLagos, the shareholdersauthorised the Board andmanagement to raise thecapital through the issuanceof tenured bonds, notes,debt instruments or loans inany currency.

They also authorised thebank to raise the money byway of a private placement,bond issuance, notesissuance, or book buildingin one or more tranches,while the pricing andterms of the issuance will bedetermined by the Board.

Speaking on behalf ofother shareholders, the trioof Boniface Okezie,Odoemena Demian andSola Abodurin, commendedthe bank for turning thefortune of the bank around.

Speaking, BonifaceOkezie lauded the bank forescaping nationalistion,saying, ‘I wonder whatwould have been our fate ifthe bank had gone the wayof the other banks that werenationalised.’

Bank has not embarked onshare reconstruction. We enjointhe bank not to consider thatoption because it will dilute ourshareholding.”

Adding his voice, Abodurinsaid, “Our total assets grew by35 percent, deposit grew by 25percent, while our profit beforetax rose by 139 percent. This iscommendable, but I hope thatour ‘Project LEAP’ will movethe bank forward because weneed dividend going forward.”

In his response, themanaging director/CEO, Mr.

Segun Oloketuyi, explainedthat raising fresh capital willhelp the bank to not onlyincrease its lending capacity,but to also pursue its growthplan.

He said, “We are raisingmoney because of our growthplan. Some shareholders areasking for dividend, we canonly do this if we grow and wehave enough capacity.

“Most of the business we dorequires lending and we needmore money to be able to dothis. Also, any asset we acquireor any branch we open takesaway from our capital, so weneed additional capital to beable to do this.”

“To lend, we need capacityand this entails having enoughcapital adequacy ratio. TheCBN also recommends that wehave a buffer; that meanshaving capital adequacy ratioabove the 10 percent industryrequirement.”

On the bank migration tonational bank status, he saidthat application has been madeto the CBN and its approval isbeing awaited.

Speaking earlier, thechairman, Adeyinka Asekun,attributed the 2013performance to the success ofthe management’s turnaroundplan. He added that despitethe challenging operatingenvironment, Wema Bankachieved a significantmilestone as it returned to fullprofitability following concertedeffort at implementing the firstphase of the bank’s turnaroundproject.

Asekun also assured allstakeholders that Wema Bankwas confident of achieving itsgrowth targets whilstremaining nimble, efficientand responsive.

Foreign exchange volatility slowed tothe lowest level in almost seven years

as central-bank polices of monetary stimulusand forward guidance restrain price swings.

The dollar was little changed against theyen after a report showed business activityin the Chicago area unexpectedly increasedto a seven-month high in May. The Japanesecurrency strengthened earlier as agovernment report showed inflationaccelerated to the fastest in more than twodecades in April, reducing the prospect ofadditional stimulus by the Bank of Japan.The krona declined versus most of its 16major peers after Sweden’s economyunexpectedly contracted and amidspeculation the Riksbank will cut rates. TheCanadian dollar fell as first-quarter economicgrowth slowed.

“The forward-guidance policy by thecentral banks is keeping a lid on rateexpectations,” said Peter Kinsella, a seniorforeign-exchange strategist atCommerzbank AG in London. “We’reincreasingly going to see very flat volatility.It doesn’t seem at present that there’s goingto be any catalyst to shake us from themalaise.”

Forex volatility drops to seven year lowJPMorgan Chase & Co.’s volatility index

for the currencies of the Group of Sevennations fell to 5.94 percent at Friday, reachingthe lowest level since June 2007. A separateJPMorgan index measuring global foreignexchange volatility also reached a 2007 low.

The dollar was little changed at 101.77 peryen, after dropping as much as 0.3 percent.The euro gained 0.2 percent to $1.3635. Theshared currency added 0.3 percent to 138.79yen. The Russian ruble and Chile’s peso havegained 2.4 percent against the dollar thismonth, leading winners among 31 majorcurrencies, according to data compiled byBloomberg. The Swedish krona dropped 2.6percent, while the Czech koruna slipped 1.9percent, the biggest losers.

Canada’s dollar dropped 0.2 percent toC$1.0858 against its U.S. counterpart afterdata showed gross domestic product grew ata 1.2 percent annualized pace in Januarythrough March, compared with adownwardly revised 2.7 percent in the priorthree months. Economists surveyed byBloomberg predicted growth would slow toa 1.8 percent pace.The krona slid as muchas 0.6 percent to 9.0894 per euro, the weakestlevel since May 6.

Ecobank rewardscustomers incard promo

The grand draw of theEcobank’s Card 4 Prizes

promo has produced additionalwinners, including threecustomers that went home withthe grand prizes of Honda Cars.

The winners are AwoyeraPeter, Lagos/south-west region,Asoanya Jerry, south-south/south east region, and AliyuYelwa, Federal Capital Territory/North region grand prizewinners. Others won Trip toBrazil, 300 thousand Nairaworth of scholarship, smartphones, LCD TVs, airconditioners, home theatres andgenerators

The Card 4 Prizes Promowhich was based on thecustomers’ use of all theelectronic channels of bankingthat range from the use of:cards, debit cards, credit cards,pre-paid cards, Point of Saletransactions, Online shopping,purchase of recharge cards withthe ATM machine andwithdrawals with the ATMmachine, has made manycustomers of Ecobank to bebeneficiaries of the promo.

One of the grand prizewinners, Asoanya Jerry, fromsouth-south/south east region,said “I used the Point of Salemachines, made onlinepayments of staff salaries.

Committed to provingcutting edge banking

services to its customers, one ofthe leading retail bank,Diamond Bank PLC hasupgraded of its mobile-basedbanking application, theDiamond Mobile app.

With this development,subscribers to the mobile appcan carry out more bankingtransactions beyond fundstransfers and bills payment ina secured environment at anytime of the day.

Some of the unique featuresrecently added to the App,according to the Bank willinclude flight bookings, creditcard repayments, accountstatement generation and debitcard activation or deactivation.

These are in addition topreviously available serviceslike funds transfer to Diamondand non-Diamond Bankaccounts, payment forBlackBerry Internet Services(BIS), bills payment, airtimepurchase, Diamond Bankbranch and ATM locators, etc.

Diamond Bankupgrades mobilebanking application

By EMEKA AGINAM

CMYK

Vanguard, MONDAY, JUNE 2, 2014 — 23

Banking & Finance

CHILDREN'S DAY - Enterprise Bank’s Executive Director, Lagos and South-WestBanks, Mrs. Nneka Onyeali-Ikpe, a customer of the bank; Mrs. Nonny Rosemary Nwajeiwith her child, Chukwudiebube Obiora John, and the Divisional Head, E-Business & RetailSegments, Mrs. Ori Ogba, at the annual Children’s Day Party that the bank organised forchildren in Victoria Island, Lagos.

The nation’s externalreserves fell by $995million last month

even as the Central Bank ofNigeria (CBN) sold $2.63billion at the Retail DutchAuction System (RDAS)sessions during the month.

Data from the CBN websiteshowed that the externalreserves fell to $37.147 billionby May 27th from $38.142billion on April 28th. Thisimplies a reversal of themodest increase in externalreserves recorded in April. Itwill be recalled that theexternal reserves fellpersistently from $48.85billion in April 2013 to $37.83billion in March 2014, beforerising to $38.1 billion in April.The persistent decline in thereserves is driven by hugeforeign exchange sales by theCBN in order to defend thenaira.

This is reflected in thedollar sales by the apex bankat the RDAS sessions held inMay, which showed amarginal increase in theamount of dollar sold by theCBN. From $2.62 billion inApril, dollar sales rose to$2.63 billion in May.Cumulatively, the apex banksold $14.83 billion throughthe RDAS sessions from

External reserves fall by $995m•As CBN sells $2.63bn at RDAS

By BABAJIDEKOMOLAFE

January to May. In January,dollar sales rose by 48 percent to $2.94 billion from$1.99 billion in December2013. It rose by another fivepercent in February to $3.1billion, and in March it roseby 14 per cent to $3.54billion.

The amount of dollar sold inthe first five months of this

year represents 58.45 percentof the $25.37 billion sold bythe apex bank in 2013.

Meanwhile the nairadepreciated by 213 kobo at theinterbank foreign exchangemarket in May. Data from theFinancial Market DealersQuote (FMDQ) showed thatthe interbank exchange rateopened the month at N160.67

per dollar, but declined toN162.8 per dollar at theclose of business on May30th.

The naira howeverremained stable at theofficial market with theofficial exchange rateremaining at N155.73throughout the month.

SAP Africa has said that banksneed to embrace real time

reporting in order to become Basel 2complaints.

“As the Nigerian banking sectorraces to become Basel 2 compliant,innovation becomes critical in helpingbanks establish more efficientprocesses, increase transparency andbecome more customer-centric,” thecompany stated in a statement.

SAP Africa strives to provide thebanking sector with agile financialsolutions designed to deliver detailedregulatory reporting on a single dataplatform with the ability to handlemass analysis within seconds.

Countries all over Africa – includingNigeria which is the largest economy- are making every effort to increasetheir levels of regulatory complianceto keep up with legislative andeconomic requirements for analysingfinancial data, including threats andrisks.

“SAP Africa, in partnership with EY(Ernst and Young), are committed totransforming the banking sector inNigeria to become Basel 2 compliant

Banks need real time reporting to complywith Basel 2-SAP Africa

and take advantage of the Big Dataanalytics solution for real-timereporting,” says Darrel Orsmond,Head of Financial Services for SAPAfrica. Through this technology, thebanking sector will be in acompetitive position to provide rapidassessment of capital, reporting tothe Regulator for compliance anddelivering of reports in real time,according to Orsmond.

Orsmond adds, “The averagetimeframe for banks to become Basel2 compliant can be as much as 18months, and banks should startpreparing well in advance for Baselimplementations. Thesepreparations should includetechnology investments in riskmanagement, real-time reporting,data analysis and cleansingcapabilities.”

“By identifying and eliminatingrisks in advance through the use ofreal-time reporting, banks can satisfythe needs and demands ofstakeholders thereby reducing riskand increasing regulatorycompliance.” Orsmond commented,”

Banks that are not Basel 2 compliantcould run the risk of not pricing theirloans correctly, thereby not holdingthe appropriate levels of capital.” Hefurther added that accurate bankdata is vital to reach Basel 2compliance and often the biggestchallenge and cost ofimplementation is not the softwareitself, but rather the time it takes toimplement, caused by inaccuratebank data and a shortage of therequired mathematical andmodelling skills.

Precise records of losses and thelegal processes involved, areessential inputs to ensure theaccurate prediction of potentiallosses. Banks need to hold just theright level of capital, and poor datausually leads to Banks having tocarry excess levels of capital.

Darrel Orsmond addressed theissue of regulatory compliance at theSAP Basel 2 – Regulatory andReporting Demands for Big Dataevent being held in Lagos, Nigeriaon 27 May 2014 and is available forcomment.

US seeks morethan $10bnpenalty from BNPParibas

BNP Paribas SA fell themost in 15 months in Paristrading after a personfamiliar with the matter saidU.S authorities are seekingmore than $10 billion tosettle federal and stateinvestigations into dealingswith sanctioned countriesincluding Sudan and Iran.

BNP Paribas S A (BNP) fellin Paris trading after a personfamiliar with the matter saidU.S. authorities are seekingmore than $10 billion tosettle federal and stateinvestigations into dealingswith sanctioned countries.

The shares declined asmuch as 6.1 percent, thelargest intraday drop sinceFebruary 2013, and closed2.4 percent lower at 51.37euros. BNP Paribas, thelargest French bank, hasfallen 9.3 percent this year,compared with a 3.8 percentincrease in the BloombergEurope Banks and FinancialServices Index.

A final deal between BNPand the U.S. is probablyweeks away, said the person,who asked not to beidentified because the talksaren’t public. The amount tosettle has escalated: the banksaid in April that it mightneed to pay far more than the

Central banksoutline ways toboost ABS market

The European CentralBank and Bank of

England on Friday outlinedoptions to reinvigorate themarket for bundled bankloans, which was “tarnished”by the global financial crisis,saying a better-functioningmarket for asset-backedsecurities can help boostlending to the private sector,particularly small businesses.

Improved harmonization ofthe rules applied to suchpackaged loans, the creationof principles to improvetransparency and enhanceddata on loans would helpdevelop a deeper market forthese types of securities, thebanks said in a joint paper.

“Looking ahead, thebanking system is likely toneed access to a wider rangeof funding sources,” the ECBand BOE said. “The revivalof the ABS market cantherefore play a useful role inensuring that there is not arenewed buildup of systemicrisk, including from excessivereliance upon any singlesource of financing,” theysaid.

24 — Vanguard, MONDAY, JUNE 2, 2014

CMYK

Corporate Finance

BY NKIRUKA NNOROM& WILLIAM JIMOH

Operators in theNigerian capitalmarket have

identified the relativeabsence and insignificance ofindigenous companies listedon the Nigeria StockExchange, NSE, as a majorthreat to the country ’sattainment of African marketleader status. The operatorssaid this at the 10th AnnualPEARL Awards public lecturefor capital marketdevelopment in Lagos,adding that it is importantNigeria develops the sizeand liquidity of her market byensuring additional domesticparticipation against currentdomination by multinationalcompanies which account formore than 50 percent of themarket capitalisation.

Delivering this year ’slecture, tagged, “ActualisingNigerian Capital MarketQuest for Leadership inAfrica: Issues, Challengesand Options,” Chairman,National Association ofSecurities Dealers (NASD)Limited, Mr. Tola Mobolurin,said the domination of themarket by foreign investorsunderscores the weakness ofthe domestic market, addingthat Nigeria cannot attainleadership without asignificant contribution of thedomestic institutional, highnetworth and retail investors.

