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HERE are strong indications that banks and other financial institutions are worried over the possibility of not being able to recoup their investment in the power sector. Indications to this emerged at the just-concluded Seventh Lagos Economic Summit, tagged Ehingbeti 2014, where some chief executives of financial institutions expressed concern over the revenue profile of the power companies, especially the recently privatized electricity distribution companies (DISCOs). Consequently, they called for an increase in the electricity tariff and price of gas to boost the income generating capacity of the companies. Speaking at a session tagged, ‘Funding the power sector - creating banking projects/companies,’ the executives explained that increasing electricity tariff, as well as the price of gas, will improve the fortunes of the power companies and make it possible for more investors to stake their funds in the sector. Members of the panel included Mr. Rossie Turman, Partner, Skadden, Arps, Slate, Meagher & Flom LLP; Mr. Idris Mohammed, Partner, Development Partners International; Mrs. Sola David-Borha, Chief Executive Officer, Stanbic Holdings, Mr. Ayo Gbeleyi, Commissioner for Finance, Lagos State and Mr. Akin Ogunranti, General Manager, Power and Infrastructure, Zenith Bank Plc. Mr. Batchi Baldeh, Senior Vice President, Power, African Finance Corporation was the lead speaker, while Mr. Solomon Adegbie-Quaynor, Country Manager, International Finance Corporation, IFC, was session chair. David-Borha explained that the problems bedevilling the power sector will be addressed with appropriate pricing and tariffs. She noted that the distribution companies’ ability to pay back their indebtedness will improve as their ability to generate more cash improves. She maintained that pricing is key in the power sector as it will help ensure that the numbers add up. She added that if the pricing issue is addressed, everything else will fall in place. “If we really want more investors to come and invest in the power sector, it is necessary that they should

PARTNERSHIP: From left ; Group Managing Director/CEO, BGL Plc, Mr Albert Okumagba; Group Deputy Managing Director, BGL, Mr Chibundu Edozie; and Managing Director, Vunani Limited, Mr Butana Khoza, during the signing of the strategic partnership agreement between BGL and Vunani in Lagos on Tuesday. PHOTO: Kehinde Gbadamosi

Banks, others jittery over investments in power sector z Worry over low rates of return, seek higher power, gas tariffs be given the right incentives and opportunities. We have to encourage investors by putting more money on the table; by ensuring the right tariffs are in place,” she said. Also speaking, Ogunranti called for an increase in the tariffs, noting that a number of investors are waiting on the sidelines and will not hesitate to come in and invest in the sector once the pricing issue is tackled. He said, “Increasing the tariff will encourage more investors to put in more money. If we did do not get the tariff issue right, we will not see the rapid improvement we desire in the power sector. Adegbie-Quaynor pointed to the fact that what the masses are paying

via the use generators is very high. He said the fact is that the masses are paying life cycle power costs of US$0.40 (N64) to $0.50 (N80) per kilo watt hour, with small petrol or diesel generators. He said that this makes it critical for private investors, regulators and the government to come together and discuss key issues that can make the power reforms successful so that the ordinary man and woman do not have to pay such large amounts for power. The key issues, he noted, include reliability and availability of gas, which will require investment in gas supply and a pipeline network; strengthening and expansion of the power transmis-

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154.74 155.24 258.895 259.732 214.7636 215.4576 176.5247 177.0933 1.5247 1.5296 0.3082 0.3182 239.3962 240.1698 24.9106 24.9915 41.2607 41.394 28.7573 28.8502 240.2493 241.0256

155.74 260.5686 216.1515 177.6637 1.5345 0.3282 240.9433 25.0724 41.5273 28.9431 241.8019

CBN Exchange rate as at 11/04/2014 C M Y K

18 — Vanguard, MONDAY, APRIL 14, 2014

Cover Story

Breaking the Nigerian poverty cycle through entrepreneurial revolution (1)


Banks, others jittery over investments in power sector Continued from page 17 sion network; investment in the power discos to reduce the Aggregate Technical, Commercial and Collection (ATC&C) losses, that may be as high as 60 per cent in some discos; and rehabilitate and expand the generation companies (GENCOs) and the Independent Power Projects (IPPs)”. He noted that resolution of these key issues requires significant investment, management and technical skills, adding that government, regulators and the private sector need to come together and reach a solution that will lead to the necessary investments, and at the same time not be adversely impactful on the common man or woman. Continuing, he said, “The World Bank’s position is that government, regulators and the private sector owners of power assets should come together, deliberate, and find a fair and balanced solution so that Nigeria has reliable and affordable power to fuel inclusive growth and economic development. “IFC, World Bank and Multilateral Investment Guarantee Agency (MIGA) are committed to supporting government, regulators and the private sector in making the power reforms successful through the World Bank Group’s Energy Business Plan which aims to support financing and risk mitigation for the addition of at least 1,500MW of additional generating capacity in the next 12 to 18 months. We would also, “Support capital expenditure financing in two to four distribution companies; support development, investment and financC M Y K

ing of Public-Private Partnerships (PPPs) in both power transmission and gas pipeline networks; support development and financing of affordable renewable energy solutions through solar lanterns and cook stoves, amongst other products, to the common man and woman, and also offgrid solar solutions to Small and Medium Scale Enterprises and critical centres like hospitals and schools using photovoltaic technology. However, in a separate session at the summit, Nigerian Labour Congress, NLC represented by its General Secretary, Mr. Issa Aremu, warned that until the problems in the sector are resolved, any attempt to bring about increase in electricity tariffs will be seen as criminal and will be sternly resisted. He said that tariffs should be commensurate with service delivery. “It is stealing if you increase tariffs without improved service”, he said. He said Nigerians are actually looking for improved service delivery as regards power supply and will actually like to see what they are paying for before tariff increase is considered. He noted that the nature of the power sector reforms and how they are carried out are critical, and also wondered why the reform process is being rushed, especially when the operators are of the view that a lot still have to be put in place to drive the process. In other panel sessions at the three-day summit, the issue of revamping the power sector in the country took the centre stage, while improving electricity supply to Lagos was also given adequate at-

tention. For instance, Mr. Charles Momoh, Chairman, West Power and Gas, owner of the Eko Distribution Company, emphasized the need to revamp the country’s power infrastructure, saying that the country is still using power infrastructure in operation since 1896. He blamed the epileptic power situation across the country on the non-availability of gas and the reduction of power supply to the distribution companies. Specifically, he said that the total gas available for Lagos State, cannot power more than 500 mega watts of electricity, adding that the company is currently receiving less than 200 mega watts, down from the 400 mega watts promised when it took over the assets. Momoh further blamed the Transmission Company of Nigeria, TCN, for the “blinking” power situation, saying, “The TCN introduced frequency relays to protect their equipment, which is at the expense of consumers’ appliances, because this relay is responsible for the two minutes on and off power situation in Lagos.” He noted that Eko Distribution Company currently have the capacity to deliver 700 mega watts of electricity, but it is currently receiving only about 240 mega watts. He however noted that Eko Distribution Company has commenced the process of increasing power supply by about 500 mega watts, adding that it is talking to 45 companies interested in

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UNVEILING: From left, Executive Secretary, Lagos State Water Regulatory Commission, Mrs Tanwa Koya; a board member, Professor Lanre Fagbohun; chairman, Mr Taiwo Shebioba; member, Mr Doyin Owolabi and President of Consumer Advocacy Foundation of Nigeria, Ms. Sola Salako, at the unveiling of the commission's website, toll free lines, and complaints boxes for better public access in Lagos.

igeria is a country of absurd economic th realities. The 13 largest crude oil producer in the world and the second largest economy in Africa earn an estimated $2.2 million a day in oil revenue. Yet, its GDP per capita, at just over $1,400, is among the lowest for the continent and 54 per cent of its 148 million people live on less than $1 per day. The figures are especially shocking because of the abundance of natural resources primarily oil and natural gas, and massive agricultural potential based on its climate and significant rural population. Human development data for Nigeria has remained persistently bleak despite a considerable upturn in the country’s economic fortunes since 2000. The UNDP ranked

The obvious explanation behind this is that policy makers sorely failed to share the increase in wealth equitably


th the country 80 in a poverty survey of 108 developing nations that focussed on severe deprivation. The agency gave Nigeria a Human Poverty Index of 37.3, placing it below more impoverished African neighbours with far smaller economies like Rwanda and Malawi. Significantly, the study looked not just at income destitution, but also at secondary aspects including education, access to health care, standard of living and life-expectancy. More than 67 million Nigerians are docketed as poor according to standard definitions, while 35 per cent of the total population live in extreme poverty. These recent trends are especially worrying because they parallel a significant but contradictory improvement in Nigeria’s macro-economic

performance. Before the current global financial crisis set in, Abuja had been successful in wielding substantial positive change in its overall balance sheets through a process of reprioritisation and economic reform since 1999. A slew of measures, including privatisation of several steel, petrochemical, mining and port entities helped develop the non-oil sector, bring down inflation and boost international currency reserves. Nigeria also successfully negotiated with the London and Paris clubs to do away with a large part of its foreign debt. However, World Bank research confirms that even during periods of relative prosperity, poverty levels remained unabated in the broadest sense, and actually worsened during successive positive growth periods.


etween 1972 and 1980, for instance, the Nigerian per capita income shot up from $1,300 to $2,900 based on rapidly escalating oil prices. A subsequent decline in global oil revenues dragged down per capita income, consumption and expenditure to critical levels. However, Nigeria neglected investment in human development projects and continued to pump borrowed finances into capital-intensive enterprises. The fallout was that the dramatic rise in national fortunes bypassed the majority of Nigerians, as evident from the negligible rise in per capita consumption figures for the same period. The differential effect on poverty levels in rural and urban areas for the coinciding period is equally startling. Because of a simultaneous worsening of income distribution, rural poverty declined slightly while the number of urban poor gained. However, the worst-off were also the worst losers, as the population living in extreme poverty across Nigeria swelled up from 10 million to 14 million. The obvious explanation behind this is that policy makers sorely failed to share the increase in wealth equitably.

Vanguard, MONDAY, APRIL 14, 2014 — 19


hen in August 2009 Sanusi Lamido Sanusi intervened in five troubled banks in the country; many saw it as a rescue mission. But I saw it differently. I whole-heartedly supported Sanusi cleaning up the toxic assets in the industry. Beyond that, I disapproved of his taking over of some banks that were still liquid at the time of the intervention. Sanusi did not separate the individuals from the institutions. If some of the bank executives contravened the banking rules, the CBN or the law enforcement agencies are at liberty to deal with such individuals. As it happens so often in developed democracies, companies that infringe on regulatory guidelines are fined heavily and in some cases, their chief executives are prosecuted and jailed. If Sanusi at the time had relieved the chief executives of those banks of their jobs and considered lost written off made them to face the law, he principal of their non- the books of a bank to be so would have been a hero. But performing loans, the he did not stop at removing management of some of the treated, most of the banks the chief executives, he went troubled banks started bailed out by CBN had no ahead and took over the banks. negotiations with key debtors functional boards to grant That was what many did not who applied for forbearance. such waivers, leaving the decision to the Managing see that behind the scene, In the madness of the time, there were unseen hands Intercontinental Bank granted Directors, some of whom were guiding some of the well- waivers to a debtor who owed acting as sole administrators. The discretion applied by targeted decisions. When the bank N11 billion and those chief executives was not some of us saw through what applied for 70 per cent waiver. in the interest of reviving the was happening and said so, Also, another customer who the country never took our owed the bank N1.5 billion ailing banks but to pander to words for certain. One of the applied for forbearance and the interest of those who very sad things that happened got about N500 million waiver. appointed them. In normal then was waivers granted to The debtor was billed to pay circumstances, it is only the billionaires. At the time, the N1billion but what was said to accumulated interest and link between Sanusi, Lai Alabi have reached the bank’s vault penalty that are built into a and Bukola Saraki was not so was N800 million. The balance loan term that can be granted clear to Nigerians. Now that of N700 million was given as as waivers, not the principal. It was abnormal that at a time Sanusi Lamido Sanusi has waiver to the debtor. when the Economic & openly acknowledged that In another instance, a Financial Crimes Commission, Saraki was his classmate, the customer who owed N7.5 picture of what happened to billion was said to have had EFCC, was busy recovering the rescued banks is becoming his entire indebtedness written debts from chronic debtors, the management of the troubled clearer. Now, if Saraki is off. banks started to give waivers Sanusi’s close friend and Lai The suspended CBN without the approval of any Alabi worked for Saraki, then Governor, Mallam Lamido the connection and the Sanusi, when questioned by legally constituted board by subsequent chain of actions reporters at the 2009 IMF/ shareholders. In the ordinary that led to the liquidation of World Bank meeting in course of doing business, some of the banks is emerging Istanbul, Turkey, said that the money fully provided for as loan loss when recovered goes in very clear terms. Central Bank will not get to beef-up the capital or For those of us who reported involved in the day-to-day the crisis recall with nostalgia running of the troubled banks. shareholders’ funds which the that Intercontinental Bank’s He said that the onus of non-performing loan has interim management then running the banks was in the grossly eroded. What one headed by Lai Alabi had hands of the managements found disturbing at the time was the fact that the caretaker granted waivers to the tune of and the boards. management of several billions to some It was clear from the Intercontinental Bank had companies alleged to be beginning that what was associated with Saraki. These happening in the industry at disclosed that the bank debtors were close to the then the time was not normal as recovered over N78 billion out interim management put in bankers were worried that of the N142.644 billion place by the CBN Governor. though it is normal for a long- provisions for loans and other The explanation then was that standing non-performing loan known losses, stating that the waivers the bank granted to in order to recover fully the

