financial vanguard october 21 edition

OCTOBER 22, 2012

FG worried on use of dollar as second currency in Nigeria's market —CBN to stop cash dollar sales to BDCs BY OMOH GABRIEL & EMMA UJAH, just back from Tokyo Japan

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he federal Government is worried by the use of dollar as means of payment or legal tender in the local market in Nigeria. The practice is seriously affecting the value of naira as most Nigerians are fast losing confidence in the local currency as a store of value. The naira is the only legal tender in the country but in most parts of Nigeria, Lagos and Abuja in particular, lands are sold in dollars, prices of some products are denominated in dollars, school fees are quoted in dollars and hotels charge and collect dollars for rooms and other services. In Japan and other developed countries, payments for any local transactions are done in the local currency unit; their nationals insist on payment for goods and services in local currency. Reacting to reporters question on the use of dollar in Nigeria local market CBN Governor Mallam Sanusi Lamido Sanusi said that the dollarisation of the Nigerian economy is of serious concern to the President, the Central Bank of Nigeria, the Economic management team and every body and that the CBN is coming up with a policy to stop the practice. He said that as a first step, the CBN will soon stop the cash sale of dollars to Bureaux De Change, where members of the Nigerian public usually make their purchases of dollars in cash to make transactions within the country. Mallam Sanusi Lamido Sanusi at the joint briefing to mark the end of the 2012 IMF/World Bank Annual Meetings with Dr Okonjo-Iweala in Tokyo Japan said that the idea of introducing the N5, 000 note was to check mate the practice of the movement of huge funds around the country in dollars. Sanusi whose proposal to introduce the N5, 000

currency note into the Nigerian market was halted by the federal government following heavy criticism against the move, said the introduction of the N5, 000 note was to check the dollarisation of the Nigerian economy by providing Nigerians with heavy cash transaction and a higher denomination. His words, “The dollarisation of the economy is a big problem for all of us and it is something that we are going to walk towards taking stopping. One major plank of solving the problem of dollarisation was the N 5, 000 note, because that is one of the reason people go for dollars, and that is the reality; if you have inflation over a long time; if you have had devaluation over sometime; your currency, because the naira is not just a medium of exchange but also a store of value, if your currency loses its position as a store of value, you have a problem. “People carry $10, 000, that is N1.5 Continued from page 18

158.85

+0.25

2,475.00

+37.00

19.74

-0.05

112.86 92.08

+0.44 -0.02

CURRENCY BUYING CENTRAL SELLING DOLLAR STERLING EURO FRANC YEN CFA WAUA RENMINBI RIYAL KRONA SDR

154.76 248.2969 201.8225 166.9652 1.9531 0.2905 238.5634 24.7437 41.2671 27.0531 238.7947

155.26 249.0991 202.4746 167.5046 1.9594 0.3005 239.3341 24.8241 41.1405 27.1405 239.5662

155.76 249.9013 203.1266 168.044 1.9657 0.3105 240.1049 24.9045 41.5338 27.2279 240.3377

CBN Exchange rate as at 19/10/2012 C M Y K

18 — Vanguard, MONDAY, OCTOBER 22, 2012

Cover Story

Youth restiveness and unemployment in nigeria: The way out part 1

FG worried on use of dollar as second currency in Nigeria's market Continued from page 17 million in their pockets. Seventy per cent of the dollars people buy from the BDCs is not for transactions outside Nigeria. They move dollars from one part of the country to another. In fact, from one part of Abuja to another. “In a brief case, you can carry a $100, 000. That is about N15 million. Now part of the logic for introducing higher denomination is to provide genuine high-value cash users with a note that is a store of value as a first step towards our attempt to eliminate the use of dollar to move cash around because the dollar has became the second national currency”. The CBN boss who revealed that even President Goodluck Jonathan was worried over the development said that under the new policy to be announced shortly, transactions between the apex bank and BDCs, on the one

hand, and between BDCs and their customers would be done online. He explained further that those who honestly need to make payments outside the country would have the recipients paid directly from the bank accounts of the BDCs or take the option of buying travellers’ cheques. According to him, “we are worried about it. The president is worried about it. We are all worried about it and we are coming with a fresh policy to stop selling cash dollars to BDCs. “We will credit their accounts. If you want to pay for medical bills abroad, you give the hospital account. If you want to pay school fees, you do transfer like everybody else. “If you want to travel, you buy travellers’ Cheque or get money on your cards, instead of people moving around with

dollars. But what is happening now is that if you want a N2 million transaction, you have to carry bags of naira cash. And this was part of the logic of bringing in a higher denomination for people who do high-volume cash transaction to reduce the amount of paper money they carry along. “I am glad that you asked that question because you are now beginning to think about some of the concerns that we have as managers of the economy because you have to print so much paper money and it is because people don’t want to carry so much papers in cash that they are carrying dollars and we cannot let it continue to happen. In America you cannot transact business with Pounds Sterling. You cannot and we will deal with it. It will stop”.

DMO tasks state, local govts on effective debt management

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ebt Management Office (DMO) has called on all tiers of government to ensure effective management of debts to fast-track economic development. Dr Abraham Nwankwo, Director-General of the Office, made the call when the Senate Committee on Local and Foreign Debts visited the office on over sight function. “We continue agreeing with the National Assembly, with the people of Nigeria but the C M Y K

most important thing is for these borrowed monies and un-borrowed monies to be used well, effectively, efficiently with minimum linkages; and something to show for it. The most important thing as you have implied is when states borrow, let them make good use of what they borrow because if states borrow money that will be repaid over 40 years. “And they use it to build a road; of cause, the road does

not last for five or seven years if they are well maintained, so future generations will still use the road.” Nwankwo said that the DMO had continued to offer advice to state governments as it concerned their debt management, adding that all the debt profile of states of the federation had be reconstructed. According to him, the DMO will announce the states domestic profile by the end of the year after Continues on page 19

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they should also be partakers of its benefits. This strife led to a rise in kidnapping and vandalization of oil pipelines as well as other vices that were being perpetrated. After a period of years, the Nigerian government intervened and the Amnesty program was created to help deliver some of the promises which government had made to the youths in those areas. The baton was soon handed over to the Eastern Nigeria. Increase in the rate of armed robbery attacks, kidnappings as well as

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From left: Project Director, Isee Expo, Dr. Obinna Awiaka, Registrar, Nigerian Optometric Association, Dr. Sam Edu Ntem, Director, Blindness Protection Programme, Lagos State Ministry of Health Dr. Funmi Sokunbi and Vice Chairman, Isee Expo Dr. Nkem Okoroafor, at the 5th International Optical Exhibition and Conference, at Muson Centre Onikan Lagos…PHOTO; Kehinde Gbadamosi

he words ‘ youth’ and ‘ restiveness’ have become so commonly used together in the last couple of years that it seems to have taken on a life of its own. In the last decade and more there has been a proliferation of cases all over the country and indeed the world, of youth agitations which have tons of people dead and valuable infrastructure as well as personal properties lost and destroyed. A sustained protestation embarked upon to enforce a desired outcome from a constituted authority by an organised body of youths, fits the label of youth restiveness. It is also a combination of any action or conduct that constitutes unwholesome, socially unacceptable activities engaged in by the youths in any community. It is a phenomenon which in practice has led to a near breakdown of law and order, low productivity due to disruption of production activities, increasing crime rate, intra-ethnic hostilities, and harassment of prospective developers and other criminal tendencies. This scourge has been around for a long time and it looks as though it is defying solutions. Maybe the question that needs to be asked is what is truly responsible for this expression of dissatisfaction by the youth? Have their complaints over the years not been heard or attended to? Is there more to the killings and destruction than just drawing attention to the needs they want met? Are the youths trying to draw society ’s attention to themselves more than the issues they appear to be fronting? These and more are the questions we would try to tackle head on today. In Nigeria for instance, the Niger Delta region which is unarguably the bedrock of the oil industry in Nigeria permeated the news for a lengthy period of time as the youths of that region tried various means of getting government and oil companies to pay attention to their dire conditions of living and alleviate their sufferings since according to them, the resources which is building the nation is flowing from their land so by virtue of that

It is a phenomenon which in practice has led to a near breakdown of law and order, low productivity due to disruption of production activities

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unbridled thuggery became the order of the day. Today the Northern part of Nigeria has literally erupted with unrivalled violence. Bomb blasts, kidnaps and killings of Nigerians and others have become the prevailing trend. Despite beefing up of security in these areas, the problems still looms. This situation begs the questions, ‘’what is the government of the day willing to do to put a permanent end to these problems. STATISTICS The National Population Commission (NPC) has said the country’s population has risen from the 140,431,790 it was five years ago when the last national headcount was taken, to 167,912,561 as at October 2011.This represents an annual population growth rate of 5.6 million people. The Ministry of Youth Development, said recently that there are 68 million unemployed youths in Nigeria.

Vanguard, MONDAY, OCTOBER 22, 2012 — 19

President Goodluck Jonathan presented the 2013 appropriation bill to the National Assembly. The bill has since generated heated debate especially on what should be the right benchmark for crude oil price

Nigeria, a nation of sharing, what a nation!

