Page 1













*The Hon. Minister of State for Federal Capital Territory, Oloye Olajumoke Akinjide (middle) flanked on the right by the Secretary, FCT Area Councils Joint Account Allocation Committee (JAAC), Alhaji Yusuf Tsaiyabu and the Chairman, Kuje Area Council, Hon. Danladi Etsu Zhin (left), during the JAAC meeting chaired by the minister in Abuja.

154.8 245.2496 194.9087 162.2131 1.971 0.277 234.6356 24.3824 41.2745 26.1509 235.4198

155.3 246.0418 195.5382 162.7371 1.9773 0.287 235.393 24.4616 41.4078 26.2353 236.1802

155.8 246.8339 196.1678 163.261 1.9837 0.297 236.1513 24.5408 41.5411 26.3198 236.9406

CBN Exchange rate as at 31/08/2012

Alcohol sales surge in Nigeria •Despite rising religious beliefs


lcohol sales in Africa are surging because of economic and population growth, a trend rubbing against the grain of another demographic factor defining the region: intense religiosity. By almost any measure, Africa is an exceptionally devout place and the major growth area for Christianity and Islam. This should have implications for investors, especially in the fast-growing retail and beer sectors: they must navigate sacred sensitivities in areas such as marketing and factor the faithful into forecasts and demographic profiles for the continent’s population of just over a billion. Brewing executives have said they tone down their advertising campaigns in Africa and these do tend to be conservative. In Nigeria for example, scantily-clad women tend not to feature on billboards promoting beer brands. Instead, a man in a suit is portrayed

sipping a refreshing cold lager, or more often than not, the ad shows just a giant bottle and glass. According to a 2010 report by the Pew Forum on Religion & Public Life, the number of Muslims living in SubSaharan Africa rose 20-fold from

1900 to 234 million. Christianity has grown at an even more blistering pace, with numbers soaring almost 70-fold over the same period of time to 470 million from just 7million. And in the case of Christianity, much of this growth has

been concentrated in Pentecostal churches and other evangelical denominations which, like Islam, tend to frown on alcohol. The Pew survey also questioned people in 19 African countries about their views on alcohol consumption and found that majority in all but three countries - Cameroon, Chad and Democratic Republic of Continues on page 18

World Bank chief in Africa for first overseas visit


ew World Bank President, Jim Yong Kim heads to the Ivory Coast and South Africa this week on his first trip to Africa since taking the reins of the global development lender two months ago. The visit comes at a time when African economies are among the fastest growing in the world although their development is constrained by shortages of roads, ports, power

supply, water and sanitation. Despite high rates of growth, rising youth unemployment and inequality are a growing concern. “Africa is truly taking off and I look forward to hearing directly from governments and people on the continent on how the bank can help drive more inclusive development throughout Africa,” Kim said in a statement.

During his trip to the Ivory Coast, starting on Tuesday, Kim will meet President Alassane Ouattara and his economic team, which have managed to turn around a stagnant economy within a year since the end of a civil war that claimed more than 3,000 lives. The government has launched several Continues on page 18 C M Y K

18 — Vanguard, MONDAY, SEPTEMBER 3, 2012

Cover Story

Vocation and technical education – A key to improving Nigeria’s development (3) *The Hon. Minister of Trade and Investment, Olusegun Aganga, and Executive Chairman, Adhama Textile & Garment Industry Limited, Alhaji Saidu Dattijo Adhama, inspecting the new textile machines acquired through the Bank of Industry’s credit facility to the company, during Aganga’s two-day inspection tour of industries in Kano.

Alcohol sales surge in Nigeria Continued from page 17 Congo - found it morally objectionable. “Views on this issue are related to how religious a person is,” said Neha Sahgal, a Pew research associate. What we found is that in most of the countries those who pray several times a day are more likely to find drinking alcohol morally objectionable than those who pray less,” she told Reuters in a phone interview. Against this backdrop of piety, the conservative approach to advertising seems to be working. Home to some of the world’s fastest growing economies, Africa’s thirst for beer and spirits is surging: analysts estimate beer volumes rose around 7 percent last year. Excluding the mature South African market, growth reached more than 10 percent. Drinks companies want to maintain the momentum. SABMiller is investing up to $2.5 billion over the next five years to build and renovate breweries on the continent. African sales of rival Diageo, the maker of Guinness, have risen by an average 15 percent in each of the last five years, accounting for 14 percent of the group’s total. Nigeria’s 160 million people are now the world’s second biggest consumer of Guinness, after Britain, and analysts expect it to take the number one slot within a couple of years. Cameroon, with a much smaller population of around 20 million, is the fifth biggest. In Nigeria, Africa’s most populous country, which is C M Y K

evenly divided between Islam and Christianity, church and mosque numbers are exploding alongside beer consumption. Beer turnover in Nigeria is growing faster than its economy. “At the moment, beer consumption is about 19.5 million hectoliters in 2012 and growing at about 8-9 percent per annum,” said Esili Eigbe, an analyst at Stanbic IBTC, who covers the brewery sector. A number of factors could explain this. Africa’s population is young and many of the region’s converts find their religious zeal only as they grow a little older. In any case, most

people’s drinking peaks in their 20s. And a lot of Africans, like a lot of people on other continents, are both religious and thirsty. “People’s sense of morality sometimes doesn’t correspond with their behaviour. This is not unique to Africa,” said Sahgal, an expert on polling on religious issues. Some Africans are perfectly comfortable with this fact. “Islam advises against alcohol but does not force you. I drink to help me relax after a hard day’s work,” said Wasiu Abudu, a 42-year-old auto mechanic who lives in Lagos.

World Bank chief in Africa for first overseas visit Continued from page 17 major infrastructure projects and restored security across most of the cocoa-growing country. He will also visit an industrial park for small and m e d i u m - s i z e d agribusinesses, which will highlight the push for more investment in agriculture amid increasing volatility in food prices. The World Bank last week said global food prices had jumped 10 percent in July as drought parched crop lands in the United States and in Eastern Europe, and it urged governments to shore up programs to protect the poorest. Kim will end his trip in South Africa where he will

hold talks with South African President Jacob Zuma and Finance Minister Pravin Gordhan, as well as local entrepreneurs. A wave of labor unrest and violence in South African mines has highlighted frustrations over rising poverty, inequality and stubbornly high unemployment. “South Africa is a key factor of African growth and a leading voice for the African continent in the G-20 and other global forums. It is also an important driver for trade and investment,” said Kim, former president of the Ivy League college Dartmouth in New Hampshire.

processes, jobs, organisational structure, management system, and also in process designs used in manufacturing industries. These components of ICT have great implications for the enhancement of entrepreneurship education in technology and vocational education field of work. According to Azuka, Nwosu, Kanu and Agomuo (2006), classroom behaviour must align with ICT-driven environment which is



n entrepreneur is a person who makes plans for a business or a piece of work and gets it going. Anyanwuocha (2001) observes that the entrepreneur is the chief coordinator, controller and organizer of the production process. The entrepreneur combines other factors of production (land, capital and others) in such a way as to obtain maximum production of goods and services at minimum costs. In order to effectively enhance occupational skills in the present day, entrepreneurs need also to acquire information and communication technology knowledge and skills. Mkpozi (1996) observed that a country that is developing and manufacturing its own goods either from Hi-Tech or small/medium scale industries using indigenous skills and exports some of those goods to other countries is usually economically stable. This could be better achieved through the acquisition of entrepreneurial and occupational skills in technology and vocational education. Individuals with technical and vocational skills and good knowledge of ICT are characterized by selfreliance, self-employment and fit properly into today’s technical, entrepreneurial and business world. The entrepreneur should, therefore, possess technical skills, ideas and management skills which are necessary for the success of the venture. One of such skills is information and communication technology which is characterized by employee empowerment and involves the making of unskilled and semi-skilled workers to be skilful and functional in today’s world. It also involves the development of task oriented team of workers who no longer depend on individual managers for all their decisions to achieve targets. Technical process reengineering are also required to redesign technical work

The entrepreneur should, therefore, possess technical skills, ideas and management skills which are necessary for the success of the venture


constantly shaping and reshaping the work place and consequently, what is learnt and how learning takes place. There are various numbers of opportunities for technology and vocational education graduates with entrepreneurship skills in ICT driven technical and vocational education environment. These opportunities exist in various forms for enhancing entrepreneurship skills. Nwabuona (2004) views entrepreneurship education as the identification of the general characteristics of entrepreneurs and how potential entrepreneurs can be trained in management techniques needed for effective performance of persons for long time survival of an organisation.

Vanguard, MONDAY, SEPTEMBER 3, 2012 — 19

CBN currency redesign move is self seeking, no foreseeable gain economy to full employment or fight inflationary pressure? Far from it! In the context of developing countries like Nigeria, there are four objectives of monetary policy: to ensure economic stability at full-employment or potential level of output; to achieve price stability by controlling inflation and deflation; to promote and encourage economic growth in the economy and achieve balance of payment of exchange rate stability. According to the Central Bank of Nigeria Act, 2007, (Section 2), “the key objects of the Central Bank shall be to: (a) ensure monetary and price stability; (b) issue legal tender currency in Nigeria; (c) maintain external reserves to safeguard the international value of the legal tender currency; (d) promote a sound financial system in Nigeria; and (e) act as banker and provide economic and financial advice to the Federal Government.”


he Central Bank by focusing on the naira, means that it intends to lay greater emphasis on the most important function of central banks everywhere in the world namely, to issue legal tender currency and to defend its value domestically, by ensuring low inflation and externally, by ensuring appropriate and stable exchange rate regime. In what way will redesigning the naira, the issuance of N5, 000 note and coinage of the lower

denominations enhance the domestic and international value of the naira? It is doubtful if the current move will take the nation anywhere near the



he recent pronouncement of the Central Bank of Nigeria Governor, Sanusi Lamido Sanusi of the intention of the CBN to redesign the nation’s currency, has provoked lots of argument from both the informed and the not so well informed. The CBN has proposed to issue a N5,000 note and to coin N5, N10, N20 etc. The CBN had argued that it was long it last reviewed the currency in circulation in the country. Is the CBN carrying out the review for the sake of it or it wants to achieve a particular monetary policy? There are mainly two important instruments with which objectives of macroeconomic policy can be achieved. Monetary policy is concerned with changing the supply of money stock and rate of interest for the purpose of stabilizing the economy at fullemployment or potential output level by influencing the level of aggregate demand. More specifically, in times of recession, monetary policy involves the adoption of some monetary tools which tend to increase the money supply and lower interest rates so as to stimulate aggregate demand in the economy. On the other hand, in times of inflation, monetary policy seeks to contract the aggregate spending by tightening the money supply or raising the rate of interest to combat inflationary pressure. In the present circumstance, is the CBN seeking to move the

goods and services cheaper thus reducing the level of inflation in the country? The CBN by desiring to put into circulation a higher denomination of the naira is admitting to the failure of monetary policy to adequately address inflation in the country. In any part of the

The CBN by desiring to put into circulation a higher denomination of the naira is admitting to the failure of monetary policy to adequately address inflation in the country.

stated goals. Printing will definitely not be done locally but abroad. The N40 billion to be expended will be paid to foreign contractors who will generate employment in their country at our own expense. The CBN under Professor Chukwuma Soludo promised that the Nigeria Security Printing and Minting Company the CBN took over will be resuscitated to undertake the printing and minting 100 per cent of the local currency. Where is the Mint and its position today? Is redesigning the nation’s currency Nigeria’s priority now, in a situation of massive unemployment? Will N40 billion if invested in other sectors of the economy not increase production and make


world where cashless policy is pursued, higher denomination currency becomes obsolete as people are encouraged to do electronic payment. It is ridiculous that at a time when all government payments to contractors, employees and others, are done through electronic means, the Central Bank is coming up with a higher denomination. Who needs it? Whatever is the argument being put forward by the CBN to justify this, it is not going to enhance the local and external value of the naira and as such, it is of no use at the moment. What the CBN should do for Nigeria as the second largest economy in Africa is to make the Naira

the currency of reference on the continent, and thus a strategic catalyst for achieving the goal of an international financial centre as well as promoting Nigeria’s rapid economic development. he thrust of any currency reform in Nigeria should focus on how to ensure its stability and global integration. This will help to deepen the financial system and national economy, and make the naira the currency of reference in Africa. The CBN’s last attempt to re-introduce coins into the economy was a fiasco. The 1 kobo, 2 kobo, 5 kobo, 10 kobo, 20 kobo, and one naira that were coined literally disappeared from circulation. Before then, goods and services were available in the affected lower denominations. As soon as they were coined, market women started rejecting them, took them to goldsmiths and melted them for ornaments. Elementary economics also teaches that at certain level, coins cease to become legal tender. There is no way any one in today’s Nigeria will want to carry N5,000 in coins around with him. Today, Nigerians have prices listed in 50 kobo, N5, N10 and N20 because they are notes and not coins. The base price list today is N50 because it is a note. Coining N5, N10 and N20 will simply take them out of circulation. If the CBN were to learn from experience, it will know that as soon as twenty naira is coined, it will go out of circulation and N50 will become the base currency. If this happens, prices will be redenominated and this will lead to local price adjustment. If this does not lead to induced inflation, the CBN should give us another name for it.


BUSINESS & ECONOMY Edo Govt. loses N1.2m to illegal tax collectors weekly


do Chairman, Traders Welfare Union, Mr Lucky Irukpe, has said that the state government loses N1.2 million to illegal tax collectors every week in all the major markets in the state. Irukpe told newsmen in Benin that illegal tax collectors invade markets and extort money from street traders that were not remitted to the government. He said that the act was being carried out by some of the committee members set up by government and private owners of market stalls. The

chairman said he had been a victim of extortion for the past 17 years, adding that the revenue collected were not going into the coffers of the state government. He said that the population of street traders were more than the regular traders inside the market, adding that a onemillion capacity market could not accommodate the traders. Irukpe said, “We, the traders are the only ones that can stop street trading within 21 days, if given the opportunity. “We are determined to put a stop to street trading to

ensure that the sufferings and unjust harassment of the traders in the hands of illegal tax collectors becomes a thing of the past.” According to him, the committees set up to put a stop to street trading are not

capable because they lack moral justification to tackle the menace. Irukpe explained that street trading was an embarrassment to the ongoing development stride of the governor, adding that it

was occasioned by agents and landlords who hike the rent on their shops. He called on the state government to address the issue of the agents and landlords, who take advantage of every situation to increase rent on shops.

IFC and IE Singapore sign memorandum of understanding to invest in Africa


FC, a member of the World Bank Group, and International Enterprise Singapore, part of the Ministry of Trade and Industry, signed a memorandum of understanding on Thursday to jointly identify growth sectors in Africa for Sin-

gapore-based companies to invest in and to share business leads and opportunities through partnerships. The signing took place on the sidelines of the two-day Africa Singapore Business Forum.

The forum is hosted by International Enterprise Singapore to provide a platform for Singaporean and other Asian companies to connect with potential business partners from Africa. C M Y K

20 — Vanguard, MONDAY, SEPTEMBER 3, 2012

Business & Economy BRIEFS FG targets $8bn from palm oil export — Minister he Federal Government has said that it was targeting eight billion dollars revenue from palm oil export under the Agriculture Transformation Agenda (ATA). Dr Akinwumi Adesina, Minister of Agriculture and Rural Development, announced the plan in Abuja at the signing of the agreement for Estate Participation in the Oil Palm Nursery and Field planting activity. The minister explained that the country would have achieved the target if it had made use of its oil palm industry in 1961. “Nigeria used to be the largest exporter of palm oil in the 1960s until Malaysia came here and got its improved palm nuts from Nigeria. Now Malaysia makes $18 billion from oil palm export. We want to get back to when palm oil used to be the mainstay of our economy,” Adesina said. He said the situation changed following the anomaly caused by the discovery of crude oil in commercial quantity in the 1970s. The minister said Nigeria produced only 1.3 million tonnes of vegetable oil and imported more than 350,000 tonnes of vegetable oil annually.