Revisiting rescued banks’ grant of waivers to billionaires: What redress is possible? debtors was in line with the with serious issue of moles existing policy in the bank to in the bank, what these people encourage debtors to pay. intended to achieve was to Explaining the situation, Lai malign the bank, frustrate the Alabi had said: “When loans progress we have made for the have become bad as they are, purpose of serving certain when the underlying interest. securities have virtually been ”Most of the figures given totally eroded as we have out are distorted. For instance, now, then there is a need to in some cases the give some amounts they The very sad concessions are asked to pay in order to thing that exclude the encourage happened then values of share such debtors the loans were was waivers to pay, that used to is exactly granted to purchase. Also in what we did billionaires. At most cases, the and this is the waivers took into the time, the practice in all consideration, banks - both link between wrong debits, in Nigeria Sanusi, Lai penalty charges a n d and other entries Alabi and worldwide. in dispute; we ” T h e r e Bukola Saraki need to have in existed such was not so clear mind that our policy on effort has so far to Nigerians. w a i v e r s a reward before the Now that Sanusi yielded of about N80 p r e s e n t Lamido Sanusi billion since the management intervention.” has openly assumed Now that it is in office, this acknowledged the public was then that Saraki was domain that presented to some of the his classmate, the credit actions were committee the picture of premeditated to w h i c h what happened help a friend get refined it what he had to the rescued a n d craved for but presented it banks is could not get in to the board becoming the ordinary run w h i c h of business, what clearer approved it. redress is But we are possible for those contesting lost five banks?



Cover story

Banks, others jittery over investments in power sector Continued from page 18

embedded generation and two other companies for captive power. On his own part, Mr. Sola Adeshina, Managing Director, Sahara Power, owner of the Ikeja Distribution Company, also noted that unavailability of gas and a non-cost reflective tariff structure is hampering the effective delivery of power to consumers. In addition, Mrs. Funke Osibodu, Chief Executive Officer, Benin Electricity Distribution Company, said that operators are aware that Nigerians are fed up with the power situation and want a change. She however noted that what is lacking is the fact that a vast majority of Nigerians do

not have the information that the change that is expected will require more from every one. According to her, fixing the problems in the power sector is a long haul and it will take a long time for operators to achieve their goals. “Nigerians should be aware that infrastructure is not power. The government and some politicians will donate transformers to a community and they will think their power problems are over. “We should know that transformer is not power. Power has to be generated first before the transformer and other equipment can distribute.” In his own view, Mr. Anil Sardana, Managing Director,

Tata Power, who spoke via live webcast from India, said the reforms in the Nigerian power sector will not succeed unless there is direct support and oversight from the government.

He noted that financial prudence in the transition process is key, adding that emphasis should be placed on the change management process, as well as in the valuation of the business.

He said customer satisfaction should be the key goal for the reforms process, adding that the reforms should also focus on working to reduce the cost of distribution.

Bajaj raises stakes on tricycle with 20 new features


ajaj Auto Limited, manufacturers of Bajaj tricycle, Bajaj RE, said it has improved the performance its tricycle. The company said it has added 20 more advanced features to the cycle. The company stated that for advanced performance of the tricycle it has added eight performance advancement in the redesigned gear box, increased the slot width for

smoother gear shifting, improved on the engine cooling mechanism, the digital ignition with TPS and exhaust TEC. Speaking, Head, Marketing and Sales for DAG Motorcycles Industries Limited, marketers of the tricycle, Mr. Firdous Ahmad, who gave the brand perspective of the tricycle, said that the anti judder clutch has

been improved upon, the hood pipe heightened, improved on the cabin ergonomics, redesigned the driver cabin floor and the water splash guard improved upon. For durability of the tricycle, he said the product now has bigger screw– on type oil; strainer which is a dual oil filtration process.


20 — Vanguard, MONDAY, APRIL 14, 2014


Vanguard, MONDAY, APRIL 14, 2014 — 21

Business & Economy BY OSONDU NWOKORO



Omobolaji Johnson, Minister for Information and Communication Technology

The Lagos initiative: Another first by the telecoms industry


he digital world is here. We are all using various digital devices – smartphones, laptops, tabletops,tablets, phamblets, etc and consuming data,which is the currency of the digital world. Manufacturers and techies are pushing out new gadgets and appon on a daily basis tofurther drive us down the digital lane. At the heart of all these are the telecommunications networks which provide the high capacity transport infrastructure that services ride on. It is often acknowledged that telecommunications is to the digital era what electricity was to the industrial era. Across various spheres of endeavours – education (distance learning), traditional and social media, travel and tours, shopping, entertainment, etc, Nigerians are actively harnessing digital opportunities and ways of life, courtesy of the enablement accorded by the telecommunications networks.From growing telephone penetration from less than one percent in 2001 to more than 86 percent in 2013, the telecommunications sector now comes second only to the oil and gas sector in terms of attracting Foreign Direct Investment (FDI) and contribution to Gross Domestic Product (GDP) in Nigeria. According to Pyramid Research, the sector contributed about 35 percent of FDI(around US$45bn)between 2001 and 2011 and its GDP input grew from below one percent to 8.54 percent between 2001 and 2013. The sector has also been responsible for creating around three million direct and indirect jobs and a value chain that impacts millions of Nigerians across various spheres of life. It has also been pivotal in promoting wide public access to information which is an important element for the development of democracy. As a social overhead capital, that is, a basic service without which primary, secondary and tertiary productive activities cannot function effectively, telecommunications therefore needs to be accorded due attention by relevant stakeholders in order to ensure that Nigeria’s vision of digital inclusion is realized. With the announcement of the National Broadband Plan (NBP) by the Federal Government last year, the telecommunications sector is set to play an even greater role in the socio-economic development of the country. A critical success factor for the NBP was aptly outlined in the

financial leakages and brought about an increase in internally generated revenue by 100 per cent, from N300 million to N600 million within one year and to N1.6 billion presently. Lagos State has also adopted e-payments solutions for government transactions. The Eko Atlantic cityproject which will be Africa’s first “Smart City” is undoubtedly the most ambitious ICT project of the State to date. While not detracting from these initiatives, the recent agreement between the Lagos State Government and the telecommunications operators which streamlines the approval processes and fees for telecommunications facilities deployment is an even more momentous development in terms of scope of impact and demonstrated alignment with the spirit and letters of the NBP’s vision on publicprivate sector collaboration.TheLagos State Government was interested in protecting the sanctity of extant planning and related regulations while the

It has also been pivotal in promoting wide public access to information which is an important element for the development of democracy


following statement “implementation of a national broadband plan requires long-term commitment and significant action by the Federal, States and Local Governments, as well as, the executive and legislative branches of government – alongside strong private sector participation.”Riding on this, theFederal Government through the Ministry of Communication Technology is partnering with IBM, a global ICT player, to provide technology-driven solutions to resolve challenges in key sectors of the Nigerian economy and to that end has convened a ministerial roundtable to develop appropriate implementation plans.

At state level,Lagos and Osun have declared ICT adoption as an important part of their strategic development efforts and are actively collaborating with the private sector to this end. Ogbeni Rauf Aregbesola,Governor of Osun State who had earlier championed the State’s multiple award-winning computer tablet innovation, “Opon Imo” (Tablet of Knowledge), recently reaffirmed his determination to make his state the ICT hub in Nigeria at a ceremony marking the take-off of the multi-million dollar RLGAdulawo Technology City in Ileshathat that was set-up by RLG Communications, a phone manufacturing company, with support from Osun State Government. According to the Group Chairman of RLG Communications, the technology city will play a major role in the technology revolution that is imminent in Nigeria.The centre will be involved in the training of youths in the assembly, repair and manufacture of various electronic devices and is expected to create over 10,000 jobs, both directly and indirectly. Aside from being a strategic tool, Osun Statehas keenly applied ICT in transactional activities as Ogbeni Aregbesola had indicated that the deployment of ICT in government operationshad blocked

telecommunications operators’ concerns were around speed of i n f r a s t r u c t u r e deployment,discriminatory fees and multiple taxation/ regulation, as well as the protection of their facilities from illegal lock-outs by overzealous government officials. In discussions leading to the landmark agreement, the parties were able to reach reasonable and legitimate compromises as partners-indevelopment to streamline processes leading to reduction in approval timelines for the grant of site build permits to 30 days and reduction of applicable fees by around 60 percent. This landmark agreement will certainly facilitate the expansion of telecommunications infrastructure across Lagos State to enhance the provision of services currently on offer and facilitate the deployment of “future” services such as 4G LTE. The CEO of Airtel, Segun Ogunsanya, certainly had this in mind when he recently expressed gratitude to the Lagos State Government and announced that telecommunications operators would reciprocate the goodwill by providing state-of-the-art services in the state. Telecommunication has been playing a leading role in national development since the liberalization of the sector about thirteen years ago. In addition to facilitating teleaccess for over 120million

Nigerians presently and making significant contributions to GDP and FDI, the sector is now pioneering a developmental partnership model that will prove useful in the consolidation and growth of all infrastructure-based industries in Nigeria, thereby reaffirming its status as ‘the goose that lays the golden egg.' Such a specially innovative industry should be widely celebrated rather than vilified as unfortunately seems to be the case currently. zOsondu is Director, Legal & Regulatory Affairs at Airtel Nigeria.

MTN provides data roaming services BY ETOP EKANEM


TN, has taken the bull by the horns by providing data roaming services for its customers , even as many operators are shying away from resolving the high rates of data roaming charges or coming up with a better alternative,. Only few operators are trying to ensure that their medium and high value customers still have access to the internet through their mobile phones while roaming. Recently, MTN launched a product termed “Browse like Home when you Roam with MTN One World”. The MTN One World is a new data roaming tariff where MTN prepaid and post-paid subscribers, who travel out of the country, have access to the internet on their mobile phones and send text messages, paying a standard home rate of 5kobo per kilobyte and N4 per SMS, as if they were in Nigeria. This service is available in any of 19 MTN operating countries namely: Benin, Cameroon, Ghana, South Africa, Liberia, Cote D’Ivoire, Uganda, Congo, Rwanda, Guinea Conakry, Zambia, Iran, Sudan, Guinea Bissau, Cyprus, Swaziland, Yemen, Afghanistan and Botswana. The Chief Marketing Officer, MTN Nigeria, Larry Annetts, explained that, the key strategic focus for the new tariff plan is to ensure data communication at the most affordable and friendly rate on the go. “We are always committed to deliver a new world of digital experience to our customers and the thrust of this initiative is to ensure friendly roaming tariff , where our customers who travel to any of our 19 operating countries can still feel at home, browsing at a standard home rate of 5kobo per kilobyte.


22 — Vanguard, MONDAY, APRIL 14, 2014


Vanguard, MONDAY, APRIL 14, 2014 — 23

Corporate Finance

Diamond Bank posts N8.2bn profit in first quarter By PETER EGWUATU


iamond Bank Plc has recorded a Profit After Tax (PAT) of N8.2 billion for the first quarter of 2014, representing a growth of 37 per cent Year on Year. According to information from the Nigerian Stock Exchange, NSE, the Bank also recorded a profit before minority interest of N8.446 billion for the year under review, while interest income stood at N38,245 billion. Analyzing the Diamond Bank’s first quarter results, FBN Capital stated that the growth in PAT was driven by visible improvements in Diamond’s underlying results and a reduction in taxes. According to its analysis “Both funding income and non-interest income posted healthy growth during the period. Diamond Funding income was up 12 per cent y/y to N27.5billion while non-interest income grew 65 per cent y/y to N10.0billion to support a 23 per cent y/y growth in PBT before provisions.” Continuing, the FBN Capital stated “Loan growth of 3 per cent Quarter on Quarter, q/q in first quarter, Q1 was slightly ahead of the

2 per cent q/q deposit growth during the period. Similar to the fourth quarter, Q4 numbers, these results more than offset a 25 per cent y/y increase in Operating Expenses ,opex and N5.0 billion in loan loss provisions (up 54 per cent y/y). Sequentially, PBT was up 42 per cent q/q because funding income growth of 7 per cent

q/q and a 24 per cent q/q decline in provisions were enough to offset a decline of 11 per cent q/q in non-interest income. “ However a N2.0bn tax gain in Q4 2013 and to a lesser extent N250million loss on the other income line compared with N764million in Q4 2013 resulted in PAT declining 11 per cent q/q.