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t the just-concluded International Monetary Fund/World Bank Group Annual Meetings, all the finance ministers of the world and the governors of central banks met to assess the state of the world’s economy and finances so that each country will get to know what is happening and take adequate measures to either protect its economy or adopt measures to foster its economic growth in the content of trends and developments around the world. This is the major reason of the annual meetings. It was also a venue where nations seek advice on how they can manage their economies in the context of the global environment and many shared experiences. Nigeria was represented at the meetings by the Finance Minister, Dr. Ngozi OkonjoIweala and CBN Governor, Mallam Sanusi Lamido Sanusi. From the various seminars, papers and discussions at the meetings, it was clear that there was high level of uncertainty in the global economy. Several discussants submitted that there may be further slow down of the global economy describing the gains so far made as very fragile. Two central themes came on board the discussions - that of ravaging disaster wreaking havoc across the globe as a result of climate change and the need to build into national planning, disaster management; and the urgent need for nations to build buffer to contain external shock in the event of economic recession and for managing disasters when they do occur. While these issues took center stage in Tokyo, Japan,

As it is in economic history, a poor country caught in poverty trap will always want to consume every kobo it earns while those climbing the ladder of wealth would always save part of their income

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for the 2013 budget proposal before the National Assembly. In the current budget debate as to the rationale for using $75 as benchmark price for crude instead of $80, it is pertinent that Nigerians take cognisance of what is going on globally, in order to position the nation for

economic development to take place. It must not be personalised and it should not be about who wins the argument. It should be about what is good for Nigeria in the context of present realities. If the budget benchmark is moved from $75 to $80, the question to ask is; what advantage will the ordinary Nigerian derive from it? Moving the benchmark to $80 or more, will not in any way increase the revenue accruing to the nation. If Nigeria produces two million barrels per day and sells at the international market for $100 per barrel, the revenue generated will be $2 billion. That the budget is based on $75 will only mean that Nigeria will spend $75 from every $100 earned and save $25. If the benchmark is moved to $80 per barrel, Nigeria will spend $80 of every $100 earned and save $20. What this means is that the executive arm of government is saying ‘let us save an extra $5 now that prices are good’ while the National Assembly members are saying ‘no, spend

$5 more now and save less.’ It also means increasing the amount available for sharing among the three tiers of government from the common pool. There is no increase in revenue generation into the federation account. As it is in economic history, a poor country caught in poverty trap will always want to consume every kobo it earns while those climbing the ladder of wealth would always save part of their income. It is from savings that funds are released for investments to be made whether at household, corporate or national level. Without savings, no investment can take place. Nigeria needs to save now instead of squandering what it earns now on subsidy that is fraught with corruption. A budget oil benchmark price of $75/barrel for the 2013 period is below current world market prices and based on moving averages of the world oil price, allowing for uncertainty in world oil price movements. The question is

what the extra amount will be spent on? Already, the budget is 72 per cent recurrent and 28 per cent for projects that will benefit the common man. Will it not be better for Nigerians to focus on areas where additional revenue will be generated from? Why are we so fixated on sharing and not on baking the proverbial national cake? The bigger the cake, the larger will be each component's share of it. Nigerians keep thinking that oil price will hold firm, of which there is no guarantee, nobody can guarantee that. Nigeria needs to make sure it has alternative resources in the event of the collapse in the price of oil. Has the National Assembly given thought to the fact that the various reforms going on in the power sector, port, and infrastructure can generate much more revenue for the country than oil? Is it not shameful that Nigeria still imports fuel and spend billions on fuel import subsidy? The National Assembly should convince the nation why the benchmark should be $80 outside spending more on wages, salaries and entitlement of a few privileged Nigerians in public service.

Cover Story

DMO tasks state, local govts on effective debt management necessary analysis. He said that states had been advised not to use more than 40 per cent of their monthly allocation from the federation account to service debt. He said that states had also been encouraged to improve on the means to grow their internally generated fund as an alternative means to finance their projects. Commenting on state of the Nigerian bond in the international market, the director general said that Nigerian bond had been trading well and had opened doors for private sector to get bond at the international market. He said that it was the performance of the bond that led to the listing of Nigeria’s bond in the JP Morgan

Sovereign debt index. Nwankwo urged the legislators to approve the borrowing programmes, saying that “ we have done the sustainability analysis and see what the picture looks like. “We will make sure that we did not get to the dangerous threshold.” He solicited the committee’s support to ensure a favourable working environment and improved remuneration for its staffers. “This is an area that we want you to help us in any way you could. In 2007, as soon as I assume this position, we worked out and got a prime piece of land at the Central Business District. But we cannot develop it because of budgetary constrains but I believe that if all the

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Continued from page 18

The most important thing as you have implied is when states borrow, let them make good use of what they borrow

authorities put their heads together, the National Assembly, our committee, there should be a way to make sure that this unique institution is helped to have its own office building.’ Responding, Chairman of the committee, Sen. Ehigir Edobor Uzamere, said that the visit was

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basically a fact-finding one; to see how well the office had utilised the money released to it in the 2012 budget. “The DMO is performing a very important crucial and unique role in our country particularly in our current economic and development challenges. As a developing

economy, we cannot meet our infrastructural developmental needs through budgetary allocation. Hence we have to borrow to develop our infrastructure.” According to him, the DMO must ensure effective management of debt, noting that the committee's stand is that the Federal Government should not borrow to finance budget deficit. He assured that the Senate would support the DMO to enable it perform its duties effectively. Also, Sen. Gbenga Obadare, tasked the office to check consistent borrowing and called for stringent measures to reduce borrowing by state governments. “There is need for them to prioritise what their needs are and not to borrow anyhow and leave the states indebted,” he maintained. C M Y K

20 — Vanguard, MONDAY, OCTOBER 22, 2012

Business & Economy BRIEF NACCIMA set to revamp technical education for job creation BY NAOMI UZOR

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he Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), has said that plans are being made to revamp the Nigerian educational system, especially at the technical and vocational level. In a parley with pressmen, National Vice President and Chairman, NACCIMA committee on technical education,Mr. Michael Adesina, said technical and vocational education in Nigeria is deteriorating and has resulted in poor production quality and has provided an excuse for foreign investors to bring into the country thousands of lower and middle level technical manpower, thereby depriving the nation of job opportunities for its youths. According to him, NACCIMA has taken upon itself this wake-up call by organising a Two -Day National Education Summit, tagged “ Vocational Education as Driver for Economic Development and Job Creation” to address a number of burning technical and vocational issues of concerns, with a view to restoring the lost glory of our education system. “The purpose of the summit is to create an effective forum for Public-Private dialogue to address the dearth of technical and vocational education graduates with appropriate training , which is largely responsible for poor operation and maintenance of infrastructure in the country, particularly in areas such as the telecoms, power operation & maintenance, industrial machinery operation & maintenance, mechanized agriculture/ Agribusiness, construction, oil & gas, tourism & hospitality, water supply, transportation, etc. The growth and success of these sectors are very dear to the chieftains of private sector operations” he said. He said the summit was intended to get relevant stakeholders from the public and private sectors of the economy together to brainstorm on the challenges/ problems of technical and vocational education in Nigeria and proffer the way forward in line with the transformation agenda of the federal government.

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2012 BUDGET:

Lagos records 72% third quarter performance BY OLASUNKANMI AKONI AND MONSUR OLOWOOPEJO

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overnor Babatunde Fashola of Lagos State has disclosed that the budget for the 2012 fiscal year, pegged at N49 billion has recorded 72 per cent cumulative third quarter performance. Fashola, along with the state Commissioner for Budget and Economic Planning Mr. Ben Akabueze, who briefed Newsmen after the quarterly budget review meeting, at Aalusa, traced the 10 per cent drop in third quarter as opposed to the 75 per cent recorded in the half year review to a number of factors he said were inimical to budget performance. According to the governor, “The budget is driven by the state government budget trust which is poverty eradication programme, sustainable economy and infrastructural renewal in Lagos. That is where we will continue to concentrate on even in the fourth quarter.

The NEPAD Business Group Nigeria held its 2nd Annual General Meeting ( AGM) and Award Ceremony at Federal Palace Hotel Lagos. From left: Chief Chris Ezeh, Chairman Fidelity Bank Plc; Deputy Gov. of Anambra State Engr. Emeka Sibeudu, representing Gov. Peter Obi of Anambra; Dr Edozie Aroh Commisioner for Youth & Sports and Chairman of NEPAD BusinessGroup Nigeria Mr Goodie Ibru. Photo By Diran Oshe “And we will concentrate on the areas that we set out to achieve during the Economic Summit which is PATH. The third quarter budget performed at 65 per cent which is a drop from what was

achieved in the second quarter which was 75 percent. It marches back to what the state achieved in the first quarter. With this drop, the state now has a drop in its cumulative budget

Cornerstone, Linkage merger: over 20,000 shareholders oppose move Say mergers have never benefited shareholders By ROSEMARY ONUOHA

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ver 20,000 shareholders of Linkage Assurance Plc have warned the Board and Management of the company to discontinue any merger plan with Cornerstone Insurance Plc, saying that the purported merger plan will not benefit shareholders. According to the shareholders, mergers and acquisitions in the country have always been to the detriment of shareholders whose investments are always reduced drastically after the reconstruction of shares must have taken place. Accordingly, the shareholders vowed that they will no longer fold their hands and watch their investments filter away in the name of mergers and acquisitions. According to them, the reforms introduced by the Governor of Central Bank of Nigeria Mallam Sanusi