He said, “Indeed foreigninvestors have accounted foras high as 70 percent of thetransactions in the marketsince 2009 to date withouthindrance. The significantvolatility that attended thishas been largely looked onbenignly by the regulatorswhose gaze have been fixedon the stability the inflowhave accorded the localcurrency; Naira.

“There is no gainsayingthat Nigeria is far from beingthe African leader. Focusingon the current African leader(South Africa) may notprovide the vision that canpropel the quantum leapneeded to overtake it. It isbest to set the vision againstthe benchmark of the worldleading light while breakingdown the achievement intosteps and milestone tosustain the desire for itsattainment.

“By the world bankbenchmark for a developedmarket, our market needs tohave a minimum of fivecompanies, whose marketcapitalisation is at least $2.065 million each and have

APPRECIATION - From left: Mr. Solomon Oyetunji, Delaer, Total Alapere ServiceStation; Mr. Alex Vovks, Managing Director, Total Nig. Plc; with Mrs. Emilly Shaka-Momodu, Retail Safety and Training Manager attending to a customer at the Total topService Customer appreciation week 2014 at the Ketu Alapere Service station

Low domestic participation threatens Nigeriaemergence as African market leader

a free float in the market of50 percent of itscapitalisation ($ 1.032million) with liquiditymeasurement AnnualizedTraded Value Ration, ATVR,of 20 percent.”

He explained that thequest for leadership cannotbe achieved without activecommitment of thegovernment. “What ishowever expected of thegovernment does not gobeyond the ambit of goodgovernance and soundeconomic management towhich government shouldordinarily be committed,” heenthused.

Speaking further, he saidthe only demand on thegovernment is to pay a little

more attention to the elementthat could accelerate thegrowth of the capital marketbecause the rapid economicgrowth is also hinged onsuch effort.

Also speaking, AlihajiKasimu Garba Kurfi, councilmember, NSE and ManagingDirector, APT Securities &Fund Ltd, noted that for theNigerian capital market toattain leadership position,there is need for everybodyconcerned, includingoperators, regulators and theshareholders to change theirperception towards themarket.

According to him, whileNigeria local investorsholding on to their shares,their foreign counterparts,

who understand the marketwork round the clock and reapall the capital appreciation fromtheir shares.

He lamented that someshares have gained as much as30-35 percent in the fewmonths, but the local investorswere not part of the gain dueto their attitude to the market.

“The government also is nothelping matter. When theylicensed the telecommunicatincompanies, nobody mademention of listing in the stockexchange. When they renewedtheir licences, again, the stockmarket was not mentioned.They have just issued licencesfor private ownership of powerbut nobody mentioned thecapital market.

By NKIRUKA NNOROM

The Chief ExecutiveOfficer of the

Nigerian Stock Exchange,NSE, Mr. Oscar Onyema,has said that local investors’participation in the stockmarket year-to-dateoutweighs foreignparticipation.

He said this in hisopening remarks at the2014 ‘Putting InvestorsFirst’ day organised inconjunction with CFASociety in Lagos.

He observed that localinvestors’ participationaccounted for close to 60percent of transactions inthe market as at the end offirst quarter, 2013, while

NSE: Local investors’ participationsatisfactory —Onyema

foreign investors wereresponsible for about 40percent.

“This turn of eventscontrasted sharply with thecircumstances between 2009and the first half of 2012when local investorseschewed the market onaccount of losses theysustained in the aftermath ofthe meltdown of 2008 withtransaction values beingcontrolled by foreigninvestors to the tune of 80percent in certain instances,”he affirmed.

Represented by HarunaJalo-Waziri, ExecutiveDirector, BusinessDevelopment, NSE,Onyema pointed out that theExchange in 2012

commenced financial literacyprogramme as a first step inprotecting investors.

“This programme aims toenhance investors’understanding of the basics ofinvesting around portfolioconstruction, asset allocationand risk diversification. The“Investor Clinic” aspect of theprogram, which is a flag shipproduct for our financialliteracy efforts, has beendelivered in partnership withstellar organisations such asMorgan Stanley, StanbicIBTC, Greenwich Trust andFBN Capital, just to name afew.

“These have primarily beenfocused on particularsegments of the investingcommunity to discuss the finerdetails of investing and toshed more light on the capitalmarket ecosystem,” he said.

Flour MillsinvestsN220b inagro-alliedbusinesses

Flour Mills of NigeriaPlc has emerged as oneof the biggest food

companies in the country withover N220 billion investmentsin agro-allied businesses.

The company has alsorewarded the distributors ofGolden Penny Products, fortheir loyalty to the brands.

Speaking during thecustomers forum in Lagos, Mr.Paul Gbededo, GroupManaging Director, said, “Asone of the largest agro-alliedinitiatives in Nigeria, FlourMills has invested over N220billion in agro-alliedbusinesses which extend tolarge scale cultivation ofsoybean, maize, palm, rice,and cassava.

“From cultivation, we arealso processing these rawmaterials into animal and fishfeed, edible oils, rice, sugarand high quality cassava flourin different parts of thecountry.”

Shares near all-time high; bondyields slip to 11-month lows

Global equity marketshovered just off all-time highs last week

as investors brushed off aweaker-than-expected readingon the U.S. economy, whilebenchmark U.S. Treasuryyields fell to 11-month lows. OnWall Street, the S&P 500 hitanother intraday high early inthe session despite first-quarterGDP data showing the U.S.economy contracted onepercent. Better-than-expectedjobless claims pointing to astrengthening labour marketand merger and acquisitionactivity also boosted sentiment.

The dollar trimmed earlylosses against major currenciesas traders focused on signs ofthe U.S. economy strengthening“Once you get beyond theheadline number and lookunder the hood, things don’treally look so bad,” said BorisSchlossberg, managing directorof FX strategy at BMO CapitalMarkets in New York.“Inventories were to blame fora lot of it and that bodes wellfor the future.”

CMYK

Vanguard, MONDAY, JUNE 2, 2014 — 25

Corporate Finance

LAUNCH - From left: Ms Deola Oyegbade, Divisional Head, SME, Mainland, GTbank;Mr. Ayodele Adewumi, Divisional Head, SME, Lagos Island and Lola Odedina, Head,External Communications and Public Affairs during the GTBank SME Markethub launchin Lagos. Photo Lamidi Bamidele.

The Central SecuritiesClearing System,CSCS Plc, said it is

enhancing its capacity to growits revenue by 15 percent onannual basis.

Consequently, the companysaid it has started investing innew product creation as wellas diversifying into otherbusiness areas, adding that itis positioning itself to sustainthe continuous patronage ofkey stakeholders throughactive engagement with themarket with the aim ofincreasing revenue growth.

Furthermore, CSCS notedthat it will engage inaggressive marketing ofexisting and potential servicesand re-sourcing the businessdevelopment center foreffective customer servicedelivery.

In his address to themembers of the company atthe 38th annual generalmeeting in Lagos, theManaging Director, Mr. KyariBukar, said in order to increaseannual contribution of newand ancillary products, thecompany will embark on hugeinvestment in research anddevelopment to determine themarket needs, saying that thisformed the foundation fordevelopment of new products

CSCS targets 15% annual revenue growth

that offer value added CentralSecurity Depository (CSD) andclearing house services tomarket participants.

On information technologyupgrade, he said, “As a CSD,technology is very instrumentalto the success of our businessas it allows for the securetransmission andmanagement of large amountsof information. It is thereforeimperative that we implement

the best technologies toachieve business growth.” “Ina bid to improve post tradeservices to market participantsand the recent evolving trendsin the Nigerian capital market,CSCS has commissioned the“CSCS new CSD.

Platform Project”. This projectis geared towards providingthe organisation with a worldclass platform that will provideefficient clearing, settlement

and depository services tothe Nigerian capital market.

“To improve our servicesand efficiently manage thepositive growthexperienced by the capitalmarket with theintroduction of newproducts, services andmarket participants, thenew CSD application willprovide seamlesscommunication amongmarket participants. Itwould also have the abilityto support real-timeprocessing, supporte l e c t r o n i cdematerialisation, inter-account transfers, corporateactions and accountclosures. This project hasbeen commissioned with itsestimated completion datescheduled for the thirdquarter of 2015,” he added.

He also pointed out thatthe volume of dematrialisedshares within the yeardropped to 44.3 billion incontrast to 44.5 billionrecorded in the previousyear. In his address, thechairman, Mr. OscarOnyema, said that in termsof expansion of itsoperation, CSCS had in2013 commenced theclearing and settlement oftransactions on the Over-the-Counter platforms tothe NASD and the FinancialMarkets DealersQuotations (FMDQ)platforms, adding that thecompany has beenengaged to provideclearing, settlement andwarehousing services fortransactions that will takeplace on the floor of theNigerian CommodityExchange (NCX).

In a bid to empower small and mediumscale enterprises operating in the

country and improve their visibility in thee-commerce space, Guaranty Trust Bank,weekend launched e-commerce portal forlocal SMEs – The SME Market Hub.

The GTB SME Market Hub, the first ofits kind, is a free, secure e-commerce andbusiness directory platform wherebusinesses can list, promote and sell theirproducts and services online.

On the SME MarketHub platform,customers receive free web page with e-commerce tools, unique SME Market Hubwebsite address, personalised onlinestorefront, shopping cart with noconsignment fee, inventory paymentgateway, as well as order and enquirynotifications.

Addressing the newsmen at the formallaunch in Lagos, Lola Odedina, Head,External Communication and Public Affairs,said the platform is open to small to mediumbusiness owners from every sector of theeconomy that have registered business inNigeria and operate GT Business Account,Corporate Current Account or GT MaxAccount.

She noted that the e-commerce andbusiness directory portal is part of GTBank’sstrategy to empower and support NigerianSMEs and also contribute to the growth and

Stories ByNKIRUKA NNOROM

GTBank empowers SMEs, launchese-commerce portal

development of the Nigerian economy.She said the portal is designed to enable

Nigerian entrepreneurs migrate theirbusinesses online and take advantage ofthe vast international and local salesopportunities within the e-commerce space.

“SME owners will also have access to awide variety of business tools that willenhance profitability as well as acommunity that will allow them forgerelationships with other business owners,”she said. She noted that GTB has registereda total of 5,200 (five thousand, twohundred merchants) todate, saying that theGhana and East African versions will belaunched before the end of the years asboth countries have critical mass of smallbusinesses.

“There is no getting away from the factthat economic conditions remainchallenging for small and medium scaleenterprises (SMEs) in Nigeria. It ishowever vital that this integral sector ofthe economy gets all the support it needsto drive growth and development.

“With the introduction of the SMEMarket Hub, GTBank has provided SMEsan e-commerce platform that allows smalland medium business owners create andmaintain an online presence and expandtheir business frontiers to new markets andmillions of buyers that are online.

A United KingdomDepartment for

International Development,DFID, programme - Growthand Employment in States(GEMS3), is working closelywith the states in Nigeria toimprove tax payment optionsand to reduce nuisance taxesto make life easier for allLocal Government Areas,LGAs and taxpayers.

To this end, GEMS3 hasentered into partnership withthe Kogi State government todeploy advanced systems inthe state’s payment system.

According to a statement byVictoria Ndoh, spokespersonfor the programme, theproject, which is funded byUnited Kingdom DepartmentFor InternationalDevelopment, DFID, isaimed at promoting growthand employment as it focuseson areas of tax administrationand harmonisation, landadministration andinvestment promotion at bothstate and local governmentlevels.

DFID partners statesgovernments toboost IGR

By KAYODE AMOLEGBE

‘Fidelity Bankadjudged mostoutstandingFamily Friendlybank

Fidelity Bank has beenadjudged the bank with

the most outstanding familyfriendly policies in Nigeria.

In a survey conductedamongst corporateorganisations in Nigeria bythe Institute for Work andFamily Integration (IWFI) incollaboration with the LagosBusiness School and the GreatPlace to Work Institute, theinstitute said that FidelityBank emerged tops in all themeasuring indices.

Specifically, the IWFI, whichhas consistently promotedwork family balance and goodwork ethics, through policyresearch, seminars,conferences, and training;working with majororganisations and institutionsin the last eight years with itsprincipal objective of buildingbetter family, better businessand better society said thatthey were impressed withFidelity Bank’s efforts atimproving the welfare of itsstaff members.

26 —Vanguard, MONDAY, JUNE 2, 2014

Vanguard, MONDAY, JUNE 2, 2014 — 27

CMYK

Commodity index

May 23 -May 29, 2014

Micro-Finance

Honeywell Flour Mills Plc has reiterated itscommitment to positively impacting on

humanity by giving back to the society as part ofCorporate Social Responsibility (CSR) activities.

The company paid courtesy visit to some orphanagehomes in Lagos, including; SOS Village, Isolo, LittleSaints Orphanage and Bethesda Home for the Blind,where it donated products, equipment, cash, andalso sponsored a jolly train ride with children ofselected schools in Lagos, as part of the Children’sDay celebration. The train ride, took off from EbuteMetta Station went through Oshodi, Ikeja, AbuleEgba to Ijoko and back to Ebute Metta.

Managing Director, Mr. Lanre Jaiyeola, said thatthe company will continue to support good cause inthe society especially those that have direct impacton human development. He added that it willcontinue to seize opportunity to make its impact feltin the society, listing such opportunities to include:support for sporting events, entrepreneurshipprograms, vulnerable groups, and others. Jaiyeolasaid, “It is our own way of adding value to the peoplethat we believe should have needs within the society,and our own way to alleviate poverty, suffering inthe land.”