Compared with our unrevised estimates (prior to Q4 results being published), Diamond’s Q1 2013 results are better than we were expecting. Although funding income was close to our forecast of N28.5bn forecast, noninterest income came in ahead of our forecast by 48 per cent.

LECTURE: - From left, Vice Chancellor, Ladoke Akintola University of Technology, Ogbomoso, Prof.Gbadegesin Adeniyi; Former National President, Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture, Chief John Odeyemi; Vice Chancellor, Obafemi Awolowo University, (OAU), Ile Ife, Prof. Bamitale Omole; and Chairman, GlaxoSmithKline Nigeria Plc, Chief Olusegun Oshunkeye, at the first yearly lecture organised in honour of Odeyemi by the Natural History Museum, OAU.

Seplat listing may spur return of public offerings — NSE boss A

stock market debut by oil and gas firm Seplat in Lagos and London is likely to unleash a round of Initial Public Offerings (IPOs) in Nigeria , the Chief Executive Officer, Nigerian Stock Exchange, NSE, Mr. Oscar Onyema has said. Onyema told the Reuters Africa Investment Summit that he expects more oil and gas listings to follow Seplat’s. He said this would help tackle the sector ’s underrepresentation on the Nigerian Stock Exchange. The sector currently makes up just 2.6 percent of market capitalization versus 14 percent of Nigeria’s newly rebased GDP. After Seplat, the sector will make up 5.9 percent of the exchange. Seplat said it had raised $500 million in its IPO and plans to list its shares in Lagos and London on April 14. The offering gives Seplat a market

capitalization of $1.9 billion. None of the foreign oil majors such as Shell and Exxon Mobil that have been operating in Nigeria for decades are listed. Only local firms; Oando, Forte Oil, Conoil and now Seplat are listed. Heavyweight cement producer Dangote Cement accounts for a third of the NSE , followed by the banking sector .”It will be the first yet to resume. The market is down 6 percent in the first quarter, which Onyema attributed to the tapering of quantitative easing in the United States, volatile emerging market currencies and Nigeria’s forthcoming elections, which had led to some pullback from foreign investors. Nigeria revalued its gross domestic product (GDP) on Sunday to more than $500 billion, surpassing South

Africa as the continent’s top economy and shrinking the ratio of stock market capitalization to GDP to 15 percent, compared with more than 100 percent in most

developed stock markets. “It positions us better to become a gateway to Africa for foreign direct or portfolio investments,” Onyema said of the rebasing.

GTBank to reward credit card holders


uaranty Trust Bank Plc has announced the launch of its new loyalty scheme exclusively for GTBank credit card holders. The loyalty scheme is in partnership with Avios, the leading global travel rewards company. This initiative is part of GTBank’s overall strategy to bring the best in card products to its customers. It will reward international GTBank credit card holders, who are also members of the British Airways Executive Club Programme, for using their cards to pay for purchases using Point of Sale terminals. Avios is the global currency of the British Airways Executive Club. Members can collect Avios when they book a flight or shop with its partners and now when they spend with their GTBank credit card. With the new GTBank credit card loyalty scheme, every card holder will collect one Avios for every $2 USD on qualified spend on the card.

IMF urges nations to cut budget deficit


he International Monetary Fund, IMF urged has nations to cut budget deficits, saying deflationary concerns, weak growth prospects and rising borrowing costs threaten to undermine fiscal balances. While Europe is most exposed to the risk of a sustained period of ultra-low inflation, the U.S. Federal Reserve also saw its preferred gauge of price changes remaining below its 2 percent target for almost two years. The IMF has termed such developments “low-flation” and is calling on countries to take action to prevent it from hurting output and reducing governments’ ability to repay debts. “In most countries, persistently high debt ratios continue to cast shadows over the medium term,” the Washington-based IMF said in its Fiscal Monitor report released today. “Risks to fiscal forecasts remain mostly on the downside, reflecting weak growth prospects, medium-term policy uncertainty, and persistent deflationary concerns with potentially deleterious impacts on debt dynamics” and budget results, it said.

Skye Bank posts N17bn profit for 2013


kye Bank Plc has announced a profit before tax of N17.136 billion for the financial year ended December 31, 2013, representing an increase of 3.79 per cent over the N16.510 billion recorded during the corresponding period in 2012. According to the International Financial Reporting System’s (IFRS) compliant result submitted to the Nigeria Stock Exchange last week, the Bank’s profit after tax rose significantly to N16.023 billion compared with N12.644 billion posted in the previous year showing an improvement of 26.7 per cent. Other highlights of the result include growth in total assets from N1,073 trillion to N1.116 trillion, while its deposit liabilities also increased from N966 billion to N996 billion during the period under review, reflecting a growth of three per cent. C M Y K

C M Y K Company Oil and Gas and Products Petroleum Prod ucts Capital Oil Plc 1st fTier Securities AGRICULTURE Crop Production FTN Cocoa Processors Plc Okomu Oil Palm Plc Presco Plc Livestock/Animal Specialities Livestock Feeds Plc CONGLOMERATES Diversified Industries A.G. Levents Nigeria Plc Chellarams Plc John Holt Plc SCOA Nigeria Plc Transnational Corporation UACN Plc CONSTRUCTION/REAL ESTATE Building Construction/Structure ARBICO Plc Constain (WA) Plc CONSTRUCTION/REAL ESTATE Non-Building/Heavy Construction Julius Berger Nig Plc Roads Nigeria Plc Real Estate Development UACN Property Development Real Estate Investment Trusts Skye Shelter Funds Union Homes Real Estate Investment CONSUMER GOODS Automobile/Auto Parts DN Tyres & Rubber Plc

Opening Price (N) 0.50

Daily Stock Market Report Closing Price (N) 0.50

Opening Price N

Quantity Traded 100

Year High 0.50

Year Low 0.50


P.E. Ratio

HEALTHCARE Medical Supplies Morison Industries Plc Healthcare Providers Union Diagnostics & Clinicals Services


0.50 42.00 42.00

0.50 42.00 42.00

3,000 23,980 78,339

0.50 24.58 8.30

0.50 14.53 6.40

0.10 7.33 2.75

50.00 2.77 4.37








1.43 3.95 1.21 5.06 3.55 59.00

1.43 3.95 1.27 5.06 3.55 59.00

2,503 4,500 1,500 20,454 13,701,241 1,151,038

2.54 7.60 8.82 8.28 1.82 42.50

1.45 6.43 5.89 5.52 0.50 28.70

0.16 0.31 0.00 0.35 0.24 6.89

5.18 20.74 0.00 15.77 3.64 4.14

5.30 1.29

68.50 8.46

5.30 1.29

31,443 671,961

4 2,720,390.38

Sim Capital Alliance Plc Stanbic IBTC Bank Plc UBA Capital Plc

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

68.50 8.46

69,970 4,750

62.26 8.28

32.96 3.01

4.11 4.73

10.11 2.26








100.00 47.59

100.00 47.59

200 70

100.00 -

97.00 -

11.75 -

8.51 -

103.50 20.45 2.60

1.91 0.50 3.72 2.12 2.92 70.00 1.81 1.45 7.36 1.57

Quantity Traded

Year High

Year Low


P.E Ratio

100,882 7,781,504

103.50 15.69 1.41

103.50 10.64 0.03

10.56 0.87 0.21

9.71 18.03 6.71












3.72 2.12 2.92 70.00 1.81 1.45 7.36 1.57

162 2,500 9,498 239,074 49,500 3,000 2,150 100

5.31 1.45 3.20 23.11 5.61 1.96 12.91 200

5.31 0.70 0.83 2.58 3.61 0.95 0.95 4.28

0.19 0.44 2.62 0.20 0.09 0.00 0.00

0.00 88.50 0.00 3.07 9.05 14.13 0.00 0.00

ICT Computer Based Systems Courteville Investment Plc








Computers and Peripherals Omatek Ventures Plc








15.99 1.97

16.83 2.07

5,098 360

9.31 3.59

3.25 3.25

0.00 0.01

1.43 0.00












16.62 8.76 37.75 9.48 235.00 0.50 1.16 108.00 4.10 1.64 10.00

16.62 8.76 37.75 9.48 234.70 0.50 1.34 108.00 4.10 1.90 11.00

795,608 49,116 89,657 264,827 737,148 150 62,984 958,957 20 10,000 123,564

30.00 12.57 43.98 15.49 132.51 0.75 3.51 48.05 5.28 3.36 13.40

12.00 8.10 15.16 4.16 95.00 0.50 1.02 36.58 5.11 0.51 10.93

2.14 1.09 2.28 1.47 7.56 0.00 0.00 4.10 0.44 0.23 0.00

7.86 4.97 8.88 2.31 13.17 0.00 0.00 42.86 14.19 2.89 0.00

1.41 2.70

3,125 2,717,101

6.91 3.60

IT Services NCR (Nig) Plc Tripple Gee and Company Plc Processing Systems Chams Plc


Closing Price N

103.50 20.45 2.60

as at Friday, April 11, 2014

ICT Telecommunications Starcomms Plc 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








13.79 190.00 26.41 150.85 0.77

13.79 190.00 26.41 150.85 0.77

20 84,301 121,875 3,378,679 10,000

4.63 255.00 7.10 100.00 1.01

2.23 186.00 5.23 72.50 0.93

0.00 9.95 0.41 5.08 0.00

0.00 19.98 16.29 22.22 0.00

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

Tools and Machinery Nigerian Ropes Plc






8.18 9.85 68.49 3.70 11.90 0.53

8.18 9.85 68.49 3.70 11.90 0.53

200,400 1,131,777 1,098,837 574,785 274,862 38,647

19.90 16.20 95.00 6.60 6.70 0.88

4.31 4.02 57.00 2.31 3.80 0.50

0.00 0.91 4.09 0.39 1.01 1.13

16.91 14.38 16.89 16.92 5.75 8.83







Metals Aluminium Extrusion Ind Plc








Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc

77.00 1,185.00

77.00 1,185.00

2,974,266 211,173

37.27 840.10

8.33 400.00

Non-Metalic Mineral Mining Multiverse Plc








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

1.35 25.43

27.61 32.84

Household Durables Nigerian Enamelware Plc Vitafoam Nig. Plc Vono Products Plc

32.27 4.03 1.66

32.27 4.03 1.66

60 54,800 11,000

36.19 5.54 2.88

33.96 2.91 2.88

13.89 0.61 0.00

2.44 7.07 0.00

Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc

32.00 46.00

32.00 46.00

205,019 240,223

41.02 47.39

21.02 27.60

0.82 1.44

4.39 32.91

FINANCIAL SERVICES Banking Access Bank Plc Diamond Bank Nigeria Plc Ecobank Transnational Incorporated Fidelity Bank Plc First City Monument Bank Plc Guaranty Trust Bank Plc Skye 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 African Alliance Insurance AIICO Insurance Plc Continental Reinsurance Plc Cornerstone Insurance Company Consolidated Hallmark Insurance Custodian and Allied Insurance Plc Equity Assurance Plc Goldlink Insurance Plc Great (Nig) Insurance Plc Guinea Insurance Plc International Energy Insurance Plc Investment and Allied Assurance LASACO Assurance Plc Law Union & Rock Insurance Plc Linkage Assurance Plc Mansard Insurance 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 Unity Kapital Plc Universal Insurance Plc Wapic Insurance Plc Microfinance Banks Fortis Micro-Finance Bank Plc NPF Micro-Finance Bank Plc Mortgage Carrier, Broker and Sector Abbey Building SOC Aso Savings and Loans Plc Resort Savings & Loans Plc Union Homes Savings Plc Other Financial Institutions Africa Prudential Plc Crusader (Nigeria) Plc Deap Capital Management & Trust Plc FBN Holdings Plc Nigeria Energy Sector Fund Royal Exchange Assurance

7.41 6.03 13.10 2.11 4.75 27.20 3.49 2.62 7.20 10.35 0.50 0.99 21.25

7.41 6.03 13.10 2.11 4.75 27.20 3.49 2.62 7.20 10.35 0.50 0.99 21.25

5,568,797 19,591,452 31,605,010 6,124,714 865,336 13,759,127 22,361,420 11,771,597 9,593,981 504,983 2,103,763 2,525,595 29,699,488

12.39 7.51 14.04 3.47 5.70 26.09 6.50 3.05 7.69 10.60 1.22 1.75 21.49

4.70 1.92 9.90 1.13 2.90 13.02 2.65 0.80 1.64 2.34 0.50 0.52 11.96

1.42 0.90 2.81 0.43 0.00 2.10 0.71 0.54 0.67 0.00 0.00 1.34 2.09

0.50 0.76 0.97 0.50 0.50 2.00 0.50 0.50 0.50 0.50 0.63 0.50 0.50 0.50 0.50 2.32 0.50 0.77 0.50 0.59 0.63 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.69