NNPC plans to upgrade pipelines anaging Director of NNPC, Mr. Andy Yakubu has said that a programme was underway for the rehabilitation and upgrading of the nation’s pipelines. Yakubu, who disclosed this at a conference organised by the National Association of Energy Correspondents in Lagos, said that the rehabilitation was part of the plan to deregulate the downstream sector. He said that the development was also to stimulate the growth of Liquefied Petroleum Gas, which he said, was a significant substitute to kerosene. Yakubu was represented by Dr Timothy Okon, the Coordinator of Strategic Planning in NNPC. Yakubu said that the programme, which would last for two years, would ensure subsidy proceeds were deployed to address supply chain bottlenecks. He said that the aftermath of the programme would facilitate growth of alternative transport system such as rail transport and inland water ways.



*From left: Mallam Ahmed Kuru; Managing Director/Chief Executive Officer, Enterprise Bank Limited; Mrs. Louisa Olaloku, an Executive Director of the bank; Sir George Efughinamba Akomas, a customer of the bank and Chairman of Geolly Farms; Mr. Emeka Onwuka, Enterprise Bank Board Chairman, and Mrs. Nneka Onyeali-Ikpe, another Executive Director of the bank at the bank’s Customer Forum at Onitsha, Anambra State, recently.

Bankers fault Sanusi, describe introduction of N5,000 note as economic waste BY VICTOR AHIUMA-YOUNG


AGOS: BANKERS in Nigeria, under the aegis of the Association of Senior Staff of Banks, Insurance and Financial Institutions, ASSBIFI, has faulted planned introduction of N5,000 note by the Central Bank of Nigeria, CBN, next year, saying it would be an economic waste to the nation. ASSBIFI in a statement argued that the estimated N40 billion to be spent on the proposed Naira restructuring could be better channeled to enhance the perennial power problems, health, education, and road rehabilitation and so on. In the statement by its President and Senior Assistant Secretary-General, Sunday Salako and Friday Inegbedion respectively, ASSBIFI said, “the announcement of Thursday August 23, 2012 by the Central Bank of Nigeria on the proposed restructuring of the Naira that will lead to the introduction of N5,000 note come year 2013 was received with great shock that we are yet to recover from. ASSBIFI, as an umbrella body for all senior workers in banking, insurance and financial institutions in Nigeria strongly oppose the whole idea of the proposed Naira restructuring at this point in time, particularly the introduction of higher banknote of N5,000 next year by CBN under its currently redesign programme tagged ‘PROJECT CURE.’ The question we are asking as practitioners and as Nigerians is what project or object is the programme out to ‘cure’? Is it inflation, interest rate, im-

proper banking habit, bank robberies, unemployment, corruption, money laundering, poverty, insecurity, etc? “We have always advocated that national issues of this magnitude with serious monetary and fiscal implications on the nation's economy, should be subjected to public debate. We seriously disagree with the

CBN Governor’s claim that the idea is as a result of inflationary pressures, rather, we believe it is more of miscalculation and economic somersault. Nigerians are yet to come to terms with the economic gains of Sanusi’s reformation agenda since assumption of office as governor of Central Bank of Nigeria. For instance, interest rate is

still at double digit level; dusts raised by the recapitalisation cum nationalisation of banks are yet to settle as workers are laid off in droves without adequate provision for their terminal benefits; the cash-less programme is still at the experimental stage. “Let us take some time to look back. This is the 10th time the national currency, Naira will be restructured since its introduction in 1973 to replace the pounds sterling. Prior to the Pounds, the people of Nigeria were using cowry shells as currency. In all of these, it only signals the devaluation of the nation’s currency and slippery slope towards hyperinflation. The introduction of higher value currency notes in the economy often signifies a regime of increased and sustained fiscal deficit financing. Our ancestors developed hunch-backs carrying sacks of shells, so the present generation has bluntly refused the same load of coins. What they do immediately is to price all goods and services out of those coins range. The infrastructure suitable for appropriate use of coins in our society are conspicuously absent.” “Bank workers are constantly and continually maimed and killed as banks are fire bound with dynamites and huge sums of raw cash carted away. High denomination currencies will increase the amount of cash at bank vaults thus making them vulnerable to attacks.

Concessionaire invests N40bn on port infrastructure


anaging Director of Apapa Bulk Terminal, Capt. Emmanuel Omotayo, has said that the company has invested over N40 billion ($250 million) on infrastructure after the concession of the terminal in 2006. Omotayo disclosed this in an interview in Lagos. He said that the company, owned by the Flour Mills of Nigeria, had even spent more on ports development before 2006. “Before the port reform programme, Flour Mills had been operating Berths One to Four. We developed the ports before the reform was introduced. In spite of our investments in cargo throughput and infrastructure in the ports, we still pay the Nigerian Ports Authority (NPA) for use of the ports. Government, in its magnanimity, gave us right of first refusal when the issue of concession came up. “In view of our heavy investment in the ports before the concession, we accepted to be concessionaires,” he said. Omotayo said that when the port reform came, it was a

blessing to the operators because they had a vision of what they wanted to do. He said that the entire infrastructure they met prior to port concession had been pulled down due to their level of decay and new structures put in place. The company chief said that the new infrastructure erected after the concession included warehouses, sugar refinery, marine towers, wheat and cement discharge equipment as well as conveyors. He said that the company had also built silos with storage capacity of 250,000 tonnes up from the 8,000 tonnes silos met in 2006. Omotayo said that due to on-going improvements in the terminal, vessels with a draft of 12.5 metres could now berth at the terminal instead of the 9.5 metres draft met in 2006. He said that the terminal had the capacity to receive vessels with deeper draft, but inadequate depth of water in the channel had prevented this. “One of our challenges is the lack of adequate water in

the channels. A vessel that is capable of carrying 75,000 tonnes of cargo, but due to the water depth, brings in only 40,000 to 56,000 tonnes of cargo. We submitted an application to the NPA in 2010 to reconstruct part of the terminal, but this is yet to be approved,” Omotayo said. According to him, another challenge is lack of adequate space because the terminal had been delineated and carved out. “This puts a limit to what we can do in the terminal. Our predominant operation is cargo operation, warehousing and logistics provision, but if we want to go into other businesses, we are limited. We have been intending to go into liquid bulk manufacturing like vegetable oil under our agro-allied industries, but we are constrained by lack of space. The MD said the terminal was predominantly for bulk cargo such as wheat, cement, fertiliser, sugar and wet bulk cargoes such as ethanol, palm oil and base oil.

Vanguard, MONDAY, SEPTEMBER 3, 2012— 21


22 — Vanguard, MONDAY, SEPTEMBER 3, 2012

Business & Economy BRIEFS FG pledges to open up more river ports, revitalise railway system resident Goodluck Jonathan said in Onitsha, Anambra State, that plans were underway to open up other River Ports and revitalise the railway system across the country. Jonathan made this known while inaugurating the rehabilitated Onitsha River Port. He said the measure would help in the transportation of goods and services through water and reduce the overuse of land in conveying heavy goods across the nation. “We noticed that transporting heavy goods on land help make our roads tear and get bad by the day. So when rail system and water transportation are revitalised, it will reduce the use of land in transporting heavy goods across the country,” he said. Jonathan said he was happy with the security situation in the zone.


Deputy Accountant-General says IPSAS introduction will check corruption he Deputy AccountantGeneral of the Federation, Alhaji Babayo Shehu, said on Thursday that the introduction of International Public Sector Accounting Standard (IPSAS) would check corruption in public service. Shehu said this in Bauchi on the sideline of a two-day sensitisation workshop on the introduction of the accounting system for government’s establishments in the North-East zone. “When you have a system that you report more transparently, you promote more accountability and the reports are easily understood by the general public, then, it makes it difficult for people to commit and hide fraud. The world has decided to adopt the international standard, so, Nigeria cannot be left out because we are just one out of the many nations in the world. So, to allow the accounts of our various governments to be comparable with the accounts of other nations, we also have to adopt the IPSAS. That is why the Federal Executive Council approved the implementation. "And don’t forget that this international standard is public sector, there are also international standards for the private sector, called the International Financial Reporting Standard which private sector companies are bound to implement since the Federal Executive has approved it.”



FG distributes 1.3m oil palm seedlings BY CHRIS OCHAYI


n its efforts to restore the past glory of palm oil production in Nigeria, the Federal Government said it has distributed over 1.3 million oil palm seedlings to 18 oil palm plantations or estates drawn from 11 states in the country. Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina, who flagged-off the seedling distribution exercise during the signing of agreement with the representatives of the 18 oil Palm Plantations in Abuja, said the country will soon become one of the leading producers of oil palm in the world. Adesina lamented that Nigeria spends over $500 million in the importation of over 350,000 metric tonnes of vegetable oil annually, a situation he described as “unacceptable” to the Nigerian economy. The minister explained further that under the Agricultural Transformation Agenda of the present administration, his ministry would support the production of a total of 240,000 hectares of oil palm in the next three years as well as improve the productivity of farmers through fertility management practices. As part of the measures to increase the productivity and output of oil palm, the minister assured that his ministry will enhance the semi wild grove yield through gradual replacement of old and unproductive wild palms with improved planting materials. Under the arrangement which is a public-private partnership, the Federal Government would provide free improved nuts or seedlings to the participating estates which will be required to nurse the seedlings for the next 10-12 months and thereafter transplant them to their own plantations. The minister added that the improved oil palm seedlings have high-yielding capacity estimated at over 21 metric tonnes per hectare and high resistance against many tropical diseases. He disclosed that the Federal Government has concluded plans to introduce motorised harvesters that can harvest 500-900 fresh fruit bunches per day, as well as

support the primary processors to own the Small Scale Processing Equipment,SSPE. To this end, he stated that his ministry has begun the compilation of the list of smallholder co-operative groups interested in the equipment in order to provide them with technical support, noting that

First Bank Plc has accepted to provide funds for the purchase of the equipment. To create viable market for oil palm producers in Nigeria, he said the Federal Government will soon ban the importation of cheap crude palm oil into Nigeria, to

forestall a situation where oil palm transformation agenda will be undermined. The 18 participating plantations or estates are from Kogi, Edo, Ondo, Delta, Cross River, Ogun, Akwa Ibom, Bayelsa, Abia, Osun and Enugu States.

*The presentation of cheque to winner of Nokia Danfo Reloaded competition took place at the Nokia office in Victoria Island Lagos recently. From left: Mr Fikayo Aremu,Planning and Analytic Mgr, Linda Yeo,Senior Product Mgr both of Nokia presenting the Dummy Cheque to Mr Jibola Bakare, the winner, while Miss Mayowa Okuyiga, Legal Officer, Lagos State Lotteries Board looks on. Photo by Biodun Ogunleye

FMCG’s GDP contribution rises by 24%’ ...Flour millers to benefit from growth NKIRUKA NNOROM


he Fast Moving Consumer Goods, FMCG, sector’s contribution to the country’s GDP now stands at 24.3 per cent. The recent momentous growth being witnessed in the FMCG sector presents unusual opportunity for Nigerian flour millers to unleash their growth potentials, a report by the Financial Derivatives Company, FDC, has shown. FDC observed in its monthly Economic Bulletin for the month of August, themed, ‘Investment Case for Flour Mills & FMCG Sector in Nigeria’, that the changing consumer taste which tilts towards flour products favours growth in

the flour milling business. The report, specifically observed that the change in behaviour has led to food items like pasta and noodles, which are not of Nigerian origin, to now make up a significant portion of the population’s diet as well as consumer spend. According to the report from FDC, this positions the flour millers at the forefront of opportunities in the country. FDC said, “The FMCG sector remains one of the fastest growing sectors of the economy and we believe opportunities still exists in this sector. The size of the market is heavily influenced by the country ’s demographic dynamics and the profound influence that western culture is having on consumer tastes.”

Giving a statistical breakdown of activities in the FMCG sector, the company said Nigeria’s consumer market was estimated at approximately N15 trillion with the food and drinks accounting for the largest component. The Nigerian population which is estimated at approximately 168m people, majority of which in the 1635 age bracket, also presents an advantage for the millers, the company further stated. “The FMCG sector has benefited the most from this young burgeoning population. The sector grew 10 per cent from 2000 until 2010 with the sector ’s contribution to GDP increasing from 13 per cent to 24.3 per cent over the same period.

Vanguard, MONDAY, SEPTEMBER 3, 2012 — 23

Banking & Finance

*From Left: Mr. Enitan Oyekanmi, Branch Manager, Standard Chartered Bank; Pauline Iheme, Cluster, Customer Relations Manager, Priority and International Banking, Standard Chartered Bank; David Shigarda, winner of the Visa Card Olympic promo and Idowu Thompson – Regional Branch Manager, Abuja &North Region of Standard Chartered Bank, during a presentation to winners of the Olympic Visa Card promo in Abuja.

Banks’ lending to economy dips by N368bn BY MICHAEL EBOH


ank’s lending to the Nigerian economy depreciated by 2.7 per cent in the second quarter of 2012. This was in contrast to an improvement of 8.3 per cent recorded in the first quarter of 2012. According to the Economic Report for the Second Quarter of 2012, released by the Central Bank of Nigeria, the total amount lent by banks dipped by N368 billion from N13.68 trillion recorded at the end of the first quarter of 2012 to N13.313 trillion at the

end of the second quarter. The decline, according to the report, is as a result of a significant decline in bank’s lending to the Federal Government, a development which dampened the effect of an increase recorded in lending to the private sector. At the end of the second quarter, the report disclosed that banking system’s claims on the Federal Government declined by 213.2 per cent to negative N1.381 trillion, compared to a decline of 11.3 per cent in the preceding quarter. The CBN blamed the decline in banks’ claims on the Federal Government to

the banks’ decision to reduce their holdings in government securities, especially Treasury Bills and bonds, noting, however, that the Federal Government, however, remained a net lender to the banking system at the end of the review quarter. However, the CBN disclosed that banking system’s credit to private sector rose by 4.1 per cent to N14.694 trillion, in contrast to the decline of 0.4 per cent at the end of the first quarter of 2012. The CBN attributed the increase in credit to the private sector on a 3.9 per

cent appreciation in claims to the core private sector. Furthermore, the CBN, in the report, stated that net foreign assets of the banking system appreciated by 3.0 per cent at the end of the second quarter, compared with an increase of 2.4 at the end of the first quarter, attributing this to the increase in CBN’s holdings. Continuing, the report stated, “At the end of the review quarter, other assets (net) of the banking system declined by 4.7 per cent to negative N 7.355 trillion, compared with the decline of 2.6 and 10.4 per cent at the end of the preceding quarter and the corresponding quarter of 2011, respectively. The development reflected, largely, the fall in unclassified assets of the CBN.” The report further disclosed that currency in circulation stood at N1.364 trillion, dropping by 4.8 per cent, compared with a decline of 8.5 per cent at the end of the first quarter, due to a 12.6 per cent reduction in currency outside the banking system in the second quarter. The report said, “Total deposits at the CBN amounted to N6.469 trillion, indicating an increase of 15.7 per cent, in contrast to a decline of 7.1 per cent at the end of the preceding quarter. “The development reflected largely the 20.9 per cent increase in Federal Government deposits. Of this total, the shares of the Federal Government, banks and ‘others’ were N4.714 trillion (72.9 per cent), N1.149 trillion (17.8 per cent) and N607.30 billion (9.3 per cent), respectively. “In line with the trends in DMBs’ deposits with the CBN, the Reserve Money (RM), increased by 0.2 per cent to N2.513 trillion, from N2.507 trillion at the end of the preceding quarter.

Delta State deploys software for surveillance of MDAs By LAZARUS IBEABUCHI


elta State Government has created an economic development and performance measuring mechanism which will assess quarterly, various ministries, directorates and agencies, MDAs, in the state. Speaking at a press conference, Mr. Bismarck Rewane, chairman of the state's Economic Advisory Team, EAT, said the Economic Dashboard is a selfevaluation process which will help to increase the level of transparency and accountability in corporate governance as well as open the gateway for citizens and investors to easily assess economic development in the state. According to him, the

Economic Dashboard, developed by a firm in Germany and used in various developed countries, is an automated software that measures the MDAs' progress, revealing the performing and nonperforming sectors, thereby giving the government a continual process of evaluating itself. It will also help to strategise, plan and execute its set objectives for a better performance. He said, “Currently, there is inadequate accountability in public governance. As a result, stakeholders in the private sector are partnering with the state government to launch an Economic Dashboard. The Economic Dashboard provides a summary of the key macroeconomic indices as well as current state of the sectors with direct impact on economic development.