The Enugu basedU m u c h i n e m e r e

Pro-credit Micro FinanceBank (UPMfB) willcommence Cashlesspolicy initiative asestablished by CentralBank of Nigeria (CBN)on July 1, 2014, whileextending its operation toFederal CapitalTerritory, Abuja.

As a CBN approvedState MFB, the bank isauthorized to have abranch at the capital cityof the country, hence itsdecision to extend itsoperations to Abuja,which is the country’scapital territory.

Speaking at a jointsession of the bank’sInvestors and CustomersForum cum ExtraordinaryGeneral Meeting atEnugu, ManagingDirector, UPMFB, Mrs.Nnenna Ekete, said thatit is not going to be takenunawares by the deadlineof the apex bank, as it isset to implement and

UPMfB kicks off cashless policy,extend operation to AbujaStories byPROVIDENCE OBUH

integrate the newcashless policy into itsbanking operations.

She said, “the bank hasplans to embark on theacquisition, installationand operation of softwareapplication that willenable our customers toaccess their funds easilyand transact otherfinancial businesses withtheir accounts with ourbank at any point in thecountry, through access

to Point of Sale (PoS),ATM, mobile banking,mobile money, e-payments, debit/creditcards and e-bankingservices.”

She assured customersof the bank that thenecessary softwaret e c h n o l o g i c a lapplications for easycashless banking will bein place by the bank atits various branches byJuly.

As part of CorporateS o c i a l

Responsibility (CSR) cumChildren’s Daycelebration, AccionMicrofinance Bank(AMfB) donated writingmaterials, bags, others topupils of AgidingbiPrimary School andOlomu Primary SchoolAjah.

Speaking during thepresentation ceremony,Managing Director/ChiefExecutive of the Bank,Ms Bunmi Lawson, said,

Children's Day: AMfBdonates items to pupils

“We are happy tocelebrate Children’s Daywith the children andmotivate them to bring outtheir best by believing thefuture is bright. We alsouse this opportunity toencourage the authoritiesto bring back our girls aswe believe it is theresponsibility of everyoneto protect children.”

She said that the bankis committed to enrichingthe lives of youngNigerians througheducation focusedcorporate citizeninitiatives and hascontinued to demonstratethis in a variety of projectswhich include thepresentation ofeducational material toschools. “There are alsoplans for employees of thebank to donate their timeand resources to volunteerin their host communities.”

In his remarks,Education Secretary, Eti-Osa Local GovernmentEducation Authority, Mr.Taiwo Lukman, expressedgratitude to the bank,encouraging the childrento focus on their studiesso as to have a brightfuture.

ICAN captures 58 schoolsfrom Lagos Mainland

The Lagos Mainlandand District Society

(LMDS) of Institute ofChartered Accountants ofNigeria (ICAN) hascaptured about 58schools for its annualCatch Them Young andQuiz Competition forstudents of SecondarySchools in its catchmentarea.

Out of the 58 schools,only 15 qualified for thegrand finale competitionand some of the areascovered by the LMDSincludes Apapa,Surulere, Shomolu, Yaba,Ebute-Metta, Ido,Iganmu, Akoka, Fadeyi,Obanikoro, Anthony,Jibowu, Ijora,Palmgrove, Onipanu,Oworoshoki, Bariga,Gbagada, Alagomeji andits environs.

President of ICAN,Alhaji Kabir Mohammed,said that the initiative hastaken place in almost allparts of the country andso far observed in about15 district societies suchas: Abakaliki, Owerri,Port Harcourt, Lagos,Ikorodu, Ijebu Ode,Kanu, Jigawa, Sokoto andKatsina.

Mohammed revealedthat the two bestqualifying students whodid outstandingly inIjebu Ode was givenscholarship to anytertiary institution of theirchoice in Nigeria tostudy accountancy.

“The Lagos MainlandDistrict Society of ICANis following the foot stepof the council to theextent that we need togrow attention ofbearing in mind that wehave in this countryvalues and ethics of ourprofession, integrity andaccuracy and for them tobe able to do that theyneed to be a member,that is why we think thatwe should start from thegrass root and choosethe best minds andencourage them.

Honeywell celebrates with SOSvillage, little saints orphanage,others

capital to productive sectors offersunrivalled economic and socialopportunities. To take full advantage ofthem will require skillful managementand vision.

Technological challenges:Technological innovation offers greatpossibilities. It can help support globalintegration, improve productivity, andfoster inclusion. Harnessing its powereffectively and efficiently is thechallenge.

Environmental challenges: Climatechange and sustained demand growthpress on the sustainability of naturalresources - further exacerbatinginequality and exclusion. The challengeis to implement policies to foster growththat is, in turn, inclusive andenvironmentally sustainable.

28 —Vanguard, MONDAY, JUNE 2, 2014

Interview

WHILE Nigeria celebrated the15th anniversary of the return

to civil rule Thursday May 29, orethan 300 leading policymakers fromAfrica converged in Maputo, capitalof Mozambique to take stock of thecontinent’s economic performance.

The two-day meeting, tagged Afri-ca Rising will assess Africa’s in-creased resilience to shocks and on-going economic policy challenges.Managing Director of the Internation-al Monetary Fund, Ms Christine La-garde in a keynote address charted aroadmap for the summit, which, IMF'sSenior Communications Officer incharge of Africa, Ismaila Dieng, saidwill also focus on how best the conti-nent can sustain the current growth.

Excerpts from Lagarde's address:This conference offers a unique

opportunity to reflect—together—on thelessons learned from Africa’s successand the challenges ahead. There is stillmuch to be done. The continent is verydiverse, and some countries risk beingleft behind, especially those faced withrecurring conflict. In others, the rapidgrowth is yet to be widely shared acrossthe population, with many Africansfailing to see the fruits of economicsuccess. In that spirit, I would like toshare with you three perspectives:Where we stand— taking stock ofAfrica’s achievements; What near-termand longer-term challenges areemerging; and What are the key policypriorities to address these challengesand help deliver on the promise ofAfrica’s future.

Where We Stand—Africa’s Take-offLet me start with where we stand. Sub-

Saharan Africa is clearly taking off—growing strongly and steadily for nearlytwo decades and showing a remarkableresilience in the face of the globalfinancial crisis.

Economic stability has paid off. Morethan two-thirds of the countries in theregion have enjoyed 10 or more yearsof uninterrupted growth.

This growth has delivered a moreeducated population, with significantdeclines in infant mortality. In Benin andMadagascar, for example, primary

Africa Rising:Building to the ,By CHRISTINE LARGADE

school enrolment has increased by morethan 50 percentage points. This may befrom low levels, but it is still a hugeimprovement.

And for good reasons, Africa is now agrowing investment destination for bothadvanced and emerging economies—with a record $80 billion inflow expectedthis year. Indeed, it is no surprise that‘frontier economies’ such as Kenya,Uganda, and Botswana are challengingold stereotypes and roaring loud asAfrica’s lions. And yet, the tide of growthhas not lifted all boats. Poverty remainsstuck at unacceptably high levels—stillafflicting about 45 per cent of theregion’s households. Inequality remainshigh. And some countries, still facingrecurring internal conflict, arestruggling to exit from fragility.

Africa’s success journey has beentruly remarkable. But if the global crisishas taught us anything, it is theimportance of making the benefits ofgrowth more broadly shared. Wheneveryone benefits, growth is moredurable. Over the years, the IMF hasbeen a close partner in Africa’sjourney—including during the crisis.We have listened, we have learned, andwe have responded.

We have reformed our lendinginstruments to increase access andflexibility to countries in need; extendedour zero-interest policy; andstreamlined conditionality.

We have tailored our policy advice tobetter address the very specificchallenges facing the region. And wehave supported this advice with five

regional technical assistancecentres—in Gabon, Ghana,Côte d’Ivoire, Mauritius andTanzania. Today, the largestshare of IMF’s capacitydevelopment services isdevoted to Africa. We lookforward to continuing andstrengthening this fruitfulpartnership.

Challenges ahead—Near-term worries and longer-term challenges

Africa’s future lies withitself and its people. True, theoutlook for the region is verypositive. Africa is expected togrow by about 5.5 per centthis year and next, and thepoorest countries evenfaster, close to 7 per cent.

But it must keep a firm eyeon what’s going on beyondits horizons. Globally, evenas the world turns the cornerof the Great Recession, therecovery remains weak anduneven. What does thismean for Africa?

Near- term worriesIn the near term, the region’s outlook

could be clouded by three main worries:slower growth in advanced economies,and in particular emerging marketeconomies which are major tradingpartners for Africa; lower prices forsome commodities; and tighteningexternal financial conditions andpotentially increased market volatilityas monetary policy is normalized.Policymakers will no doubt have theirhands full. But they know what to do.The IMF stands ready to help with itspolicy advice, its technical assistance,and if needed, financial support.

Longer-term challenges

Beyond these more immediateworries, there are a number of

longer-term challenges that candramatically affect the outlook for Africa;some for the better; others not so much. Demographic challenges: Africa is theyoungest continent in the world. By2040, the continent is projected to boastthe largest labour force in the world -one billion workers strong - more thanChina and India combined. Channelingthis increasing reservoir of human

,

,

•Christine Lagarde

Africa mustkeep a firm eyeon what’s goingon beyond its

horizons

Transparency canhelp increase

accountability andhelp ensure that

these resources areharnessed for the

benefit of all

Vanguard, MONDAY, JUNE 2, 2014 — 29

Interview

Future

,

Building to the future—Three policypriorities

So what are the policy priorities toensure that these challenges becomeopportunities? I see three: buildinfrastructure, build institutions, andbuild people.

Build infrastructure

First, build infrastructure—energy,roads, and technology grids.

These are the foundations of any strongand durable edifice. What does thismean in practice? Closing Africa’sinfrastructure gap.

Over the past three decades, percapita output of electricity in Sub-Saharan Africa remained virtually flat.Only 16 per cent of all roads are paved,compared with 58 per cent in South Asia.These shortfalls represent huge coststo businesses - and to people. Manycountries in the region are takingencouraging steps to close thisinfrastructure gap. In Ethiopia andMozambique, for example, investmentsin the energy sector are being scaledup, including through projects thatpromote cross-border trade in electricity.Kenya and Côte d’Ivoire are alsoinitiating regional infrastructureprojects in electricity, and road andrailroad networks.

These investments are critical forgrowth to be sustained and broadened.High quality infrastructure can be amagnet for foreign investment. It canaccelerate diversification andemployment creation, and supportfurther regional integration.

Yet the costs of closing thisinfrastructure gap can be daunting. Theinvestment needs for the region areestimated at about $93 billion annually.In most cases, the investments are largeand upfront. They need to be carefullyselected, managed and implementedwithin a medium- to long-term budgetperspective. Here, the Fund can help.We are working with many of ourmember-countries through our capacitybuilding centres and on-the-groundtechnical assistance to strengthen publicinvestment and debt managementcapacity. This helps to put thesecountries in a much better position totake advantage of increasing financingoptions.

Build institutions

Let me turn to the second policypriority: build institutions. This

means governance, transparency andsound economic frameworks. We talkedabout the foundations for the building;now think of institutions as the systemsthat ensure that the building functionsproperly and lasts a long time - like theheating, cooling and water systems.

We all know that Africa hastremendous potential. It is home tomore than 30 per cent of the world’smineral reserves. Properly managed,these endowments offer unparalleledopportunity for economic growth anddevelopment. Moreover, theseresources can be instrumental inrelieving the large constraints ininfrastructure that I just talked about.

Yet, and let me be frank, in too manycountries, the rents from extractiveindustries are captured by just a few.Mining can account for an importantshare of output and export earnings, butoften contributes relatively little tobudget revenues and job creation. Thiscorrodes the fabric of the economy andits social cohesion.

What can be done? Strengthening theinstitutional and governanceframeworks that manage theseresources is a good place to start.Transparency can help increaseaccountability and help ensure thatthese resources are harnessed for thebenefit of all.

Many countries have taken steps inthis direction. For example, SierraLeone and Uganda are setting newfiscal rules in anticipation of large

resource flows. Côte d’Ivoire has alsoimplemented a new legal framework forthe mining sector that would help attracthigher foreign direct investment.

These are areas where the IMF hashelped bring a wide range of cross-country experience to bear. And we lookforward to helping even more.

Build peopleSo, we have the foundations of our

building (infrastructure); we have setup the systems to ensure that itfunctions effectively and efficiently(institutions); now we need to let thepeople in. This brings me to my thirdpriority: build people - children, youth,workers, and in particular, women.

Let me be clear: Africa’s greatestpotential is its people. They are the keyfor the region to fully capture thedividends from population growth. Bysome estimates, a one percentage pointincrease in the working age populationcan boost GDP growth by 0.5 percentagepoints. This is huge.

For this to happen, however, ‘good’jobs need to be created in the privatesector. Today, only one in five people inAfrica finds work in the formal sector.This must change. With wider accessto quality education, healthcare andinfrastructure services, it change.

Similarly, technology can be tappedto extend the reach and access offinancial services to millions of people.Here, Kenya’s experience offersvaluable lessons to the rest of the worldon how to empower the poor throughfinancial access.

By combining mobile banking withfinancial services provision, 75 per centof Kenya’s population now has accessto financial services. Crucially, it is thepoor that have benefited the most fromthis expansion.

Which brings me to a topic that is closeto my heart: women. I know that mostof the women in Africa cannot afford notto work. But when they do, they aremostly employed in informal activities.We all know what this means: low

productivity, low incomes, lowprospects. We also know the constraints:access to education, credit, and markets.

The gains to be made by overcomingthese constraints are immense—particularly through girls’ education. Bysome estimates, the economic loss indeveloping countries from theeducation gap between girls and boyscould be as high as $90 billion a year -almost as much as the infrastructure gapfor the whole of Sub-Saharan Africa!