0.50 0.76 0.97 0.50 0.50 2.06 0.50 0.50 0.50 0.50 0.63 0.50 0.50 0.50 0.50 2.32 0.50 0.77 0.50 0.59 0.63 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.69

100 1,207,472 245,313 4,410,491 150 9,054,578 1,500 93,000 2,750 2,200 74,400 1,670,890 10,500 3,200 151,500 5,098,821 1,000 5,074,189 10,000 204,700 418,000 200 1,000 1,000 30,000 1,000 1,500 300 11,342,914

0.50 1.11 1.03 0.54 0.50 2.44 0.50 0.68 0.50 0.50 0.50 0.50 0.50 0.60 0.50 2.59 0.54 0.81 0.61 0.50 1.01 0.50 0.56 0.50 0.50 0.50 0.50 0.50 1.08

0.50 0.50 0.58 0.50 0.50 1.08 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 1.06 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

0.00 0.50 0.14 0.02 0.50 0.28 0.01 0.00 0.03 0.01 0.00 0.02 0.00 0.00 0.03 0.16 0.00 0.37 0.02 0.03 0.06 0.04 0.09 0.00 0.00 0.00 0.02 0.00 0.07

0.00 22.20 6.79 27.30 10.00 7.43 50.00 0.00 16.67 50.00 0.00 25.00 0.00 0.00 16.67 16.19 0.00 2.19 26.00 16.67 15.50 12.50 5.65 0.00 0.00 0.00 25.00 0.00 15.43

6.27 0.97

6.27 0.97

1,000 272,000

6.00 1.18

0.00 0.92

0.04 0.92

150.00 10.56

1.35 0.50 0.50 0.50

1.35 0.50 0.50 0.50

500 185,447 20 109,000

1.57 0.50 0.50 0.50

1.37 0.50 0.50 0.50

0.19 0.02 0.00 0.00

47.6 7 25.00 0.00 0.00

3.04 0.50 0.99 12.35 552.20 0.62

3.04 0.50 0.99 12.35 552.20 0.59

3,031,252 22,000 500 11,354,899 212,000

0.75 0.50 2.02 20.00 250 0.78

0.00 0.50 2.02 8.57 552.20 0.50

0.19 0.00 0.00 2.03 12.68 0.13

8.73 8.34 5.00 7.93 0.00 12.39 9.15 5.43 11.19 0.00 0.00 0.43 10.24

9.16 0.00 0.00 9.85 43.55 6.00

Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company

1.41 2.74

5.94 1.47

0.5 0.25 0.00


39.60 9.16 0.00


Paper/Forest Products Thomas Wyatt Nig. Plc








Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc

1.94 0.50

1.94 0.50

200,200 10,000

2.50 2.58

1.62 2.58

0.11 0.00

13.15 0.00








3.98 19.95 12.68 4.30 1.05 2.92 0.63

3.98 19.95 12.68 4.30 1.05 2.78 0.66

6,888 119,520 10 29,198 200 84,311 2,749,340

3.98 15.58 15.03 4.30 1.86 2.92 0.63

3.98 12.71 13.97 3.60 1.05 2.92 0.63

0.00 3.90 0.90 1.22 0.30 0.07 0.00

0.00 3.26 0.00 3.52 6.18 41.71 0.00

OIL AND GAS Energy Equipment and Services Japaul Oil & Maritime Service








Intergrated Oil and Gas Services Oando Plc








20.50 0.50 51.90 122.70 120.05 54.44 172.38

20.50 0.50 51.90 122.70 120.05 54.44 172.38

82,191 2,000 16,044 507,146 36,576 156 32,566

37.10 0.70 5.59

0.50 0.50 3.89

4.93 0.00 0.61

7.40 0.00 6.99

163.50 2,100 240.00

141.00 63.86 195.50

6.11 2.98 14.63

11.11 19.23 17.07














2.65 0.25

0.60 11.12

Mortgage Carriers, Brokers and Se Abbey Building Society Plc 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

Petroleum and Petroleum Products African Petroleum Plc Beco Petroleum Plc Conoil Forte Oil Nig Plc Mobil Oil Nigeria Plc MRS Oil Nigeria Plc Total Nigeria Plc Hospitality Tantalisers Plc SERVICES Afromedia Plc Automobile/Auto Part Retailers RT Briscoe Plc Courier/Freight/Delivery Red Star Express Plc Trans-National Employment Solutions C & I LEASING PLC Hotels/Lodging Capital Hotel Ikeja Hotel Plc

1.15 4.39 0.50 4.55 0.57

4.39 2.47

116,700 2.47

3.67 62




4.55 0.57

1,000 72,000

400 2.07

0.01 0.51



12.75 8.19 4.91 11.25

0.34 0.92

34.09 2.12




3.17 0.30 0.00 3.60



0.00 6.82







Media/Entertainment Daar Communications Plc





Printing & Publishing. Academy Press Plc Learn Africa Plc Studio Press Nig. Plc University Press

1.80 1.78 2.40 3.67

1.80 1.78 2.40 3.67

1,000 152,048 1,080 1,232,211


Road Transportation Associated Bus Company Plc




3.00 1.33


Speciality Interlinked Technologies Plc








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

2.46 5.09

2.46 5.09

55.669 811,742

2.78 11.75

1.57 6.50

0.60 12.53

4.22 8.75

24 — Vanguard, MONDAY, APRIL 14, 2014

Capital Market

Vanguard, MONDAY, APRIL 14, 2014 — 25

Banking & Finance By BABAJIDE KOMOLAFE


he rate of increase in prices of goods and services will rise to 10 percent from the 7.7 percent recorded in February. The rate, which is referred to as inflation rate has been relatively stable since October last year. From 7.8 percent in October, it rose marginally to 7.9 percent in November and 8.0 percent in December. Though it remained stable at 8.0 percent in January, it however fell to 7.7 percent in February. A Central Bank of Nigeria (CBN) official however estimated that this decline will be short-lived and replaced by a steady rise in the next six months. Deputy Governor, Operations, CBN, Mr Kingsley Moghalu disclosed this in his personal statement at the Monetary Policy Committee (MPC) meeting held last month. He said, “While headline inflation in February 2014 fell to 7.7 percent from 8.0 percent in January 2014, core inflation has inched higher from 6.65 percent in January 2014 to 7.17 percent in February 2014. Moreover, staff estimates project headline inflation at a range between 8 percent and 10 percent over the next six months, based on factors including fiscal spending and the impact of the planting season. This projection clearly indicates that an inflationary threat remains real, and the beast of inflation is yet to be slain decisively. The policy implication is that the MPC must maintain a tight

Second set of winners emerge in Ecobank’s promo


UNVEILING: From left, Managing Director/CEO, SystemSpecs, Mr. John Obaro, Super Eagles former goalkeeper and Ambassador, Remita Corporate Champions’ Cup, Mr. Peter Rufai, Managing Director/CEO, Media Vision, Mr. Fela Bank-Olemoh and Executive Director, SystemSpecs, Mr. ‘Deremi Atanda during the trophy and logo-unveiling ceremony of Remita Corporate Champions Cup in Lagos

CBN official predicts 10% inflation by July monetary policy at this time. This is more so when we consider the global conditions noted earlier.” Meanwhile analysts at Financial Derivatives Company (FDC), have predicted decline in inflation for the Month of March to 7.64 percent. The prediction was contained in the FDC’s Economic Bulletin published last week. The company stated, “Based on our monthly analysis of the national consumer price

index, we forecast a moderate decline in the headline inflation to 7.64 percent in March from 7.7 percent recorded in February. Our projection reveals a slower rate of change in consumer prices when compared to the same period in 2013.” “Further to this, the continuous contractionary monetary policy by the CBN is expected to keep inflation muted in the near team. Also, the projection of a lower

inflation rate coincides with the announced rebased GDP numbers. Most countries look towards achieving a high GDP growth rate in a low inflation environment. A high nominal GDP in a low inflation environment increases the fiscal and monetary policy options open to policy makers. As an attractive market, the increase in capital flows will boost the external reserves level and enable the CBN bring down interest rates later.”

AfDB President leads discussions on financial inclusion at CEOs roundtable President, Africa Development Bank Group (AfDB), Dr. Donald Kaberuka, will lead discussions on financial inclusion at the Africa CEO Round-table & Conference on Corporate Sustainability & Responsibility (AR-CSR). The event, which is the fourth in series, will focus on Financial Inclusion with the theme: ‘The Intersection: Financial Inclusion, Economic Sustainability & Social Benefit’. Scheduled to hold in June will feature a keynote address by Kaberuka. In a statement announcing the event, the conveners of the Conference, ThistlePraxis Consulting, said, “The correlation between financial inclusion and economic growth has long been widely recognized. However despite broad consensus on the importance of access to finance as a powerful poverty alleviation tool and

substantial financial sector reforms in Africa, it is estimated nearly half the continents’ households continue to be excluded from the formal financial sector’. “Financial inclusion, which advances universal access to appropriate and affordable financial services, is crucial to inclusive growth. At the basic level, financial inclusion is effectively a measure of the extent to which economic agents in an economy utilize the financial services apparatus at their disposal to effect the desired exchanges, and particularly, support the highest possible activity in the real economy. Hence, the 2014 edition will seek to interrogate the intersection where financial inclusion fosters economic sustainability and enhances societal benefit. The financial industry plays a critical role for society at large, serving

individuals, families, businesses, governments, civic institutions and other stakeholders. The sector performs indispensable functions such as enabling financial inclusion, facilitating saving and investment, providing protection from risks and supporting the creation of new jobs and enterprises. It is critical that the sector operates to provide these functions for society in a stable, sustainable way, and increases awareness of its activities in this area. In its annual tradition, the AR-CSR will again feature a series of events such as: CEO round-table sessions followed by a one-and-a-halfday conference; Sustainable Solutions Showcase (an exhibition of eco-friendly products and service solutions); Eco -Tourism, Sustainable Investment

Forum (hosted by the Cross River State Government); Networking cocktails & Gala Dinner amongst other inspiring and intellectually stimulating activities. Leaders from a variety of sectors from far and wide within and outside the continent will gather to share their expertise and experiences on an array of business and development sub-topics. They will also try to identify what is missing: the pooling of the most available heap of investable funds possible from all nooks and crannies of the economy; how to channel the pooled funds to attractive production activities, particularly those of small-to-medium size enterprises which are established as the main engines of economic growth and job creation across countries.

cobank has rewarded another set of winners that emerged from its Card 4 Prizes promo’s second monthly draws that held simultaneously in Lagos, Port Harcourt and Abuja last week. The 15 lucky winners emerged from a transparent electronic draw witnessed by officials from National Lottery Regulatory Commission (NLRC) and the Consumer Protection Council (CPC). They went home with different prizes including smart phones; Led TVs; air conditioners; home theatres and power generating sets. According to Head, Cards and e-banking, Ecobank Nigeria, Mr. Tunde Kuponiyi, the promo which was flagged off in February is gradually achieving its objectives. More customers of the bank now utilise the alternative payment channels that includes ATMs, Point of Sale (PoS) terminals and internet Banking.

Stanbic IBTC relocates Oshodi branch


s part of efforts to take banking services even closer to customers’ doorsteps, Stanbic IBTC Bank, a subsidiary of Stanbic IBTC Holdings, has relocated its Oshodi branch at Brown Street to a more accessible location along the OshodiApapa Expressway. The new branch is strategically located close to Oshodi bus stop to better serve the banking needs of residents of Oshodi and its environs. Speaking on the relocation, Executive Director of Personal and Business Banking in Stanbic IBTC Bank, Obinnia Abajue, said the move became necessary to accommodate the growing need to provide full financial services in the Oshodi area. Abajue said the financial inclusion drive of the bank has seen a rapid expansion of its operations within Oshodi and its environs, necessitating the relocation to a more conducive environment for customers. “Stanbic IBTC Bank currently has over 180 branches nationwide with presence in every state of the federation. Our retail banking business operates a network of over 2,500 MobileMoney agents. C M Y K

26 —Vanguard, MONDAY, APRIL 14, 2014

Banking & Finance

FCMB, Kano boost cashless policy with customised PoS terminals T

he cashless policy has received a major boost with First City Monument Bank (FCMB), Limited and the Kano State Government partnering to launch customised Point of Sales (PoS) machines to fast-track internally generated revenue in Fagge Local Government. The PoS machines, which are secure, easy to use and run on customised software, have been distributed to the tax collection staff to ease

revenue generation in the area. FCMB in a statement announcing the partnership said, “Fagge local government is taking the lead in the implementation of the newly passed 2014 Kano State Harmonized Rates and Levies Law that aims at removing all ambiguities hitherto experienced by tax payers by providing them access to track their tax records. The FCMB PoS machines

will ensure effective and efficient tax collection system thereby eliminating issues such as multiple taxes and leakages in local council’s revenue collection system. Handing over the machines to the local government at a ceremony held recently at Fagge town, FCMB’s Zonal Head for the North-west Zone, Mr. Abdullahi Mainasara, explained that the Bank developed the tax collection platform as

part of its contributions to the success of the cashless economy and financial inclusion policies of the Central Bank of Nigeria. He added that the, deployment of the PoS machines to motor parks, markets and other collection points, “ will help to reduce leakages in tax collections, boost internally generated revenue (IGR), enhance automation, tracking and real time reporting of revenue collection”. He said the PoS

collections initiative for Fagge LGA, ‘’is also in line with FCMB’s focus on being a strategic partner in helping our customers grow their collections and payments and also build customised solutions where they may not yet exist”. According to him, the Bank has conducted refresher training for revenue collectors and other staff involved in the project on the use and operations of the PoS machines as part of the

capacity building components of the partnership. Mr. Mainasara added that FCMB would ensure that the customized PoS revenue collection initiative, which is being piloted in Fagge local government, is extended to all the 44 local governments in Kano state. He reiterated the commitment of the Bank to further partner with the local and state governments on other initiatives that would impact the lives of individuals, businesses and the society.