Lamido Sanusi which forced some banks to be nationalised while others were captured through hostile acquisition leading to massive depreciation of investors holdings, will no longer happen again as they are ready to go to any extent to protect their investments. The shareholders poured out their anger at the 18th Annual General Meeting of Linkage Assurance Plc held in Lagos last week. Addressing shareholders at the meeting, President of the Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie advised Linkage Assurance Board to do a rights issue as against merging its operation with that of another company. According to him, with almost N1 billion in fresh funds coming from a major investor in the company, Bayelsa State Government and another N1 billion expected from the Nigeria Deposit Insurance Corporation, NDIC, being proceeds of previous

rights issue that was trapped in the rested Allstates Trust Bank Plc, the company does not need any merger for survival. He also advised the board to do a right issue, assuring that shareholders would be most willing to take up their rights in the company accordingly. Also speaking on the issue, another shareholder, Mr. Nona Awo threatened that shareholders would not allow the company’s Board to railroad them into a merger arrangement of 30:70 in favour of Cornerstone, adding that minority shareholders would definitely move against it. Also, President of the Nigerian Shareholders Solidarity Association, Mr. Timothy Adesiyan said that shareholders were not afraid of merger but warned that shareholders would not close their eyes and allow the board to enter into merger arrangement with Cornerstone Insurance which he described as a dwarf.

performance which is 72 percent. “But this is not where we want to be. During the second quarter, this was when we utilised the state borrowing power that was contained in the budget. The third quarter was challenging because the federal allocation has started dropping. It accounts for the relatively lower performance”. Fashola added that the effect of the new amended personal income tax which was signed and back dated, has begun to hit into the state revenue. “Those were the reason responsible for low budget performance. Other social reasons for the drop were that, during the quarter, there was the month of Ramadan and during this time, the productivity within the state is somehow low”. He assured that there will be a push back from the state government during the fourth quarter to ensure that the state achieve more than 75 per cent. He said ,”Part of the things that would be done in the 4th quarter is the erection of more road traffic signs across the state and others. Many of the streets in the state are being light up to ensure proper illumination at night. Except for the drop in the budget performance, the state government has not relented in its effort to construct various social amenities for the residents of the state infrastructural renewal.”

Vanguard, MONDAY, OCTOBER 22, 2012 — 21

Business & Economy BRIEFS

Stories by NKIRUKA NNOROM

Japan’s JX to buy 60,000 tonnes LNG in spot market

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igeria should embark on an exportoriented strategy to manufacturing if economies of scale are to be reconciled with the relatively small domestic markets, says Fabian Ajogwu, a Senior Advocate of Nigeria, SAN, and Managing Partner, Kenna & Associates. He made the remark while presenting a paper themed, ‘Doing Business in Nigeria: Fiscal, Legislative and Judicial Challenges’, at the just concluded 42nd Annual Conference of the Institute of Chartered Accountants of Nigeria, ICAN. He noted that in creating the balance, “government’s intervention, if at all needed, ought not to be directed towards protectionism, but aimed at export niches.” He stated that with adequate infrastructure and policies in place, production costs would invariably be reduced and economies of scale achieved. Ajogwu stated that with relatively very little manufacturing activity going on in Nigeria, it was difficult to reap economies of scale in production, adding that apart from rising costs of production as a result of lack of adequate infrastructure, the anti-trade policies of the government may have raised international transport costs compared to the declining trend in Asia and other parts of the world. “In addition to the above

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From right: Mr. Abiodun Ogunkoya Managing Director, Nigerian Bag Manufacturing Company Plc (BAGCO); Mrs. D. B. Adewale, Head Teacher, Akinsemoyin Primary School , Mr. Korede Okusanya, Company Secretary, BAGCO at the commissioning of a borehole donated to the school.

Develop export-oriented policies, FG told problems, is the perception of Africa’s investment environment as being relatively a high-risk area, especially when compared with Asia. Africa is prone to two types of risks – policy

changes and shock. “Successive governments have changed policies with almost a zero degree of predictability and confidence among businessmen, mostly in response to donor

MAN Ikeja branch urges FG to harmonise checklist of MDAs he Ikeja branch of the Manufacturers' Association of Nigeria, MAN, has urged the Federal Government to take steps to harmonise the checklist of its various Ministries, Departments and Agencies, MDAs, to eliminate incidence of multiple visits to factories and duplication of duties. The Association’s Chairman, Rev. Isaac Ade Agoye, who made the call in histhwelcome speech at the 45 Annual General Meeting of the Association in Lagos, said “the government needs to urgently and seriously consider putting in place a mechanism that will bring down the cost of doing business and enhance competitiveness.” Besides, he stated that steps must be taken to ensure a reduction in inflation, foreign exchange and interest rate through formulation of good monetary policies by the

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X Nippon Oil & Energy Corp said it would buy 60,000 tonnes of liquefied natural gas (LNG) on the spot market, aiming to expand sales in a domestic market shifting away from costlier and more polluting oil. This would be the second attempt by JX Nippon Oil, Japan’s top refiner, to buy LNG via a spot contract. Its first purchase was earlier this year, moving into a market dominated by power and gas utilities. In April, it imported 60,000 tonnes of LNG from Nigeria, taking the delivery at its only import terminal in Mizushima, western Japan, which is jointly operated with Chugoku Electric Power Co, a company spokesman said. JX Nippon Oil plans to start operation of a new LNG import terminal in Hachinohe, northern Japan, in April 2015, where it aims to take in about 700,000 tonnes of LNG a year. The company has already signed long-term LNG contracts starting from 2015 to import 300,000 tonnes a year from Australia’s Gorgon LNG project operated by Chevron and 200,000 tonnes a year from Shell Eastern Trading.

federal government, while also advocating a check on the inflow of fake, sub-standard and contraband goods into the country. Lamenting the slow pace of growth in the manufacturing sector, he said that government’s efforts at transforming the manufacturing sector during the year recorded marginal success as a result of the magnitude of accumulated challenges in the economy and poor implementation of policies in the past. He stated that at 52 years of nationhood, the country was still grappling with unemployment, insecurity, high level of crime and abject poverty due to failure of the real sector. He said, “The manufacturing sector did not fair well in 2012 as a result of unfriendly business environment and the perennial problems associated

with the real sector. “In the last few years, a large number of manufacturing companies have closed shops nationwide. The ever busy industrial estates are now shadows of their past glory.” He noted that for the nation to rise above all its challenges and join the league of developed nations, the manufacturing sector must be empowered, while businesses and products must be encouraged to be of international standard. In his address, the MAN President, Chief Kola Jamodu, said that the inability of the government to extract optimum benefits from international trade agreements has compounded the unfriendly investment climate in the nation, resulting in smuggling, dumping, unemployment and dwindling foreign direct investment.

conditionalities seen as the price for relying on aid. African economies are also more susceptible to economic shock arising from the terms of trade and climate than other economies, mostly because of its trade restrictions and also overreliance on export of primary commodities whose prices are often affected by international events, for instance cocoa, rubber or oil price decline in the international market. “Nigeria being an oil dependent economy is therefore more vulnerable to these external shocks. Both shocks and policy changes alter relative prices, and volatility of prices discourages irreversible investment in favour of liquidity,” he said. He, however, remarked that the history of policy failures and economic collapse do not necessarily mean that country’s ailing economy could be revamped, saying that countries like Uganda and Indonesia have been through worse economic crises, yet had managed to embark on reforms armed at scaling the hurdles necessary for economic recovery or growth. According to him, Nigeria can get things right by creating a minimum adequate economic environment for economic recovery. This, it can do by stabilizing the macroeconomic environment, and then getting the prices and other incentive policies right.

Islamic finance body hires new CEO ahead of first issuance he International Islamic Liquidity Management Corp (IILM), a company backed by central banks located mainly in Asia and the Middle East, has appointed a new chief executive ahead of its first issuance due within the next few months. The Kuala Lumpur-headquartered IILM has delayed its first issuance of short-term sukuk, or Islamic bonds, twice since it began operations last year. The company, which aims to help sharia-compliant banks manage liquidity and create a liquid cross-border market for Islamic instruments, said that Rifaat Ahmed Abdel Karim would take over as chief executive, replacing Mahmoud AbuShamma who was hired in February 2011 on a three-year tenure.

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22 — Vanguard, MONDAY, OCTOBER 22, 2012

Banking & Finance BRIEFS Chicken Republic strategises for more competitiveness, eyes international market

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hicken Republic, a subsidiary of Food Concepts Plc, said that it is putting measures in place to retain a leading role in the quick food service business in view of increasing competition, especially that from expected foreign entrants in the industry. This came even as the company said it is planning to expand its brand beyond the shores of Nigeria to niche African markets, including Ivory Coast, Cameroun, Ghana and Sierra Leone with Ghana serving as the hub of African expansion. Addressing the press on some of the strategic plans, at the company’s Head Office in Lagos, the Chief Operating Officer, Mr. Tunde Ogunrinde, said part of the measures was to ensure that it continued to delight its numerous customers both in the quality of products offered across the outlets and a commitment in maintaining their ambience. “We are aware of the competition in the industry; more companies are coming in, including those from international market, but we are not afraid of these competitions. We are fully bullish and aggressive in what we want to achieve. “Part of what we are doing is to ensure that we continue to listen to our customers; meet their needs and continuously improve the quality of our services. For us, the future is really bright,” he said.