“The Federal Government and various state governments run on deficit budget. This means our annual budget is financed through external sources. Many states are using bonds to finance infrastructure development. As such, the Economic Dashboard, which is private sector-driven, is in furtherance of good corporate governance which is in short supply in the country. It will help assess the extent that the state is optimally utilising its scarce resources.” Dr. Ndidi Edozien, CEO, Strategic and Execution Consulting added that the peer review mechanism is a framework created by the state government to open up wider opportunities for the private sector to participate in developing the state. She said the Economic Dashboard will provide data for the economic team to

measure progress and contribute in meaningful development that is public and private sector-driven. Commenting on the outcome of the meeting of EAT attended by Governor Emmanuel Uduaghan and other stakeholders in Lagos, Mr. Rewane said the state is set to revive all the moribund industries and also develop its agricultural sector, with a view to generating more revenue and employment. “At the meeting, we noted that there is major constraint between real Gross Domestic Product, GDP, which is about seven per cent and, potential GDP standing at about 22 per cent in the country. In order to improve the standard of living of citizens, the governor gave an assurance that within 90 days, all the dormant industries in the state will be reviewed and reactivated.

BRIEFS Bernanke says he wouldn’t rule out further asset purchases


ederal Reserve Chairman, Ben S. Bernanke said he would not rule out further bond purchases to boost growth and reduce unemployment, which he called a “grave concern.” “The costs of nontraditional policies, when considered carefully, appear manageable, implying that we should not rule out the further use of such policies if economic conditions warrant,” Bernanke said today in a speech to central bankers and economists at an annual forum in Jackson Hole, Wyoming. Bernanke’s speech comes two weeks before he leads a meeting of the Federal Open Market Committee to decide whether an expansion of the Fed’s record stimulus is needed to spur growth. Two rounds of large-scale asset purchases totaling $2.3 trillion have so far failed to reduce the jobless rate below 8 per cent more than three years into the recovery. Bernanke’s 24-page speech at the Kansas City Fed’s symposium reviewed the Fed’s policy actions through the financial crisis and use of nontraditional policy tools such as communication and outright bond purchases, concluding that they have been effective in boosting growth and improving financial conditions.

Banks pin hopes on $7.6bn AIA selldown for buffer


s American International Group (AIG.N) becomes free next week to sell a $7.6 billion stake in former unit AIA (1299.HK), deal-starved bankers in Hong Kong are jostling for a role in what may be Asia-Pacific’s biggest stock market event of the year. A lock-up agreement preventing the U.S. insurer from selling the stake expires on September 4. If AIG does decide to sell the entire 18.6 percent stake, the deal would be Asia’s biggestever block offering, ahead of Vodafone plc’s (VOD.L) $6.6 billion sale in China Mobile (0941.HK) two years ago. A role in the AIA Group Ltd selldown could offer a major financial boost to the banks, in the form of a substantial fee for a day ’s work, and a significant increase to their deal rankings heading into the final quarter of what has been a dismal year. C M Y K

24 — Vanguard, MONDAY, SEPTEMBER 3, 2012

Banking & Finance BRIEF Spain capital outflows rise nearly 40% in June


pain saw close to a 40 per cent rise in capital outflow in June, Bank of Spain data showed on Friday, as investor confidence in a country struggling to balance its public accounts eroded further. The central bank reported that net capital outflow, not including central bank operations, was 56.6 billion euros ($71 billion) in June, after an outflow of 41.3 billion euros in May. A total of 315.6 billion euros of capital has left the country in the year to end-June, equivalent to nearly one-third of the country ’s economic output. In the first half of 2012 capital outflow was 220 billion euros. Spain’s economy entered a recession at the end of last year, and falling output and tax revenues will test the country ’s ability to cut its public deficit to meet European Union demands. One analyst said Spain’s dire situation would be helped if the country calls for a rescue package to lower its financing costs, something the government is contemplating.

Deflation deepens as Japan contraction risk intensifies Japan ’s consumer prices slid at a faster pace in July and industrial production unexpectedly slumped, raising the danger that the world’s third-largest economy has slipped back into a contraction. The benchmark price gauge, which excludes fresh food, fell 0.3 percent in July from a year before, putting the central bank’s 1 percent inflation goal further from reach, a government report showed in Tokyo. Industrial output fell 1.2 percent. A private measure of manufacturing for August was the lowest since the aftermath of the record March 2011 earthquake. Today ’s releases reflect diminishing demand overseas for the nation’s exports amid the European crisis and exchange-rate appreciation, and the end of incentives for vehicle purchases. With Prime Minister Yoshihiko Noda’s government today predicting it will miss a deficit-reduction target, pressure may rise on the Bank of Japan (8301) to expand stimulus and sustain the recovery.

*From left: Alhaji Kabir Mashi, Executive Chairman, Federal Inland Revenue Service (FIRS); Dr Musa Babayo, Chairman, Board of Trustees, Tertiary Education Trust Fund; Professor Ruqayyatu Ahmed Rufa’i, Hon. Minister of Education and Prof Mahmood Yakubu, Executive Secretary, Tertiary Education Trust Fund at the Year 2012 Tertiary Education Trust Fund (TETFUND) Taxpayers Forum held in Lagos. Photo by Lamidi Bamidele

Money market assets’ value dips by N288bn in three months By MICHAEL EBOH & ELIZABETH AMIHOR


he value of money market assets in the Nigerian financial system dipped by N288 billion in three months — between April and June 2012, according to the Central Bank of Nigeria’s economic report for the second quarter of 2012. Money market assets’ value which opened the second quarter at N5.534 trillion depreciated by 5.2 per cent to close the quarter at N5.246 trillion. The decline, according to the report, is as a result of significant decline in the value of Federal Government of Nigeria, FGN, Bonds, Treasury Bills, Bankers’ Acceptances, BAs, and Commercial Papers, CPs, owing to reclassification of some items. In particular, the value of Bankers Acceptances held by banks dropped by 29.01 per cent to N20.2 billion at the end of the second quarter, compared with the decline of 61.3 per cent at the end of the first quarter. Value of Commercial Papers held by banks depreciated 98.9 per cent to N2.0 billion at the end of the second quarter of 2012, compared with the decline of 3.5 per cent at the end of the preceding quarter. According to the report, the development reflected the decline in investments by deposit money banks and discount houses, especially BAs accounted for 0.4 per cent of the total value of money market assets outstanding at the end of the review quarter,

compared with 0.5 per cent at the end of the preceding quarter. The CBN disclosed that Open Market Operation, OMO, remained the major instrument of liquidity management in the second quarter of 2012, complemented with interventions in the foreign exchange market. According to CBN’s report, while the open market experienced a fall the interbank market rate maintained an upward trend for most part of the second quarter in response to liquidity condition. The CBN said, “The weighted average interbank call rate increased

by 0.14 percent point to 14.34 percent at the end of Q2 compared to the 14.20 percent which stood at Q1 of 2012. Federal government Bonds and Nigerian Treasury Bills (NTBs) were issued at the primary market for the fiscal operations of the Federal Government.” The apex bank further noted that FGN Bonds of three, five, seven and 10-year tranches were auctioned during the review period, noting that of the four tranches, two (threeyear and 10- year) were reopenings while the other two (5-year and seven- year) were new issues. It said, “The total amount offered, subscribed to and

allotted were N243.91 billion, N468.22 billion and N243.91 billion respectively, with marginal rates between 14.95 – 16.24 per cent. N20 billion and N28.7 billion of the 7and 10–year tranches were also sold to non-competitive bids in the month of June. “Bills of maturities ranging from 41 to 357 days were also traded in Q2of 2012 to mop up excess liquidity in the system. The total sale in the review period was N681.43 billion, while subscription was N1, 978.10 billion. “The bid rates ranged from 12 to 18.5 per cent, while the stop rates ranged from14 to 15.56 per cent. The total sales were 52.02 per cent below the level in the previous quarter.

GTB declares 25 kobo interim dividend for Q2 2012 NKIRUKA NNOROM


uranty Trust Bank Plc has declared its intention to pay an interim dividend of 25 kobo per share to the shareholders for the half year ended 30th June, 2012. The half year unaudited financial statement filed with the Nigerian Stock Exchange (NSE) showed that after tax profit rose significantly by 64.7 per cent. According to the filing obtained by Vanguard, only shareholders whose names appear on the bank’s register as at 10th of September, 2012 would benefit from the returns, while the qualification date for GDR th holders would be 5 September. While ordinary shareholders would be paid st on 21 September, GDR

nd holders would be paid on 2 October, 2012, the bank said. Breakdown of the results also showed that post tax profit rose to N45.55 billion from N27.65 billion, which translates to 64.7 per cent increase. The profit before taxation rose by almost the same margin to N53.64 billion from N32.92 billion recorded in the same period of 2011. Profit from continuing operations climbed 67.5 per cent to N44.94 billion, while profit to equity holders jumped by 66.2 per cent to N45.38 billion. The bank grossed N106.12 billion within the period, compared to N84.77 billion reported in the equivalent period of 2011, amounting to 25 per cent increase. GTB’s data showed commendable credit exposure to the real sector as the position of its loans and

advances improved by 12.4 per cent to N794.70 billion, as against N706.89 billion in 2011. While commending the bank on its tradition of consistently paying dividends, shareholders at the last yearly meeting said it was exciting, especially now that other quoted companies, particularly banks find it difficult to pay dividend. Speaking, Sir Sunny Nwosu, National Coordinator, Independent Shareholders Association of Nigerian (ISAN), said the move was commendable. Also speaking, President, Nigerian Shareholders Solidarity Association, NSSA, Mr Timothy Adesiyan, said he was hopeful that shareholders would receive higher returns at the end of current financial year.

Vanguard, MONDAY, SEPTEMBER 3, 2012 — 25

Corporate Finance

*From left: Mrs. Frances Akpomuka, Company Secretary, Dr. Mohammed Koguna, Chairman and Mr. Sule Umar Bichi, Managing Director/Chief Executive Officer at the 19th Annual General Meeting of Red Star Express held in Lagos. Photo by Sylva Eleanya.

Flour Mills blames high production cost for profit decline BY MICHAEL EBOH & NKIRUKA NNOROM


lour Mills of Nigeria Plc has blamed tough o p e r a t i n g environment and the rising cost of production for the decline in its bottom line in its 2012 financial year. The company had recorded a turnover of N258.268 billion in its year ended, March 31, 2012 financial statement; rising by 8.15 per cent from a turnover of N238.8 billion recorded in 20112. Despite the increase in its turnover, the company’s profit before tax dipped by 26.73 per cent to N12.049 billion in 2012 financial year, from N16.445 billion recorded in its 2011 financial year, while its profit after tax depreciated by 11.36 per cent to N8.377 billion from N9.45 billion in 2010. Speaking at a forum heralding its 2012 annual general meeting, in Lagos, Mr. Emmanuel Ukpabi, Group Managing Director, Flour Mills, attributed the decline in its profit to the high cost of raw materials, high cost of power generation, Federal Government’s policy on cassava and security challenges in the Northern part of the country among others. According to him, the high cost of raw materials, especially rising cost of wheat in the international market, is eroding its profit, in addition

to high diesel and gas cost. He said, “If the Federal Government will address the country’s power situation and the company resort to the use of public power, our production cost will reduce significantly.” Ukpabi said the recent policy of the Federal Government on cassava addition in flour production, which led to the introduction of higher tariffs on wheat importation, has posed a serious challenge to the

company. According to him, the policy has brought about an introduction of 15 per cent levy and 10 per cent duty on wheat importation, adding that a lot of facility will have to be put in place by flour millers for them to be able to effectively implement the policy. “Another challenge inherent in the cassava policy is the acceptability of the finished products by bakers. There is the question of how many

bakers will be prepared to use flour made from cassava and wheat in the production of bread,” he queried. Ukpabi disclosed that the security challenges in the northern part of the country is seriously hampering its operations, earnings and profitability, saying that in some of its milling plants in the region, production is been impeded, arising from government’s imposition of curfews and restrictions in the areas affected by insecurity. On the company ’s future plans, Ukpabi stated that its subsidiary, Golden Penny Sugar, is set to commence operation fully and will launch its sugar products into the market before the end of the year. He said, “Over the next few months, we would be commissioning our high tech sugar refinery powered by two natural gas-driven turbines and waste heat exchange burners, which have qualified for carbon credits under Clean Development Mechanism, CDM.” Continuing, Ukpabi noted, “Flour Mills’ goal is to be involved at all stages of the food value chain where a profitable agro-allied platform of cultivating and processing locally produced raw materials will ensure the growth and success of our food business. “In pursuit of our goals in the food and agro-allied businesses, we continue to explore growth opportunities through acquisitions, mergers, take-overs and other forms of business combinations in other to broaden our earnings base, create synergies and build a profitable and sustainable future.”

Conoil targets expansion, eyes West African market

BRIEFS GT Asset trains Kwara indigenes on risk management, investment NKIRUKA NNOROM wara State Government in partnership with Guarantee Trust Asset Management Limited have concluded an investment and risk management training for Kwara State civil servants, in a move to guarantee their financial freedom. Speaking at a two-day workshop with a title, “Steps to Attaining Financial Freedom” organised by the State Government, Mr. Nicholas Nyamali, Managing Director, GT Asset Management, said the firm decided to partner Kwara State government due to the efforts put in place by Governor Abdulfatah Ahmed in ensuring welfare of the people of the state not only during their active years of service but also when they retired. Nyamali said his firm was ready to assist public servants in Kwara State in achieving a desirable retirement through quality financial freedom, asset management and risk intervention initiatives. A statement signed by Abdulwahab Oba, Chief Press Secretary to the Kwara State Governor quoted Nyamali as saying, “We have designed this gesture to ensure financial freedom among civil servants and help them plan for their tomorrow which shall soon come through retirement.”


DuPont to sell car paint unit to Carlyle for $4.9bn




onoil Plc has pledged to expand its operations, even as shareholders applaud the Board and management of the company over its impressive financial performance despite challenges and harsh operating environment plaguing the downstream sector of the petroleum industry. Meanwhile, the company has promised to project its corporate brand beyond the Nigerian borders with the determination to dominate the oil marketing business in West Africa sub-region and beyond. General Secretary, Independent Shareholders

Association of Nigeria (ISAN) Mr. Adebayo Adeleke spoke alongside the other shareholders during the company ’s 42ndAnnual General Meeting for the year ended December 31st 2011 held in Ibadan, Oyo State. Adeleke who stated that the performance of Conoil during the period under review further re-enforced investors’ confidence in the company, said that a closer look at the results posted by the company shows a prudent management, strategic planning and cost control measures, resulting in growth and improved bottom-line. “The cash flow position of the company revealed a company that is very liquid to

meet its obligations and explore more profitable opportunities.” Earlier, Chairman of Conoil Plc, Dr. Mike Adenuga, attributed the impressive performance to the company’s commitment to operational efficiency, adherence to corporate governance guidelines, strategic planning, pro-active investment and expansion policy. Adenuga noted that despite some of the bold and commendable measures the Federal government took to stimulate real growth in the various sectors of the economy, the business operating environment still remained very challenging.

uPont Co struck a deal to sell its slow-growing car paint business to investment firm Carlyle Group LP (CG.O) for $4.9 billion cash as it seeks to focus on highergrowth areas such as agriculture and nutrition. A sale of the performance coatings unit to Carlyle, one of private equity’s top investors in industrial companies, allows DuPont to cut debt and better positions it for acquisitions in priority sectors such as advanced materials and biotechnology. A private equity firm with expertise in managing costs, Carlyle gets a business that is a leader in the markets it serves and has a stable cash flow that allows it to seize on opportunities in developing economies such as China and Brazil. C M Y K

26 —Vanguard, MONDAY, SEPTEMBER 3, 2012

Corporate Finance BRIEFS Access Bank’s CRO appointed RIMAN President


ccess Bank’s Chief Risk Officer,(CRO), Dr. Gregory Ovie Jobome, has been appointed as the President of Risk Managers Association of Nigeria (RIMAN), an industry body of risk professionals comprising both institutional and individual members in the financial services sector. By this appointment, Greg will steer the affairs of the association for the next one year and help in attaining its objective of building and sustaining a credible risk management environment through proactive advocacy, capacity building, knowledge sharing and promotion of high professional standards in the country. Speaking on his appointment, Greg said “It is an honor to accept these new responsibilities at RIMAN. My colleagues in the executive council have performed excellently in repositioning the Association and I am delighted to have this opportunity of working with them to entrench best practice in risk management function in Nigeria.”