As the old African adage goes: “If youeducate a boy, you train a man. If youeducate a girl, you train a village.”

My bottom line: invest in women. Ithas a great rate of return—economicallyand socially for the future.

Let me conclude:

We are all witnessing amomentous transformation in

Africa. Five years ago in Tanzania,Africa’s economies were underchallenge as the global economy facedits most severe crisis since the GreatDepression. We meet now inMozambique with an outlook ofoptimism and high hopes.

The opportunities are vast and thechallenges, while significant, can beovercome through sustained strongpolicies, both economic and social. Nowis the time to go further, to work togethertowards an inclusive, job-rich andsustainable growth strategy. Now is thetime to extend the gains that manycountries have enjoyed to those thathave been left behind by helping themovercome fragility and build stronginstitutions. I want to end by quotingfrom the words of Mozambique’snational anthem: “Pedra a pedraconstruindo um novo dia. “Stone bystone, building a new tomorrow,” thatis what Africa Rising is all about.

Africa Rising will benefit the lives ofpeople on the continent. Beyond that,Africa Rising will benefit the world. AnAfrica ever more integrated in the worldand the world learning from Africa.

,

,

Today, only one infive people in Africa

finds work in theformal sector. Thismust change. With

wider access toquality education,

healthcare andinfrastructure

services, it mustchange

30 — Vanguard, MONDAY, JUNE 2, 2014

CMYK

Homes & Housing Finance

Stories by YINKAKOLAWOLE, withagency report

Anambra setsup committeeon housing

Anambra Stategovernment has

inaugurated an inter-ministerial committee ondelivery of housing estates inthe state.

Governor Willie Obianoinaugurated the committee tobe chaired by Commissionerfor Housing and UrbanDevelopment, Mr. LawrenceChinwuba, in Akwa, the statecapital. He charged membersto provide first class housingestates, noting that was whypersons with experience inthe delivery of homes wereselected to constitute thecommittee.

The governor listed theterms of reference for thecommittee to include:identifying suitable andstrategic locations for theconstruction of housingestates; to resume theprovision of infrastructure inexisting government landslated for housingconstruction and to enter intopartnership with willingdevelopers on Public-Private-Partnership initiative with aview to providing decent andaffordable houses in well-planned environment.

Ogun to focuson affordablehousing

Ogun State governmentis set to focus more on

affordable housing and urbanrenewal to meet theyearnings of the people.

Governor Ibikunle Amosunstated this at the 2ndOgunState Investors’ Forum heldin Abeokuta recently.According to him, the stategovernment is committed tothe provision of housing forall; hence, it has evolvedcreative and participatoryprocesses between the publicand the private sectors toachieve affordable housingfor the people.

“The ultimate goal is tointervene in the housingdelivery process and ensurethat citizens own and haveaccess to decent, safe andaffordable housing,” Amosundeclared.

The governor said thegovernment had put in placevarieties of two-, three- andfour-bedroom housing unitsat Plainfields Estate; a 170-hectare site-and-servicesresidential scheme at Kobape;and MITROS City and NewTown in Isheri.

How to access theNational Housing Fund

The National HousingFund (NHF) scheme

was established by Act 3 of1992 to enable Nigerians inall sectors of the economy,particularly those within thelow and medium incomelevels who cannot affordcommercial housing loans,such as civil servants,traders, artisans, andcommercial drivers etc., toown houses.

The Act stipulates thatfunding of the scheme willcome from mandatorycontribution of 2.5 percentof monthly income ofNigerians earning N3000and above per annum, inboth public and privatesectors; commercial andmerchant banks to invest 10percent of their loans andadvances portfolio;insurance companies toinvest 20 percent of non-lifeand 40 percent life funds inthe housing sector, with 50percent of these directly inNHF and; financialcontributions of the FederalGovernment. The pool offunds created by thesebecomes available to anycontributor to borrow from,after contributing for aminimum of six months.

PurposeThe aims and objectives of

the fund include:Mobilisation of fund for theprovision of houses forNigerians at affordableprices; Ensuring constantsupply of loan to Nigeriansfor the purpose of building,purchasing and improvingof residential houses;Providing incentives for thecapital market to invest inproperty development and;Encouraging thedevelopment of specificprograms that would ensureeffective financing ofhousing development, inparticular low cost housingfor low income workers.Others are: Providingproper policy control overthe allocation of resourcesand fund between thehousing sector and othersectors of the Nigerianeconomy and; Providinglong term loan to mortgageinstitutions for on-lendingto contributions to the fund.

Any intending beneficiarymust be registeredcontributor and up to datewith his/her contributions.

BenefitsBenefits available to

contributors include:Housing loan of up to 90percent of the cost of thehouse; Interest on loansremains fixed throughoutthe life of the mortgage at 6percent per annum; Longperiod of repayment of upto 30 years; Contributions

can serve as additional oldage security; Refunds with 2percent interest on retirementand; Maximum loan of N15million can be borrowed.

EligibilityTo be eligible for the NHF

loan, a contributor interestedin obtaining NHF loan mustapply through a registeredand duly accredited mortgageloan originator, e.g. a PrimaryMortgage Bank (PMB), whopackages and forwards theapplication to FMBN.Applicants are required toprovide satisfactory evidence

of regular income. Deductedmonthly contributions mustbe remitted to FMBNpromptly, and at least 6months contributions shouldbe made.

Documents required toprocess NHF loan include:Completed application form;Photocopy of title documents;Current valuation report onthe proposed house to buy orbills of quantities (BOQ) forthe house to build and; Threeyears tax clearance certificate.Others are: Evidence of NHFparticipation; Copy of payslips for the previous threemonths and; Equitycontribution or personal stakeof 30 percent, 20 percent or10 percent depending on the

loan amount applied for.NHF loan cannot be used to

purchase piece of land tobuild a house. A prospectiveapplicant who wishes toobtain a loan to build a houseis expected to have his/herland as well as an acceptancetitle to the land prior to theapplication for NHF loan.

Contributors can apply asan individual for NHF loan todevelop a land or buy directlyfrom government consortestate or private estatedeveloper. A contributor canonly obtain NHF loan facilityonce in a life time. The onlycollateral needed for NHFloan is the property inquestion. No other collateralis required to secure the loan.

THE FederalGovernment has

announced the removal ofMr. Terver Gemade as theManaging Director of theFederal Housing Authority(FHA) following thedissolution of its interimmanagement team.

A statement by TundeIpinmisho, Head,C o r p o r a t eCommunications, FHA,said Engr. David Kpue hasbeen appointed as actingManaging Director of theorganisation. He wasdeputy general manager inthe Authority. An AssistantGeneral Manager, Mr.Jonah Saidu, has also been

FG removes Gemade as FHA bossdirected to take charge of theFinance department of theAuthority.

In their letters ofappointment, they weredirected to take chargepending the appointment ofa substantive management.

The statement noted thatGemade became ManagingDirector of FHA in May 1989.After he had completed hisfirst tenure of four years,government last year re-appointed him with a newteam to drive thecommercialization of theAuthority for an interim termof 12 months which wasrenewable subject to goodperformance.

While handing over,Gemade said he did his bestto fulfill the mandate of FHAduring his tenure.

Responding, Kpuethanked him for his serviceto the Authority and wishedhim well in his futureendeavors. Kpue urged himnot to hesitate to make hisexperience availablewhenever it was needed.

He urged the staff of theAuthority to brace up to thechallenge of meeting thehousing needs of Nigerians.He said he was satisfied thatthe Authority’s staff had theexpertise, experience andwill power required to turnthe Authority around.

Easy – to – construct prefabricated housing

Vanguard, MONDAY, JUNE 2, 2014 — 31

CMYK

32 — Vanguard, MONDAY, JUNE 2, 2014

Insurance

UNVEILING - From left: Acting Chief Executive Officer, Etisalat Nigeria, Mr. MatthewWillsher; Etisalat customers, Mr. Soni Irabor, Mr. Obi Somto, Mr. Mai Atafo and Director,Consumer Segment, Etisalat Nigeria, Mr. Oluwole Rawa, at the unveiling of Etisalat MobileNumber Portability (MNP) Testimonial Campaign, held at Eko Hotel & Suites on 28th May,2014.

The NationalI n s u r a n c eC o m m i s s i o n

(NAICOM) has said thatthe Associated Airlineaircraft that crashed lastOctober was not insured byany insurance company inNigeria.

Commissioner forInsurance, Mr. FolaDaniel, who disclosed this,denied knowledge ofpayment of claims tofamilies of victims ofAssociated Airline.

He refuted claim by thecompany that theCommission was contactedfor the presentation ofcheques to the families ofthe victim.

He insisted that theCommission was notinvited for thepresentation, adding thatthe claim by the airline wasuntrue.

It will be recalled thatearly this month AssociatedAirline said it had paid$480,000 (about N77m) ascompensation to thefamilies of those who diedon October 3, 2013, whenits aircraft crashed.

The aircraft, which wastaking the corpse of aformer Governor of OndoState, Dr. OlusegunAgagu, to Akure for burial,came down shortly aftertake-off and killed 13 out ofthe 20 people on boardinstantly.

Associated Airlines plane notinsured in Nigeria — NAICOMStories byROSEMARY ONUOHA

The airline in a statementsaid that each of the relationsof the 16 victims was paid$30,000 as the first tranche ofcompensation in accordancewith the International CivilAviation Organisationstandards.

International flights aregoverned by the Montreal

Convention, a global aircarrier treaty adopted in 1999by ICAO, a United Nationsagency.

The Montreal Convention of1999 states that airlineswishing to operate ondomestic routes shall adoptthe approved liability limits inline with the requirement of

ICAO, which states that theairline shall paycompensation, in the case ofdeath, or injury ofpassengers, of $100,000 perperson; destruction, loss ordelay of baggage shall be$1,000; and destruction, lossdamage or delay of cargoshall be $20.per kilo.

The carrier said in thestatement that the balance of$70,000 per victim would bepaid as quickly as possiblewhen other matters pertainingto documentation would havebeen resolved. The statementsaid the compensation waspaid to the relatives at theairline’s Lagos office, addingthat they were individuallypresented with a “certificateof release and discharge”.

The Chief OperatingOfficer, Associated Airlines,Mr. Taiwo Raji, stated thatthere had been lots ofinsinuations that the carrierwas shirking its responsibilityto the victims’ families.

He, however, said that theairline had to do a lot ofpaperwork and had beenputting things in place toensure that the relatives weresettled as quickly as possible.

“We have been meeting withour insurers but it has beenvery slow. We are workingwith them to resolve thewhole issue. The insurers andthe airline have resolved topay 30 per cent of what shouldbe paid now, while the 70 percent balance will also be paidas quickly as possible,” hesaid.

The National Pension Commission,PenCom, said a number of measures

have been adopted in the pension industryto improve service delivery.

Acting Director General of PenCom,Chinelo Anohu-Amazu, made the assertionat the 8thannual business law conferencein Lagos while delivering a paper titled“Contributory pension scheme as a catalystfor economic development,” in Lagos lastweek.

Anohu-Amazu said that part of themeasures on the part of PenCom is theestablishment of zonal offices in the sixgeopolitical zones of the country to amongothers attend to complaints, enquiries andthe provision of other customer services toall stakeholders as well as the establishmentof contact centre to centralize, track andresolve stakeholder complaints.

On the part of Pension Fund Administrators(PFAs), Anohu-Amazu said that the measuresadopted include Know Your Customer (KYC)techniques for proper monitoring of clientneeds and client feedback mechanism.

The PFAs also adopted the development offollow-up models for settlement ofoutstanding client issues as well asestablishment of contact centres.

According to the Acting DG, pension assetshave grown to N4.13 trillion while theproportion of the assets to Nigeria’s GDPgrew from 1.4% in 2006 to 9.5% in 2013, whichrepresents an average yearly growth of 30%.

NAICOM targets improved service deliveryShe said that the most significant proportion,

about 63% of the assets (equivalent to N2.64trillion) was invested in FGN securities andthe asset invested in authorized markets withportfolio limits.

On the role of pensions in an emergingeconomy, Anohu-Amazu said that it providessocial security by alleviating old age poverty;ensures that every pensioner receives pensionas and when due; stems further growth ofpension liabilities; fully funded towards futurepension obligations as well as curtailment ofthe burgeoning pension liabilities of federaland state governments.

She said that the Contributory PensionScheme, CPS, supports economicdevelopment; is an efficient avenue forinfrastructure and economic development; aswell as provides availability of investible fundsto support the development of the real sector.

According to her, the CPS stimulates jobcreation through employment generation bothdirectly and through third party serviceproviders to the pension industry.

She said that the number of registeredcontributors is over 5,980,415 as at February2014 even as there are 95,840 retirees currentlyreceiving pensions as and when due underthe CPS as at March 2014.

“Total pension fund assets had grown to overN4.13 trillion as at March 2014. Nigerian CPShas become a model for other African countries:Study visitations from Ghana, Malawi,Uganda, Tanzania,” she said.

China said it will cut thereserve requirement

ratio for some of the nation’sbanks, the government’slatest step to support growthin the world’s second-biggesteconomy.

Policy makers will“appropriately lower thereserve requirement forbanks that have extended acertain amount of loans torural borrowers and smallercompanies, the cabinet saidyesterday after a regularmeeting led by Premier LiKeqiang. It didn’t give moredetails about the reduction.The State Council alsopledged to fine-tune policywhen needed, whilereiterating it will maintain aprudent monetary stance.

China’s economy isforecast to expand 7.3percent this year, whichwould be the weakest pacesince 1990, according to aBloomberg survey ofanalysts this month. PremierLi called last week onregional authorities to helpstabilize expansion as heseeks to ensure that thegovernment meets its goal ofabout 7.5 percent growth for2014.