Nigeria forex reserves hit 32month high of $42bn igeria’s foreign exchange reserves jumped to $42.02 billion by October 17, the highest in 32months and an increase of 3.11 per cent, month-onmonth, latest figures from the central bank showed. Nigeria’s forex reserves were last around this level on February 17, 2010 when they hit $42.22 billion. The reserves were at $40.75 billion at month ago.

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BY KAYODE AMOLEGBE

oins used to be visible in economic activities in the country. From the preindependence period when the first set of coins was introduced to the mid-1990s, coins were generally acceptable and wide used for payment of goods and services. But gradually, coins became less visible and acceptable. Today they are almost extinct. This is in spite of the efforts of the Central Bank of Nigeria (CBN) in the last seven years to revive public acceptability of coins. While some blame the seeming general distaste for coins as a legal tender on the heaviness of the metals used to produce them, some believe it is because the amount denominated in coins cannot buy anything. But despite these factors, what can government do to make Nigerians accept and use coins. "Nothing!" That was the response of majority of the people that spoke to Vanguard. “If the prices of goods and services can come down, the coins would be spendable. But I do not think the coins will have value again,” said Mr. Bernard, a commercial tricycle rider. “There is nothing government can do as people do not accept coins again. Maybe the money they want to use to implement the N5,000 should be invested in something else and leave the other currencies as notes,” said, Miss Elizabeth, a student of University of Agriculture Abeokuta, UNAAB. “I do not foresee coins coming to this generation again. So, I do not think government can do anything; there is no state of coins that comes back that is useful again. They have made coins to be useless, so what are they going to do? Besides, people do not want to carry coins in their p o c ke ," declared M r. Ezekiel, a commercial tricycle rider. “People do not like coins. There is nothing they can do. Some people do not appreciate coins; maybe they can take it back to papers,” maintained Ola, a student of Ibadan Polytechnic. “In my own opinion there are no ways coins can be accepted? Looking at our coins, it cannot be compared to other

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Will Nigerians accept coins again?

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There is nothing coins can buy as at now. There should be price control, that is the only way out in my own opinion, because without price control; just like the issue of pure water, nobody can get pure water for five naira

countries'; our own is as heavy as a stone. So for someone like me to be carrying coins; I do not think there is anything government can do. Talking about government reducing the prices of goods and services, it depends. As far as I am concerned, looking at the denomination they want to convert into coins, I believe people that patronise pure water will accept coins,” stated Mr. Okoye Omonlove. “I think the coins are very heavy money to carry about. They should just abort the coins stuff; let just face it the way we are and forget about that N5,000 note,” said Adora, a student of Nnamdi Azikwe University. “There is nothing coins can buy as at now. There should be price control, that is the only way out in my own opinion, because without price control; just like the issue of pure water, nobody can get pure water for five naira and except government can mandate the manufacturers to do so.

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And before government can mandate manufacturers, definitely they must control the import duties because manufacturers will complain about import duties, and whenever import duty is high definitely the government cannot mandate them. But if the government can beat down the import duties, then definitely government can tell them to beat down their price. I think that is the only way coins can be in the system,” Mr. Samson, a driver, opined. “There is nothing government can do for the citizen to accept coin. “I do not think there is anything the government can do. Because, first, coins is heavy and it is not easy to carry in your pocket; we do not need c o i n s , ” s a i d Ay o b a m i Salami, a secondary school graduate. ‘There is nothing the government can do; the coins have no value again. They should scrap it,’declared Mrs. Temitope, A d m i n i s t r a t or, ENEDA Nursery and Primary school)

“Coins are a legal tender I will accept it. But the thing is that our society has not reached the level where coins can be used, most of the people that could use them, the market people, they are not literate enough to know t h e p u r p o s e o f coins. And again this ATM machines would not be able to dispense coins, so generally there is no economy that does not have coins, because coins moderate inflation. If you buy something maybe N2.30 kobo or 2.3 kobo they should give you a change but they do not do so in Nigeria. It is either N10, N 20, N5; N50 is even difficult to find, so that is the challenge because they have to get a round figure for every purchase you make, so it increases inflation in a way. In our society it is not easy to implement policies the way they are formulated; there are too many intervening factors that we do not take into consideration when making the policy. So what the government can do is, maybe, they should publicise and make people understand that coins is important and they should rely on the judgment of the people to accept coins. And again that banks to dispense and accept the coins; because when you pay people with coins they will be able to accept it,” said Chris, a Journalist.

Vanguard, MONDAY, OCTOBER 22, 2012 — 23

Banking & Finance BRIEF

Economic Indicators

Asian currencies gain in week on recovery optimism outh Korea’s won led a weekly advance in Asian currencies as signs of an improvement in the global economy brightened the outlook for the region’s exports and spurred demand for emerging-market assets. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s mostactive currencies, rose 0.2 percent this week and touched 117.87 yesterday, the highest level since February. The won completed its best week of the month and the yuan had an 11th week of gains, the longest winning streak since March 2008. India’s rupee fell for a second week as the government reported this year ’s fastest inflation. China’s factory production, retail sales and fixed-asset investment accelerated in September, data showed yesterday. Retail sales in the U.S., the world’s biggest economy, increased 1.1 percent in September while housing starts climbed 15 percent to a four-year high, reports showed this week. Europ’s leaders committed to their goal of creating a euroarea bank supervisor by yearend, according to officials at a European Union summit in Brussels ending today. “The September data was clearly stronger than expected,” said Nizam Idris, head of Asian fixed income and foreign- exchange at Macquarie Bank Ltd. in Singapore. “The growth momentum will continue. Still, we are at a very early stage of the recovery so it’s too soon to expect” faster gains in Asian currencies including the yuan. The won appreciated 0.7 percent this week to 1,103.45 per dollar in Seoul, according to data compiled by Bloomberg. The yuan rose 0.22 percent from Oct. 12 to 6.2535 after touching a 19year high of 6.2446 yesterday. Taiwan’s dollar climbed 0.3 percent from a week ago to NT$29.286. The won touched 1,102.50 on Oct. 17, the strongest level since 0ct. 31, 2011. South Korea’s economy probably expanded 1.7 percent in the third quarter from a year earlier, the least in three years, a Bloomberg survey showed before data next week. “The won was strong this week on positive data from the U.S., but it seems some overseas investors are covering their short positions on the dollar,” said Lee Jung Hyun, a Seoul- based currency trader for Industrial Bank of Korea. (024110) A short position is a bet an asset will decline in value.

S

Average Nigeria Interbank Offered Rates (NIBOR)

Cost of funds falls as N277bn statutory allocation boost market liquidity *Macroeconomic indices favour reduction of MPR but-Experts BY BABAJIDE KOMOLAFE ost of funds in the interbank money market fell last week following the inflow of N277 billion statutory allocation funds which lifted market liquidity by over 200 per cent. Meanwhile, economic experts have said that the macroeconomics indices favour a reduction in the monetary policy rate, but the possibility of such reduction is slim this year. Earlier in the week, the market experienced huge outflow of liquidity to fund foreign exchange and treasury bills and FGN bond purchases. This prompted cost of funds to rise by about 200 basis for short tenured borrowing, with cost of Overnight borrowing rising to 14 per cent from 11 per cent at the start of business on Monday while that of 7-Days borrowing rose to 14.1 per cent from 12.25 per cent. But on Wednesday, the inflow of N277.4 billion prompted interbank interest rates to fall by over 300 basis points. Interest rate on Overnight borrowing fell by 333 basis points to 10.25 on Thursday from 14 per cent on Tuesday. It however rose slightly on Friday to 10.375 per cent. Similarly interest rate on 7-Days borrowing fell by 279 to 11.12 per cent on Thursday. On Friday it dropped further to close at 11.04 per cent. Reflecting the impact of the inflow, idle funds in the

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market rose by over 200 per cent to N335.998 billion from N98.334 billion.However, the impact of the inflow and the surplus liquidity might wane this week due to outflows through foreign exchange and treasury bills purchases. Experts comment on September inflation figure Commenting on the September inflation figures released last week by the National Bureau of Statistics (NBS), analysts at the Financial Derivatives Company (FDC) said that the further decline in inflation rate to 11.3 per cent from 11.7 per cent in August as well as other macroeconomic indices favours a reduction in the MPR, which is the benchmark interest rate. “All pointers are in favour of a cut in the MPR. However, we are of the view that the 12 per cent per annuum. monetary policy rate is here to stay for the rest of 2012, with moderate cuts in early 2013 if macro-economic indicators maintain positive trend”, they said in the company ’s bi-monthly economic and business update issued on Friday. Similarly, Razia Khan of Standard Chartered Bank Group said that decline in inflation, “ will give some encouragement to those expecting the eventual resumption of monetary easing from the CBN” Last year the CBN commenced measures to tighten money supply in order to arrest rising inflation. Among other things, the apex

bank raised the MPR six times from 6.0 per cent to 12 per cent. It also reduced banks’ ability to create loans by raising the amount of assets banks must keep as cash namely the Cash Reserve Ratio (CRR) to 12 per cent from 2.0 per cent. Reflecting the impact of these measures, the inflation rate has been on the downward trend since the last month. Meanwhile, the measures also restricted access to credit and increased cost of credit in the economy, prompting private sector operators to call for relaxation of money supply. According to the FDC report, “a quick look at Nigeria’s current macroeconomic score card shows inflation moderating, external reserves growth of 26.9 per cent (year to date) to $41.99 billion, a strong exchange rate with a 2.02 per cent year-to-date appreciation to N157.42 per dollar at the inter-bank market, declining interest rates and slowing growth of 6.28 per cent (in Q2). The CBN governor mentioned the high core inflation index and weak global growth prospects as some of his reasons (and the MPC’s) for keeping the monetary policy rate at 12 per cent per annum, while still keeping an eye on other macroeconomic indicators. Notwithstanding, if the impact of the excessive floods wanes in subsequent months, leading to a further deceleration in inflation, the CBN may be forced to reduce