FirstBank partners Oyo to boost economic development


s part of its strategic initiatives to drive financial empowerment and boost economic development, First Bank of Nigeria Limited, is teaming up with the Oyo State Government for the State Summit scheduled to hold from today. The Summit themed “Oyo State: Right for Business” is organized to highlight the various opportunities that are abound in the state for both local and foreign investors, as well as identifying practical solutions to develop key strategies that will serve as an integrated road map to achieving the economic transformation of Oyo State through a framework of private sector partnership. The main aim of the summit is to create an enabling environment that would attract business and investment opportunities in Oyo State from stakeholders across board, and also strengthen the progressive partnership between the state government and the private sector. His E xcellency, Senator Abiola Ajimobi the Governor of Oyo State will be on hand at the opening ceremony to declare the Summit open. Other dignitaries and discussants expected at the summit include; The South African Ambassador to Nigeria, Mr J. N. K. Mamabolo; Nigeria’s foremost businessman, Alhaji Aliko Dangote, Group Chairman FBN Holdings Plc, Dr. Oba Otudeko, Dr. Oby Ezekwesili and Mr. Bismarck Rewane. C M Y K

Vanguard, MONDAY, APRIL 14, 2014 — 27


28 —Vanguard, MONDAY, APRIL 14, 2014

Homes & Housing Finance

JPMorgan profits fall as mortgage business fades


S banking giant JPMorgan Chase has reported a sharp fall in profits at the start of 2014, which it blamed on declines in its mortgage business. The bank said net income in the three months to the end of March was $5.3bn (£3.1bn) - a fall of 19 percent compared with a year earlier. Profits from its mortgage business stood at $114m, down $559m from last year. The figures mark the second successive quarterly fall in profits at the bank. Profits from its corporate and investment banking division stood at $2bn, down from $2.6bn just three months earlier. The results follow a 2013 marred by huge legal settlements over JPMorgan’s mortgage practices prior to the 2008 crisis. The “London whale” trading scandal and other controversies including legal costs relating to the fraudster Bernie Madoff also dented earnings in 2013. JPMorgan chief executive Jamie Dimon still described the bank’s first quarter results as “good” given the industrywide headwinds in both investment banking and mortgages.

US mortgage rate inches towards record low


verage U.S. rates on fixed mortgages declined last week, edging closer to historically low levels as the spring homebuying season begins. Mortgage buyer Freddie Mac said that the average rate for the 30-year loan fell to 4.34 percent from 4.41 percent the previous week. The average for the 15-year mortgage eased to 3.38 percent from 3.47 percent. Mortgage rates have risen about a full percentage point since hitting record lows about a year ago. Refinancing’s share of mortgage applications fell from 53 percent to 51 percent in the week ended April 4 - the lowest level since July 2009, the Mortgage Bankers Association reported Wednesday. The increase in mortgage rates over the year was driven by speculation that the Federal Reserve would reduce its $85 billiona-month bond purchases, which have helped keep longterm interest rates low. Indeed, the Fed has announced three $10 billion declines in its monthly bond purchases since December. C M Y K

Procedures, requirements for obtaining C of O in Lagos State By YINKA KOLAWOLE


nvestigations have revealed that majority of home owners in Lagos State, and in many other states of the federation, have no Certificate of Occupancy (C of O). A Certificate of Occupancy is a document issued by State governments in Nigeria to a land/property buyer as a proof of ownership. A parcel of land or property without an authentic C of O or equivalent could be likened to a vehicle without an authentic vehicle licence. Individuals or corporations seeking to buy land in Lagos have several options: They can buy straight from the government in the case of government acquired land or buy from individuals who have bought from the government or buy from the natives (popularly known as Omo o’nile in Lagos), after verifying from the authorities that they are not illegally selling government acquired land. Whoever one buys from, you need to eventually obtain a C of O from the state government to legitimize the purchase, if the previous owner have not already done so. The following are the step by step procedures and documents required for obtaining a C of O in Lagos State for both State land and non-State land: Procedures for State land Applicant purchases and submits application pack to Land Use Allocation Committee (LUAC) and collects acknowledgement slip; Applicant collects letter of offer of allocation (1 day); Applicant pays for allocated land (within 90 days); Applicant issued with letter of confirmation with plot and block number (Full payments must be made before Plots & Blocks are allocated); Scheme Officer processes application for C of O, signs off on the file and forward files to Executive Secretary LUAC (5 days); Surveyor General provides Scheme Officer with digitized survey (2 days); ES LUAC approves processing and signs letter of allocation. ES LUAC signs off on the file, send file to the Senior Special Assistant to the Governor on Lands (2 days); SSA (Lands) vets entire file and sends file/application with a covering memo to the Permanent Secretary Lands Bureau (2 days); If file has a query, message is relayed back by notification;

PS Lands signs off on the memo and sends file to Governor (2 days); Governor approves file and electronically signs the C of O (2 days); If file has a query, message is relayed back by notification. Upon approval and signing of C of O, the Governor signs off and sends file to the Deputy Registrar for further processing (2 days); Deputy Registrar processes file further, signs off and sends file

Abijo Commercial and Industrial (Form for Prime Land); other areas (Form for General); Four Passport Photographs with white background; Evidence of payment of Income Tax; Current Development Levy (In case of company, Evidence of payment of Income Tax o f Two Directors and Development Levy); Survey Plan; All payment receipts of Land Charges; Vital Information Form.

Duties); Registration of C of O (by Land Registry); and Collection of executed and registered C of O (by Applicant) Documents required for Non-State land Formal Letter addressed to the ES LUAC, Block 13, Room 4, Lands Bureau, The Secretariat, Alausa, Ikeja; Completed Certificate of Occupancy Form with receipt; Land Information Certificate with receipt; Four original Survey Plan (2 in cloth and 2

Certificate of Occupancy key for housing development to Registrar of Titles for final registration (2 days); Registrar of Titles registers the C of O, signs off and request for printing of C of O (1 day). The whole process adds up to 21 days Documents required for State land Formal Letter addressed to the Executive Secretary – Land Use and Allocation Committee, Block 13, Room 4, Lands Bureau, The Secretariat, Alausa, Ikeja; Standard Allocation Form with Receipt - Lekki Pennisula Schemes,

Procedures for NonState land Submission of Application and Vital Information Form for Certificate of Occupancy (by Applicant); Compilation of applicants names for publication, Title Search for previous Registration and Site Inspection (21 days); Certificate of Occupancy Engrossment (by LUAC); Recommendation for execution of C of O (by ES LUAC, SSA Lands & PS Lands); Execution of C of O (by Governor); Stamp Duty (by Commissioner for Stamp

in paper); Four Passport Photograph with white background; Sketch Map of the Site Location; Purchase Receipt Duly Stamped; Evidence of payment of Income Tax; Current Development Levy. (In case of Company, Two Directors Tax Clearance and Development Levy); Publication Fee N10,000.00; Capital Contribution Fee subject to a minimum of N30,000.00; Building Plan Approval if developed; and Copy of Tenement Rate Receipt (if occupied).

Our journey to home ownership, by Lagos HOMS winners


leven new home owners who successfully met the requirements of the Lagos Homes Ownership Mortgage Scheme (Lagos HOMS) collected the keys to their apartments from the Lagos State Governor Babatunde Fashola recently. One of the lucky winners, Mr. Amos Kimeh Omodunni, narrated his journey to becoming a home owner in Lagos with these words: “Everything worked just like clock. I did not have to visit any office or talk to anyone. Everything that I needed to do to complete that application was done just in my office and I did not have to move anywhere.” Omodunni won a three-

bedroom apartment at Shitta Estate, Surulere, one of the estates purposely built by the state government for ownership by prospective first time home owners only under a mortgage payment system. Other lucky new home owners are: Mrs. Rukiat Abdulmalik, Mr. Ademola Odujoko, Mr. Ejiroghene Torishedu Madedor, Mrs. Yetunde Oluwaseun Awopeju, Mr. Ajayi Omotayo Jubril, Mrs. Ganiyat Dolapo Akanni, Mr. Gbenga Owolabi, Mr. Chukwuneta John Paul Ogbatwi, Mrs. Bibian Aloba Kanayo and Mr. Ikpeh Daniel Darligton. Giving testimony on behalf of other winners after they

were handed keys to their respective apartments, Omodunni said the journey that changed his status started a few weeks ago when he came across the scheme on one of the social media sites. According to him, he saw the photographs of one of the schemes that were uploaded when the Governor visited the estate. Having read more about the Lagos HOMS initiative, he said he became interested. That was how he applied and followed the entire process through, online. He explained that he was fascinated by the noncomplex procedure of the scheme unlike some other house ownership schemes.

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Aviation Stakeholders fault merger of aviation parastatals



igerian Aviation Handling Company Plc. capitalized recently marked 35 years in cargo, aircraft handling, passenger facilitation, crew transportation and aviation training. Part of the activities marking the Company’s 35th anniversary, saw the Managing Director, Mr Kayode Oluwasegun-Ojo, personally handling the check-in formalities of a London-bound Virgin Atlantic Airways passenger Mr. Michael Olusesi. He thereafter fielded questions from Aviation reporters. Exceprts: NAHCO is 35 years old. What has kept the company going? Good and strong corporate governance. The company has maintained strong corporate ethical standards. We are a service provider and whatever impression you create with passengers stays with them and is passed on to others. So, it is imperative you maintain high standard and give customers valued services. NAHCO is one of the few companies that has been successful after privatization and is one of the few publicly quoted companies in aviation industry. What is the relationship with shareholders? We have tried to keep faith with our shareholders. We are a profit oriented company. In 2005, NAHCO Aviance was privatized and subsequently listed on the Nigerian Stock Exchange in 2006. The company is now owned by over 80,000 shareholders, including two international airlines — Air France and Lufthansa; as well as local investors; Sycor Private Investment Limited and Rosehill Group Nigeria Limited. The company’s stock exchange symbol is “Nahco”. We have always placed the interest of our shareholders first and we try to satisfy them. We pay dividends, though the shareholders will always ask for more . We have the confidence of our shareholders. The performance of the company on the stock exchange is okay. Your company has a strong global alliance with Aviance. How has that impacted your business ? NACHO has developed strategic global alliances through its membership of Aviance, the global alliance of 10 reputable airport service providers operating from 112 stations in 17 countries. We


NAHCO MD, Mr Kayode Oluwasegun-Ojo

viation stakeholders have reacted furiously to the Federal government approval of the Steve Oransanye report and the White Paper directing the merger of Nigerian Airspace Management Agency, NAMA, Nigerian Civil Aviation Authority, NCAA, and Nigerian Meteorological Agency, NIMET, into a body called Federal Civil Aviation Authority. Former commandant of Nigeria Airport, Capt. John Ojikutu, is of the opinion that government cannot merge a regulator with agencies it is supposed to regulate. According to Ojikutu “Whoever advised government to merge Nigeria Airspace Management Authority, NAMA, Nigerian Civil Aviation Authority,NCAA, and the

Airports need separate power projects, says NAHCO boss have a cordial relationship with our partners and we have abided by the MoUs we signed with them. The partnership has made us a global player and has helped us compare our performance with our foreign partners and keep international standards. In terms of training and equipment, how much has the company invested in these areas ? We have invested more than $50 million in equipment and training. The benefit of training is what has helped us retain our international clients. In the last three to four years, we have invested more than N500 million on local and international training of our staff. We are a service provider and so, training is key. We provide value and build value through training. When I took over as chief executive of the company, most of the company ’s equipment were more than 20 to 30 years old. In the last three years we have invested heavily in equipment and I am proud to say that our equipment are now less than three years old. What is your share of the ground handling operations market currently ? We currently control 85 per

cent of the ground handling operations in Nigeria. The company currently serves more than 35 airlines at seven airports across Nigeria, with plans to expand operations to other African countries. It handles about 70% of domestic and foreign airlines operating in Nigeria. You had issues with the Nigerian Customs over improper warehouse records. Though the issues have been resolved, what is your relationship with the organization now ? Yes, we, along with SAHCOL, had issues with Nigerian Customs over what they called improper records of goods in our warehouses. The issues have been resolved and agreements were signed. We have abided by these agreements. We have a cordial relation with them. What has been the biggest challenges so far ? Infrastructure problems at most of the airports. Power supply is the biggest challenge. It has increased the cost of operations. We are however hopeful that with privatization of the power sector, things will improve. We are also recommending to the government that there

should be an independent power project strictly for the airports. This will enhance power supply to the airports. Also as a leader in ground handling operations in Nigeria, we are target of attack by our competitors. We are however not aversed to healthy competition.