China to cutreserverequirement rationfor some banks

UBS probed overmoneylaundering,organised crime

UBS AG, Switzerland’sbiggest bank, is being

probed by Belgianauthorities over allegationsof money laundering andorganised crime. JudgeMichel Claise is leading theinvestigation, Anja Bijnens, aspokeswoman for theBrussels prosecutor, said bytelephone yesterday.

UBS employeesapproached wealthy Belgiantaxpayers including chiefexecutive officers andsportsmen over a 10-yearperiod, encouraging them toopen undeclared accounts inSwitzerland, M... Belgiquemagazine reported, withoutsaying where it got theinformation.

UBS Belgium, the bank’slocal arm, helped to organizethe transfer of large amountsof money to Switzerland, themagazine said.

Prosecutors began theprobe at the end of last yearand it is based on “verydetailed testimony, themagazine said.

CMYK

Vanguard, MONDAY, JUNE 2, 2014 — 33

People in Business

C a n a d i a n - b o r nJelena Zivkovic isthe Acting Director,

Academic Advising &Retention at the AmericanUniversity of Nigeria (AUN),Yola, Adamawa State. In thischat with Vanguard, Jelenawhose real interest isentrepreneurship, especiallywomen entrepreneurs, saysnorthern women who werehitherto very conservative,are beginning to enter theworkplace or business placeso she decided to find outwhy.

Excerpts:

What led to the study?We know the northern

region is generallyconservative and there arecertain stereotypes andexpectations on women andwomen in business is not oneof them. It’s more like womenhave their role at home but weare seeing a trend, wheremore and more women areentering the workplace orbusiness place so I was kindof curious why they are doingthat. What is going on in theirlives and family structure thatis supporting them to do thatbecause surely, they cannotjust go on their own, theremust be support from thehusbands. I met with about 60women entrepreneurs inthree states – Abuja,Adamawa and Kano over thelast couple of years and Iwanted to understand and tryto get a better picture of howthey became entrepreneurs.

What do you think couldhave led them into small-scale businesses?

It could be a cultural shift,a mindset or as a result offinancial need. I only have 60women at this stage and I amhoping to get up to 100. I amnoticing that these women areobviously getting supportfrom their family members.They see it as an economicneed and contributing to theirfamilies’ economies.

By EBELE ORAKPO

,

,

More Northernwomen arebecomingentrepreneurs— Jelena Zivkovic

What kindof businessesare they into?

They are intoinformal businesses.Some are hair dressers,tomato sellers, wholesalersfor clothing, baby clothes,retailers, I even met a lawyerwho has her own practice; youknow, going against the norm.All the women I met agreedthat they are seeing morewomen entrepreneurs.

How easy was it gettingthe support of their

husbands?They said they needed the

permission of the menotherwise it would not havebeen possible. I know offamilies with 20 children andnone has the shoes, and theyare not in school but the malefamily members just refusethat their women go to work.This would have beenenough reason for the men toencourage the women to workso they can contribute to theupkeep of the children. So Idon’t know at what point weare going to see what the menreally need to encourage theirsisters, mothers and wives.

Remember that if societyaccepts it, then it is a loteasier but if society does notaccept it, it will be verydifficult. So this is what I amfinding fascinating and tryingto understand. I noticed thatwhen I asked the women why

While women in other partsof the world see it assomething for personaldevelopment; to make thembetter people, something thatwill make them fulfilled, buthere, the women are drivenby external influences –children’s education andprovision for the family.

I asked a woman why sheis selling soft drinks and shesaid: “Because I will haveextra money to make a reallygood meal for my husband.”She said her husbandcompliments her on thewonderful meals withoutasking her where she gets themoney from. Then she saidthat more and more women intheir society now come outwith make-up and dressdifferently so she is worriedthat they may take herhusband away from her soshe has to work to make moremoney to make good foodbecause she feels that willmake the husband stay withher. Meanwhile, she doesn’ttell him where she gets themoney from neither does heask. And I said: “ Wow! That’sa very different perspective.”

they went into business, mostof them said they were doingit to be able to send theirchildren to school - but I rarelyheard any of them saying shedid it for her personaldevelopment or satisfaction.So they don’t see being anentrepreneur or getting intothe business world asfulfilling their own desires.

A f r i c a ' sbiggest fundmanager CEOr e s i g n s

Elias Masilela resigned asthe chief executive

officer of South Africa’sPublic Investment Corp.,Africa’s biggest fundmanager and the largestshareholder on theJohannesburg stockexchange. Masilela, 50, willtake outstanding leaveimmediately and officiallystep down on June 30 aftermore than three years in thejob, the Pretoria-based PIC,which manages 1.6 trillionrand ($153 billion) in assets.Chief Financial OfficerMatshepo More will be actinghead of the manager of thepension funds of SouthAfrican state workers. ThePIC has used itsshareholding to preventforeign takeovers of SouthAfrican companies includingpharmaceuticals makerAdcock Ingram HoldingsLtd. (AIP) and to force thedeparture of the chiefexecutive officer of Togo’sEcobank Transnational Inc.(ETI).

O n l i n eb a n k i n gthefts inJapan promptsc o m p e s a t i o nr e t h i n k

The northernregion isgenerallyconservativeand there arecertainstereotypesandexpectationson women andwomen inbusiness is notone of them

•Jelena Zivkovic

Hackers stole nearly $2million from the online

bank accounts of Japanesebusinesses in April, a surgein theft that has promptedsome banks to curtail onlineservices and rethinkcompensation policies,executives and regulatorssay.

In April there were 50cases of theft from onlineaccounts held by Japanesebusinesses with nearly 200million yen stolen,according to a person withknowledge of the industry-wide tally, which has notbeen made public. That wasmore than the entireprevious year. Japanesebusinesses reported 34 casesof online banking theft forthe year ended March with atotal of 182 million yen ($1.8million) stolen, according todata released by theJapanese BankersAssociation.

Earlier this month, a seniorofficial with Japan’sFinancial Services Agencytold regional bankexecutives that regulatorswere concerned that onlinetheft could cause a chain ofsmall business failures andbankruptcies, according toparticipants who attendedthe closed-door meeting.

34 — Vanguard, MONDAY, JUNE 2, 2014

CMYK

Aviation

DRAW - From left: Vice President, Flight Operation, Arik Air, Capt Ado Sanusi, Arik AirAmbassador, Tobi Sanni-Daniel (Ice Prince) Senior Vice President, Commercial, Arik Air,Mr. Siva Ramachadran and Director, Consumer Protection, Nigeria Civil Aviation Authority(NCAA), Mr. Adamu Abdullahi, during Arik Air Brazil 2014 promo draw, held at ArikCorporate Headquarters, Ikeja, Lagos.

Chairman of theSenate Committeeon Aviation, Senator

Hope Uzodinma, has said theSenate Committee on Aviationdemanded explanations fromthe supervising Minister ofAviation, Dr. Samuel Ortom,on the N174 billion debtincurred by the ministry since2011 because the expenditurewas not within the ministry’sbudgetary framework. Andthe National Assembly,especially the SenateCommittee on Aviation wasnot informed about the debt.

According to SenatorUzodinma: “When we say weare not carried along it isbecause they didn’t allow theNational Assembly to playtheir own role.” Uzodinmagave this explanation while

Why we queried Aviation Ministry over174bn debt — UZODINMA

By LAWANI MIKAIRU& DANIEL ETEGHE

fielding questions fromAviation reporters at theMurtala MohammedInternational Airport, Lagosafter an oversight visit to theairport by the SenateCommittee on Aviation.

Explaining further, thechairman said: “Yesterday, (Monday), while we were atthe ministry., we discoveredand it was confirmed by the

ministry that under the phasethree remodelling that FAANand the Ministry of Aviationare indebted to the tune ofover N174bn, these are fundsnot within the budget.”

“You will agree with me,they didn’t carry us along andthat is why it is not in thebudget so we now queriedhow they over-committedgovernment without prior

approval. Now the only wayto go because some of thoseprojects are also as critical asimportant, we now said thatthere will be a committee bythe Federal Ministry ofAviation to look at thoseprojects and then reprioritisethem and see what theministry will be able toshoulder given the leanresources under their envelopfor 2014.”

“ And then talk with us andsee how we can work togetherto now look for money to paybecause there is already acommitment on the side ofgovernment. So you see whenwe say we were not carriedalong it is not because wedidn’t share money but it isbecause they didn’t allow thenational assembly to playtheir own role. “

Commenting on the Airfieldlighting hitherto handled byNigerian AirspaceManagement Agency,NAMA, Senator Uzodinmasaid “ now that the air fieldinglight has been transferredback to Federal AirportsAuthority of Nigeria, FAAN,we now know that FAAN hasthe technical and financialcapacity to rise up to thechallenges and ensure thatwe have all the runways lightup for night navigation, it issomething that we must dobecause we must get value toevery expenditure that wehave done.”

Airline Operators ofNigeria, AON, has

condemned the call for theinspection of aircraft by theNigerian Civil AviationAuthority, NCAA, in Nigeriaafter it has been flown into thecountry from abroad.

AON kicks against inspection of aircraft inNigeria

By LAWANI MIKAIRU& DANIEL ETEGHE

The chairman of AON,Captain Nogie Meggisonwho made the condemnationsaid such proposal couldmake Nigeria a dumpingground for bad aircraft if, afterbringing the aircraft into thecountry, it was discovered thatthe aircraft had a major faultwhich could not be repaired.

Captain Meggison stressedthat such proposal may affect

the safety and development ofthe aviation sector as aircraftthat do not fit into theNigerian NCAA’sspecifications in terms ofairworthiness could be flowninto Nigeria.

He said the usual practicewhere, aircraft safetyinspectors from the NCAA,travel to the maintenancefacility or the manufacturersfacility or country of sale tocarry out the necessary checkon the aircraft before beingflown into Nigeria is betterand safer.

He said defects or faultsfound by NCAA inspectors onany aircraft requiringrectification could be carriedout at the seller’s C CheckMaintenance RepairOrganization (MRO), beforesuch planes are flown intoNigeria.

According to him “If you saythe aircraft should be flowninto Nigeria first , beforeNCAA inspectors carry outtechnical checks on arrival inNigeria and it is discoveredthat there is a major defect orthe aircraft does not complywith Nigerian specification,what do you do “?

Members of the Air Transport ServicesSenior Staff Association of Nigeria,

ATSSSAN, have shelved its planned two dayswarning strike to protest the proposed mergerof aviation parastatals as feelers from thePresidency indicate that government hasbacked down on the planned merger.

After a two day National Executive CouncilMeeting at Ijebu Ode, Ogun State, ATSSSANsaid the information at its disposal shows thatthe federal government will not go ahead withthe planned merger. The union said in acommunique that “ the planned strike wassuspended due to the credible and

ATSSSAN shelves warning strike, as Presidencybacks down on merger

By LAWANI MIKAIRU &DANIEL ETEGHE

authoritative overtures from the Presidencywhich indicate that President Good luckJonathan has listened to the cries of the aviationworkers.”

It will be recalled that aviation unions andstakeholders have been kicking against thefederal government acceptance of the ChiefSteve Oronsanye panel which recommendedthe merger of Nigerian Civil Aviation Authority,NCAA, who is the regulator of the aviationindustry with service providers like NigerianAirspace Management Agency, NAMA, andNIMET who forecast weather.

ATSSSAN also explained that it consideredthe “ country’s keeping of global standards,procedures and practices in order to sustainsafety and security of the airspace and generaloperations.”

Managing Director ofWakanow Travels and

Tour Agency, Mr. ObinnaOkezie weekend identifiedtechnological problems as oneof the major setbacks in thetravel and tour agenciesstressing that one of itcomponent was transparency.

Disclosing this developmentto newsmen during the officiallaunching of the WakanowCorporate credit card inpartnership with DiamondBank in Lekki, Lagos, Mr.Okezie stressed that thecompany was introducing newtechnology so that they couldimprove on the technologywith the aim of doing well inthe travel market and on theweb.

He said “We are bringing intechnology so that we canimprove in order to be enabledto do well on the web and onthe mobile but like I saidleakages has been one of themajor challenges and MD’s ofmost of these corporations,transparency has been an issueand we have been able to tackleit to some extent, on the retailspace customers can go on ourwebsite and see the priceseven if you don’t book with us,you have an idea what theprices are so that is wheretransparency comes in.”

Technology majorsetback to travelagencies says Okezie

By DANIEL ETEGHE

Chairman of the NationalAviation Handling

Company (NAHCO) PLC,Mallam Suleiman Yahyah,has revealed that theestablishment of Free TradeZone at the MurtalaMuhammed Airport Lagos bythe company would attractnothing less than $500Million investment to thenation’s economy within fiveyears .

Speaking at the nationalexecutive council meeting ofthe Air Transport ServicesSenior Staff Association ofNigeria (ATSSSAN) in IjebuOde, Ogun State, Yahyah saidwhen the Free Trade Zone isfully operational, it wouldcreate employmentopportunities for quite anumber of Nigerians and theeconomy would surely feel theimpact of the operation of theFTZ.

NAHCO FTZ toattract $500Million investment

By LAWANI MIKAIRU

Vanguard, MONDAY, JUNE 2, 2014 — 35

CMYK

Looking from the factthat the funds from theFederation Account

are not judiciously utilised bythe states and they are notaccountable to the people andthe state legislature, ourconcern is that even if they getmoney from bonds and it isnot invested, the state will beleft with a huge debt burdenwhich will hurt in the longterm.” Dr Usman Muttaka,Head of Department ofEconomics, Ahmadu BelloUniversity, Zaria.