the MPR by at least 25 basis points in November.” Khan, who is Regional Head of Research, Africa, Global Research for the Standard Chartered Bank Group echoed the same sentiments. “First, assuming nothing else changes, inflation is likely to continue to decelerate in the months ahead as tight money supply has more of an impact. This may be blurred, a bit, by the impact of recent flooding, but that should not be a major consideration overall. It is no game changer for core inflation, where the trend remains encouraging. With official projections of only 6.5 per cent growth in 2013 (healthy by anyone’s standards, although more modest than the growth Nigeria has reportedly seen post-crisis), hopes for countercyclical policy - specifically monetary easing - may increase. “There are two issues with this. Nigeria’s external vulnerability and dependence on oil earnings means that the overriding aim must still be to increase foreign exchange reserves, boosting external buffers. If this can be done comfortably alongside monetary easing, so be it - but given the weakness of the monetary policy transmission, and the imperative to take action now in order to smoothen future spending, Naira stability, allowing for foreign reserves accumulation will remain the overriding priority.”

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24 — Vanguard, MONDAY, OCTOBER 22, 2012

Corporate Finance BRIEF GT Bank reports mixed to lackluster Q3 2012 results —FBN Capital BN Capital has stated that Guaranty Trust Bank (GTBANK) Plc's third quarter result for 2012 was uninspiring following decline in some of its performance indicators. While commenting on GTBank’s third quarter result released by the Nigerian Stock Exchange (NSE) last week, the FBN Capital Research team, said, “Although earnings were up strongly on a year-on-year basis, with Profit Before Tax (PBT ) and Profit After Tax (PAT) growing 21 per cent year-on-year and 81 per cent year-on-year respectively, both net interest income and non-interest income were down, by 19 per cent and 63 per cent respectively. As such, profit before provisions declined 34 per cent quarteron-quarter basis to N33.5billion. The latter overshadowed a decline in opex of 39 per cent quarteron-quarter basis such that PBT fell 25 per cent quarteron-quarter to N21.9illion. PAT was down 22 per cent quarter-on-quarter to N19.8billion. Compared with our estimates, the results were broadly below expectations.” FBN Capital further said, “ PAT missed our estimate by 16 per cent; both interest income and non-interest income contributed to the negative surprise. After delivering a stellar Q2 performance, largely on the back of a very strong non-interest income result, we had expected Q3 results to show a modest decline in profits. GT Bank management signaled to this effect on the Q2 2012 conference call; although no firm guidance was provided, there was an indication that the run-rate in non-interest income through half year was likely to be closer to the Q1 result of N11.6billion than the N17.9billion in Q2. We had assumed N14billion. As such, the N6.7billion was significantly weaker than what the market would have been looking for, to our minds. We appreciate the lumpiness on this line but the 63 per cent quarter-onquarter is quite unusual; we would be looking for some explanation from management on this point.”

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BY PETER EGWUATU

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he Managing Director, Red Star Express Plc, Mr. Sule Umar Bichi, in this interview with Vanguard, as part of activities toth mark the company’s 20 anniversary spoke on the company’s performance in the stock market, challenges in the industry, successes and other issues affecting the economy. Mr Bichi has been in Red Star Express since 1998 which is about 15 years now. He joined Red Star Express as Head of Finance and went through the General Manager position to Executive Director and Planning and now the Managing Director. Excerpts: How has Red Star Express performed in the stock market? Red Star Express Plc was listed on the Nigerian Stock Exchange in November 2007. If you are following the trend of the capital market, that was around the time when the Nigerian capital market was bubbling in 2007 and 2008, while early part of 2008 was the peak. Thereafter, the global financial crisis came up in 2009 which started in Europe and then the entire global capital market started shaking and this is not only in Nigeria but globally. I think in 2008, the market dropped more than 25 per cent. The following year 2009/2010, it went down the more. Red Star Express shares came to the market by introduction in 2007 at the rate of N4 per share. It went through the ups and down but as at today, I think despite the downturn, it is trading at some where between N3.44 and N3.50 or there about. If you compare the N4.00 and N3.44, it has done relatively well. Its performance is not bad because most of the shares sold at the Exchange have dropped more than 20 per cent now. I remember there are some shares sold for N8.00 per share and are now selling less than N5.00 today. So it is like that globally given the meltdown, but what investors in the market are looking for is consistency in paying dividend and price appreciation of shares. The core performance of the company is in terms of profit and quality of profit. The stock market is gradually stabilizing and we have been paying dividends; at least our dividends have not been going down. In the last three years, we have been paying about 30 kobo to 50 kobo per share and the shareholders and the market are watching and are seeing that we are consistent in paying dividend. I learnt recently that when the market markers were introduced by the Nigerian Stock Exchange recently, it identified our

We have declared profit, dividend consistently for 3 years —Red Star Express MD … Seeks road rehabilitation

,

Mr. Sule Umar Bichi

The power sector is another one sector that needs to be looked at. By nature of our job, we need power 24 hours and not only in one location but in all locations

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shares as part of the shares they will be working with. So, you can see the extent to which we have been accepted in the market, even though we have not gone to raise capital from the market, but with the response I get I am sure if we do, we are going to get positive response.

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re you planning to come to the capital market to raise money? We will come to the market to raise fund when we need it to boost our investment. There are a lot of opportunities for us and when they materialize, we will come to the capital market. We do not put the cart before the horse. We have to get the business before we can ask for public money to invest .If we

go to the market and get the money and we do not have where to put them, then it is not the best. So, once we come out for something, we will definitely come to the capital market, and we believe the company has great potential because opportunities are just opening for logistic service. We have just started because the economy is growing; that is how the logistic service will go and fuel the growth of our economy. What challenges are Red Star facing in the industry? The challenges we are facing in the industry are in infrastructure. When I say infrastructure, I am talking about the road network within the country, the ports, airports, power, particularly the

provision of electricity. When I say road, it is because we connect all the cities in the country and we use vehicles that ply on the road. When the roads are bad, and are not motorable, you find that the level of wears and tears are so much and the risk of having accident is higher. So we want particular attention to be given to the road network. The port, particularly the airport, as we all know the courier service is time bound which requires very quick connection to the air, and unfortunately, not all airports are opened at night, so you find out that you only have to make use of the networks during the day but if we can make them functional 24 hours, it means we can move items even in the night and that is what is happening all over the world and then deliver as early as possible in our locations. Not only that, the airline industry is having a lot of issues, the services are not there because you find out that most of the airlines are not in the air, they are not on the ground, you will see that it is very few domestic airlines that are still working. There is the need to look at this because if this is done, it will improve the efficiency of our industry. The power sector is another one sector that needs to be looked at, by nature of our job, we need power 24 hours and not only in one location but in all locations. The government in collaboration with the private sector should come together to see to the improvement of these challenges that we are facing. hat are you doing in terms of brand awareness? On brand awareness, we have normal strategy of reaching out, though we are not very good in advertisement, but we have a lot of avenue to reach out to our customers. We are doing some kind of things to keep our customers through the services we provide, and we have marketing arrangements that include bringing our customers together. The customers’ forum like I said before are all aimed toward keeping our brand alive. We also associate ourselves with the press, both print and electronic, not necessarily in so much advertisement but in many other ways we can collaborate.

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Vanguard, MONDAY, OCTOBER 22, 2012 — 25

Corporate Finance BRIEFS Access Bank records N39bn Q3 profit ccess Bank Plc pre-tax profit for the first nine month to September more than doubled to N39.11 billion ($248.48 million), compared with 18.07 billion naira in the same period of last year, the bank said on Friday. Gross earnings jumped to 162.27 billion naira in the same period, from 86.32 billion last year. Access Bank acquired rescued rival Intercontinental last year and merged their operations. The bank’s shares rose 3.3 percent to 9.40 naira on the local bourse on Friday.

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From left: Mr. Bola Adeeko, Chief of Staff/Head of Corporate Division, Nigerian Stock Exchange (NSE); Mr. Jalo Waziri, Executive Director/Head, Business Division, NSE; Mr. Sule Umar Buchi, MD/CEO, Red Star Express and Mr. Muyiwa Olumekun, Executive Director, Red Star Express during a visit by Red Star Express officials to the NSE in Lagos. Photo by Sylva Eleanya.