Nigeria Meteorological Agency, NIMET, must be from another planet. He probably forgot to include FAAN in the appropriation to further take us back to the era of selfregulation.” “Oransanye must have been wrongly briefed by some egg heads. How do you merge operators of the industry with the regulator? This merger completes what Oduah started – bring the industry under the jackboot of the government. Must the government drive the policy, regulate and operate the industry? We must be in a world of our own and out of the earth.” “When we should get the private operators to invest more in the industry or commercialise government operators like FAAN and NAMA as recommended in the privatisation and commercialization Act of 2000, government instead is appropriating the industry to itself alone. Surely, government officials and political office holders can not remove their eyes, mind and souls from the hidden or sleaze funds in these agencies.” Chairman, Air Transport Services Senior Staff Association, ATSSSA Mr Ekanem Ekanem believes that whoever advised government to merge the agencies does not wish the country well, as the merger will take Nigerian aviation sector some decades back. He said NCAA is an autonomous body and cannot merge with service provider like NAMA.

Petroleum Minister needs chartered plane for effective performance —Aviation experts


viation experts have thrown their weight behind the Minister of Petroleum, Mrs Deizani Alison-Madueke saying she needs a chartered aircraft to facilitate her movement considering the nature of the job of her ministry.They further contend that going by regular scheduled flights will slow down the minister ’s movement and consequently make her less efficient. Recall that the House of Representatives has been probing the Petroleum Minister over an allegation that she “ has expended over N10 billion on charter and maintenance of a Challenger 850 aircraft.” However, the Nigerian National Petroleum Corporation,NNPC, has

denied the existence of a chartered aircraft for the exclusive use of the Minister . Speaking exclusively with Vanguard , an aircraft Engineer with the defunct Nigerian Airways and current executive member of Aviation Round Table, Engineer Sheri Kyari said the nature of the Petroleum Minister ‘s job dictates that she has access to a chartered aircraft to facilitate her movement. According to Engr Kyari “ the difficult terrain were oil companies operate needs to be accessed by an aircraft and being a supervising minister over these companies, the minister needs a stand by aircraft for exigent movement. C M Y K

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CBN releases N19.9bn GESS fund to boost agric T

he Central Bank of Nigeria (CBN) has so far released about N19.9 billion under the Growth Enhancement Scheme (GES)’s Credit Risk Guarantee (CRG) meant to boost agriculture financing in the country. The apex bank, however did not approve any Growth Enhancement Scheme

(GES)’s Credit Risk Guarantee (CRG) in the months of January to March, 2014. The Central Bank in its Development Finance Department (DFD) report for January- March 2014 disclosed that the sum of N134.61million was paid to 61 projects under the Nigeria

Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) in the first quarter of this year. The Nigeria IncentiveBased Risk Sharing System for Agricultural Lending (NIRSAL) is a mechanism designed to provide farmers with affordable financial products, reduce the risk of financial institutions that grant them loans, build

capacities of banks to lend to agriculture, as well as develop an incentive mechanism for Nigerian banks based on their commitment to agricultural financing. The report showed that one Credit Risk Guarantee (CRG) valued N2 billion was issued during the review period. That took the total value to N16.272 billion in respect of 45 CRG cover issued from inception to date. On the other hand, seven Interest Drawback Programme (IDP) claims valued at N57.250 million were processed and paid during the review period under the NIRSAL. That made the total Interest Drawback Program (IDP) claims paid under NIRSAL to N124.769 million in respect of 22 projects. The apex bank’s Development Finance Department report on the Commercial Agriculture Credit Scheme (CACS), revealed that from inception in 2009 to March, 2014 that the sum of N228.093 billion has so far been released to the economy under the Commercial Agriculture Credit Scheme in respect of 299 projects. The CACS was established to finance large ticket projects along the agriculture value chain. The scheme is being administered at a single digit rate of nine per cent to beneficiaries for a period of seven years. State governments, including the FCT can access a maximum of N1 billion each for on lending to farmers’ cooperatives or other areas of agricultural intervention. A breakdown of the amount showed that it comprised N199.831 billion released from

Nigeria‘ll soon be free from wheat importers —ADESINA BY GABRIEL EWEPU


S the federal government intensify its campaign for 20 per cent inclusion of cassava flour in wheat flour, the Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina said Nigeria will soon be free from the shackles of wheat flour importers. Adesina made the declaration while commissioning the official headquarters, buses, guest house and website of the Nigeria Cassava Growers Association of Nigeria, NCGA, in Abuja at the weekend. Adesina commended the achievements recorded by the NCGA and congratulated farmers for making Nigeria the world’s largest cassava producing and exporting nation. He said the government was making frantic effort to place Nigeria as number one cassava processing country in the world since it had occupied the position of number one producer of the commodity over time. He assured Nigerians that by 2015, Nigeria will surpass the target of adding 20 million metric tons of food to the national food output set at the time of launching the ATA in 2011. Adesina said: “I want to say that President Goodluck Jonathan is excited with what you farmers are doing because without food there cannot be national security. President Jonathan launching the Agricultural Transformation, ATA, just three years ago and his goal was very simple is to take Nigeria from a food dependent to a food self-sufficient country and also making it a food exporting country.

Nasarawa tasks extension workers, youths on bumper harvest


he Nasarawa state government has urged beneficiaries of the Federal Government’s motorcycles and Knapsack sprayers, to ensure bumper harvest and food sufficiency in the state. Mr Emmanuel Yaji, the state's Commissioner for Trade and Commerce, commended the government’s gesture during the distribution of 22 motorcycles and sprayers to extension workers and youths in Lafia. The largesse was in fulfilment of an earlier agreement reached between the state government and the Federal Ministry of Agriculture. Alhaji Danladi Madaki, the Commissioner for Agriculture and Water Resources, said the agreement was to ensure the transformation of the agriculture sector and to enhance food security in the state. Madaki lauded the government for fulfiling its own part of the bargain, adding that the motorcycles would enable the extension workers to effectively monitor the activities of farmers in the state.

Legend promo 3 kicks off


he 2014 edition of Legend Extra Stout’s Real Deal National Consumer Promotion, officially kicked off this month. The promotion which will last for two months will end in June 2014. Launched in 2012, the first edition of the promo saw hundreds of lucky consumers winning prizes such as TV sets, generators and millions of free Legend Extra Stout drinks, among other prizes. Last year, Legend Extra Stout however stepped up the ante in the annals of consumer promotions in Nigeria by taking 25 lucky consumers to Dubai in the United Arab Emirates on an all-expense paid trip. While in Dubai, they shopped for gift items worth one million naira in value. The lucky consumers were also taken on a special tour where they visited fascinating tourist sites during their stay. C M Y K

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Tax Matters


What constitutes ‘Trade’ for Tax purposes: Guidelines for the General Public

Kabir Mashi, FIRS Boss was a one-off and therefore did not constitute ‘trade’. The case was ultimately settled in the Supreme Court. In the ruling the Court laid down two important axioms: •Firstly, that the word ‘trade’ should be interpreted in its widest sense, in accordance with its common everyday meaning; •Secondly, that an isolated one-off transaction can still constitute a “trade”. In line with the ruling of the Supreme Court, the following definition seems to capture the common meaning of the word ‘trade’. Trade is “the business of buying and selling or barter in goods or services”(taken from Black’s Law Dictionary, Eighth Ed.



his article clarifies the FIRS’ position on what constitutes ‘trade’ or business for tax purposes. In accordance with the Companies Income Tax Act (CITA), and the Personal Income Tax Act (PITA), any trade is subject to tax under CITA and PITA, even if that trade is carried out by friendly societies, co-operative societies, charitable and ecclesiastical organizations, or trade unions. . CITA states that “any trade or business for whatever period of time such trade or business may have been carried on” shall be subject to Companies Income Tax (Sec 9(1)(a)). The profits of certain institutions are exempt from tax under CITA, but only in so far as such profits are not derived from ‘trade or business’ (Sec. 19(1) (a, b, c, e)). This means that the profits of any organization that are derived from ‘trade’ shall be subject to Companies Income Tax. This raises the question, what exactly constitutes ‘trade’? A definition of the word ‘trade’ cannot be found in Nigerian tax legislation although an attempt was made in PITA. The interpretation Section of the Fifth Schedule of PITA defines “trade or business” to mean “trade or business or that part of a trade or business the profits of which are assessable under this Act”. However, the issue has been addressed in several legal cases, the rulings of which provide some legal certainty regarding how the courts interpret the word (see Section 2). In line with these rulings, ‘trade’ can be regarded as “the business of buying and selling or bartering goods or services”. Furthermore, the one-off nature of an activity in no way invalidates that activity as constituting trade. This interpretation matches the approach in other jurisdictions, namely the UK and USA (see Section 3). Case Law in Nigeria Although no explicit definition of ‘trade’ exists in the law, the issue has been addressed in several legal cases, the rulings of which provide some legal certainty regarding how the courts interpret the word. The most important case is that of Arbico Ltd v. FBIR, {1996} 2 All NLR 303. The plaintiff in the dispute, Arbico, had acquired a plot of land, erected a building, and sold the property at a profit. The company was subsequently assessed for tax on the proceeds of the sale of property The Company objected to the assessment on the basis that the transaction

A definition of the word ‘trade’ cannot be found in Nigerian tax legislation although an attempt was made in PITA. The interpretation Section of the Fifth Schedule of PITA defines “trade or business” to mean “trade or business or that part of a trade or business the profits of which are assessable under this Act


(2004)). Treatment in Other Tax Jurisdictions

In considering what constitutes ‘trade’ for tax purposes it is useful to consider how the issue is addressed in other jurisdictions. In the UK, as in Nigeria, there is no statutory definition of the word ‘trade’. Her Majesty’s Revenue and Customs (HMRC) relies on case law to formulate a working definition. HMRC states that “Usually, trading involves the provision of goods or services to customers on a commercial basis”. As in Nigerian case law, “Simply because a venture is a one-off or occasional does not mean that it will not be treated as trading for tax purposes”. It is interesting to note that although the HMRC definition employs the notion of ‘commercial basis’, HMRC explicitly states that whether or not the profits of an activity are ultimately used for charitable purposes is not relevant for the determination of whether or not that activity constitutes a trade. In the USA, the Internal Revenue Service (IRS) employs a similar approach to HMRC. IRS regards ‘trade’ as including “any activity carried on for the production of income from selling goods or performing services”. It is interesting to note how IRS treats the trading activities of an organisation that also carries out tax exempt activities. IRS states that “an activity does not lose its identity as a trade or business merely because it is carried on within a larger group of similar activities that may, or may not, be related to the exempt

purposes of the organizations. In other words, a single organisation can undertake both exempt activities and trading activities. This implies that an organisation cannot argue that none of its activities constitute ‘trade’ just because it undertakes some exempt activities. Badges of Trade In 1955 in England, the Royal Commission on the Taxation of Profits and Income in reaction to whether a statutory definition of trade was necessary, said that “each case must be decided to its own circumstance (1955 Cmnd.9474 para.116) and suggested badges of trade” which they considered to be the major relevant considerations that will facilitate in determining whether any profit is a taxable trading profit or not. Badges of trade refer to certain indicators that may be used in determining the factual question as whether an activity is trade or not. Case law has expanded it to 9. The badges of trade are: •Profit seeking motive. An intention to make a profit supports trading, but by itself is not conclusive. •The number of transaction. Systematic and repeated transactions will support ‘trade’. An isolated transaction may also constitute a trade. •Existence of similar trading transactions or interests. Transactions that are similar to those of an existing trade may themselves be trading. •Changes to the asset. Was the asset repaired, modified or improved to make it more easily saleable or saleable at a greater profit? •The way the sale was carried out. Was the asset sold in a way that was typical of trading organizations? Alternatively, did it have to be sold to raise cash for an emergency? •The source of finance. Was money borrowed to buy the asset? Could the funds only be repaid by selling the asset? •Interval of time between purchase and sale. Assets that are the subject of trade will normally, but not always, be sold quickly. Therefore, an intention to resell an asset shortly after purchase will support trading. However, an asset, which is to be held indefinitely, is much less likely to be a subject of trade.