Enterprise Bank restates commitment to efficient service


anaging Director/ Chief Executive

Officer, Bank (EBL), Ahmed Kuru said the bank has overhauled its operational channels and invested heavily in personnel to serve every customer of the bank efficiently and satisfactorily. Kuru, who addressed hundreds of customers of the bank at the capacity-filled Sharon Hall, GRA Onitsha, during the bank’s customer forum, affirmed that, “Our bank is now a strong financial institution with asset base in the excess of N200 billion and in the last one year, we have spent a lot of time and resources put suitable infrastructure in place just to serve you better. We have sharpened the system and hastened our speed of service delivery because we value our relationship with you.” The Managing Director/ Chief Executive Officer further explained that Bank the Customer fora across the country to interact with customers and stakeholders on ways that would be mutually beneficial. C M Y K

Equities’ value on NSE rises by N112bn By LAZARUS IBEABUCHI


he Nigerian Stock Exchange, NSE, continues to record an upsurge in investors’ confidence as the value of listed equities appreciated, last week, by N111.81 billion. Specifically, equities’ value, represented by the market capitalisation and the AllShare index, rose by 1.5 per cent. The market capitalisation which opened at N7.448 trillion, gained N111.81 billion, to close at N7.561 trillion; while the All-Share Index garnered 351.23 basis points to close at 23,750.81 points from 23,399.58 points at which it opened. Forty-two equities appreciated in price during the week, higher than thirty equities in preceding week. Nestle Nigeria Plc led on the gainers’ table, gaining N24.94 to close at N550.00 per share from N525.06 per share at which it opened; followed by Guinness Nigeria Plc, rising by N3.50 to close at N252 per share and Nigeria Breweries garnered N3.30 to close at N123.00 per share. Other price gainers include: Chemical and Allied Products Plc N2.42, UAC Nigeria Plc N1.65, Seven-Up Bottling Company N1.50, Flour Mills Nigeria Plc N1.50, Okomu Oil Palm Plc N1.50, Glaxo Smithkline Consumer Plc N1.28 and Cadbury Nigeria Plc N1.20, among others. On the other hand, 26 stocks depreciated in prices, lower than thirty-four in preceding

week. PZ Cussons Nigeria Plc led on the losers’ table, shedding N1.12 to close at N22.86 per share; followed by Conoil Plc, dropping by N1.03 to close at N19.73 per share and Morison Industries Plc lost N0.71 to close at N12.73 per share. Other price losers in the top 10 category include: Arbico Plc N0.66, Nigerian Aviation Handling Company Plc N0.60, Dangote Flour Mills Plc N0.35, May and Baker Nigeria plc N0.26, Dangote Sugar Refinery Plc N0.23, National Salt Company

Nigeria Plc N0.19 and Red Star Express Plc N0.19 The volume of equities traded in the week under review, appreciated by 66.3 per cent, as investors exchanged 1.461 billion shares valued at N10.14 billion in 20,322 deals, in contrast to a turnover of 878.53 million shares valued at N9.907 billion in 11,633 deals in the penultimate week. The Financial Services sector was the most active during the week under review with 1.1 billion shares valued at N6.89 billion exchanged by investors

in 12,030 deals. Volume in the sector was largely driven by activity in Banking sub-sector, with 761.22 million shares valued at N6.70 billion in 11,311 deals. Shares of Zenith Bank Plc was the toast of investors in the sub-sector, recording 163.99 million shares valued at N2.53 billion in 1,421 deals, followed by First Bank Plc with a turnover of 103.003 million shares valued at N1.38 billion in 3,058 deals, and Access Bank Plc recording 70.86 million shares valued at N546.09 million in 941 deals.

*From left: Minister of Agriculture, Dr. Adesina Akinwumi, Group MD/CEO, Access Bank Plc, Mr. Aigboje Aig-Imoukhuede and Minister of State for Agriculture, Alhaji Bukar Tijani during the presentation of 10 Coaster buses donated by Access Bank Plc, to the Ministry of Agriculture and Rural Development to boost Federal Government's Agriculture Sector Transformation Agenda in Abuja.

Mansard Insurance declares N902m half year profit BY MICHAEL EBOH & RITA OBODOECHINA


ansard Insurance Plc, formerly Guaranty Trust Assurance Plc , has announced a profit after tax of N902 million in its half year ended, June 30, 2012, financial performance. According to a statement by the company, its profit after tax appreciated by 63 per cent from a profit after tax of N555 million recorded in the same period in 2011. The company recorded gross premium income of N7.89 billion, rising by 29 per cent from N6.10 billion recorded in half year 2011; net premium revenue of N2.39 billion, up by 26 per cent from N1.90 billion recorded in 2011 and

profit before tax of N1.03 billion, rising by 38 per cent from N743 million in half year 2011. The company said the improvement in its premium income is as a result of its focus on key products and market segments, its continuous effort to control underwriting cost and its conservative approach to underwriting policies. It further stated that the significant appreciation recorded in its bottom line was due to growth achieved on all its income lines and its improved operational efficiency. Speaking on the performance of the company, Tosin Runsewe, Chief Client Officer, Mansard, said, the company is putting in place measures to ensure that it

continually churns out impressive performances till the end of the year, leveraging on the gains made in its investment portfolio and in the expansion of its retail distribution network. He said, “We begin the year with the strategic intent of completing our transition to a leading independent insurance company in Nigeria. We also set out to sustain our growth by focusing on key products and certain market segments while expanding retail distribution points. “These impressive numbers are a testament to the success of our strategy. With 63 per cent growth in profitability achieved against a backdrop of improvement in our underwriting performance,

impressive and sustainable growth in invest income and greater cost optimization, Mansard Insurance has continued its development as a leading independent underwriter in Nigeria. “Given the positive outlook for the rest of the year, we hope to meet our profit forecast for 2012.” Also speaking, Rashidat Adebisi, Chief Financial Officer of the company, said, “We are proud to announce that we are the first insurance company operating in Nigeria to have a complete set of financial audited and published in line with the dictates of the International Financial Reporting Standards, IFRS. “This is another milestone in our history and a validation of our leadership position in the industry.


1.19 5.52 0.95 5.81 33.86

26.25 7.21

Livestock/Animal Specialities Livestock Feeds Plc

CONGLOMERATES Diversified Industries A.G. Levents Nigeria Plc SCOA Nigeria Plc Transnational Corporation Chellarams Plc UACN Plc

CONSTRUCTION/REAL ESTATE Non-Building/Heavy Construction Julius Berger Nig Plc Roads Nigeria Plc


6.40 4.40 52.00 1.99 4.90 0.86

16.74 500.00

10.03 36.19 3.01 2.88

24.44 35.00

7.60 0.64 0.57 2.65 10.21 1.31 0.50 12.50 3.05 17.81 1.07 0.70 1.15 2.73 0.88 6.40 1.04 4.33 4.95 0.50 0.50 15.39

0.50 0.65 0.50 0.50 0.50 1.31 0.50 0.56 0.50 1.55 0.50 0.53 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.51 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50

0.50 0.50

0.50 2.02 0.51

Beverages-Non-Alcoholic 7-UP Bottling Company Plc

Food Products Dangote Flour Mills Plc Dangote Sugar Refinery Plc Flour Mills Nigeria Plc Honeywell Flour Mill Plc National Salt Co. Nig Plc UTC Nigeria Plc

Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc

Household Durables Beta Glass Co Plc Nigerian Enamelware Plc Vitafoam Nig. Plc Vono Products Plc

Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc

FINANCIAL SERVICES Banking Access Bank Plc Afribank Nigeria Plc Bank PHB Plc Diamond Bank Nigeria Plc Ecobank TRANSNATIONAL INCORPORATION Fidelity Bank Plc FinBank Plc First Bank of Nig. Plc First City Monument Bank Plc Guaranty Trust Bank Plc NPF Micro-Finance Bank Plc Intercontinental Bank Plc Oceanic Bank International Plc Skye Bank Plc Spring Bank Plc Stanbic IBTC Bank Plc Sterling Bank Plc UBA Plc Union Bank Nig. Plc Unity Bank Plc Wema Bank Plc Zenith Bank Plc

Insurance Carriers, Brokers and Sector AIICO Insurance Plc Continental Reinsurance Plc African Alliance Insurance Cornerstone Insurance Company Consolidated Hallmark Insurance Custodian and Allied Insurance Plc Equity Assurance Plc Goldlink Insurance Plc Great (Nig) Insurance Plc Guaranty Trust Assurance Plc Guinea Insurance Plc Intercontinental Wapic Insurance Plc International Energy Insurance Plc Investment and Allied Assurance LASACO Assurance Plc Law Union & Rock Insurance Plc Linkage Assurance Plc Mutual Benefits Assurance Plc NEM Insurance Co. (Nig) Ltd Niger Insurance Co. Plc OASIS Insurance Plc. Prestige Assurance Co. Plc Regency Alliance Insurance Sovereign Trust Insurance Staco Insurance Plc Standard Alliance Insurance UNIC Insurance Plc Universal Insurance Plc

Mortgage Carrier, Broker and Sector Aso Savings and Loans Plc Resort Savings & Loans Plc

Other Financial Institutions Crusader (Nigeria) Plc Deap Capital Management & Trust Plc Royal Exchange Assurance


3.29 249.00 8.42 119.70 0.89

Beverages-Brewers/Distillers Champion Breweries Plc Guinness Nigeria Plc International Breweries Plc Nigerian Brew Plc Premier Breweries Plc

HEALTHCARE Medical Supplies Morison Industries Plc Healthcare Providers



Real Estate Investment Trusts Skye Shelter Funds CONSUMER GOODS Automobile/Auto Parts DN Tyres & Rubber Plc


0.50 30.00 14.89

1st fTier Securities AGRICULTURE Crop Production FTN Cocoa Processors Plc Okomu Oil Palm Plc Presco Plc

Real Estate Development UACN Property Development


Oil and Gas and Products Petroleum Products Capital Oil Plc


Opening Price (N)

Capital Market


0.50 2.02 0.51

0.50 0.50

0.50 0.61 0.50 0.50 0.50 1.20 0.50 0.52 0.50 1.60 0.50 0.55 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50

7.70 0.64 0.55 2.71 10.30 1.40 0.50 13.54 3.00 17.53 1.07 0.70 1.15 2.68 0.88 6.70 1.05 4.29 5.10 0.50 0.50 15.38

22.86 35.24

10.03 36.19 3.01 2.88

16.65 525.06

6.49 4.17 53.50 2.00 4.70 0.75


3.28 252.50 8.42 123.00 0.93




26.72 6.94

1.18 5.52 0.89 5.81 33.86


0.50 31.50 15.00


Closing Price (N)


300,000 84,748 278,900

800,000 440,000

2,080,326 2,455,844 1,000 100,000 200 13,908,000 24,300 456,756 2,000,000 1,698,475 7,100 262,030 37,332 115,000 6,000 1,551,606 500,050 2,330,304 41,100 200 2,000 51,600 100 100,000 400,100 500 4,000 73,114

3,268,445 646,608 13,287,533 6,021,762 2,698,976 22,890,534 1,000 28,426,429 3,828,683 12,354,962 56,000 73,200 91,000 8,487,510 1,006,032 3,750,278 17,555,419 36,778,426 957,770 1,149,372 409,146 41,623,960

298,027 1,268,518

225 60 227,437 5,000

625,405 110,133

4,632,547 12,770,417 135,730 1,061,458 1,475,173 210,100


10,000 485,318 22,005,991 1,251,837 500,000




339,530 50,000

24,241 700 12,277,703 100 650,225


8,724,183 11,180 280,737


Quantity Traded


0.61 2.02 0.66

0.50 0.50

1.06 1.20 0.50 0.50 0.50 3.51 0.50 0.69 0.50 0.95 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.90 0.50 2.50 0.50 0.50 0.50 0.50 0.50 0.50

11.10 3.39 2.30 9.27 4.30 3.20 9.50 16.12 8.30 20.50 1.78 1.78 13.50 10.17 2.18 11.38 2.91 11.70 5.38 1.92 1.75 16.70

43.50 31.25

15.58 42.66 6.75 3.67

29.20 470.00

19.90 16.20 95.00 6.60 6.70 0.88



0.50 2.02 0.50

0.50 0.50

0.50 0.85 0.50 0.50 0.50 2.00 0.50 0.50 0.50 0.95 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 1.90 0.50 0.50 0.50 0.50 0.50 0.50

4.26 0.64 0.53 2.05 1.65 1.20 0.00 7.95 3.60 11.64 0.00 0.87 0.00 3.90 0.73 6.30 0.95 2.17 1.96 0.50 0.52 11.45

27.00 22.56

12.71 36.19 4.78 2.66

10.17 367.83

4.31 4.02 57.00 2.31 3.80 0.50


2.23 186.00 5.23 72.50 0.93





32.96 3.01

1.45 5.52 0.50 6.43 28.70


0.50 14.53 6.40

Year Low

255.00 7.10 100.00 1.01




62.26 8.28

2.54 8.28 1.82 7.60 42.50


0.64 24.58 8.30

Year High


0.00 0.00 0.03

0.00 0.00

0.09 0.10 0.00 0.00 0.06 0.43 0.00 0.00 0.00 0.08 0.00 0.00 0.00 0.02 0.06 0.10 0.00 0.10 0.36 0.01 0.01 0.14 0.03 0.07 0.00 0.00 0.00 0.00

0.80 0.00 0.00 0.00 0.28 0.22 0.00 1.34 0.69 1.61 0.00 0.18 0.00 0.85 0.50 0.54 0.22 0.13 7.59 0.11 1.34 1.57

1.29 1.32

3.90 1.61 0.70 0.00

0.28 15.94

0.54 0.71 4.50 0.26 0.73 0.06


12.12 0.35 4.50 0.00





3.26 3.66

0.28 0.35 0.22 0.31 7.03


0.01 7.94 1.80



0.00 0.00 16.67

0.00 0.00

5.56 10.20 0.00 0.00 8.33 4.88 0.00 0.00 0.00 17.25 0.00 0.00 0.00 25.00 8.33 5.00 0.00 5.00 1.39 50.00 50.00 6.43 16.67 7.14 0.00 0.00 0.00 0.00

5.83 0.00 0.00 0.00 25.91 6.68 0.00 6.96 6.20 8.74 0.00 5.44 0.00 5.07 5.44 14.81 4.68 19.23 0.28 4.82 0.43 7.83

20.93 20.46

3.26 22.48 7.34 0.00

37.57 27.96

16.91 14.38 16.89 16.92 5.75 8.83


19.98 16.29 22.22 0.00





10.11 2.26

5.18 15.77 3.64 20.74 4.14


50.00 2.77 4.37

P.E. Ratio

Non-Metalic Mineral Mining Multiverse Plc


4.90 1.64 5.90

Transport-Related Services Airline Services and Logistics Plc Nigerian Aviation Handling Company


1.64 181 4.20 4.10


6.94 1.22



1.97 1.72

Speciality Interlinked Technologies Plc

Road Transportation Associated Bus Company Plc

Printing & Publishing. Academy Press Plc Learn Africa Plc Longman Nigeria Plc University Press

Media/Entertainment Daar Communications Plc

Hotels/Lodging Capital Hotel Ikeja Hotel Plc

Courier/Freight/Delivery Red Star Express Plc Employment Solutions C & I LEASING PLC

Automobile/Auto Part Retailers Incar Nig. Plc RT Briscoe Plc

Afromedia Plc



20.50 0.50 21.85 2.50 10.42 111.51 32.29 128.01

Petroleum and Petroleum Products African Petroleum Plc Beco Petroleum Plc Conoil Eterna Oil and Gas Plc Forte Oil Nig Plc Mobil Oil Nigeria Plc MRS Oil Nigeria Plc Total Nigeria Plc Hospitality Tantalisers Plc