Investment value on NSE appreciates by N2.7bn BY MICHAEL EBOH

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marginal increase was recorded in investors' holding on the Nigerian Stock Exchange, NSE, last week, as the value of listed equities appreciated by N2.71 billion. The improvement was occasioned by gains in the share prices of highly capitalized companies, which sustained the indices despite losses recorded in the share prices of majority of the listed equities. In the week under review, 27 companies recorded share price gains while 46 companies recorded declines in their share prices. Equities’ value, represented by the market capitalization, rose by 0.03 per cent to close the week at N8.697 trillion, from N8.695 trillion at which it opened the week. The All-share index also rose by 0.03 per cent, as it garnered 8.5 basis points to close the week at 27,296.35 points, from 27,287.85 points at which it opened. Nestle Nigeria Plc recorded the most share price gain, rising by N59 to close at N684 per share from N625 per share at which it opened; PZ Cussons Nigeria Plc followed with a gain of N4.98 to close at N30 per share, while Chemical and Allied Products Plc garnered N3.64 to close at N31.19 per share. Other share price gainers include: Seven-up Bottling

Company Plc N1.95, Dangote Cement Plc N1.50, Flour Mills Nigeria Plc N1.01, DN Meyer Nigeria Plc N0.92, University Press Plc N0.73, UACN Property Development Company Plc N0.50 and Beta Glass Company Plc N0.47 among others. On the other hand, Guinness Nigeria Plc recorded the most share price loss, dropping by N16.60 to close at N265 per share, from N281.60 per share at which it

opened the week; Total Nigeria Plc followed with a loss of N5 to close at N125 per share and Nigerian Breweries Plc shed N3.15 to close at N138.85 per share. Other share price losers include: Okomu Oil Palm Plc N1.69, Ashaka Cement Plc N1.65, Unilever Nigeria Plc N1.50, Oando Plc N1.24, Lafarge Wapco Plc N1, Cutix Plc N0.85 and Cement Company of Northern Nigeria Plc N0.60.

Equity trading, however, declined in the week under review by 14.88 per cent, as a turnover of 1.859 billion shares valued at N16.350 billion was recorded in 28,383 deals, in contrast to the preceding week’s turnover of 2.184 billion shares valued at N17.495 billion in 27,786 deals. The Financial Services sector dominated the activity chart (measured by turnover volume) recording the highest trading volume of 1.422 billion units of shares valued at N10.579 billion traded in 17,662 trades, representing 76.50 per cent, 64.70 per cent and 62.23 per cent, of the volume, value and number deals executed on the stock market during the week.

Local content: RMRDC seeks collaboration with Dangote Cement

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mpressed by the latest technology at the Ibese plant of Dangote Cement, the Raw Material Research and Development Council has called for a partnership with the cement company in the area of raw material sourcing and deepening of the local content policy of the Federal Government. A five-man management team of the Council led by its Director-General, Engineer Azikiwe Peter Onwualu, which visited the six-million ton per annum capacity Ibese Cement Plant in company of the President of the Lagos State Chapter of Association of Small Scale Industrialists, Mr. S.T Kuti-George toured the plant and lauded entrepreneurial spirit of

Alhaji Aliko Dangote, Chairman of the Cement Company. Speaking at the end of the plant tour, the Director General of RMR&DC expressed delight at the visit, saying it was an eye opener indeed, “much revealing about the activities of the Dangote Group”. Given the exploits of Dangote Cement in the cement industry with the latest technologies deployed in the excavation of raw materials for production which is more environmental friendly, Engr. Onwualu sought for the collaboration of his agency with Dangote group in the areas of raw material sourcing, research and development and deepening the local content

policy. The agency, under the Federal ministry of Science and Technology he said would be ready to partner Dangote Cement in researching into areas through which gypsum could be discovered in large commercial quantity, processing it to acceptable purity of over 90 per cent and pushing for Federal government interest in opening up the gypsum business as commercially viable business entities capable of attracting massive government infrastructure in the sector “This way, more jobs will be created with the intermediate industries that will come up instead of the wholesome import of this raw material from outside the country”, he stated.

Wema Bank launches online game n an industry where digital marketing strategies have largely changed the process of Customer acquisition, engagement and Service, Wema Bank, has scored yet another first with the launch of an online social game, SharpSule, in partnership with Nigerian social tech startup, Maliyo Games. Sharp Sule, the first ever facebook app for African themed casual games, is a fun and interactive game that brings excitement and real value to its players. Through this launch, Wema Bank also becomes the first financial institution in Nigeria to foray into social gaming - riding on the heels of its equally successful hosting of Nigeria’s first fully online reality competition, ‘The Writer ’, in partnership with the widely read blog, tncng.com. The Sharp Sule interactive game follows the story of a regular guy, Sharp Sule, who works hard to earn a living by riding his motorbike on the streets of Lagos, Nigeria. He aspires to run a bigger transportation business, earn more money and upgrade his status. The aim of the game is to avoid obstacles on the busy roads– cars, traffic officials, and more– whilst collecting coins in the process that will translate to points in the game as well as real cash. The game, which is simplistic in nature, presents an immersive experience for players from the beautiful background music to the really hilarious ‘Ye!’ scream that SharpSule lets out when he crashes into a vehicle.

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9.01 0.64 0.57 4.79 11.95 2.34 0.50 17.00 3.62 20.50 1.07 0.70 1.15 4.05 0.88 7.30 2.00 5.50 8.01 0.54 0.52 18.35

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

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

5.19

0.50

0.50

0.50 2.02 0.51

0.50 0.50

0.70 0.82 0.50 0.50 0.50 1.40 0.50 0.50 0.50 1.60 0.50 0.61 0.50 0.50 0.50 0.50 0.50 0.50 0.52 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50

9.40 0.64 0.55 4.40 12.05 2.13 0.50 17.01 3.49 20.30 1.07 0.70 1.15 4.30 0.88 7.30 1.83 5.21 7.99 0.62 0.57 18.20

30.00 41.50

10.03 34.39 3.57 2.88

29.90 684.00

8.20 5.81 66.01 2.50 5.91 0.73

40.95

3.80 265.00 12.83 138.85 0.89

0.50

100.00

11.50

31.00 10.07

1.57 5.42 1.18 5.81 40.30

1.70

0.50 34.01 14.92

0.50

Closing Price (N)

5.46

0.50 2.02 0.57

25.02 43.00

Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc

0.50 0.50

10.03 36.19 3.52 2.88

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

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

30.00 625.00

Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc

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

8.20 6.12 65.00 2.68 6.02 0.76

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

0.80 0.88 0.50 0.50 0.50 1.47 0.50 0.50 0.50 1.55 0.50 0.61 0.50 0.50 0.50 0.50 0.50 0.50 0.57 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50

39.00

Beverages-Non-Alcoholic 7-UP Bottling Company Plc

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

0.50

3.80 281.60 13.19 142.00 0.89

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

100.00

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

11.00

31.00 10.60

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

Real Estate Development UACN Property Development

1.50 5.52 1.14 5.81 40.50

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

1.56

0.50 35.70 14.98

Livestock/Animal Specialities Livestock Feeds Plc

0.50

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

Opening Price (N)

Oil and Gas and Products Petroleum Products Capital Oil Plc

Company

Capital Market

300,000

50,000

1,100,000 60,000 220,000

100 2,300,000

1,508,973 1,101,000 1,000 7,100 100,000 621,700 4,500 40,982 2,000,000 1,698,475 20,000 1,172,778 1,062 1,670,890 6,503,000 20,590 4,818,594 110,000 5,413,157 1,822 40,000 528,684 6,066,500 60,000 50,000 13,000 1,000 100,000

14,547,002 646,608 13,287,533 24,836,830 9,744,915 4,805,407 1,000 44,887,149 2,343,299 18,213,114 56,000 73,200 91,000 8,300,617 1,006,032 1,106,990 8,075,667 9,607,249 897,694 8,840,528 20,900,966 42,841,354

271,966 119,399

225 10,620 582,742 11,923

1,352,243 346,448

3,367,566 3,158,641 355,556 1,566,319 510,667 564,183

6,227

50,000 332,781 106,784 776,391 1,000

20,000

2,000,000

620,075

40,220 520

105,561 264 29,624,620 100 175,438

5,737,000

150,000 61,236 533,491

5,000

Quantity Traded

0.50

10.54

0.61 2.02 0.66

0.50 0.50

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

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

43.50 31.25

15.58 42.66 6.75 3.67

29.20 470.00

19.90 16.20 95.00 6.60 6.70 0.88

51.49

0.50

9.52

0.50 2.02 0.50

0.50 0.50

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

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

27.00 22.56

12.71 36.19 4.78 2.66

10.17 367.83

4.31 4.02 57.00 2.31 3.80 0.50

,39.00

2.23 186.00 5.23 72.50 0.93

4.63

0.50

97.00

11.59

32.96 3.01

1.45 5.52 0.50 6.43 28.70

0.48

0.50 14.53 6.40

Year Low

255.00 7.10 100.00 1.01

0.50

100.00

20.15

62.26 8.28

2.54 8.28 1.82 7.60 42.50

0.66

0.64 24.58 8.30

Year High

0.00

0.00

0.00 0.00 0.03

0.00 0.00

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

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

1.29 1.32

3.90 1.61 0.70 0.00

0.28 15.94

0.54 0.71 4.50 0.26 0.73 0.06

3.70

12.12 0.35 4.50 0.00

0.00

0.00

11.75

1.66

3.26 3.66

0.28 0.35 0.22 0.31 7.03

0.04

0.01 7.94 1.80

E.P.S.