That statement credited toDr Muttaka was quoted in thePUNCH of May 25, 2014, ina report titled States raiseN514bn through bonds in fiveyears, written by SimeonEjembi. The report could nothave come at a better time aselections are about to be heldin Osun and Ekiti states in afew weeks; and the rest of thecountry next April. For toolong, elected governors in allthe states of Nigeria had takenit upon themselves to get theirstates into long-term debts,mortgage the future stream ofstate revenue long after theyhave left office – with hardlyanybody asking questions.And all these in a democracy.

League Table of BondDebts by states:

Below are the current levelsof bond debts owed by somestates. Those are not the only

STATE DEBT RANK1. Lagos N187b 5th

2. Bayelsa N50b 4th

3. Delta N50b 3rd

4. Osun* N30b 18th

5. Ondo N27b 11th

6. Edo N25b 23rd

7. Ekiti N25b 34th

8. Gombe N20b 36th

9. Imo N18.5b 13th

10. Kwara N17b 32nd

11. Ebonyi N16.5b 33rd

12. Niger N15.6b 12th

So you want to be governor in 2015?heavily indebted states,however. How much AkwaIbom and Rivers as well asOgun and Oyo states owe isnot included yet. Naturally,the State of Excellence shouldset the pace and Lagos Statehas not disappointed in thisrespect. But, some of the otherstates should give theirpeople a lot to worry aboutgiven their ranking, seebelow, on the revenue fromthe Federation Account –which still constitutes the bulkof their revenue. The figuresand the capacity of some ofthe states to carry the debtburden, in the event of adrastic downturn in crude oilprices, should frighten thosewanting to take over fromoutgoing governors.

· Osun has drawn onlyN30b out of the N60b itplanned to eventually borrowunder the state government’sdebt issuance programme;which means that the figurecould rise any time from now.

The first thing which strikesa casual observer is thepenchant for states with lowrevenue ranking to borrowcomparatively more than thosewith high revenue profile.Lagos is unique among all thestates on account of itsrelatively high InternallyGenerated Revenue, IGR, asa percentage of total revenuecollected. But, most other

states depend almostexclusively on the allocationsfrom the Federation Account.Most spend virtually everykobo collected now and theystill experience difficulties inmeeting their financialobligations. With federallyallocated revenue on thedecline, the states willexperience increasingdifficulties in meeting theirfinancial obligations. Debtdefaults loom as distinctpossibilities.

Ordinarily, there is nothingwrong with governmentsborrowing to finance capitalprojects. But bond financingis supposed to be used forprojects which will generatethe funds with which the loanwill be repaid. That meansthat funds meant for a project

cannot be diverted to anyother purpose –howeverurgent or meritorious. Inmature democracies, thelegislature ensures that this isdone. But, there is probablyno single independent StateHouse of Assembly in Nigeriatoday. All without exceptionhave become appendages orrubber stamps of the stategovernors.

It is, therefore, most likelythat some, if not most of thefunds collected for somespecific projects have beendiverted to other end uses. Itwould have been bad enoughif those projects are alsoyielding revenue to helprepay the debt. It is worsewhen they go into drain pipesleading inexorably to privatepockets.

The lame duck governors,who can keep their lawmakersat bay, have had the benefitof enjoying a free hand todisburse public funds as theychose. They have enjoyed thebenefits of exercising powerunchecked and they candepart while passing the billto their successors to pay.That explains why, with theexception of Osun and Ekiti,as well as Anambra and Edo,whose governors are notdeparting in 2015, everygovernor is eager to select hisown successor. None wants topass the baton of office to ahostile or uncooperative newgovernor who might exposeany shady deals that mighthave been associated withthose projects.

The would-be successorsare warned to be wary of thebooby traps awaiting them inthe Governor’s office. Onceyou have been imposed on thepeople by the outgoinggovernor, you will beexpected to live with theproblems which a mortgagedfuture will mean for the state.And, if it means sacking a lotof state workers, then theburden will be yours not thatof the man who got the stateinto the mess in the first place.

V i s i t :www.delesobowale.com orVisit: www.facebook.com/biolasobowale

Business & Economy

“

The N7 billion green fieldmanufacturing plant

investment of Al Grain FoodsLimited has delivered a newentrant into the noodles marketwith Al Grain noodles.

With the entrant consumersof noodles now have more

Al Grain enters noodles market withN7bn investment

By PRINCEWILLEKWUJURU &NAOMI UZOR

LAUNCH - From left: Managing Director, Nokia West andCentral Africa, Nick Imudia; Marketing Campaign Manager,Nokia West and Central Africa, Yetunde Ogeroju; Director,Consumer Channels Group, Microsoft Nigeria, MarkIhimoyan and Retail Customer Marketing Manager, NokiaWest and Central Africa, Olajide Adeyemi during the launchof the first Windows Dual SIM smartphone, Nokia Lumia 630,held at Protea Hotel, Ikeja.Photo byAkeem Salau.

about 10 years ago where youthslearn various trades such asfashion designing, catering,metal fabrication, welding andcarpentry. Anybody can registerto learn. It is for all categoriesof people. School leavers, dropouts, graduates, schoolcertificate holders andilliterates,” she said.

choices to make with the formalentry of the new product,positioned as a healthy choice.

Al Grain is a whole grainnoodles product manufacturedin the N7b green field plant ofAl Grain Foods Limited, Isolo,Lagos.

Economist and founder of theCentre for Values inLeadership Prof Pat Utomi leda star cast of guests frombanking, industry, government

as well as Nollywood at theunveiling of the product inLagos.

Speaking at the launch,Utomi called for greater focusby both Government andprivate sector players onagriculture and manufacturing,remarking that a synergybetween both sectors would bethe surest route to creating jobsto reduce unemploymentamongst Nigerian youth.

Utomi said he had tasted theproduct before the formalpresentation and confessed hislove for its formulation andpresentation. Professor Utomi

who was the guest of honour,disclosed: “I do not have aparticular food I crave for, butsincerely Al Grain noodle hasbecome part of my menu.”

Utomi confessed that he hasbecome a convert of the noodleand enjoined consumers toenjoy it and make Al Grain partof the items in their hampersalways. “I’m a convert to AlGrain.

Director says skills acquisition will reduceunemployment, security challenges

Director, Jobs Creation,Lagos State Ministry of

Special Duties Mrs BisiOnayemi has urgedgovernment at all levels to useskills-based education tomanage the nation’sunemployment and securitychallenges. Onayemi said inLagos that unemployment was

a major driver of kidnapping,armed robbery and the currentinsurgency. She said the state’s18 skill acquisition centres trained about 18, 000 peopleannually in various needs basedcrafts to make them self-employed and self-sufficient.

“We have skillacquisition centres started

League Table of Bond Debts by states:

36 — Vanguard, MONDAY, JUNE 2, 2014

Business & Economy

Luxury industry in Lagosworth $3bn — Polo MD

Limited and PoloAvenue.

The Financial TimesBusiness of LuxurySummit this yearattracted seniorexecutives, industryleaders, brand experts,executives and decision

makers of the luxuryindustry. Theses includethe likes of StellaMcCartney; ChristianLouboutin; CarolineBrown; LapoElkann;William Lauder; MarcoBizzarri and VanessaFriedman.

Firm plans sustainablecorporate governancepractice in Nigeria

By NAOMI UZOR

DCSL CorporateServices Limited

said it is set to enthronesustainable corporategovernance practiceswith the establishment ofan academy to properlyequip those who haveresponsibilities withinthe governanceframework.

In a parley withpressmen, the ManagingDirector, DCSLCorporate ServicesLimited, Mrs BisiAdeyemi, said they areof the opinion thatcorporate governanceserves as a tool forensuring accountability,transparency,responsibleand ethicalmanagement ofresources, adding that,good corporategovernance impactspositively on acompany’s operationsand acts as a panacea forcorporate failure.

She disclosed that theacademy is designed tobe a governance andcorporate secretarialtraining & resourcecentre of specializedlearning for companysecretaries, In-Houselegal counsel,compliance officers,interns and all thoseseeking training in theseareas and that theacademy would assistparticipants to have abetter understanding of

the principles of goodcorporate governanceand equip them with theknowledge required toassist their respectiveorganizations to imbibethese principles for theoverall benefit of allstakeholders.

“DCSL is a privatelimited liability companywhich providescompany secretarial,g o v e r n a n c e ,immigration andtraining services todiverse governmental,corporate andindividual clients acrossseveral business sectorsin Nigeria and over thepast few years, hasthrough its corporategovernance series ofopen enrolmentseminars, roundtablesand publicationscontributed to thoughtleadership on the subjectmatter “ she stated.

Furthermore, she saidin continuation of theircorporate governanceseries, they have a fewseminars and trainingprogrammes slated forlater in the year forDirectors, companysecretaries, risk officersand members of theaudit committees and inconjunction with theHawkamah institute ofcorporate governancein Dubai, they are co-hosting a corporategovernance training fordirectors in Dubai in the12th and 13th ofNovember 2014.

SUMMIT - From left, Christian Louboutin, John Obayuwana and Burak Celetduring the Financial Times Business of Luxury Summit in Mexico.

John Obayuwana,the Founder andManaging Director

of Polo Luxury Group,has projected that Lagosalone could generate $2-3billion in luxurysales.

He made thisprojection whileaddressing delegates atthe just concludedFinancial Times Businessof Luxury Summit inMexico.

In a presentation on‘The challenges andopportunities that existfor international luxurybrands in Africaparticularly in Nigeria,’Obayuwana, said that the currentconsumption of luxurygoods by Nigerians inshopping destinationssuch as Paris, Dubai, UKetc. show the spendingpower of Nigerians in theluxury sector.

“Wealthy Nigerianshave a huge appetite forluxury shopping abroad.In Nigeria, customers arenot just looking for logos;they are looking forquality and greatservice.” In addition, hespoke about thechallenges that haveinhibited the luxuryindustry in Nigeria suchas lack of power supply,high cost of operation,lack of human capital,and the lack of retailinfrastructure.”

He stressed theimportance of payingattention to the middleclass in order to ensurethe sustainabledevelopment of theluxury industry.

Mr. Obayuwana hasplayed a significant rolein shaping and definingthe landscape of theluxury industry inAfrica. He continues todo so with his ongoingeffort to ensure theapplication ofinternational standardsin the retail luxuryindustry in Nigeria,which is evident at Polo

Vanguard, MONDAY, JUNE 2, 2014 — 37

Tax Matters

Taxation is arguably as old asmankind. In his book, IncomeTax Law and Practice in

Nigeria, Ola, C. S. said apart fromrevenue to the government, taxation isimportant to everyone and taxescollected come back to the taxpayers inthe form of social amenities.

Almost everything we own and usefor personal or investment purposes isa capital asset. Examples include ahome, personal-use items likehousehold furnishings, and stocks orbonds held as investments. Capitalgains are the profits realized from thesale of assets at a price that is higherthan the purchase price. When a capitalasset is sold, the difference between thecost sale and the sales price is a capitalgain or a capital loss. You have a capitalgain if sales price is higher than cost ofsale. The reverse is the case for a capitalloss.

Capital Gains Tax (CGT) is a type oftax levied on capital gains accruing toindividuals and corporations. TheFederal Inland Revenue Service (FIRS)and State Boards of Internal Revenueare responsible for the administrationof the CGT in Nigeria. It is a taxapplicable to capital gains accruing toany person (company or individual) onthe disposal of a chargeable asset.Capital gains taxes are triggered whenan asset is realized, not while it is heldby an investor. An investor can ownshares that appreciate every year, butthe investor does not incur capital gainstax on the shares until they are sold.

Not all disposals are subject to CGT;only chargeable assets are. Chargeableassets are all forms of property,including options, debts and any formof property created or acquired by theperson disposing it, or otherwise comingto be owned without being acquired.Landed properties and buildings arethe main income yielding assets inNigeria.

Most countries’ tax laws provide forsome form of capital gains taxes oninvestors’ and individuals’ capitalgains, although CGT laws vary fromcountry to country. In Nigeria, CGT wasoriginally introduced by the CapitalGains Tax Act of 1967 with a rate of 20%but effective from 1998, the CGT ratewas revised down wards to 10%. Thelegislation currently governing taxationof capital gains is the Capital Gains TaxAct CAP C1 LFN 2004.

Capital gains are excluded fromtaxation under the Companies IncomeTax Act (CITA) to avoid double taxationsince such gains are subject to tax underthe CGT Act. Assets situated outsideNigeria are chargeable to CGT on theamount received in or brought intoNigeria. In the case of a non-resident,CGT is charged on any part of the gainsreceived or brought into Nigeria.

Disposal to a Connected Person

When a taxpayer transfers his capitalasset to say, his wife, this is seen as a

The CGT – An UntappedRevenue Goldmine

By EMBUKA ANNA ,

,transaction between ‘connectedpersons’. In this case, the chargeablegains will be calculated on the basis ofthe market value of the asset at the dateof transfer. Section 24 of the CGT Act,2004 provides that a person is‘connected’ if:

a. That person is the individual’sspouse.

b. A trustee of a settlement with anyindividual who in relation of thesettlement is a settler.

c. A person is connected with anyperson with whom he is in partnershipand with any person the spouse orrelative of any person with whom he isin partnership.

A company is connected with anothercompany if:

a. The same person has control of bothor he and persons connected with himhas control of the other.

b. Where a group of two or moreperson has control of each company andthe group either consists of the samepersons or could be regarded asconsisting of the same persons bytreating a member of either group asreplaced by a person with whom he isconnected.

c. A company is connected withanother person if that person hascontrol of it or if it and that personconnected with it together have controlof it.

d. Any two or more persons actingtogether to secure or exercise control ofa company shall be treated in relationto that company as connected withanother and so will any person on thedirections of any of them to secure orexercise control of the company.