0.60 14.10

Intergrated Oil and Gas Services Oando Plc

3.98 12.71 13.28 4.30 1.05 2.92 0.66

INDUSTRIAL GOODS Packaging/Containers Abplast Products Plc Beta Glass Co. Plc Greif Nigeria Plc Nampak Nigeria Plc Poly Products (Nig) Plc Studio Press (Nig) Plc W.A. Glass Ind. Plc OIL AND GAS Energy Equipment and Services Japaul Oil & Maritime Service

1.44 0.50

1.66 0.50

Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc Mortgage Carriers, Brokers and Se Abbey Building Society Plc Union Homes Savings and Loans


Processing Sysetms Chams Nigeria Plc



Metals Aluminium Extrusion Ind Plc

Paper/Forest Products Thomas Wyatt Nig. Plc

5.98 10.60



2.42 1.53

9.50 7.27 24.12 4.30 110.02 0.50 0.58 43.25 2.87 2.12 10.93

Tools and Machinery Nigerian Ropes Plc

Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company

INDUSTRIAL GOODS Building Materials Ashaka Cement Plc Berger Paints Plc CAP Plc Cement Co. of Northern Nig. Plc Dangote Cement Plc First Aluminium Nigeria Plc DN Meyer Plc Lafarge WAPCO Plc Portland Paints & Products Nig Plc Paints & Coatings Manufacturers Premier Paints Plc



Computers and Peripherals Omatek Ventures Plc 13.12 2.41


ICT Computer Based Systems108 Courteville Investment Plc

ICT Telecommunications Starcomms Plc

5.05 1.14 0.88 30.50 1.67 0.83 8.59 3.17

Pharmaceuticals Ekocorp Plc Evans Medical Plc Fidson Healthcare Plc Glaxo Smithkline Consumer Nig May & Baker Nigeria Plc Neimeth International Pharm Nigeria-German Chemicals Plc Pharma-Deko Plc

IT Services NCR (Nig) Plc Tripple Gee and Company Plc


Opening Price N Union Diagnostics & Clinicals Services

1.93 5.40



1.64 2.03 4.20 4.52


6.94 1.14



1.97 1.80



20.50 0.50 19.73 2.30 10.47 111.51 32.29 128.01



3.98 12.71 12.98 4.30 1.05 2.78 0.66

1.44 0.50

1.44 0.58







2.19 1.50

9.70 7.63 29.00 4.22 114.10 0.50 0.81 44.01 2.16 2.09 10.93


13.12 2.41



5.05 1.05 0.84 31.80 1.33 0.76 8.59 3.17


Closing Price N

5,100 2,245,431



3,000 340 4,322 1,114,089


50 418,133



240 225,295



82,191 3,479,260 172,908 544,448 124,169 4,672 90,386 14,810



6,888 1,000 400 29,198 200 84,311 2,749,340

2,000 1,000

32,642 15,000







250 2,227,819

355,314 427,608 166,087 41,740 95,704 10,374 68,423 99,615 500 300 1,000


5,003 100



91 97,940 217,000 299,164 94,220 217,708 1,927 50


Quantity Traded

2.78 11.75



8.00 6.82



400 2.07



4.33 3.65



1.57 6.50



4.60 3.60



3.00 1.33



1.97 1.30


141.00 63.86 195.50

163.50 2,100 240.00

27.99 0.50 0.50 5.71 3.89


3.98 12.71 13.97 3.60 1.05 2.92 0.63

1.33 0.50

1.62 2.58







5.94 1.47

12.00 8.10 15.16 4.16 95.00 0.50 1.02 36.58 5.11 0.51 10.93


3.25 3.25



5.31 0.70 0.83 2.58 3.61 0.95 0.95 4.28

37.10 0.70 32.60 5.59



3.98 15.58 15.03 4.30 1.86 2.92 0.63

1.51 0.99

2.50 2.58







6.91 3.60

30.00 12.57 43.98 15.49 132.51 0.75 3.51 48.05 5.28 3.36 13.40


9.31 3.59



5.31 1.45 3.20 23.11 5.61 1.96 12.91 200


Year Low


0.51 0.80



0.00 0.13



0.22 0.69



0.00 0.16


13.32 3.32 11.91

4.93 0.00 6.02 0.67



0.00 3.90 0.00 1.22 0.17 0.07 0.00

0.05 0.00

0.13 0.00







0.15 0.19

1.59 1.71 1.76 1.80 8.01 0.00 0.00 1.05 0.36 0.18 0.00


6.49 0.00



0.06 0.00 0.27 8.88 0.21 0.08 0.00 0.00



4.22 8.75



0.00 27.69



34.09 2.12



0.00 8.19


11.11 19.23 17.07


7.40 0.00



0.00 3.26 0.00 3.52 6.18 41.71 0.00

28.80 0.00

13.15 0.00







39.60 9.16

7.86 4.97 8.88 2.31 13.17 0.00 0.00 42.86 14.19 2.89 0.00


1.43 0.00



9.05 14.13 0.00 0.00

88.50 0.00 3.07


P.E Ratio

as at Friday, August 31, 2012


Year High

Stock Market Report

Vanguard, MONDAY, SEPTEMBER 3, 2012 — 27

28 — Vanguard, MONDAY, SEPTEMBER 3, 2012



r. Wale Oluwo, an economist, is the Managing Director, Investment Banking division of BGL Securities Limited, one of the leading independent investment and research company in Nigeria. In this interview with Financial Vanguard, he said that restructuring the naira is least of Nigeria’s problem. He counseled that rather, the money intended to utilise on such project should be channeled to smoothening the cashless policy initiative. EXCERPTS:

Let me start by asking you what you make of the CBN’s planned introduction of N5,000 bill and redenomination of some lower currencies to coins? I think it is not an issue we should be discussing at this time. We have much more bigger problems to tackle and printing the higher denomination of N5,000 and redenominating other ones will not in any way improve the economic situation we are in. Now, we are in a very grave situation and a lot of us don’t know that. Now, you cannot implement monetary policy without implementing them through efficient market. As it is, a lot of the markets have collapsed. The equity market collapsed about four years ago. About one and half years ago, the bonds market has partially collapsed such that almost half of the Federal Government Bonds are not being traded at all. So, you have a situation where you are implementing monetary policies and markets are not efficient; you cannot allocate resources, you cannot set prices that clear themselves, you have market makers who cannot make the market. You are not dealing with that and you are coming to Nigerians to say ‘look this is the time to increase the denomination to five thousand naira.’ What is wrong with the one thousand naira we have presently? Who is complaining? So, I totally reject this policy and I think it is high time Mallam Sanusi repents very quickly of this and if he does not, let the President call him to order. I think this is happening because when Soludo wanted to do redenomination, he was stopped by the Presidency. So, the CBN is not bigger than Nigeria and no matter the autonomy CBN has, it is still answerable to the President and to the people of Nigeria. It is important that at this time, we should put a stop to this proposal. You said that it is time the President calls him to order, but Sanusi has already said that he has the backing of the presidency. So, how do we reconcile this? That depends on the information he made available to the President. The President is just a human being. There is some information you make available to him that will make him accept what you have brought to him. It is also possible that subsequent information will come to light, especially now that the thing has come to public domain, and a lot experts, a lot analysts and stakeholders are now bringing different perspective to the same issue and as the President gets C M Y K

Naira restructuring is unn will not improve Nigerian

notes do yo coins time the ti down So, y peop printi unne cashl

the benefit of this new information, that may likely put him in a position to reconsider whatever he has signed before. Do you share Sanusi’s view that restructuring the naira will enhance the cashless policy initiative?


don’t think so. I don’t think there is coloration at all between the cashless policy that we are implementing and this five thousand naira note. I believe that the cashless policy itself even makes it unnecessary to have this five thousand naira note because we are trying to engender a regime where people can do business without carrying cash. So, the money he is going to use in reprinting and redenominating currencies that probably nobody will use, he should use that money and invest in all these electronic payment system. If he said we should go cashless and majority of Nigerians have believed him that it is the right thing to do, every investment and money at his disposal should be deployed in making that process smooth and less cumbersome; supporting the private sector that have the infrastructure and the backbone that will sell the cashless transaction, not investing additional money in cash printing. It is absolutely contradictory. For me, this goes deeper than the way the general public is looking at it. We had a debate about a month and half ago about the level of autonomy we should allow the CBN to have. This action of Sanusi has brought that debate to the fore. I think the Senate allowed itself to be intimidated by the articulate presentations of Sanusi, Asiwaju Tinubu and other stakeholders- Ciroma and the rest of them. Ordinarily, what was at stake

I think it is not an issue we should be discussing at this time. We have much more bigger problems to tackle and printing the higher denomination of N5,000 and redenominating other ones will not in any way improve the economic situation we are in.

You avers the C attitu futur


clear, you re coins it befo peop coins bank ‘pay m CBN and b coins Nige coins orien on its have empl as a r Then need natur time y •Wale Oluwo...For the past 30 years, Nigerians have abandoned coins. What is the benefit of coins to Nigerians? during that debate was not really the autonomy of the CBN. What CBN did was to cleverly clothe everything under the cloak of autonomy and started crying that they wanted to strip it of its autonomy. That was not correct. I know the CBN will waste money in two ways now. he first way is that we will waste money printing five thousand naira that is completely unnecessary. On the other hand, we are going to waste money changing some currencies to coins. For the past 30 years, Nigerians have abandoned coins. What is the benefit of coins to Nigerians? Why will the Nigerian person want to spend coins? There is no automated machine that accepts coins. There are no direct PoS services that accept coins and coins are heavy. We must understand money within the context of the definition of money. Money is supposed to be a store of value, a medium of exchange. So, if you want to exchange your goods for my own, you need money. That money can be ordinary paper, it can be a computer, and it can be gold. It does not matter because money is not demanded for its own sake; it is demanded for the sake of what it can buy in terms of goods and services. If


•Wale Oluwo

Vanguard, MONDAY, SEPTEMBER 3, 2012 — 29


necessary waste, s' lot —Oluwo

s can act as medium of exchange, what problem ou have with that? Why must it be coins? The s revolution will come at a later date and by the it comes, it will be clear to everybody that this is ime to embrace coins. So, you cannot force coins n people’s throat. They will continue to reject it. ou are going to waste money printing coins that le will not use, and we are going waste money ing five thousand naira notes that is absolutely ecessary at this time that we are preaching a less economy.

u raised an important issue of Nigerians being se to coins usage. I don’t know what prompted CBN’s decision, but do you see a change in ude among Nigerians towards coins in the nearest re


he problem is not with Nigerians; the problem is

with the CBN. Nigerians have made their position r, ‘we don’t want coins at this time.’ It is either espect that view or you waste your money printing s that definitely will not be used. They have done ore and banks were directed that instead of paying le with only notes, they should pay some of it in s, but it did not work. Come on! I cannot go to k and you pay me coins, I have the right to say me with notes, I am better with it.’ It is either the is telling us that they want to print these coins be spending them there or they want to print the s for Nigerian people to use when in actual fact, erians have shown that they are not interested in s. So, what is the use? They are not ready to rentate themselves. The coins evolution will come s own when productivity has increased, when we e a bumper economy that is stable, when loyment has come, when prices have come down result of increase supply of goods and services. n that is when coins will come back, you don’t to force or encourage people. It will just come rally and they will be looking for it, because each you buy something, there will be change to collect and there will be no coins. Then people will say, ‘bring back the coins. People are cheating me; each time I buy something, they will withhold my change because there are no coins. By the time I added everything together, I have already lost one hundred naira.’ People are going to be sensitive to that. So, it will be a process of evolution. You cannot force people to use coins and I think Mallam Sanusi will have to understand that. Do you see the country attaining that state of evolution you spoke about any time soon? Yes, we will get there in the nearest future, but that will be when we are able to get our economy right by reducing the role of government in the economy gradually and allowing the private sector to unleash their capacity and potentials on the economy. Look, it is all about supply side. It is all about more supply. We cannot be tired of increasing supply because it is increase in supply that brings down the price of goods and services and it is the private sector that can increase supply. So, I don’t understand why we say coins are important at this time, honestly. I have not seen the numbers; I don’t know what this is going to cost us… (Chips in) N40 billion N40 billion! Oh my God! That is a lot of money. N40 billion to print N5,000 notes? What about the coins? (Chips in again) I think the N40

billion is for everything. It is a lot of money, honestly. N40 billion can do a lot in helping the cashless policy to go smoothly. We have tried it only in Lagos. For the CBN to deploy this cashless thing all over Nigeria, particularly those difficult places in the North where you don’t have a lot of people who are educated, that is where you need a lot of the infrastructure to reduce the process to the level that such people can understand in order to flow with it, rather than using the money to print notes and coins when you should be pushing it to the cashless activity. Some people are already expressing fear that the move will trigger off more inflation. Do you also share that opinion? ot necessarily! Not necessarily!! There is no coloration between where you print higher denomination of currency and inflation. That is the truth. We must start from the definition of inflation itself. Inflation is where too much money chases little goods. If we understand inflation like that, and you print five thousand naira, is it going to keep goods out of circulation that will make it inflationary or is it going to increase the quantum of money in circulation? Those are the two basic processes by which that action can be inflationary. It is either that the new money that you are printing or the new coins that are not there is taking goods away from the economy or it is increasing the money in circulation. That is why I said I can’t see any coloration. The amount of money in the system which you can categorise as M1, M2, M3, cash and demand deposit and all of that, by the time you add them together, the fact that we are printing N5,000 notes is not going to increase that quantum, because we are going to withdraw some and replace them with five thousand. The same with the notes they are changing to


The cashless policy itself even makes it unnecessary to have this five thousand naira note because we are trying to engender a regime where people can do business without carrying cash

•Wale Oluwo...What I believe based on his comment is that Nigeria is being blackmailed.

imagination makes people to doubt the intrinsic value of their own currency, then they might take flight to the dollar and they now believe that dollar is stronger; ‘it is better I keep my assets in dollar.’ At that point, the naira will begin to lose its quality as a store of value and what is imaginary can now become real. It is an assumption, it is not apparent. It is not an expected event but it is an event that might trigger an actual event. It is just like when people are at the stock exchange and they wake up in the morning and say, ‘this Lever Brothers shares will likely go down.’ You know it is not real. They are not saying that based on any fact; they have not looked at the accounts of the company, they have not looked at the facts behind the figure and nothing has shown that it will go down. Psychologically people just think ‘ah this thing may go down’ and that psychology can start spreading as rumour and you know what will happen? People will say, ‘I don’t want to hold this because it may go down’ and they start to sell, before you know it what happens? The price of the shares will start to go down. So, what is not real has triggered a real direction. So, that is what I see in this thing. If people begin to perceive it as evidence that

The coins evolution will come on its own when productivity has increased, when we have a bumper economy that is stable, when employment has come, when prices have come down as a result of increase supply of goods and services.

coins, we are going to withdraw those notes and replace them with coins. So, it is a swop. cannot see any inflationary implications that will go with it. Even if you say that prices will start from probably fifty naira, it is a fallacy because when you still go to buy your petrol, the meter is still going to be reading on basis of one kobo or ten kobo. If the price of something is supposed to be ten naira, it does not mean that the person that is selling that thing will increase the price to fifty naira because that is where the denomination of notes starts from. No, what is going to happen is that you are still going to use your note to buy five of such item that is ten naira each. So, let’s separate all these economic issues and not bring in inflation into something that is not inflationary. We must understand the definition of inflation to be able to relate it to what is happening. It will not be inflationary in any way. What is inflationary is if we start to print money and we don’t swop it, then it will be inflationary or if we don’t produce enough and we have too much money chasing few goods, then it will be inflationary. In that case, what do you think is the likely implication to the economy and to Nigerians? I think the implication is that it will induce a psychological scenario where people will begin to think that, probably, the value of the currency is going down. It is not real, it is just psychological. People will think that now we are having higher denomination, it will now mean that the value of naira relative to dollar is getting weaker. That imagination will now trigger a movement in the supply or demand for dollars because if that


naira is getting weaker, they might begin to take position in dollar and that in effect might now turn around to make an imaginary event to become a real event. The impact of that you cannot separate it now because you need a lot of econometric model to be able to analyze how that will cascade into the entire economy, but we are not in that position now. As an economist, I am not going to take a position that is not backed up by facts. Perhaps, you are saying that the CBN Governor did not do his research well, because I can recall he said the policy is also a tool to tighten inflation No! I think the only motivation the CBN has put forward that appears factual is the fact that Sanusi said that Nigeria is being blackmailed. I want to believe that it is the only reason why this is happening. If it is all these other things like inflation, he should show us the data. It is based on that data that we will appraise what he has put on the table. What I believe based on his comment is that Nigeria is being blackmailed. The people who produce the ink that they use in printing the naira notes are now saying that unless they give them that contract to continue to print for Nigeria, they will not make that ink available to any other contractor that is going to do the job. You know Mallam Sanusi is a very nationalistic person and can be very stubborn too. So, I think he would have said, ‘no, Nigeria will not continue to give you this contract because you are blackmailing us. As a result of that, we will change this currency and what is making us to have the need to use your ink, we will remove it and go and patronize other vendors.’ So, based on my limited information, I think that is the major rationale for wanting to do the exercise. C M Y K