0.00

0.00

0.00 0.00 16.67

0.00 0.00

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

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

20.93 20.46

3.26 22.48 7.34 0.00

37.57 27.96

16.91 14.38 16.89 16.92 5.75 8.83

13.92

19.98 16.29 22.22 0.00

0.00

0.00

8.51

7.33

10.11 2.26

5.18 15.77 3.64 20.74 4.14

15.00

50.00 2.77 4.37

P.E. Ratio

13.77 2.41

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

0.50

Processing Sysetms Chams Nigeria Plc

0.50

4.90 2.16 5.00

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

0.50

3.10 2.11 4.20 4.10

Printing & Publishing. Academy Press Plc Learn Africa Plc Longman Nigeria Plc University Press Road Transportation Associated Bus Company Plc

0.50

6.50 1.14

0.50

3.30

1.97 1.77

Media/Entertainment Daar Communications Plc

Hotels/Lodging Capital Hotel Ikeja Hotel Plc

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

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

Afromedia Plc

SERVICES

0.50

20.50 0.50 20.79 2.28 10.20 115.00 30.68 130.00

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

0.62 12.50

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

1.44 0.50

3.98 9.53 13.28 4.30 1.05 2.92 0.66

Mortgage Carriers, Brokers and Se Abbey Building Society Plc Union Homes Savings and Loans

2.20 0.50

1.38

Paper/Forest Products Thomas Wyatt Nig. Plc

Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc

0.50

10.55

Metals Aluminium Extrusion Ind Plc Non-Metalic Mineral Mining Multiverse Plc

5.69

8.26

2.09 1.91

19.50 8.01 27.55 6.55 118.50 0.50 2.01 57.50 3.15 1.95 10.93

NATURAL RESOURCES Chemicals BOC Gases Plc

Tools and Machinery Nigerian Ropes Plc

Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company

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

0.50

0.50

ICT Telecommunications Starcomms Plc

0.50

Computers and Peripherals Omatek Ventures Plc

5.05 1.36 1.30 39.00 1.71 1.43 8.59 3.02

Opening Price N

ICT Computer Based Systems108 Courteville Investment 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

2.46 5.90

4.90

0.50

3.41 2.01 4.20 4.83

0.50

6.60 1.09

0.50

3.10

1.97 1.89

0.50

0.50

20.50 0.50 20.79 2.20 10.25 115.00 30.68 125.00

11.28

0.60

3.98 10.00 13.28 4.30 1.05 2.78 0.66

1.44 0.50

1.35 0.58

0.50

1.38

0.50

10.55

5.69

7.85

1.99 1.81

17.85 8.01 31.19 5.95 120.00 0.50 2.93 56.50 3.29 1.98 10.93

0.50

13.77 2.41

0.50

0.50

5.05 1.20 1.23 39.00 1.65 1.24 8.85 3.02

Closing Price N

3,000 289,853

20

81,232

10,768 9,308,892 4,322 572,362

312,000

800 92,000

12,150,143

452,500

240 129,389

33,000

50

82,191 200 20,649 82,000 105,183 17,754 300 4,321

2,670,638

2,485,071

6,888 154,728 100 29,198 200 84,311 2,749,340

2,000 1,000

28,790 15,000

13,870

1,000

3,800

5,000

13,340

10,000

55,484 2,357,539

578,480 37,650 203,830 155,854 378,041 10,374 117,356 40,400 1,000 2,900 1,000

2,307,692

21,800 200

691,550

1,200,000

1,000 355,260 517,838 7,050 229,765 528,500 1,927 100

Quantity Traded

Stock Market Report

0.51

2.78 11.75

5.15

1.57 6.50

4.90

0.50

4.60 3.60 0.80

3.17 8.00 6.82

0.48

3.00 1.33

0.90

2.65

1.97 1.30

3.68

0.50

400 2.07

1.64

3.67

4.33 3.65

0.72

539,000

141.00 63.86 195.50

163.50 2,100 240.00

27.99 0.50 0.50 5.71 3.89

1.87

3.98 12.71 13.97 3.60 1.05 2.92 0.63

1.33 0.50

1.62 2.58

0.50

1.38

0.50

10.70

6.80

8.26

5.94 1.47

12.00 8.10 15.16 4.16 95.00 0.50 1.02 36.58 5.11 0.51 10.93

0.50

3.25 3.25

0.50

0.50

5.31 0.70 0.83 2.58 3.61 0.95 0.95 4.28

Year Low

37.10 0.70 32.60 5.59

78.97

0.97

3.98 15.58 15.03 4.30 1.86 2.92 0.63

1.51 0.99

2.50 2.58

0.50

1.38

0.50

12.39

9.20

8.69

6.91 3.60

30.00 12.57 43.98 15.49 132.51 0.75 3.51 48.05 5.28 3.36 13.40

1.47

9.31 3.59

0.50

0.52

5.31 1.45 3.20 23.11 5.61 1.96 12.91 200

Year High

0.87

0.51 0.80

0.00

0.00

0.00 0.13

0.26

0.00

0.22 0.69

0.08

0.54

0.00 0.16

0.04

13.32 3.32 11.91

4.93 0.00 6.02 0.67

6.95

0.16

0.00 3.90 0.00 1.22 0.17 0.07 0.00

0.05 0.00

0.13 0.00

0.00

0.00

0.00

0.13

0.93

0.00

0.15 0.19

1.59 1.71 1.76 1.80 8.01 0.00 0.00 1.05 0.36 0.18 0.00

0.00

6.49 0.00

0.04

0.05

0.06 0.00 0.27 8.88 0.21 0.08 0.00 0.00

E.P.S

4.22 8.75

0.00

0.00

0.00 27.69

12.19

0.00

34.09 2.12

11.25

4.91

0.00 8.19

12.75

11.11 19.23 17.07

6.99

7.40 0.00

4.17

6.06

0.00 3.26 0.00 3.52 6.18 41.71 0.00

28.80 0.00

13.15 0.00

0.00

0.00

0.00

85.77

7.37

0.00

39.60 9.16

7.86 4.97 8.88 2.31 13.17 0.00 0.00 42.86 14.19 2.89 0.00

0.00

1.43 0.00

12.50

10.00

9.05 14.13 0.00 0.00

88.50 0.00 3.07

P.E Ratio

as at Friday, October 19, 2012

26 — Vanguard, MONDAY, OCTOBER 22, 2012

Vanguard, MONDAY, OCTOBER 22, 2012 — 27

Insurance

L-R: Mr. Lateef Omoladun, a new inductee and Managing Director of KOB Insurance Brokers Limited receiving letter of admission from the President of the NCRIB, Barrister Laide Osijo, during the induction of new Insurance Brokers in Lagos, recently

Brokers to underwriters: Show documentary evidence of withheld premiums By ROSEMARY ONUOHA

I

nsurance brokers under the auspices of the Nigerian Council of Registered Insurance Brokers, NCRIB, have charged underwriters to show documentary evidence of withheld premiums from underwriters. The charge is coming on the heels of growing allegations against brokers by insurers that the high rate of outstanding premiums in

their books are as a result of brokers’ refusal to remit some premiums they collected from clients. President of NCRIB, Mrs. Laide Osijo who challenged the underwriters to come forward with their evidence said “The allegation is unfounded. We have asked underwriters that have documentary evidence to bring them out, so that we can do reconciliation. That was the advice we also gave the National Insurance Commission, NAICOM. The Commission wrote us and we

replied by telling them to ask underwriters to show evidences of premiums withheld by brokers. I would not say that brokers do not err, but brokers in the past are different from those practicing now.” Osijo however said that the council would partner with NAICOM on its planed validation of debts alleged to be owed by brokers. Osijo, said that the council suggested the idea to validate the debts to NAICOM, adding that brokers in recent time are striving to be ethical and

professional and would never engage in anything that would attract sanction. She said: “We suggested the idea to validate acclaimed debts to NAICOM. The underwriters have been accusing brokers of withholding premium which is not true. The underwriters often claim that the premiums have been paid and that brokers are with-holding them. But the truth is that most of the premiums are receivables that are not yet collected, especially government accounts. Because the debit notes are written by brokers, it is assumed that the money is with brokers. “The allegation is unfounded. We have asked underwriters that have documentary evidence to bring them out, so that we can do reconciliation. That was the advice we also gave NAICOM. The commission wrote us and we replied by telling them to ask underwriters to show evidences of premiums withheld by brokers. I would not say that brokers do not err, but brokers in the past are different from those practicing now.” “Brokers of these days are afraid of being sanctioned; hence, they abide by rules. So we are trying to practice professionally and ethically these days, and I can boldly boast of that. Why would anybody accuse somebody for no just cause? It is unfair. If it is possible underwriters can go to the insured to confirm if the premiums have been paid, instead of accusing brokers unjustly. But that may be going to the extreme for there is no contract between the insured and the underwriter. Since we bring the business, we should be allowed the freedom of contract.”

Law Union posts N4bn GPI By RITA OBODOECHINA aw Union and Rock Insurance Plc has posted a Gross Premium Income, GPI, of N4.20 billion for the financial year ended December 2011. The figure represents a four per cent increase from the 2010 figure of N4.046 billion. Addressing shareholders at the company’s 43rd annual general meeting in Lagos, Chairman of the company, Mrs. Adenike Adeniran said that earned premium stood at N4.181 billion and was 11 per cent higher than N3.770 billion recorded in 2010. She noted that investment

L

income for the period stood at N228.63 million as against N261.6 million in the preceding year. However, claims incurred (net of recoveries) reduced significantly by 21 per cent from N792.2 million incurred in 2010 to N653.72 million in 2011. According to her, management expenses stood at N619 million having increased significantly from N490 million in 2010 in line with an increase charge for repairs and maintenance cost following an increase in cost of maintaining the leasehold properties due to fire outbreak, increase in cost of maintaining pool cars, significant spending on

information technology, adjustment to salary scales and increase in cost of alternate power in line with deteriorating power situation in the country. She added that provision for doubtful debt rose significantly by 56 per cent in 201, accounting for the reduction in the profit before tax by 44 per cent from N384 million in 2010 to N170.6 million in 2011. Meanwhile, the Chairman said that the company plans to undertake a reorganisation of its staff and reduction of management overheads. According to her, the move is part of the strategy for the company to grow its business as it intends to block all financial drain pipes.