•Method of acquisition. An asset that is acquired by inheritance, or as gift, is less likely to be the subject of trade. These ‘badges’ will not be present in every case and of those that are, some may point one way and some the other. The presence or absence of a particular badge is unlikely, by itself, to provide a conclusive answer to the question of whether or not there is a trade. The weight to be attached to each badge will depend on the precise circumstances. FIRS Position A definition of the word ‘trade’ cannot be found in Nigerian tax law. However, the issue has been addressed in several legal cases, the rulings of which provide some legal certainty regarding how the courts interpret the word. In line with these rulings, ‘trade’ can be regarded as “the business of buying and selling or bartering goods or services”. Where one or more of the criteria on the badges of trade apply, FIRS will treat such transaction as trade. Furthermore, the one-off nature of an activity in no way invalidates that activity as constituting a trade. This interpretation matches the approach in other jurisdictions, namely the UK and USA. The following decided cases are relevant in this regard: i In the case of Marlin Vs Lowry (1955)3 All ER 48; 11 TC 297), a person without previous knowledge of linen trade bought a surplus stock of aeroplane linen from government which he sold to the public in small lots. He engaged employees for the re-packaging and embarked on sales” promotion through extensive adverts and campaigns. It was held that he was trading. ii In Murray Vs I.R. Comrs (1951, 32 TC 238), where a timber merchant who bought standing timbers in two plantations and could not cut them due to labour cost, sold the rights to cut the

timbers to meet his indebtedness. He was

assessed to tax on the profit from the transaction. He contended that the sale was a capital transaction since it was not in the normal course of his business but it was held that the transaction was part of his normal trading as a timber merchant.

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E- Commerce

Samsung launches app that connects smart phones, TV, tablets, others S

TARTING in South Ko rea and the U.S. but soon rolling out globally, consumers will be able to connect and control appliances, TVs,

smartphones, and tablets with little more than an app. Samsung first demonstrated the system and its possibilities at the Consumer Electronics

Show in January, and while it has taken the company only three months to go from showcase to showroom, the future of the connected home isn’t here just yet.

VISIT: Mr. Hassan Bello, Executive Secretary, Nigerian Shippers’ Council, NSC (middle), flanked by Bamishebi Thompson, Authority Manager, Integrated Logistics Services, Intels (r) and Ishaku Shekarau, during Intels’ courtesy visit to NSC in Lagos.

Raphael Afaedor launches


afael Afaedo who left, Nigeria’s online retailer that he co-founded recently has launched an online grocery store, Supermart is a three hour online grocery delivery service that allows customers shop for groceries from leading supermarkets in Lagos. Afaedor teamed up with Gbolahan Fagbure, Jumia’s former Chief Operating Officer to build the online grocery store which will allow customers to buy items from various supermarkets all from the supermart website, thereby saving them time and money. Raphael said he was motivated by, “knowing that customers typically go to multiple supermarkets to complete their grocery shopping.” He said, “The Supermart allows customers easily add items from the multiple stores into one basket and pay once. For the first time in Nigeria, customers will be able to select when their order is delivered to their homes or

offices, which can be in as early as three hours.” Supermart, he explained, aims to use customer service by using personal shoppers to individually pick customer orders, select them carefully and then have it delivered by the firm’s delivery drivers. “We have worked very hard to build a service we believe

will add a great deal of convenience to the lives of people who prefer not to spend hours driving between various supermarkets, looking for parking spacs at busy supermarkets and waiting on queues to pay for their shopping,” co-founder, Gbolahan added.

Although downloading and setting up the Android smartphone app will give consumers control over a host of devices, said devices need to be compatible; the app won’t start magically controlling the refrigerator that’s been standing in the kitchen for the past five years. However, if you’re prepared to upgrade to the latest Samsung double-door smart fridge (the T9000), then you’ll be able to operate it while at work, shut it down remotely while on holiday, and adjust its temperature. Likewise, if your washing machine is the latest Samsung model, then you’ll be able to programme wash and spin cycles to coincide with arriving home from the office. Samsung says all of its 2014 model smart TVs will also work with the app and that before the end of the year, functionality will extend to cover its new range of smart lightbulbs and its upcoming smart oven, too. “We are excited that the launch of Samsung Smart Home makes the connected home a reality today and allows our customers to live a smarter life,” said Dr. Won-Pyo Hong, president and head of the Media Solutions Center at Samsung Electronics. “Samsung Smart Home lets people live better, worry less, and be smarter with their devices and appliances. We also have grand plans to enhance more and more parts of the home experience, especially with a view of expanding it to areas with high-growth potential such as home safety and energy management.” However, that’s for the future. The development of the connected home and its supporting technologies is still at a very early stage, yet, consumers appear to be excited about the prospect of the Internet of Things and about homes filled with smarter appliances.

Microsoft, University of Nairobi release survey on cloud computing


niversity of Nairobi, and Microsoft technology, has released a baseline survey on cloud computing and its impact in Kenya.The project was to make stakeholders in Kenya understand the status of cloud computing and its supporting technologies with the intention of learning more about the future of the technology in Kenya. According to the report, there is relatively low awareness of cloud computing policy framework in Kenya by respondents and that government would also need to fast-track the enactment of key policies addressing cyber security, data protection and privacy in order to increase confidence in the adoption of cloud services in the country. Kunle Awosika, Microsoft's Country Manager in Kenya noted that an increasing number of companies and government organizations are turning to cloud services to increase the productivity of their workforce. “We are seeing widespread adoption of cloud-based email services and productivity tools like Office 365, which enables “always-on” access to emails and files from virtually anywhere. Businesses are also running CRM, HR, accounting and custom enterprise applications in the cloud. Cloud computing can benefit governments in three areas: increasing national competitiveness, enhancing citizen services and driving down costs,” he said.

Website security flaw spurring calls for password change

Tobeit plans ‘Hackcess’ to combat IT R security threats T obeit Consulting, an information technology firm said it plans to organize a technology conference and exhibition in Lagos that will focus on combating IT security challenges in Nigeria. The event, tagged ‘Hackcess festival’ is aimed at bringing together ICT experts from the West African region to come and discuss issues and challenges around IT security. According to Tobechi Ndubuaku, Chief Operating Officer of Tobeit, “Hackcess was born out of a desire to help educate corporate organizations, both large and

medium scale companies and the public on some of those burning technology areas that are most times rarely discussed.” He explained that, “The Hackcess festival will discuss the ‘Hacking idea’ in such a way that has not been discussed in this part of the world before. The conferences at this festival will play hosts to some of the world’s most reputable ICT companies who have invested a lot in IT security solutions and are spending a lot of resources on research and development to curb most of the IT challenges

most organizations are currently undergoing. The two day event will create a platform for ICT technocrats from the financial services, oil & gas, telecommunications and SME sector to share their experiences and chart a better path of securing information and the growing amount of data generated via modern transactions. The challenges that affect both public and private cloud have been highlighted as some of the key issues to be discussed.

esearchers have pushed out a fix for a security flaw that affects as many as two-thirds of all internet servers and could let hackers intercept encrypted traffic including e-mail messages, banking information, usernames and passwords. The flaw and the fix, which researchers disclosed last week, involve a two-year-old programming mistake in OpenSSL. OpenSSL is opensource software that is widely used by internet companies to secure traffic flowing between servers and users’ computers. SSL refers to an encryption protocol known as Secure Sockets Layer and its use is indicated by a closed padlock appearing on browsers next to a website’s address. C M Y K

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Commodity index

Finance InternationalMicro Business News

NASME faults importation of locally available machines Stories by PROVIDENCE OBUH


he Nigerian Association of Small and Medium Enterprises, NASME, has called on its members not to p a t r o n i s e importedindustrial machines that are locally available. The association made the call during an industrial tour of Federal Institute of Industrial R e s e a r c h Oshodi, FIIRO. NASME Lagos State Chairman, Ladi JemiAlade, noted that SMEs are spending fortunes importing machines that are locally available in the country. He stressed that , “Economies grow faster with the use of locally fabricated industrial machines. “We are here to see machines which instead of buying from China, our members can buy from FIIRO. Most of the equipments imported

to Nigeria can be fabricated locally.” He noted that uses of locally fabricated machines would reduce the rate of unemployment in the country. “If you buy equipment from China, when the equipment has fault, you go back to China to bring experts to repair it, therefore creating jobs in China, but if you do it locally when it is bad you get someone from here to fix

it, you will engage our unemployed youths and save cost,” Alade added. FIIRO DG, Dr. Gloria Elemo in her response said most of the technologies at the institute are targeted at the SME sector of the country. Represented by a Director, Dr. Patrick Irabor, Elemo expressed the Institute’s readiness to partner with SME operators to boost the nation’s growth.

L-R: Regional Sales Manager, Lagos, Mr. Olusegun Adekeye; Mr. Adeola Isaac, N500,000 winner in the on-going Nutricima Mega Cash Promo and Area Sales Manager, Lagos North, Nutricima Ltd. Mr Ohu Abidoye during the second prize presentation at Ikorodu

Lubcon chair hinges economic devt on entrepreneurship


he significance of entrepreneurship and enterprise creation in economic growth and development cannot be over emphasised, said Janni Ibrahim, Chairman, Lubcon International. He said that the developed nations of the world did not only apply the entrepreneurship theories but followed them religiously to accomplish the status of development and industrialization that have made them the envy of the world. Ibrahim, who is also the President of the Alumni Association of the Nigerian Institute for Policy and Strategic Studies (NIPSS), said these at the occasion of th 12 Conferment of Fellowship award ceremony of the Institute of Chartered Accountants of Nigeria ICAN. According to him, “The conscious introduction of entrepreneurship education into the curriculum of our

educational system, as most of our children spend more time in school, should be widely supported. All facets of our lives are touched by entrepreneurship activities, hence we cannot ignore the significance of this all important factor if we must develop as a nation. “In as much as we all cannot be entrepreneurs in the true sense of it, we all can however be enterprising and innovative to affect positively our various jobs and services, be it public or private.


he wealth of the world is gradually drifting into the hands of emerging countries, although the USA is still the largest in terms of GDP, China and India put together have caught up with the USA with their show of consistent growth over the decade. While the USA and the other developed nations are

facing serious slow growth, the emergence of these newly industrialized nations is also to the credit of enterprise creation. Meanwhile, ICAN conferred fellowship award to about 491 of it members constituting 20 percent or 7,489 of its membership strengthen of 38, 104, where it called for integrity and transparency. Mohammed explained that the promotion became necessary as a result of the institute effort to meet globalisation processes taking place in the business environment. He said, “The use of a common accounting and financial reporting language applied consistently will facilitate investment and other economic activities across borders at a time when globalisation of businesses and finance has inevitably called for a common set of high quality global accounting standards.”

Vanguard, MONDAY, APRIL 14, 2014 — 39

Advertising, Media & Marketing

Theatric performance that delivered Legend activation STORIES BY PRINCEWILL EKWUJURU

Customers as Captives (1)



Femi kuti and his band performing at the Legend Realvolution Activation at Eko Atlantic Hall. Activation Agency, Led by Felix Eiremiokhae. At the Legend Activation’ night, beginning from the gate of the prestigious Eko Atlantic hall , which housed over 1,200 loyal consumers of the brand, the Activation’ smirks of the trappings of a class experience. With the presence of the gorgeously dressed ushers that welcomed guests with a smile, and the gentle approach of the security personnel stationed at strategic positions at the centre, gives a conclusion of the kind of Activation that the Agency has planned for the unveiling of the latest Gold neck Stout in the market. The chronological display and flick by the dancers, the

Unilever’s Knorr fetes cooks


he Knorr seasoning brand from the stable of Unilever Nigeria Plc has started giving out cash and product rewards to viewers of the Knorr Taste Quest cooking competition. The competition which is organised to search for Nigeria’s best in cooking also decided to reward viewers who watch the show on television with cash and prizes to the tune of N10,000. To participate, at the end of each episode, viewers at home were to watch out for one simple question from the previous episode, and send the correct answer to the short code given on the screen. The first 20 correct answers become winners for that week. Hundreds of winners have emerged nationwide, as the program is showing on major stations across Nigeria The Champion of the competition will win N2 million cash prize, a Ford Eco Sport SUV courtesy of Coscharis Motors, and Kenwood kitchen equipment. The second place winner will

get, N1 million cash prize and Kenwood kitchen equipment and the third place winner will get N500,000 cash prize and Kenwood kitchen equipment.

historical perspective of the evolution of the Legend brand depicts the reason the Activation’ team threw in all takings to see that the brand delivers on schedule. The drama, ‘Bodi No be firewood’ depicts of a typical example of the brand’s strength to conquer adversities in life and the concomitant protection that can come from a reliable ally, the unity it brings when friends gather to celebrate an occasion, the sound effect of the movie connects the brand to the consumer, all these put to gather is an attempt to create a route for the brand to explore the market. When Femi Kuti came on stage, he did not disappoint. He provided that legendary display on stage dishing out his popular tunes. He was energetic on stage, fully using the space as he sang. Speaking on creating right Activation’ to suit a particular event, Henry Bamidele, CEO of Expression Impact said, “I witnessed the activation created by Oracle Experience for Nigerian Breweries distributors’ award.