30 — Vanguard, MONDAY, SEPTEMBER 3, 2012


Vanguard, MONDAY, SEPTEMBER 3, 2012 — 31

Homes & Housing Finance BRIEFS


Kwara suspends implementation of urbanisation law


he Nigeria Deposit I n s u r a n c e Corporation (NDIC) has concluded arrangements to settle claims of depositors and creditors of the 24 primary mortgage banks (PMBs) whose licences were recently revoked by the Central Bank of Nigeria (CBN). A statement from the office of the Director, Claims Resolution Department of NDIC noted that it has completed arrangement to commence the verification and payment of depositors creditors the mortgage banks from 6thAugust, 2012. “Members of the public are requested to note that most of the closed PMIs had long ceased to render service to their affected customers and could not forward the statutory monthly reports to the supervisory authorities despite repeated demands including paid newspaper advertisements by the CBN. As a result of those infractions, the CBN recently revoked their licenses consequent upon which the NDIC commenced the process of settling the claims of the depositors and creditors of the banks. “In pursuance to the above, all depositors and creditors of the 24 under-listed closed PMIs are required to present evidence of their deposit claims at any NDIC office for processing. These include savings passbooks, withdrawal slips, cheque books, fixed/term deposit certificates, statements of accounts and other relevant documents as proof of account ownership or any creditors’ claim against the


Detached houses in a private estate

Closed PMBs: NDIC set to settle claims of customers closed PMIs. For those who wish to collect deposits on behalf of individuals and corporate bodies, proper written authorisation and identification will be required which must be endorsed by signatories to the account,” the statement added. The mortgage banks involved include: Accalaim Homes and Loans; Allwell Savings and Loans; CB

Homes Savings and Loans; Coastal Homes Savings and Loans; Credence Savings and Loans; Crest Mortgage Savings and Loans; Estaport Building Society; Future View Mortgages; Guardian Trust Savings and Loans; Home Trust Savings And Loans and; Horizon Building Society. Others are: ImaniSavings and Loans; Mars Home Investment Savings and

Expert urges mass housing design to suit ‘real’ masses


he case has been made to design mass housing programmes in the country that will truly suit the ‘real’ Nigerian masses. Muhammed Sani of the Institute of Economic Development in Abuja, made the case in a statement particularly addressed to the Federal Capital Territory (FCT) administration. He noted that the only way to check issues of illegal land acquisition and illegal construction in FCT is for the administration to redesign its mass housing programme to accommodate those he referred to as “the real masses”. Sani said there is need to make the process of land allocation in Abuja less

cumbersome and less expensive. According to him, “the process of obtaining land from the FCT is cumbersome and very expensive. An applicant has to fill a form and pay a non-refundable fee of N100,000. This application is not automatic and mostly not forthcoming. The poor are the worst hit as there is no provision for them in the master plan of Abuja. Therefore, they have to resort to doing the illegality, buying land from the Gbagyikings and indigenes.” He further observed that the 19 villages penciled down for demolition by the FCT administration were juicy areas because of their proximity to the city centre, “The non-indigenes prefer

them and so also the FCT administration therefore it is a fight between the mighty rich and the poor,” he said. Sani noted that while the demolition plan was in order, considering the fact that the people occupying the land bought them illegally and had no titles to claim them, the FCT administration despite its enormous responsibilities, ought to have stopped the non-indigenes from developing the land, adding that those whose houses were to be demolished would be rendered homeless. “The way out of this rigmarole is for the FCT administration to be sincere and call a spade a spade. The FCT mass housing scheme should be redesigned to accommodate the real masses.

Loans; Melrose Savings and Loans; New Capital Savings and Loans; Niger House Building Society; Omono Building Society; Owners Home Savings and Loans; Perennial Building Society; Primrose Savings and Loans; Sakkwato Savings and Loans; Secure Savings and Loans; Urban Shelter Savings and Loans and; Peak Savings and Loans. It would be recalled that the CBN said the licences of the mortgage banks were revoked because they have effectively closed shops, having ceased to carry on the business for which they were licensed for a continuous period of six months. This, according to the apex bank, is in contravention of Section 12 of the Banks and Other Financial Institutions Act of 1991 and Section 20(iii) of the Guidelines for Primary Mortgage Banks in Nigeria. Specifically, they were said to have failed to meet CBN’s stipulated 30-days deadline to show proof of their existence and/or evidence of operations in the immediate past one year. “In the course of the recent examination of all licensed PMBs carried out by the CBN, most were not found at their last known addresses. In addition, these institutions have failed to render monthly returns to the CBN for at least six consecutive months, in contravention of Section 58 (1) and (4) of the BOFIA, 1991.”

wara State government has put on hold the implementation of the controversial Urbanisation Law 2009, which empowers the state government to acquire lands in the public interest. Governor Abdulfatah Ahmed announced the suspension in Ilorin, via a statement by his Special Assistant on Media and Strategy, Dr Femi Akorede, citing people’s opposition to the law as the reason for the suspension. He said government decided to allow the state lawmakers to review the law in the interest of the people, adding that the Ministry of Housing and the Bureau of Land had been directed to stop implementing the law, pending its review by the lawmakers. According to the governor, members of the public should not entertain any fear and misgiving about the law since the lawmakers will review the law before its application. He said his administration was willing to suspend the law in order to give room for contributions from major stakeholders on the government land policy.

Borrowers get $13.6bn in foreclosure settlement ortgage borrowers in US have received roughly $13.6 billion in relief as part of a $26 billion settlement reached in February between state and federal government officials and five of the country ’s biggest banks over foreclosure abuses, according a report compiled by a monitor for the deal. According to the monitor, the information for the report was provided voluntarily by the financial institutions involved in the settlement. The report noted that the banks have granted $10.6 billion in consumer relief to borrowers between March 1 and June 30, 2012. In addition to that, roughly 28,000 borrowers were offered and have begun a program where banks reduce the amount owed by troubled borrowers, known as principal reduction. As part of that the borrowers have received $3 billion in potential relief, said Joseph Smith, the monitor of the National Mortgage Settlement.



32 —Vanguard, MONDAY, SEPTEMBER 3, 2012

Insurance BRIEF Microinsurance would promote insurance development —NAICOM By ROSEMARY ONUOHA


he National Insurance Commission (NAICOM) has pledged to support any effort from insurance operators aimed at development of microinsurance in Nigeria. The Commission stated that unless microinsurance business is given adequate attention, its expected contribution to the nation’s gross domestic product (GDP) from the insurance sector will not be achieved. The commissioner for insurance Mr Fola Daniel who stated this at a Seminar organised for insurance correspondents with the theme “Making Insurance Work for All: The Microinsurance Initiatives” in Calabar, Cross River State, noted that the Commission has appealed to insurance operators in Nigeria to develop microinsurance with a view to develop insurance market at the grassroots. According to him, the commission has put in place a draft guideline for microinsurance business and that the draft is being exposed to the industry, experts and other stakeholders for the inputs and contributions before the final draft is released to the industry. On its part, Daniel disclosed that NAICOM recently conducted a nationwide diagnostic study of microinsurance in collaboration with GIZ, a German Agency for Sustainable Development and Access to Insurance Initiatives (AII) and its local consultants. The NAICOM boss added that the group was divided into smaller teams and each team assigned to a specific region of the country. The reports turned in by the various teams have been received by NAICOM and it is being reviewed and analysed so that the commission can do the needful, he noted. Daniel maintained that microinsurance holds great potential for developing the insurance sector in the country, taken into consideration the fact that the population size of the country gives an added advantage to the insurance industry to grow its market. The development of microinsurance is indeed one of the objectives of the Market Development and Restructuring Initiatives (MDRI), a project of NAICOM designed to increase the premium being generated by the licensed insurance companies and make meaningful contributions to the nation’s economy. C M Y K

NAICOM projects N60bn from Micro Insurance By ROSEMARY ONUOHA


n order to enable people of low income access insurance covers, the National Insurance Commission (Naicom) is coming up with guidelines that will extend insurance services to the poor at a cheaper rates. The National Insurance Commission said that the commission will licence any firm that is willing to partake in the micro insurance scheme, while micro insurance products will be sold through cooperative societies, microfinance banks, among others to the poor Nigerians. The aim, is to enhance insurance penetration especially in the rural areas, where underwriting firms have done little to capture. It is equally expected to incorporate those who are unable to buy the traditional insurance into the insurance system. With about 20 million potential subscribers, NAICOM said that it is expecting N60 billion from micro insurance products. Chief Yemi Soladoye, consultant to NAICOM said there is the need for collaboration between Central Bank of Nigeria (CBN) and Naicom to sell micro insurance through microfinance banks in Nigeria, adding that microfinance market has a lot of potential customers of micro insurance products. He stressed that about two million people currently micro insurance policyholders, stating that because the poor are more vulnerable to risks, they need insurance more than the wealthy Nigerians. Soladoye said that 75 per cent of Nigerians live in rural and semi-urban area, a ready-made market for micro insurance to thrive. Soladoye said, “This is an avenue to sell micro insurance. The product penetrates areas the traditional insurance cannot get to and that are why it is a good platform to increase insurance penetration in the country.” Speaking on access to insurance, he noted that the current insurance companies failed to appropriately utilise the market potentials which was why insurance is not expanding, explaining that there should be collaboration between banks and insurance companies to expand outreach through banks’ outlets. “Any policy that is below N3, 000 is categorised under micro insurance. And with 20 million microfinance customers, a sum of N60 billion is being projected,” he

said. Delivering his address at the Insurance seminar for Insurance Correspondents in Calabar, Cross Rivers State last week, Mr Fola Daniel, commissioner for Insurance said the development of micro insurance market is indeed, one of the objectives of the Market Development and Restructuring Initiatives (MDRI) of the commission. The commissioner said his

commission has put in place a draft guideline for micro insurance business in Nigeria. “The draft is being exposed to the industry, experts and other stakeholders for their inputs and contributions before the final draft will be drawn and subsequently released to the market. We also intend to collaborate with other relevant regulatory agencies in this drive,” he said.

This, he said will develop insurance market at the grassroots and by extension, increase the sector ’s contributions to the Gross Domestic Product (GDP) of the nation. Daniel stressed that micro insurance holds great potential for developing the insurance sector in Nigeria taking into consideration the population size of the country.

*From left: Mr. Austin Enajemo-Isire, MD/CEO, Olorogun O'tega, Chairman and Mrs. Omolola Oshiafi, Director at the annual general meeting of Standard Alliance Life Assurance Ltd held in Lagos. Photo by Sylva Eleanya.

SA Life to shore up capital base By RITA OBODOECHINA

Alliance life AsStandard surance Limited, SA Life, says it plans to increase its capital base in order to be able to meet future obligations and drive growth. The Chairman of the company, Mr. Olorogun O’tega Emerhor, stated this during the company’s 12th annual general meeting held in Lagos. He said, “It will be a proactive measure to put plans in place to increase our authorized and paid up capital in the ensuing year in order to be able to meet future obligations and drive growth” The Chairman said that with their strength, strategies and with the planned injection of additional capital, the company will be well positioned to carve unparallel nitch for its market place, adding that the resultant effect of this is a robust profitability and dividend consideration to stakeholders. He noted that the company’s focus on aggressive mar-

keting continues to pay off as reflected in the appreciable increase in gross premium written in the year. Its gross premium income grew from N1.6billion in 2010 to N2.157 billion; this represents a growth of 30 per cent over the prior year 2010. According to him, the company paid a total claim of N3.818 billion (group life N913.75 million, individual life N6.258 million and deposit administration N2.898 million. He said,” our continued strategy to have balanced mix product sale equally affected our investment linked products sales, there was decline in growth from N4.155 billion in 2010 to N2.647 billion in 2011” This represents 57 per cent reduction in 2011 over 2010 performance, there was also decline in interest and other investment income by N263.5 million which is 28 per cent and the continue provision for diminution in value of our investments. However he said, notwithstanding the external oper-

ating constraints, the company reported operating profit for the year 2011 of N493.03 billion losses in 2010, arising from the prudent management expenses and underwriting expenses during the year. He disclosed that the business and regulating environment will remain challenging in 2012 with the adoption of IFRS, ERM and Solvency ll, adding that all this will increase cost operation. However he said, “They are all welcome development that will ensure companies in Nigeria adopt international best practices thereby opening window for both local and foreign investors. He assured shareholders that the management is unbeatable about impressive results by the company, in the coming years, as the company has fully provisioned for its impaired investments and as it continues with its prudent management and aggressive service marketing strategies.

Vanguard, MONDAY, SEPTEMBER 3, 2012 — 33

Aviation BRIEFS FAAN to evacuate illegal truck owners soon he Federal Airports Authority of Nigeria, FAAN, has indicated its readiness to evacuate all illegal taxi cabs and truck owners operating within the airport vicinity soon. This is coming just as the Managing Director of FAAN, Mr. George Uriesi, recently set up a committee on the traffic situation at the airport. The committee has submitted its report to him for approval and appropriate implementation. General Manager, Public Affairs, FAAN, Mr. Akin Olukunle, who spoke with our correspondent pointed out that the current traffic jam at the airport, most especially at the hajj and cargo areas of the airport, will soon be a thing of the past. Olukunle described the bottleneck on the road as an eyesore and assured that the management of FAAN would ensure that those who have no business to do at the airport were restricted from gaining access to the complex. “The issue of congestion especially of the fuel tankers is a concern to us. We are working on that. I can tell you that FAAN is working seriously on the congestion at the airport, most especially the yellow buses that are not supposed to be there and have turned that place to their abode. We have discussed it even at the management level that whatever they are doing right now is illegal."


Air France-KLM pilots back restructuring plan ilots at Air France-KLM have backed proposals to alter their contracts and working conditions as part of the airline’s three-year restructuring plan aimed at reducing operating costs and debt.The SNPL union, which represents more than twothirds of the pilots, said 67 per cent of its members had voted for the plan. The agreement reached with pilots does not include job cuts, but does feature voluntary transfers with bonuses to Air France-KLM’s low-cost arm, Transavia. The vote comes after ground staff at Air France-KLM also approved similar restructuring measures, leaving only cabin crews in opposition.




he Nigeria aviation sector will soon witness new influx of investors as the Federal Ministry of Aviation is currently in talks with potential investors that have indicated interest in investing in the sector. Managing Director of the Nigerian Airspace Management Agency (NAMA), Engineer Mazi Nnamdi Udoh, who disclosed this to newsmen last week, said arrangements are in top gear to absorb newer airlines into the country. Speaking at the Special General Meeting of National Association of Aeronautical Engineers (NAAE) held at the Nigerian Civil Aviation Authority’s (NCAA) Annex, Murtala Muhammed International Airport, Lagos, he said the interest being indicated by the investors was a fallout of the road show embarked upon by the Ministry of Aviation and top officials of the agencies in the sector to some countries abroad. He said: “The issue is all about the management of those airlines, that is why in the spirit of transformation, we are now helping those airlines and new ones to come back to business and also provide them with an enabling environment so that those airlines will not go underground again. And that is why we also embarked on a road show to various counties and the response has been enormous. We hope in the next one year, the issue of how many airlines we have in Nigeria will be a

Murtala Mohammed International Airport, Lagos, Nigeria.