Capital gains is the net considerationaccruing to a person on the disposal ofcapital assets after the sum of the totalconsideration and expenses foracquiring the asset has been deducted.It is arrived at by deducting from theproceeds accruing to any person ondisposal the following:

a) The amount or value of theconsideration (in money or money’sworth) given wholly, exclusively andnecessarily incurred in providing theasset.

b) Expenses wholly, exclusively andnecessarily incurred on the asset for thepurposes of enhancing its value beingexpenditure reflected in the state ornature of the asset at the time ofdisposal.

c) Expenses wholly, exclusivelyand necessarily incurred on the asset

in establishing,preserving ordefending the titleor right over theasset.

d) T h eincidental cost ofmaking thed i s p o s a l ,incidental costs ofthe acquisition ofthe asset or of itsdisposal includes

fees, commissions or remuneration paidfor professional services of any surveyoror valuer or auctioneer or accountant oragent or legal adviser and cost oftransfer or conveyance including costof advertising.

Expenses Allowable andComputation of CGT

Expenses allowable as a deduction incomputing the gains or losses of a trade,business, profession or vocation forincome tax purposes are not to bededucted in the course of determiningthe applicable CGT. So also arepremiums or other payments madeunder a policy of insurance against therisk of any kind of damage or injury tolose or depreciation of any asset. Thisdoes not prevent the deduction ofexpenses allowable in the computationof capital gains under the CGT if theassets have qualified for capitalallowances.

According to Ayua, I. A. in his book,The Nigerian Tax Law, the aboveposition on deductions is to the effectthat capital gains are liberallycalculated for the purpose of the CGTlaw. In practice, capital gains arecalculated by deducting the total costof acquisition from net sales proceeds.

Example: Ola sold his property forN150,000 on the 2nd of June, 2005. Heincurred the following expenses in thecourse of the sale:

Adverts (online and print):N

8,000Legal service charge:

N15,000

He bought the property on 13th

December, 1981 at N60,000 andincurred the following expenses:

Agency: N10,000

Renovation : N 10, 000

Here is a computation of the amountof CGT due from Ola:

N N

Proceeds from sale: 150,000

Less expense:Adverts: 8,000Legal service charge: 15,000Agency:

10,000Renovation: 10,000

(43,000)

Net sales proceeds:

107,000Less cost of acquisition:

(60,000)

Gains 47,000

Capital Gains Tax = 10% of N 47,000 = N 4,700

ExemptionsThe CGT Act exempts gains accruing

to the following:a) Ecclesiastical, charitable or

educational institutions of publiccharacter.

b) Any statutory or registered friendlysociety.

c) Any co-operative society registeredunder the Trade Union Act, in so far asthe gain is not derived from any disposalof any asset acquired in connection withany trade or business carried on by theinstitution or society and the gain isapplied purely for the purpose of theinstitution or society as the case maybe.

d) Gains accruing from any localgovernment council.

e) Companies being purchasingauthorities established under any lawin Nigeria empowered to acquire anycommodity in Nigeria for export.

f) Superannuation funds (pensionprovident or other retirement benefitsfund, society or scheme approved by theJoint Tax Board under Section 20 (1)(f) of the Personal Income Tax).

g) Decorations, stocks and shares (theAct provides that where a persondisposes a decoration awarded forvalour or gallant conduct which heacquires otherwise than forconsideration in money or money’sworth, such is not a chargeable gain.The Act also recognizes disposal ofNigerian government securities, stocksand shares as non-chargeable gains).

ReliefsTo prevent double tax relief on

disposed assets, the Act provides thatrelief would be given in respect ofreplacement of business assets,compensation for assets lost anddestroyed and in respect of delayedremittances from abroad. The reliefwould be in the form of tax deferred.

Offences and PenaltiesWith regards to the FIRS’ jurisdiction,

offences and penalties under CGT is asprovided for by Part VI of the FIRSEstablishment Act 2007. On failure todeduct or remit taxes, Section 40 of theFIRSEA 2007 provides that “any personwho being obliged to deduct any taxunder this Act or the laws listed in theFirst Schedule of this Act but fails todeduct or having deducted fails to payto the Service within 30 days from thedate the amount was deducted or thetime the duty to pay arose, commits anoffence and shall upon conviction beliable to pay the tax withheld or notremitted in addition to a penalty of 10%of the tax deducted or not remitted perannum and interest at the prevailingCentral Bank of Nigeria minimum re-discount rate and imprisonment for aperiod not more than three years”.

On general penalty, Section 49 (1)

Capital Gains Tax(CGT) is a type of taxlevied on capital gainsaccruing to individualsand corporations

38 — Vanguard, MONDAY, JUNE 2, 2014

E-Commerce

Offline retail is e-commerce’s greatestcompetition - Fashpa CEO

Stories By JONAHNWOKPOKU

THE founder/Chief Executive Officer of

Fashpa.com, an exclusive on-line fashion merchant, HoneyOgundeyi has said that onlineretailers’ greatest competitionis the offline market.

She stated this during anexclusively interview with Van-guard on the operations ofFashpa.com and the state andfuture of e-commerce in Niger-ia.

“In terms of competition thereis lot of sites still coming uponline, offering fashion but ourreal competition is in the of-fline market where we see a lotof people going to buy from.So offline market can be con-sidered a strong competition,”she said.

She noted that forFashpa.com, as far as compe-tition is concerned, “We basi-cally benchmark ourselvesagainst what our customerswant. And I think the oppor-tunity lies in serving real fash-ion conscious customers; andwe are lucky that we are thefirst to offer fashion, the waythat we do and mix both fash-ion e-commerce and fashioncontent.”

Explaining the offerings ofFashpa.com, she said: “Fash-pa is an online fashion retail-er. We are one of the leadingfashion retailers in Nigeriaand Africa. And basically, weare dedicated to providing ourusers with access to fashionand lifestyle brands. If youknow Nigerians, and Africansin general, we love fashion,and lifestyle and what we aretrying to do at Fashpa is give

people better access to that.“Our online platform sells

clothes, footwear, and otheraccessories. We ship to allstates in Nigeria. We also shipworldwide. What we do is welook at fashion trends, and wesell international high streetbrands that people are look-ing for. We also sell Africanbrands. We also have our la-bels which is Fashpa.com.Apart from that, we also knowthat our customers are also in-terested in fashion contents,so we also give them fashionand lifestyle tips.”

She explained that Fashpahas been making significant

efforts to blend the offline andonline experiences just to serveand adapt the online shoppingculture to the Nigerian market,through unique paymentchannels and prompt deliverysystems.

“People still like the feelingof seeing and touching goodsbefore purchase. So what wedo is we try to understand andwe allow our customers to getthe item and we offer them cashon delivery. So you can sendyou up to three items in differ-ent sizes and you try them onand we will wait for you to tryit on and then take it. So whatwe are trying to do is to bring

a lot of things that people likefrom shopping offline to theonline experience,” she said.

“And I think what is interest-ing about developing onlineplatform is that you can’t justapply what happens in Eu-rope and America to this mar-ket. So, you have to adapt itand make it relevant to ourNigerian and African custom-er,” she added.

Ogundeyi further explainedthat Fashpa’s idea of world-wide delivery was inspired bythe need to get Nigerians andother Africans in the Diaspo-ra, to stay connected withtheir culture through fashion.

Kaymu empowers youths with entrepreneurshiptraining

TO celebrate this year ’sChildren’s Day, Ni-

geria’s online marketplaceKaymu.com.ng treated stu-dents of Kiddie Quest Mon-tessori to a workshop titledKaymu Future Entrepre-neurs Training.

The company said it un-veiled the initiative becauseit is committed to drivingthe development of entre-preneurship, especiallysmall and medium enter-prises in the country.

This,it said, has led to the

brand putting strategic meas-ures in place to drive entre-preneurship in youths, likethe Kaymu EntrepreneurialWorkshop conducted in uni-versities and the KaymuVar-sity initiative for SMEs.

” We believe that childrenare future leaders, withunique passions and aspira-tions and will like to give en-trepreneurial children theability to observe first-handthe work space and engagethem in practical activitiesthat the work environment

presents,” stated Massimil-iano Spalazzi, Managing Di-rector of Kaymu.com.ng

To this end, Kaymu hostedten children from KiddieQuest Montessori School towork a half day in Kaymu of-fice on Tuesday, May 27th foran educative, interactive andengaging training and prac-tical session.

Speaking on the opportuni-ty, the Deputy Head Girl ofthe school, Olubukola Fa-layajo expressed her grati-tude at the opportunity pre-

AIRTEL Nigeria has partnered with the Wikime-

dia Foundation to launchWikipedia Zero to its subscrib-ers in a move that will see 21million users access freeknowledge and informationvia their mobile phones minusdata charges.

Airtel Nigeria’s Chief Com-mercial Officer, MauriceNewa, said the new servicewill empower Nigerians withrelevant knowledge and infor-mation so that they succeedin their daily personal andprofessional endeavors.

“We are excited with ourpartnership with the Wikime-dia Foundation and we willcontinue to provide innovativesolutions that will uplift Ni-gerians in line with our brandpromise of becoming the mostloved brand in the daily livesof Nigerians,” he said.

Newa added that Airtel ispassionate and committed tocreating solid educational andyouth empowerment plat-forms that will enrich andtransform the lives of telecomsconsumers across the country.

IN a move to show renewed focus on entrepre-

neurship, federal governmenthas rolled out ‘Mara Mentor’a mentoring technology ap-plication designed to ‘enable,empower and inspire’ youngbusiness leaders across thecountry.

The app, launched in part-nership with the Mara Foun-dation, a social enterprise setup to support budding youngentrepreneurs in Africa, isused by the government tobolster the SME sector andboost job creation and furtherdevelop and diversify the re-gion’s economy.

President Jonathan madethe announcement the De-mocracy Day celebrations inAbuja last week.

President Jonathan said: “Iam a firm believer in youthempowerment and supportany efforts to drive our youthagenda forwards. The MaraMentor app is a fantastic ini-tiative, and I would like toexpress my sincere apprecia-tion to Mara Foundation andits Founder, Ashish J Thakkar,for choosing Nigeria for thepilot launch in Africa.”

FG unveils ‘MaraMentor’ to supportyoungentreprenuers

Airtel Nigeriaintroduces freeaccess toWikipedia

sented through the KaymuFuture Entreprenueur Train-ing.

“It was a great experienceand we learned a lot aboutbeing an entrepreneur andthe qualities of a successfulentrepreneur,” she said.

Also speaking, Head Teach-er of the school, Rotimi Aka-po said,”It is an insightful in-itiative by Kaymu and a veryeducative and captivatingexperience for primaryschool children.”

AGM: From left; Chief Emmanuel Ukpabi, former president; Mr. Sunil Sawhney, immediatePast Vice President; Mr. Paul Gbededo, newly elected President and Mr. AderemiAdegboyega, Executive Secretary at the 35th Annual General Meeting of the Association ofFood, Beverage and Tobacco Employers.

CMYK

Vanguard, MONDAY, JUNE 2, 2014 — 39

Advertising, Media& Marketing

Stories ByPRINCEWILLEKWUJURU

Three historical eventshave hindered Nigeria’s

brand building effort, said Mr.Ben Bruce, Chairman ofSilverbird Group. Hehighlighted the NigerianCivil War, the 2001 Miss WorldBeauty Pageants and thecurrent Boko Haraminsurgency as bane topositioning Nigeria as aglobal brand.

Bruce disclosed this duringthe second edition ofMarketer’s Evening organisedby the Advertisers Associationof Nigeria (ADVAN) whiledelivering a speech titled,“From local to global, Buildingthe Nigerian Brand.

He stated that these eventsbecame a point of bad globalreputation for Nigeria as aresult of the government’sinability to effectively use themedia to manage some of thesecrises.

He said that over the yearsthe Nigerian state has madeeffort to become a globalbrand, but such effort had metbrick walls due to governmentsinability to explore the mediato win some of the wars thatrattled its global brandvaluation, hence the eventsturned out to be a bad pressthat undermined Nigeria’scrave for a global brand status.

According to him, “What ishappening today in Nigeria onthe Boko Haram and the

Three events hinder Nigeria’s brand buildingefforts — Bruce

negative publicity itgenerated for us hashappened three times inNigeria without appropriateway to manage the crisisthrough the media,” he said.

According to him, the threeevents denied Nigeria theopportunity to market itspotential to the world. Henarrated that the civil warwhich was the first of thethree events showed howNigeria failed in the use ofthe media to douse the effectof propaganda on itsreputation.

He said the Biafra warlord,Late Gen. Odimegwu Ojukwuused the media effectively as

a propaganda tool to dent Nigeria’simage and got the FrenchGovernment backing.

“Nigerian won the war but Biafranwon the battle using the media, theRadio Biafra. The attack on Nigeriaby the French and those who believewhat Nigerian did against Igbos wasgenocide really prevented thecountry from being accepted acrossthe world. Ojukwu used the mediavery well and Nigeria image wasdented. That prolonged war got himsupport from Ivory Coast, Mali,Gabon and others who suppliedweapons for the Biafra,” he said.

Bruce also cited the Miss WorldBeauty Pageant in 2001 which wasstopped when the whole world hadgathered to experience Nigeria as adestination brand, that event

In recognition of its abilityto deliver authentic

consumer experience, ChivitaPremium Fruit juice, hasemerged as Africa’s BestQuality Juice Brand at the2014 Africa QualityAchievement Award.