CAP names ‘TEAL’Dulux colour for 2014


hemical and Allied Products (CAP) Plc, a subsidiary of UACN Plc and the technological licensee of AkzoNobel – manufacturers of Dulux brand of paint in Nigeria has named ‘TEAL’ 2014 Dulux colour of the year. ‘TEAL’ which is a deep blue-green colour; a dark cyan colour was unveiled as the 2014 Dulux colour of the year at an event witnessed by the company ’s various stakeholders groups including top echelon of the UACN group, Trade Partners, customers and the Media. CAP also used the occasion to introduce the new packaging design (New

Livery) for Dulux premium brand of paint. The new attractive packaging design is available for the different variants of Dulux paint; Gloss, Weathershield and Emulsion. Speaking at the event, Group Managing Director, UAC of Nigeria Plc, Mr. Larry Ettah, disclosed that the theme of the 2014 Dulux Colour of the Year, ‘Unlocking Potential’ is an interesting one that resonates with the times. ‘’We live in a time of great change. By taking a look at what we have, we can unlock the potentials that surround us and by so doing, our destinies,” he said.

.T. Briscoe (Nigeria) Plc is one of Nigeria’s foremost distributors of Toyota cars, among other things. It also offers after-sales support at its service centres strategically located in major cities. The company has been doing business in Nigeria for nearly 60 years. And it appears to have distinguished itself in the various sectors of the economy it has ventured into. So when the air-conditioning system of my Toyota car began to malfunction, it was a no-brainer for me to take the car to R.T. Briscoe. Interestingly, the two customer service representatives I met at the company asked me to deposit N15,000 before anybody could look at the car. I found that strange. I thought the company was supposed to diagnose the problem with the car first, and give me an estimate for the repairs for approval. At least, that was what I was used to, but I was a first-timer there. I sought the rationale for the deposit and I was told it was “management policy.” I sought to know what would happen to my deposit if I decided not to fix the car. I was told the deposit was refundable. But I smelt a rat. I know how difficult it is to get a refund from a Nigerian company. Moreover, I didn’t see the sense in taking a deposit in the first place if it would be refunded in full to a customer that decides not to go ahead with the repairs. While I was still trying to challenge I sought the that method of doing business, a customer rationale for the service rep pointed out deposit and I that technicians were was told it was paid on hourly basis. That “Freudian slip” “management settled the matter for policy.” I me. Was it possible that part of the deposit sought to know would be converted to what would a “diagnosis fee” (for happen to my the technician’s wages) if I decided not to fix deposit if I the car? decided not to I didn’t wait to find out. I left in a huff and fix the car. I R.T. Briscoe lost me was told the before I could become deposit was a customer! I drove to Metropolitan Motors in refundable. But Ikeja. Thankfully, the I smelt a rat approach was refreshingly different. There was no talk of deposit. Instead, the company quickly diagnosed the fault with my car and gave me an official estimate of almost N26,000 for approval. I approved willingly. At least, I knew beforehand what I was letting myself into. Work commenced immediately, still with no talk of deposit. In fact, while the repairs were on, I dashed to a nearby ATM to get cash for the bill. After the car was fixed, the final bill was N1,000 less than the estimate. Again, I was happy with the approach at Metropolitan. But that was not all. One week later, someone phoned from the company to find out how the car was doing and whether I was satisfied with the work done. You can guess my response. If you were in my shoes, which of the two companies I encountered would you rather do business with? Let’s get to the point of this story. Why do some companies make customers part with money even before they know exactly what they are paying for? Is it that such companies are afraid of losing out completely if customers change their mind? Or do they believe that the best way to do business is to treat customers like captives? If that is so, then such companies have very weak value propositions indeed. Those organisations that try to hold customers captive lose in the long run.


t takes a plethora of marketing activities for a brand to get to the market, some of these activities consumers are not privy to. These actions are privileged by few who witness the razzmatazz and glamour that follow the arrival of a new or repackaged brand to the market. Despite this, consumers do not understand the word 'Activation’, and what it stands for, yet, brands follow this route to the market. The major reason for brand activation according to experts is to chart a new course for a brand in the market. Through activation brands extend their power of communication, build visibility and memorability, also reinforce key associations. Other things, it does, is to unlock the latent potential of sports and entertainment brand (s). Like Paul Morel, Peter Preister and Andres Nystrom put it, “brand a ctivation is not a theory, but a natural step in the evolution of brands.” A good example, is the recent Activation’ of Legend Stout from the stable of Nigerian Breweries Plc, and the NESCAFE Flight Mug by Nestle Nigeria Plc, both of the creative ingenuity of Oracle Experience, an



40 — Vanguard, MONDAY, APRIL 14, 2014, Blog Website: Tel:0805 220 1997

The hype of GDP revaluation and matters arising I

n the aftermath of the announcement that Nigeria’s current Gross Domestic Product (GDP) had risen to $510bn, the question on the street was simply, that of, whether or not food will become readily available on the table for the common man, and whether or not the teeming millions of Nigerian youths who are currently unemployed will quickly be provided with jobs. In the short term, the higher revalued gross estimate of all locally produced goods and services will remain meaningless to the microeconomy, as the higher revaluation from a modest value of about $264bn would literally not change anything. The wages of the man on the street will not also increase, neither will the purchasing value of his paltry minimum wage of N18,000/month; furthermore, quality education and healthcare facilities will remain inaccessible to the masses, in spite of a much higher GDP. On the long run, however, if the right enabling political and economic environment also exist, foreign direct investments will flow into the real sector, and this would ultimately induce a positive trickle down impact on micro enterprises as well as the man on the street, and more jobs will be created, with the collateral of increasing consumer demand, which will in turn, propel additional economic growth. In the rest of this article, we will assess some of the other salient questions that have been

asked by concerned Nigerians on our newly acquired status as the 28th-largest economy in the world, with output that is, wayahead of economies such as Denmark, Austria and Singapore, which are notwithstanding, currently preferred destinations than home, for our frustrated and economically disenfranchised countrymen. Let us first respond to the question of what rebasing actually means. The word rebasing conveys a similar meaning to the simple accounting process of revaluation. The figure of $264bn was the estimated value of all goods and services produced within the territory called Nigeria by 1994. However, 24 years thereafter, a new estimate of total current output of goods and services has now been found to be above $500bn. The rise in total output of goods and services is apparently attributable to the identification of significant growth in sectors such as telecom, aviation, entertainment (particularly Nollywood), which hitherto accounted for modest or nil values in 1994. In addition to defining the structure and the sectoral potentials in each economy for the purpose of properly guiding development, the size of a country’s annual GDP also serves as a measure of comparison with the relative size of the gross output of other nations. In the new GDP estimate, commercial services subsector now contributes over 50% of total output, while industrial and agricultural outputs have

similarly increased. Consequently, in view of the significant relative growth in these sectors, it would be misleading to continue to see the size of Nigeria’s economy from the prism of the much lower estimates of 24 years ago. Indeed, in practice, GDP estimates are generally reviewed around every five years, so that government plans will be predicated on more current and accurate estimates of the performance of each economic sector. Some analysts may however, observe that in the event that average annual growth rates of 5% were officially reported between 1994 and 2014, the rebased GDP figure should be in excess of 120% of the 1994 figure of $264bn! Another frequently asked question is whether or not the higher GDP will attract more foreign direct investment to Nigeria. Indeed, increasing foreign direct investment in the real sector will certainly contribute to expanding the GDP of the host country. This is without prejudice, of course, to the fact that domestic investors could similarly grow output if they had access to cheaper funds and appropriate government support as their foreign counterparts. So, in reality, buoyant output figures may actually attract foreign investors, nonetheless, such investments may not necessarily go into the real sector, if the economy is also bedeviled by challenges such as a tortuous process of land

those Nigerians, who have the notion of competition between South Africa and Nigeria bragging rights, which may induce a psychological ‘feelgood’ sensation. Nevertheless, such ephemeral rights do not make the average Nigerian to be better off than his South African counterpart, as the revalued average annual personal income of the Nigerian worker is now about $2,700, compared to South Africa’s average personal income of almost $7,000. Besides, the quality of education, as well as the facilities for health and availability of other social welfare infrastructure, including power, remain much more readily available in South Africa than in Nigeria. Furthermore, foreign investors have previously perceived South Africa’s economy as the largest in Africa; this perception as well as the presence of other factors such as security and advanced infrastructure, may still make South Africa the first port of call for foreign investors. Nonetheless, this preference would radically change in favour of Nigeria, if we are able to put in place, political structures that would engender peace and harmony, with a transparent and accountable public service that is committed to growing our economy, with monetary and fiscal strategies that do not widen class inequity and further deepen poverty.

acquisition, extended process of company registration, grant of expatriate quotas and multiple taxes, as well as the additional challenge of insecurity, where threats of kidnapping of expatriate staff also exist. Furthermore, in spite of a buoyant GDP, popular perception of a corrupt public service would also create major obstacles to the attraction of foreign direct investment into our country. In such event, despite the increased GDP, foreign investors may decide to simply stay away or at best decide on the less risky investment of lending money to Nigeria’s government at interest rates which will be considered to be highly excessive and oppressive, for what is actually a risk-free sovereign debt, which should normally attract less than 2% interest in successful economies elsewhere. Thus, it may be possible for a foreign investor to borrow from those international banks, which hold Nigeria’s foreign reserves with little or no yield and for this same investor to, thereafter, simply turn around to lend the same funds to the Nigeria government at over 12% interest! Another question that has also been asked, is whether or not the average Nigerian is now better off than his South African counterpart, and if investors will now find Nigeria as a better investment destination than South Africa. Nigeria’s reviewed GDP at $510bn is literally larger than South Africa’s current GDP of $370.3bn, and this may give


Business & Economy

Nestle grows seasoning market profile


he seasoning market profile penultimate week grew with Nestle Nigeria Plc formally introducing the Chicken variant of its Maggi range. The Maggi Chicken brand is an extension of the Maggi family which according to the company

was reformulated to meet the demand of its consumers. The Chicken brand which formally hit the market was witnessed by a cross section of consumers, distributors and prospective, who scrambled for the distributorship of the brand at the unveiling ceremony in Lagos.

Speaking, Guy Kellaway, Category Business Managerculinary, said the brand continuously and consciously aims to bringing the best products for consumers. His words, “with the new magi chicken cube added to our seasoning range, we aim to deliver the best chicken

Maltina Shares Happiness in Lagos


n line with its tradition of putting smiles and happiness on the faces of Nigerians, Maltina - the premium non-alcoholic malt brand from the stable of Nigerian Breweries Plc - has rolled out strategic plans to reward consumers and Nigerians with freebies during the Lagos Carnival and Black Heritage week. Senior Brand Manager Maltina, Adewole Adedeji, who revealed this, said most Nigerians are aware of the fact that the brand is all about sharing happiness.”The Maltina story has always been the story of sharing, friendship, togetherness and a good time with loved ones. We always explore avenues that bring people together in

an atmosphere of friendship. And what better way to bring people together than by providing them with what makes life enjoyable. That is the brand promise we stand upon, that is why we want to make this Easter celebration memorable for our consumers and Nigerians generally.” The carnival themed ‘Lasgidi’ comes up on Monday April 21st, while the heritage week is a weeklong event scheduled to hold from the 14th of April to the 21st with various activities designed to promote the cultural and unique heritage of Lagos State.

seasoning in the market, delighting our consumers, rewarding our retail partners, whilst maintaining the highest levels of quality that Maggi is known for.” Earlier, the Managing

Director of the company , Mr. Dharnesh Gordhon, had said that the launch of the new Maggi chicken cube will bring a renewed excitement to the category, to our retailers and for all consumers.

Omoh Gabriel Babajide Komolafe Clara Nwachukwu Peter Egwuatu Yinka Kolawole Favour Nnabugwu Godwin Oritse Godfrey Bivbere Michael Eboh Franklin Alli Ebele Orakpo Ifeyinwa Obi Rosemary Onuoha


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Banks, others jittery over investments in power sector  
Banks, others jittery over investments in power sector