New investors for Nigeria's aviation industry thing of the past. There are a lot of airlines that are coming, they are already asking for registration." Asked if the decline in domestic operators has impacted the revenue generation of the agencies in the sector, Udoh stated that the revenue generation of the agencies has improved despite the reduction in domestic operators. He said the passenger traffic in the airports have grown from what was obtain-

able last year, adding that the chunk of revenue generated by the agencies is from foreign carriers in the sector. “Generally, the more the passengers carried by international flights, the more they pay. The revenue actually is foreign-driven for us and for FAAN. We are actually not feeling the impact of the reduction of domestic passengers. It all just means more frequen-

cies for those that are operating. But one thing you must notice also is the general growth in the charter service which we are also looking at to capture what is there. If you go round the country, you will see a lot of private jets. So the impact of that is not visible, that is why we have to capture it at this level and restore growth in domestic operation.”

Dana crash: Air traffic controllers fault Ojikutu’s claims he National Air Traffic Controllers Association, NATCA, has debunked the claims by Rtd Group Capt John Ojikutu that there were irregularities in the handling of Dana ill-fated plane crash of June 3rd, 2012 by the air traffic controllers on duty saying that such statement was misleading and unprofessional. The group affirmed that its officers on duty complied with the provisions and regulations of the International Civil Aviation Organisation (ICAO) Docs. 4444 (PANS-ATM), Annex 11 (Air Traffic Services), Nigerian Civil Aviation Regulations (2009) and other approved local air traffic control instructions in force in the airspace and airport concerned on the day the Dana Air crash occurred. In a statement signed by the President and General Secretary of NATCA, Haske Jibrin and Martin Akujuobi respectively, the ATC mem-


bers insisted that the ATC officers on duty complied with the provisions of the ICAO Docs. 4444 (PANS-ATM), Annex 11 (Air Traffic Services), Nigerian Civil Aviation Regulations (2009) and other approved local air traffic control instructions in force in the airspace and aerodrome concerned. According to the statement, the provisions above included the emergency response procedures approved and published for use by Duty Air Traffic Controllers in Murtala Muhammed Airport Lagos in the event of aircraft accidents. NATCA further questioned the professional competence and experience claimed by Capt. Ojikutu on the grounds that information available to the Association does not indicate that the said Rtd. Group Capt. Ojikutu holds any valid Air Traffic Controller licence, though he trained and obtained a certificate in Air Traffic Services, which was a

prerequisite for further onthe-job training that leads to the award of a Civil Air Traffic Controller licence. “The onus therefore, lies on him to furnish his listeners with his licence number, ratings held and aerodromes of validation during his historic 26 years sojourn as an air traffic controller as he has posted before the public. “His phraseologies as reported by the media houses do not in any way define him as an air traffic controller that he claims to be. For example, his call for the tape transcript of conversations held between the pilot, Lagos and Kano control towers shows that he does not understand the architecture, division of responsibilities, and transfer of control procedures within the Nigerian airspace, neither did he demonstrate any knowledge of Accident Investigation Standards and Recommended Practices (ICAO Annex 13), as manifested in his call for unrelated air traffic control/pilot conversations

tape transcript, for a time frame that will neither aid investigation nor give any further clue as to the potential role of air traffic control in such an accident,” part of the statement reads. NATCA also warned against utterances on the crash as the body charged with the responsibility was carrying out its investigation. According to them, the main objective of an accident investigation is “prevention of future-occurrence.” They debunked the claim that there were gaps in the tape transcript, stressing that modern air traffic controller/ pilot conversation tape recording which NAMA employed was digitalized and tamper – proof while recording times were captured during each active transmission, the idle periods were also captured, adding that for the purposes of investigation, the active transmission times were listened to, while the idle periods bearing no messages were ignored. C M Y K

34 — Vanguard, MONDAY, SEPTEMBER 3, 2012

People in Business BY EBELE ORAKPO


r. Kelechi Chioma is the Senior Facilitator at Protégé Centre, an outfit with the vision and mission of teaching scrabble in schools. The 2006 Applied Biochemistry graduate of Nnamdi Azikiwe University, Awka and 2010 graduate of Samsung Real Dreams (an after school development programme), spoke with Financial Vanguard recently in Lagos and said he decided to take scrabble to schools because he discovered it will help the pupils/students improve their grasp of the English Language and subsequently, their understanding of other subjects. Excerpts. According to Mr. Kelechi Chioma, he started playing scrabble after his secondary school education. “I first played scrabble after I finished writing the West African School Certificate exam. I was staying at home sleeping, eating, discussing with friends while waiting for PHCN to bring light so we could watch television and most times, we were disappointed. I was becoming bored. One day, I went to visit a friend close to my house, and I saw them playing scrabble. I took interest in the game. That was the first time I played the game and I fell in love with it. It is a remarkable game. We played almost every day and it became so competitive. Because we wanted to do well in the game, we had to study the dictionary and learn new words. It impacted me remarkably as a person because any time I played it, I learnt new words. I was more like a walking dictionary because I always beat my friend who was also very good and very intelligent; therefore, I had to constantly learn new words. I started with the A words until I got to the Z words.” Practice, they say, makes perfect and so as he continued the game, he discovered some patterns in the English language. "For example, until recently, you could not have a Q word without a U so as I played the game, I discovered that there are some exceptions. It helped my spelling, vocabulary and thinking.” Upon graduation from the university, he did his one year compulsory national youth service in Taraba State where he taught chemistry. While in the university, Kelechi said he played scrabble once or twice and after his youth service, he went back home, saw his old friends who had also finished school, and they started playing the game again. “I was playing scrabble one day with a friend of mine and I said to him, “this game has really impacted us, don’t you think we should encourage children in primary and sec-

Mr. Kelechi Chioma...Scrabble helped my spelling, vocabulary and thinking *Pupils enjoying a scrabble class

Scrabble can improve our educational standard remarkably —Kelechi Chioma

We have to break that barrier if we are going to do well; so either we begin to write our textbooks in our local languages or Pidgin English which I don’t think is feasible, or we improve our pupils' English language vocabulary at a very rapid pace

ondary schools to play the game?” He said it was a good idea but will involve a lot of work like writing proposals and convincing school owners. I said let’s do it, but he was not interested anyway, he wanted to make money faster than I was thinking. I took the bold step and started sending proposals to schools. I sent about 20 or so but did not get a single reply,” he said. Not one to be discouraged by what he saw as a temporary setback, he continued his marketing job which involved convincing people to build web sites for their organisations and use bulk SMS solutions. “I was passing one day and saw Chrisland Schools. I decided to take the proposal to them. When I got there, I submitted the proposal at the gate because they did not allow me to

enter. It was when I went for a follow up that I met my teacher in secondary school who was a guidance counsellor there. We exchanged pleasantries and I told her why I was in the school. She invited me to her office and guess what I saw? Stacks of scrabble board! I asked what she was doing with them and she said they were trying to introduce the game in the school and were searching for someone to handle it,” he said. It was like a dream come true. "I decided to teach her and she said since I could play very well, I should come at break time and teach the children. Two months later, I quit my job, I wanted something else. I went back to see her. She took me to the head teacher and said I will be taking the scrabble class. We did the test-

run for about two months. The children really liked it so she encouraged me to do a proposal to the managing director of the school, telling her that we should start effectively in the school and here we are.” On whether scrabble really helps children educationally, he said, "Scrabble can help improve our standard of education remarkably. The standard has fallen both at the basic and higher levels and to get it right, you have to go back to the basics. For instance, when I was learning physics in secondary school, to most of my colleagues, it was a challenge because of the language barrier. The textbooks were written in English, sometimes very old English so if you read the textbook, you have to translate it twice unlike someone whose first language is English. I am aware that in places like China, France, Germany and India, textbooks are written in their native languages so that barrier is not there and that is why they do very well in science/ technology because they understand it just the way it is. So we have a peculiar case. We have to break that barrier if we are going to do well. So either we begin to write our textbooks in our local languages or Pidgin English which I don’t think is feasible, or we improve our pupils' English language vocabulary at a very rapid pace. We have to improve the pupils’ vocabulary

so that they can understand these subjects better. When I went to the university and decided to read again those textbooks I was reading in secondary school, I understood better because I knew more English then. So if we can bridge that gap, I think we will have better science, arts and English students because their vocabulary will improve and it will affect every other area of our academic life. That is what scrabble does, it builds vocabulary, it’s fun and enjoyable. If you bring it to the class from as young as age one and keep playing it, and get familiar with spellings, words, and check up the meanings etc., before they know it, their vocabulary would have improved and they will understand maths and sciences much more than we did in our own time." The former head of marketing in an IT consultancy firm said they have been able to introduce the game in about 13 private and 30 public schools in Lagos with the hope of going to other parts of the country. Apart from the annual Winifred Awosika Scrabble Tournament for Schools and the Protégé Scrabble League, Kelechi said they organise scrabble competitions in schools too. "Protégé Scrabble League basically celebrates the anniversary of scrabble which was invented over 60 years ago," he said.

Vanguard, MONDAY, SEPTEMBER 3, 2012 — 35


Ospoly MFB boss hinges high interest rate on money cost Stories by PROVIDENCE OBUH


he Managing Director, Osun State Polytechnic (Ospoly) Microfinance Bank, Mr Femi Fapohunda has said that the high interest rate charge by Microfinance Banks (MFBs), are as a result of the high cost of money in the money market. This is in line with complaints gathered from customers as well as small scale business operators who are aggrieved over the high interest charged on loans. These loans range from four per cent to ten per cent depending on the bank involved. Fapohunda, said “There is no way interest rates of MFBs will not be high. Cost of money in the money market is also high. So you cannot take money from the money market, depositors’ money that you are also paying high interest on and give it out by way of loan at a very low interest. “So they can not but complain because you are not also giving them free money; you are giving them money that you collected from depositors at a very high rate too.” Meanwhile, Fapohunda in a separate interview with Financial Vanguard, disapproved claims that MFBs rely on loans from commercial banks to fund their businesses. He stressed that it is the other way round as commercial banks are being funded by deposits from customers of the banks or shareholders fund. According to him, “it is a wrong assertion to believe that microfinance banks rely on commercial banks. We rely on our customer’s deposits not on commercial banks, majority of us do not take loan from commercial banks. “I am saying it categorically, 90 per cent of MFBs don’t accept loan from commercial banks for the funding of their businesses, they fund their business through deposits from customers, not from commercial banks. “In fact it is the other way round, commercial banks look for deposits from MFBs.” Asked if interest rates charged on deposits from commercial banks are amplified, he explained that the banks follow due process on charges on deposits. “There is what we call minimum deposit rate, deposit rates generally are negotiable.” On Ospoly MFB’s recapitalization, he said that the bank is aiming towards attaining the status of a state microfinance bank, stating that people are depositing money, therefore, “before December, we would have attained over N100 million capital bases.” Continuing, he revealed that the loan portfolio in Osun State is well over N3 billion spread over 15,000 artisans and small scale businesses, adding that the association has added value to people’s life in the state and also improved on its GDP. “We have been doing a lot especially for market women, traders, salary earners, small scale business men and women have been benefiting from microfinance in the state. Not at Ospoly alone, but the state association, the National Association of MFBs Osun State. We are vibrant. In fact, we have been in the forefront of mi-

crofinance policy in Nigeria.” Speaking on the clamour for extension of the recapitalisation date for MFBs by the Central Bank of Nigeria, CBN, he said policies become binding once they are introduced. “Once it is a policy, you can only plead for time, but more often, policies are never changed no matter the situation. This is CBN’s policy and they are the chief regulator in collaboration with the NDIC. We don’t have a choice, we need to comply, if there is no control, there wouldn’t be a vibrant microfinance subsector.

Foreign investors to grow Nigeria's SMEs nternational investors, I especially the United States Government have shown interest in the development of the Nigerian Small and Medium Enterprises, as a result of their importance to economic recovery. To this end, the Nigeria-America Chamber of Commerce (NACC) is seeking to grow the sector with a $2 billion (N310bn) worth investment. The National President, NACC, Mr. Sam Ohuabunwa who disclosed the investment plan said that the investments were being made available to support both the agricultural and SMEs sector because all over the world small and medium enterprises hold the economy. “Our mission is to develop business opportunities, trade and investments whereby we train people, empower them, give them skills to start their own businesses and then provide goods and services as a tool for development. Ohuabunwa pointed out that the two billion dollar grant is also being provided to promote wider use of solar and green energy by SMEs, saying, “Electricity is a major issue in Nigeria, many businesses have folded up owing to inadequate electricity supply. Operational cost have escalated by at least 30 percent as small and medium businesses run on personally sourced power alternatives and generators fuelled by hydrocarbons costing so much per litre, therefore contributing to difficulty in scaling up businesses. To avoid non-performance of the fund, he said that only legitimate SMEs registered in accordance with Nigerian laws would qualify for the grant. “The U.S. Government is already working with civil society groups and a few Nigerian commercial banks for the proper disbursement of its grant,” he stated. Meanwhile, he said that the U.S. Export and Import Bank was also making funds available to prospective Nigerian agro-allied entrepreneurs who might want to make use of U.S. technology. It would be recalled that President of the United States of America, Senator Barrack Obama, in the US-Nigeria Trade and Investment Forum, organised by Nigerians in Diaspora Organisation,said Nigeria is the world’s next economic success story, a discovery he said was one of the major reasons why his government was committed to helping the country build strong democratic institutions.

36 — Vanguard, MONDAY, SEPTEMBER 3, 2012


Vanguard, MONDAY, SEPTEMBER 3, 2012 — 37

38 — Vanguard, MONDAY, SEPTEMBER 3, 2012

Appointments & Promotions 08033348923 BRIEFS FCMB names Kalu Group Head, Corporate Communications


IRST City Monument Bank Plc , FCMB, has appointed Mr. Ikechukwu Innocent Kalu as the bank’s Head, Corporate Communications. Ikechukwu with over 19 years experience in Brand Management and Communications across the Breweries and Telecommunications sectors, was until recentlyManaging Partner, Customer Passion Point Limited in Dar es Salaam, Tanzania. He has also worked with MTN Nigeria as Senior Manager, Channel and Regional Marketing; Zain Nigeria as Head, Markets Segments, and Zanzibar Telecommunications Limited, Tanzania as Marketing Director. As Head, Corporate Communications, Ikechukwu will be responsible for developing and executing brand strategies and activities to ensure, the bank maintains and enhance brand presence in the market; ensuring research on products, and retail segments in order to have data to plan meaningful communication and campaigns to increase segment penetration and customer acquisition. He will also oversee and coordinate activities of Corporate Communications Department. Kalu holds a Bachelors degree in Business Administration from the University of Lagos, Executive MBA in Marketing from the University of Nigeria, Post Graduate Diploma in Marketing from the University of Leicester and is also a member of the Chartered Institute of Marketing,

*Mr. Ikechukwu Innocent Kalu

DN Meyer celebrates Omole at 70 D

N Meyer Plc, manufacturers and marketers of paint products in Nigeria, has honoured Professor Wale Omole, former Vice Chancellor of Obafemi Awolowo University, OAU, Ile-Ife and the Chairman of Strategy, Finance and General Purpose Committee of the company, as he attains 70 years. Speaking at an event to mark the celebration, Chairman of DN Meyer Plc, Sir Remi Omotoso, said the company was committed to raising industry standards and rewarding excellence in Nigeria. He said “At DN Meyer, we are totally committed and poised to inspire creativity, raise industry standards to global level and reward excellence. We are here today to celebrate Professor Omole at 70 years as well as express our profound gratitude to him for the meritorious service and navigation of DN Meyer affairs as the Chairman of its Strategy, Finance and General Purpose Committee,

since the past eight years.” “Omole is a great Nigerian who has inscribed his footprints on the irrevocable sands of time. As Chairman, Strategy, Finance and General Purpose Committee, he initiated and executed many innovative projects that

resulted in strategic transformation of our company. We are grateful to be associated with him.” Otunba Niyi Adebayo, former Governor of Ekiti State, who presented the toast, lauded Omole for his outstanding contributions to

*From left: The celebrant, Professor Wale Omole, (OFR); his wife, Mrs. Sade Omole and Chairman of DN Meyer Plc, Sir Remi Omotoso (MFR)during the birthday dinner organised by DN Meyer Plc in honour of Professor Omole at 70 at the Southern Sun Hotel Ikoyi, Lagos, recently.