The Award initiated by theAfrica Quality Institute, AQI incollaboration with IBMNIntegrated Services, the AfricaQuality Achievement Award isorganised with the support ofSouth Africa Quality Institute(SAQI) and the CharteredQuality Institute (UK).

Chivita Premium Fruit juicewith 100 percent fruit juicecontent from the stable of ChiLimited was adjudged thewinner because of itsconsistency in the market,creativity and value as well asthe bespoke packaging of thejuice that allows for the bestdelivery. Speaking afterreceiving the award in Lagosrecently, Managing Director ofChi Limited, Mr. RoyDeepanjan, said the award didnot come to him as a surprise.

Chivita bags Africa’s Best Quality Juice Award 2014“We are happy to receive thisaccolade for Chivita Premiumfrom Africa Quality Institute(AQI), as it validates ourcore values as a responsibleand ethical organisation.”

The award not onlyunderscores Chi Limited’s

commitment to and passion forcreating the highest quality juiceavailable on the market today, butalso to successfully growing anethical business dedicated to helpingpeople live longer, healthier livesthrough the consumption of natural,organic fruits.

Euro Global introduces 25cl red wine pack

Euro Global Foods and Distilleries Limited, maker of SabrinaGin has expanded the Amphora wine range with the 25cl

Amphora Tempranillo wine pack. The wine was originally available in 75cl and 35clbottles, the new

product will allow Euro Global the opportunity to reach masses whohas the desire to consume wine.

Speaking on the new wine, Mr. Felix Aighobahi, Sales Director,Euro Global Foods and Distilleries Limited said,“AmphoraTempranillo wine is a beautiful wine that pairs well withall kind of foods. It is produced to emphasize the vintage lifestyle.Thenew 25cl packaging makes it lightweight, easy-to-use wine that alsotravels easily and doesn’t require a corkscrew. It will definitely makea hit with party-goers and picnickers want to avoid the hassles ofusing a corkscrew.

Amphora Tempranillo is a full bodied Spanish red wine with theflavor of leather along with cherries, the finish is mild, smooth andlingers with tannin on both side of the mouth. Its taste is quite closeto Cabernet Sauvignon.

The Amphora range comes in red and white wine. Red winesvariants are Merlot, Cabernet Sauvignon, Shiraz and Tempranillowhile the white wine is Chardonnay from France.

PARTY - From Left: Beat FM On-Air Personality, Olisa Adibua;Marketing Director, Sola Oke and Brand Manager, Absolut Vodka,Akintayo Akinseloyin, both of Pernod Ricard Nigeria, during theAbsolut Art Party 2014 at the Lagoon Crest in Lekki, Lagosrecently.

If we go on discussing those things customers hate,we would have enough material for one whole year,

and we would still not be done. What’s more? Going bythe feedback I have received, many readers areinterested in this topic. It appears that there are, indeed,many things that irritate customers. Today, we will discussa few more customer peeves and rest the series for now.

Appearing busy but unhelpfulFor some unknown reasons, some people look

perpetually busy, doing nothing. At least, that’s the waythey appear to customers. And as a customer, I see quitea lot of such people in our banking halls. Some tellersleave their seats (ostensibly) to attend to the needs ofsome customers, but they never seem in a hurry to getback to their seat to conclude the service process. Theirslow, slouching movement says it all. In situations likethis, customers make some snide comments: Where ishe going again? Wetin she dey do sef?

Rushing customers on the phoneThis may not always be the fault of the service

employee. It happens often in organisations that cherishunhelpful data such as the length of time spent on thephone with a customer. In such situations, the customerfeels rushed. Some poorly trained employees may evensuggest that the customer hang up as they have othercustomers waiting on the line. Now the question arises:how long should a customer spend with a frontlineemployee, considering that some customers are rathergarrulous? I’d say: as long as is necessary to resolve thecustomer ’s issues and leave them with a goodimpression about the company.

Outdated website informationSome organisations see having a corporate website as

an end on its own. Once the website is up and running,(they believe) their job is done. The product of such amindset is that the website is never updated with currentinformation. Examples of outdated information thatfeatures on some company websites: phone numbers thatdon’t work or that belong to former employees, officeaddresses that have changed, products that have beenphased out, etc. Customers are never happy when theycome up with outdated information on a companywebsite.

Dead website linksFor more information, please click here. To download

the catalogue, please click here. You click. But nothinghappens! The links are simply dead! And you wonderwhether the company is dead as well. The company maybe healthy. It’s just that the people who run it don’t careenough to check these little details. I think it’s betternot to have a website than to have one that doesn’t work.

“No warranty”Why would anybody sell products that have no

warranty of any sort? Insisting that there is no warrantyon your products is another way of saying “buyerbeware” or “goods bought at buyer’s risk.” If you haveever bought electronic products from Alaba InternationalMarket or computer products from the Computer Villagein Ikeja, you’ll understand what we are talking about.Of course, there are many professional business peoplein those markets who give customers warranty on theirproducts, which builds trust and gives assurance. Ifyou’re sure of the quality of your products, why not offersome form of warranty or even money-back guarantee?

•CONCLUDED

Things CustomersHate – Part 5

Continued from last week

CMYK

40 — Vanguard, MONDAY, JUNE 2, 2014

Email:lesleba@lesleba.com, lesleba@gmail.comBlog page:www.lesleba.com/blog2Website: www.lesleba.comTel:0805 220 1997

Omoh Gabriel - Group Business EditorBabajide Komolafe - Deputy Business EditorClara Nwachukwu - Energy EditorPeter Egwuatu - Asst. Business EditorYinka Kolawole - Snr Bus. CorrespondentFavour Nnabugwu - Insurance CorrespondentGodwin Oritse - Maritime CorrespondentGodfrey Bivbere - Maritime CorrespondentMichael Eboh - Energy ReporterFranklin Alli - Industry/Agric. ReporterEbele Orakpo - Energy ReporterIfeyinwa Obi - Maritime ReporterRosemary Onuoha - Insurance Reporter

CONTRIBUTORSPrincewill Ekwujuru - Media/MarketingNkiruka Nnorom - Capital MarketJonah Nwokpoku - E-CommerceNaomi Uzor - IndustryProvidence Obuh - Micro FinanceLAYOUT - Graphics Department

In last week’s article, weidentified the advantages ofa stronger naira exchange rate

to include much lower inflationand interest rates, increasingindustrial expansion, with rapidlyrising employment opportunities. We also explained how a strongernaira will eliminate fuel subsidyand also reduce the size and costof our national debt. (See“Advantages of a Stronger Naira”at www.lesleba.com).

This week, we will examine whythe Central Bank of Nigeria stillconsciously promotes a monetarystrategy that deliberately weakensthe naira; we will also, in thefollowing interrogative narrative,identify the major beneficiaries ofa weak naira exchange rate.

Why does CBN consciouslypromote a weaker naira with itssubstitution of naira allocations fordollar-derived revenue?

The CBN hinges its defence ofthis economic buccaneering onSection 162(1) of the Constitution,which stipulates that all financialaccruals must be consolidated ina federation account beforesharing, in line with currentprovisions on revenue allocation. Unfortunately, the CBN haswrongly interpreted Section 162 toalso imply that all non-naira-denominated revenue must first beconverted to naira before sharing. Nonetheless, it is evident thatCBN’s substitution of nairaallocations for dollar-derivedrevenue instigates the unyieldingdark clouds of excess naira, andthe collateral burden of a weakerexchange rate, with its diabolicaltrain of economic distortions.

If the CBN does not substitutenaira for dollar revenue, how canbeneficiaries spend theirallocations, since dollar is not legaltender in Nigeria?

The constitutional beneficiariesof dollar revenue would receive

Cover Story

So, who is afraid of astronger naira?,

,

dollar certificates for theirallocations of dollar-derivedrevenue; however, these certificatesmust first be converted to naira ata properly designated commercialbank, before spending.

What is the difference betweennaira substituted by the CentralBank and naira exchanged fordollar certificates from the banks?

The naira substituted by CBN isactually additional fresh nairasupply, which the banks mayleverage on to instigate over tenfoldincrease in money supply. Thus,the process of substitutioncontinuously promotes thepresence of surplus naira andinduces the disenablingenvironment of high inflation andinterest rates, weaker exchangerate, increasing national debt,severely constrained industrialsubsector, high rate ofunemployment, increasing fuelsubsidy, and widening gap betweenthe rich and poor.

Conversely, the exchange ofdollar certificates directly throughcommercials banks bybeneficiaries will not increasemoney supply to induce thedisenabling encumbrances listedabove. In fact, the banks willbecome more protective of theirnaira stock, so that their cashpositions are not undulyjeopardized, whenever depositorswant access to their funds. Ultimately, in such ambience, thenaira exchange rate will becomestronger, as more dollar certificateschase the relatively stable existingstock of naira in the system.

What will be the economic

implication of a stronger nairaexchange rate?

Quite simply, the result will bethe direct opposite of the adverseconsequences listed above, for aweaker naira. Thus, perceivedsystemic surplus naira will beexorcised from our monetarysystem, with the welcomedevelopment of sustainable single-digit cost of funds across the boardto the real sector, with inflation rate(closer to best practice inflationrates elsewhere), at well below4%.

Consequently, with subsisting lowcost of funds and the absence ofexcess liquidity, the size and costof servicing our national debt willalso fall remarkably.

Such an enabling environmentwith a stronger naira purchasingpower will rapidly create millionsof jobs nationwide, while theincrease in the number of paidworkers would further stimulateconsumer demand, which will inturn, instigate further industrial

expansion, with still more jobopportunities. Ultimately, with amuch stronger naira belowN80:$1, fuel prices will fall belowN97/litre, and we will save theprincely sum of about $12bn(N2tn) annually from the totalelimination of fuel subsidy; fuelsmuggling into neighbouringcountries will also becomeunprofitable.

So, if it’s all so simple, who arethose afraid of dollar certificatesand a stronger naira, and why?

Those who are fervently patrioticabout the sovereignty of thenational currency, but are ignorantof the process, which determinesthe naira/dollar exchange rate aremisguidedly opposed to a strongernaira. The other bastion ofopposition expectedly comes fromthe major beneficiaries of thecurrent economically poisoningprocess of CBN’s substitution ofnaira for dollar revenue.

For example, CBN’s recentunbridled unconstitutionalinterventions and the recklessspending, which characterizedLamido Sanusi’s term as governor,were funded from the apex bank’sself-styled buoyant ‘own’ forexreserves, which were ironicallyconsolidated simultaneously withdeepening poverty induced byCBN’s substitution of nairaallocations for dollar revenue.

How does CBN’s substitution ofnaira for dollar-derived revenuefund corruption?

The liberal latitude for corruptionin public service is facilitated bythe ‘eternal’ presence of surplusnaira in an economy, withoutrequisite accountability; for

example, the church rat willexpectedly be lean and trimmedof excess fat, when compared toits close cousins, who live in holesand crevices in an active bakery,replete with surplus food.

Is the public sector the onlybeneficiary of the substitution ofnaira allocations for dollar-derivedrevenue?

No, the banks are also majorbeneficiaries of this skewedsystem. For example, the banksearn over N300bn annually fromthe simple business of receivinggovernment deposits at zero percent and lending such funds backto government at double-digitinterest rates. Indeed, with suchhigh returns, it is not surprising thatbanks show little interest insupporting the real sector. Curiously, government hasbecome heavy debtor to the samebanks that have custody of its freefunds. Furthermore, banks alsopromote capital flight, and makehuge gains from round tripping andspeculative consolidation of foreignexchange, despite the adverseconsequences on the economy.

The Bureaux De Change (BDCs)are also proxy beneficiaries of thecurrent system, and theynonchalantly fund the millions ofdollars couriered across ourborders daily. The BDCsevidently also fund the activitiesof smugglers who do considerabledamage to our local industries, andconstrain employmentopportunities.

It is curious that CBN is reluctantto relinquish dollar revenue toconstitutional beneficiaries, but theapex bank willfully allocates dollarsto BDC operators, who may, inturn sell at a profit to any customer,including the original owners of thedollars; i.e. government and MDAs.

SAVE THE NAIRA, SAVENIGERIANS

The Executive Director,Oxfam International, a

n o n - g o v e r n m e n t a lorganisation (NGO) MsWinnie Byanyima says Africaloses $242 billion to corporateincome tax exemption andunpaid taxes by companiesannually. Byanyima disclosedthis at the Africa RisingConference in Maputo.

She said about $138 billionwere lost to corporate incometax exemption while $104billion was lost to unpaidtaxes by companies operatingin the continent yearly.

“This is double what Africaneeds to meet the MilleniumDevelopment Goals (MDG)

Africa loses $242bn to tax exemption yearly — Oxfamneeds on Health and Educationput together. It will equallysolve the $93 billionrequirement to closeinfrastructure gap,” the officialsaid.

According to her, a balanceof $30 billion will still remainout of the money to be usedfor other development issues.Byanyima attributed the lossof the revenue to absence oflegal framework in financialsystem in Africa, and called fora change of policy. She saidsome of the gaps whichallowed tax exemption indoing business in Africashould be removed and madeillegal.

“This will help Africa to getadequate revenue througheffective tax system,” the NGOofficial said. She said additionaltax officials would be neededin the region in order to haveeffective tax collection, andefforts must be geared towardscapacity building.

Byanyima called forcompanies which are willing todo the right things to invest inthe growth and development ofthe region.

Mr Bob Collymore, ChiefExecutive Officer of Safricom,also urged government to putthe right policies in place totackle the corporate income taxexemption.

The process ofs u b s t i t u t i o nc o n t i n u o u s l ypromotes thepresence of surplusnaira and inducesthe disenablingenvironment ofhigh inflation andinterest rates,weaker exchangerate

CMYK