NOI Polls appoints Modie CEO N

OI Polls has announced the appointment of Ms. Oge Modie as its new Chief Executive Officer. She takes over from Ndubisi Anyanwu, who was the pioneer Managing Director and CEO, a position he held for over five years, up until the end of July 2012. Before her appointment, Modie has served as the company’s Chief Operating Officer, a role which saw her successfully managing t h e day-to -day company ’s operations and repositioning its strategic engagements with its business clients for greater value. As a corporate finance expert, Modie has managed multiple acquisition assignments (valued at over USD 20 million) working with top-level executives in the Nigerian and West African financial services sectors. She holds a Master of Business Administration from the Cranfield School of Management and a BSc Hons in Economics from the University of Nigeria Nsukka. Modie joined NOI Polls Limited with a career spanning over 13 years as a management consultant, working in private, public and non-profit sectors in Africa and the UK. Her experience covers corporate finance, Strategy Consulting and MSME Finance & Development.

the country, especially the education sector where he served as a Vice Chancellor of OAU and chaired many national and international committees. “This toast is to a great man, an achiever and strategist with indelible track records!”

She has been involved in various notable projects, one of which was the designing and developing of a business incubator under a World Bank assisted programme. The new CEO is also an expert at business start-up and operations and was actively involved in

setting up an insurance company for one of the top three Nigerian banks. NOI Polls is an opinion research organisation in Nigeria that provides timely and relevant information on people’s perspectives on a variety of social and economic issues.

The organisation was founded in November 2006 by Dr. (Mrs.) Ngozi OkonjoIweala, Coordinating Minister of the Economy & Nigeria's Hon. Minister of Finance. Her goal was to establish a premier opinion research firm in Nigeria, which periodically provided a barometer of public opinion on a range of social and economic issues.

Okogun, Y&R CEO, bags PhD


HIEF Executive Officer, of Novelpotta Y&R, the Nigerian office of the global advertising network, Young & Rubicam Brands, Celey Okogun, has bagged a PhD in Organisation and Management, with specialisation in leadership from Capella University Minneapolis, Minnesota, USA . This attainment is the climax of 24 months of coursework and 18 months of dissertation research fieldwork with title: A Phenomenological Study of the Emergence of Leadership among Female Secondary School Principals in Nigeria. The study which took Okogun across several cities in Nigeria to interview female secondary school principals, focused on secondary education, gender, and the emerging roles of female leaders in the school system historically dominated by men.

In his speech, the President of Capella University, Scott Kinney, singled out Okogun from the 800 graduands for his courage, resolve and academic brilliance. He said; “Allow me to share a very brief story about a Capella Learner with you.

Celey Okogun is a learner in the School of Business and Technology; and he will be receiving his PhD in Organisation and Management, leadership in just a few minutes. Celey is a businessman in the advertising industry.

*Centre: Dr Celey Okogun being decorated by Scott Kinney, President of Capella University, Minneapolis, Minnesota, USA.

Vanguard, MONDAY, SEPTEMBER 3, 2012— 39

Advertising, Media & Marketing Stories by PRINCEWILL EKWUJURU


here is nothing as frustrating as having a power outage that interrupts one’s viewing pleasure and makes one lose some important scenes of a programme. It takes some minutes to start a generator, that is if there is a generator and fuel in its tank. But LG Electronics has come to the rescue by introducing the world’s first battery LED TV into Nigeria, that is its 32LS3800. The product will no doubt save TV viewers much frustration and anxiety. Even though the LG TV operates on electricity, it has a long-lasting battery that ensures TV viewing is not unnecessarily interrupted. The LG Battery LED TV comes with exciting features that make for a superlative entertainment experience. It is portable and easy to carry which makes it convenient for it to be moved from one place to the other. This feature ensures that the fun and entertainment is not limited to indoor settings alone as it can also come in handy for alfresco gatherings. Apart from watching favourite TV programmes, the 32LS3800 battery TV also comes with a USB slot which enables consumers to watch Divx Movies from their flash or external hard drives.. Amongst various features of the LG Battery LED TV has an in-built surge protector for long lasting durability and better performance against power surge; the battery which comes in handy during power outages has long life as it can last the duration of a

How LG’s battery LED TV lifts viewership



OYSAA gives new look to state secretariat


*From left: General Manager, Home Entertainment Division, LG Electronics West Africa Operations, Mr. Dave Shin; Product Marketing Manager, Home Entertainment Division, LG Electronics, Mr. James Odejimi; and Managing Director, Fouani Nigeria Ltd, Mr. Mohammed Fouani, during the official launch of the LG Battery LED TV in Lagos recently. football match. Speaking at the launch in Lagos, Mr. Dave Shin, General Manager, Home Entertainment Division, LG Electronics, said the product has come to solve the problem experienced by TV viewers as a result of the constant power outage that households and businesses in Nigeria experience’. Also speaking, Mr. Mohamed Fouani, Managing Direc-

tor, Fouani Nigeria Limited said, “Owing to our unflinching commitment to making available to our consumers only products that would enable them achieve their aspirations and dreams of the good life, we would stop at nothing to continually enrich them with products of technological innovations, stylish designs and most importantly, giving them value for money spent.”

Further, Fouani said that the ultimate aim for the launch of the LG Battery TV is to enrich family time which is waning as a result of the power interruptions. “It is our belief that it will create a unique platform for individuals to be rejuvenated and realise utmost relaxation and entertainment with their families, friends and loved ones anytime, anywhere,” he added.

Wonder Promo: MTN targets customers' hearts …Offers aeroplane ot for its large reachout, but for the cons i s t e n t modernisation of its network and reward schemes. MTN Nigeria with its Ultimate Wonder promo is targeting customers' hearts with an aeroplane offer. Aside trying to hit the bull’s eye, the company is planning further increase in its market share. The promo no doubt has increased MTN’s share of voice in the market, whilst it attempts to cement its relationship with customers. The offer is not the only reason for the promo, but the ongoing modernisation of the company’s network and rates slash and the recent doling out of $1.3 billion to modernise its Nigeria phone


network remains another bid to expand its capacity and improve the quality of service to give subscribers optimum satisfaction and value. The project is part of its investment and budget for 2012. However, for effective handling of the modernisation project, the company has contracted Chinese ZTE Corp, Ericsson AB (ERIC) and Huawei Technologies. These are leading telecom firms whose credentials transcend multinationals. According to the Nigerian Communications Commission (NCC), 48 per cent of the country’s 100 million mobilephone subscribers use the MTN network being one of three largest telecom companies in Nigeria. This is a large

share when population is considered. Aware of that magnitude, the responsibility has not been left untendered. That is why MTN has consistently shoved up value initiatives to strengthen its status as well as expand its customer base. The promo includes the ultimate prize of a CESSNA 182T airplane. Customers who recharge up to N3,000 from now till October would qualify to participate in the grand draws that will be held in Lagos to choose the eventual winner. This winner either takes the aircraft or opts for the cash equivalent. Besides, there are cash prizes for other lucky customers. One hundred customers will have the opportunities to win weekly cash N150,000 and a

weekly star prize of N2,000,000 for the entire three months starting from August, with the mere condition of N200 recharge for the entire promo duration. Recently, MTN came up with new value offerings that shattered call costs, reducing call rates by about 40 per cent on all MTN packages like MTN SuperSaver, Family & Friends, MTN Pulse & MTN Pay Go. MTN also introduced a new package called MTN Smooth talk. This was created to meet the needs of customers who want flat rates for calls to all networks. MTN Booster is also back. This was re-introduced to offer customers ultra low call rates either via weekly or monthly subscription. MTN Zone is not left out with discounts as high as 99 per cent on calls within the MTN Zone.

he Oyo State Government through the Oyo State Signage and Advertising Agency (OYSAA) has given a new look to the Oyo State landscape with a new design that projects and promotes the image of the state's ministries and agencies within the state secretariat complex. OYSAA was established to regulate and control the administration of outdoor boards and signages in Oyo State. The Director-General, Mr. Yinka Adepoju said the unveiling of the new billboard design is part of its effort to improve the environment by introducing innovative ideas which will fast-track the move from existing conventional outdoor advertising to cutting-edge technology-driven media solution comparable to international standards and best practices. Adepoju also used the occasion to commend the effort of Oyo State Government under the leadership of Sen. Abiola Ajimobi for establishing the agency claiming that this laudable initiative no doubt has the capacity to greatly enhance the on-going beautification exercise of the state’s environment, increase its revenue generation drive, and facilitate economic empowerment of its people through job creation.

Agrikexpo shifts to October rganisers of the AGRIKEXPO, 151 Products Limited and The Nigeria British Chamber of Commerce (NBCC) have postponed the agric exhibition scheduled for September 2012 to October 9 to 11, 2012. Mr. Henry Iwuno, Marketing Manager, 151 Products Limited, said the decision became necessary in the light of several requests from major industry captains, key F&B distributors, exhibiting companies, institutional/regulatory stakeholders most of whom have asked for more time for preparation and logistics. In the words of Mr. Okle Ezbe, President of the Balogun Market Association (BMA), the change in date is a welcome development considering that many of the participants have already expressed a strong desire to attend the event, but are currently away on annual holidays until much late September.


40— Vanguard, MONDAY, SEPTEMBER 3, 2012

0817 002 3569



he argument that the N5, 000 bill should not be introduced because it would spur corruption does not hold here because those that are using our currency for corruption have already migrated to the dollar because the naira has lost its value. The dollar has now become the store of value. That is why we are introducing a higher bill of value because we don’t want to dollarise our economy. We need to be in charge of the money that comes in and goes out”. The above passage is an excerpt from the CBN Media Director’s presentation at the commencement of a sensitisation campaign on the planned currencyrestructuring program. We may deduce from the above that CBN recognises that corruption is facilitated by currencies with high denomination/values! We note, for example, that the adoption of dollars for the facilitation of the $620,000 allegedly collected as bribe by Farouk Lawan from Femi Otedola is in consonance with Okoroafor’s observation. Consequently, the N5, 000 note will be introduced by the CBN to compete as the instrument of choice against the dollar for such corrupt

transaction! The CBN Media Director also willfully provided us with the reason why the naira fell out of favour with the public; according to him, ‘the naira has lost value’. Regrettably, however, the reasons for the loss in the purchasing power of the naira were not provided. Indeed, loss in a currency purchasing values is


Okoroafor did not say is that unless inflationary spiral is contained, the N5, 000 naira will also lose value over time such that a N10, 000 note will become expedient to facilitate transactions. CBN also indicated that naira’s loss of value has led to dollarization of the economy. From the foregoing, however, it is

In this manner, one can understand why the N1, 000 note can presently only buy about 40% of its original value when it was first introduced in 2005


primarily caused by high inflation rate. In this manner, one can understand why the N1, 000 note can presently only buy about 40% of its original value when it was first introduced in 2005. The loss in value is due to annual inflation rate of over 10%. Consequently, the N5, 000 denomination will hopefully command the purchasing value, which the N1, 000 note enjoyed at birth. What, of course, Mr.

evident that the loss in the purchasing value of the naira is the product of inflation; in other words, if we can contain inflation, it will not be necessary to produce higher naira denominations. The question, therefore, is how do we restrain inflation? Given that inflation is the product of too much money chasing too few goods, we can control money supply in the economy, to curtain inflation and simultaneously

improve naira value without the recourse to higher denominations in our currency profile. Zimbabwe travelled this path and ultimately inevitably introduced Zimbabwean one billion dollar note, which was only equivalent to about US$1. By the same token, the N1, 000 note, which was almost $9, when it was first introduced in 2005 has lost over 30% of its parity, such that the N1, 000 note is now only equivalent to about $6 because of annual doubledigit rate of inflation. So, it is evident from the above that CBN’s inability to properly manage money supply has resulted over time in an inflationary spiral, which has made naira to lose value. In other words, Central Bank’s failure in monetary policy management is the cause of the so-called dollarisation of the economy as decried by the apex bank’s Media Director! We have maintained in this column for many years that the unbridled increase in money supply, which inevitably drives inflation, is actually the result of CBN’s monthly substitution of hundreds of billions of naira for the dollar component of distributable revenue. Thus, the higher our dollar revenue,

the higher will be naira availability and extended credit capacity of the banks, and ultimately the higher will be the spectre of excess liquidity, while inflation will continue to destroy our social welfare. In reality, if CBN is truly concerned about the value of the naira, and its position as a currency of choice vis-à-vis the dollar, CBN must be aware that its monopoly of the foreign exchange market is inappropriate and destructive to the economy. The adoption of dollar certificates for the payment of dollar-derived revenue will immediately transform the market dynamics for naira against the dollar such that in place of excess liquidity, there will now be controlled naira supply with more dollars chasing the naira. In this manner, the naira will become the currency of choice and there will be no need for the introduction of higher and higher denominations to accommodate loss of purchasing power as a result of inflation or indeed the need for the promotion of the naira as the currency of choice for corrupt transactions. SAVE THE NAIRA, SAVE NIGERIANS!!


FIRS rakes in N524.12bn from oil, non-oil sectors in July of taxes from both oil and nonoil related businesses in the month of July, 2012. The figure, according to data obtained from the Planning, Reporting and Statistics Department, FIRS, was 100 per cent increase over



he Federal Inland Revenue Service, FIRS, Friday, said it collected a total sum of N524.122 billion worth

Omoh Gabriel Babajide Komolafe Clara Nwachukwu Peter Egwuatu Yinka Kolawole Favour Nnabugwu Godwin Oritse Godfrey Bivbere Yemi Adeoye Oscarline Onwuemenyi Franklin Alli Michael Eboh Amaka Abayomi Ebele Orakpo Ifeyinwa Obi


Group Business Editor Acting Finance Editor Energy Editor Head, Capital Market Snr Bus. Correspondent Insurance Correspondent Maritime Correspondent Maritime Correspondent Energy Correspondent Energy Correspondent Industry Reporter Capital Market Reporter Money market Reporter Energy Reporter Maritime Reporter

CONTRIBUTORS Princewill Ekwujuru Naomi Uzor Providence Obuh LAYOUT


Media/Marketing Industry Capital Market Graphics Department

N302.956 billion projected by the agency for the period. Out of this, the Oil & Gas business accounted for 57.69 per cent of the total taxes collected within the period, while non-oil taxes accounted for the remaining 42.31 per cent. Available statistics showed that while the government had targeted monthly tax collection of N155.452 billion from oil & gas sector, it received N302.373 billion instead, which amounted to 57.69 per cent increase. Similarly, a total sum of N221.749 billion was raked in from non-oil sector, as against the projected figure of N147.504 billion, representing 42.31 per cent improvement. Under the oil & gas category, the Petroleum Profit tax which was expected to yield about N149.48 billion, ended up bringing in N301.501 billion into the government coffers, which represents 57.52 per cent

increase. Gas Income tax yielded N872.2 million compared to the targeted sum of N5.975 billion, which is 0.17 per cent decline over the targeted figure. On the non-oil sector, the Company Income tax attracted N133.673 billion, 25.50 per cent increase over N67.295 billion targeted within the period, while Capital Gains tax accounted for 78 per cent of taxes collected from non-oil sector, as the government raked in N4.098 billion, as against its initial target of N245.8 million. Total tax collections from Stamp Duty tax declined by 0.19 per cent to N983 million from N1.474 billion projected. Total federation account (a+b) experienced 84.16 per cent increase from the monthly target of N224.467 billion to N441.127 billion. Under the VAT pool, the total value added tax

collected by the Nigeria Customs Service on imports (NCS-Import VAT) during the period stood at N16.927 billion, as against N20.072 billion projected, while value added tax on non-imported goods (Non-Import VAT) decreased to N36.984 billion from initial target of N46.833 billion, representing 3.23 and 7.06 per cent decline respectively. This, therefore, brought the total VAT pool to N53.912 billion from N66.905 billion, a 10.29 per cent decline over the projected figure. The EDT for the period rose by 4.73 per cent to N24.81 billion from targeted N8.069 billion. The federal government’s consolidated account attracted N4.041 billion, compared to projected N2.757 billion, amounting to 0.77 per cent increase while NITDEF decreased by 0.05 per cent to N233.2 million from the month’s target of N758.3 million.

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