She said, “Whilst blocking all financial drain pipes, aggressive drive for collection of outstanding premium, penetration of oil and gas, strong banc assurance relationships, and partnership of other agency platforms are part of the strategies to be implemented by the company” “Introduction of new products, efficient IT systems, including improved welfare, prudent and profitable investment system, continued maintenance of relationship with insurance brokers as well as a drive for retail business, includes the strategies to be implemented”.

BRIEFS Insurers urged to reposition operations

W

orried by the spate of capital flight from the insurance industry, Chairman of Niger Insurance Plc, Mr. Bala Zakariya’u has urged insurance operators to reposition their operations to be able to underwrite big risks locally. The calling is coming on the heels of the trend whereby many of such risks are ceded to foreign insurers, leading to capital flight. Zakariya’u who stated this in Lagos said that structural weakness in the industry meant that most of the large insurance business was still being written by foreign companies, as such insurance practitioners should reposition themselves to tap into the developmental efforts of NAICOM so as to correct the structural imbalance. He said that NAICOM is forging ahead with its determination to deepen the market through its Market Development and Restructuring Agenda, MDRI, to meet the N6 trillion premium target on vision 2020 roadmap. Part of the strategy is the enforcement of compulsory insurance which has been on since 2011.

Social media poses risk to companies

T

he speed of social media and its lack of accountability make it more difficult to manage the risk of online attacks, the Aon Advanced Risk Finance Conference has heard. Aon Risk Solutions Australia Placement Director Ian Davidson says threats have spread beyond clients’ own businesses. “In the past clients looked at what they were doing; now they are looking at suppliers and joint venture partners, from where they are getting input,” he said. Davidson said the inaction of companies has also become an issue “if you are seen to be not doing enough”. Social media attacks can escalate quickly and are harder to manage because the outlets do not have the checks and balances of traditional media and corporations have not been able to build relationships with them. Mr. Davidson says it can be hard for clients to determine who is responsible for the risks.

C M Y K

28 — Vanguard, MONDAY, OCTOBER 22, 2012

Housing Finance BRIEFS Ogun seeks CDAs’ support on town planning

C

ommunity Development Associations (CDAs) in Ogun State have been advised to collaborate with the government in enlightening the populace on the need for strict adherence to town planning regulations. Permanent Secretary, Bureau of Urban and Physical Planning (BUPP), Mr. Taiwo Megbope, gave the charge while addressing some CDAs in Sagamu during the Bureau’s ‘Build Right’ sensitisation programme. A statement by the Information Officer, BUPP, Adeyinka Ogundaini, quoted Megbope as reminding the CDA officials that town planning laws are against erecting structures beneath high tension power lines, on land designated for major road projects and on waterways and drainage channels to prevent flooding, among other things. He said the programme was organised to sensitise the people on the need to adhere to town planning regulations, warning that those who contraven them would have their structures demolished. He enjoined the CDAs to sensitise their members to visit the nearest town planning offices in their areas for clarification, adding that the government derives no pleasure in pulling down structures.

UK mortgage lending drops

M

ortgage lending in the UK was lacklustre in September, sliding by 10 percent compared with the previous month when borrowing for home buyers reached a two-year high. The Council of Mortgage Lenders (CML) said lending totaled £11.6 billion last month, which is also 15 percent lower than a year ago, despite a recent boost to the availability of mortgage deals. An £80 billion funding for lending scheme was launched by the government at the beginning of August to kick-start the flow of credit, which has resulted in an increase in the choice of mortgages. But the CML said there have been recent signs of demand softening and last month’s fall appears to reflect a drop off in housing market activity.

A mansion in an exclusive Abuja neighbourhood

Stakeholders set to float Nigeria’s first mortgage refinance coy Stories by YINKA KOLAWOLE & MIKE EFFIONG

S

TAKEHOLDERS in the mortgage banking and housing finance sector in Nigeria have concluded plans to float the first mortgage refinance company in the country, known as Nigerian Mortgage Corporation (NMC). President of Mortgage Banking Association of Nigeria (MBAN), Mr. Abimbola Olayinka, disclosed this in his welcome address at the 2ndMBAN Housing Finance and Investment conference and Exhibition (MBAN-HOFEX) held in Lagos, last week. He disclosed that the major stakeholders involved in the project along with MBAN include both local and foreign bodies such as Federal Ministry of Finance, Federal Ministry of Lands, Housing and Urban Development, Central Bank of Nigeria (CBN), World Bank/IFC, International Financial Institutions (IFIs). He added that PISON Housing Company Limited has been formally appointed as the Project Manager/Advisor for the NMC, in line with the mandate received by MBAN from World bank/IFC and IFIs.

He however did not state when the company will take off. Olayinka noted that because of the key role mortgage banking plays in the provision of affordable housing in Nigeria, MBAN decided to organise HOFEX as an annual event to bring products and services nearer to and in the minds of the public, and to assure Nigerian that their home ownership dreams can actually become reality. According to him, to promote consumer

credit education for the sector, MBAN has been liaising with Trade and Professional associations in Nigeria such as Nigerian Institution of Estate Surveyors and Valuers (NIESV); Nigeria Bar Association (NBA); Nigeria Union Journalists (NUJ); Nigerian Institute of Architects (NIA); Lagos Chamber of Commerce and Industry (LCCI); Real Estate Developers Association of Nigeria (REDAN) on key

issues relating to the sector such as the Land use Act 1978. “The maiden edition of HOFEX held last year was a huge success with tremendous goodwill and support received from our stakeholders, and this has propelled us to ensuring continuity of the programme on annual basis. It is gladdening to note that the statutory regulatory/apex bank in collaboration with MBAN, is set to finally wind-down the consolidation/reforms of our sector in April 2013, we are very optimistic and our stakeholders should rest assured that post consolidation, they would witness a new dawn in the mortgage banking sector in Nigeria,” he stated. Declaring open the occasion, Lagos State Governor, Mr. Babatunde Fashola, who was represented by Commissioner for Housing Lagos state, Mr. Bosun Jeje, assured Lagosians and investors who want to do genuine business in the state of government’s protection at all times. He said that the governor is passionate about making affordable houses available for 18 million Lagosians. He expressed hope that the event will help to sustain the cordial relationship existing between the state and MBAN while wishing participants fruitful interactions. He expressed hope that the event will help to sustain the cordial relationship existing between the state and MBAN while wishing participants fruitful interactions. In his keynote address on “The Mortgage Banking / Housing Finance Sector in Nigeria-A Viable Platform for Wealth Creation and Affordable Housing”, CBN Governor, Mal. Lamido Sanusi, represented by Mr.Okpokor Ezewu, A Deputy Director, emphasised that mortgage banks can help create wealth by making adequate funds available to customers at the right time with low interest rate.

Demolitions: FCT warns potential home buyers

T

he Federal Capital Territory (FCT) administration has advised the public, particularly civil servants, to make adequate enquiries before buying houses in privately developed estates in the territory. The advice is coming in the wake of the recent controversial demolition of some houses by the FCTA in the territory. Dr. Yahaya Yusuf, Director, Development Control Department, FCT, advised civil servants in Abuja to make adequate inquiry before buying houses

in private estates. He said in an interview with the News Agency of Nigeria (NAN) that some private estate developers were creating the impression that they were building houses for civil servants. “Some private developers that are into such acts are going about with Abuja Municipal Area Council (AMAC) title documents and building plan backdated to 2004 which are invalid. In 2004, Malam Nasir El- Rufai, the former Minister of FCT, stopped AMAC from allocating land to people, and

two years grace was given to those with such documents to put structures on them or their plots would be revoked,” he said. Yusuf said that in view of the development, civil servants were advised to get clarification from FCT before making payment for offers from private developers. He cited the case of the estate with massive houses belonging to a private developer in Kyami on Airport Road that was demolished for failing to heed notices served by FCTA for it to stop work on the estate.

Vanguard, MONDAY, OCTOBER 22, 2012 — 29

Housing Finance

Ocean surge: Expert charges V.I residents on safety Stories By YINKA KOLAWOLE

I

n the wake of the ocean surge that recently ravaged the coastline of Lagos State, landlords and residents of Victoria Island have been urged to take more responsibility in ensuring the safety of the highbrow island. A renowned realtor, Mr. Bode Adediji, gave the charge in a recent exclusive interview with Vanguard. He noted that by virtue of their status in society, they can form a pressure group that cannot be ignored by government. “I will like to lay some measure of blame at the doorstep of property owners in that particular environment. For upwards of 40 years now, this is one region that has set the pace continually in property value appreciation, capital value, and rent generation capacity, much more than most other premium locations in cities like Abuja and Port Harcourt. Until the late Mrs. Oye Williams set up the VI and Ikoyi Residents Association (VIRA), no single concerted effort could be traced to any person or companies to salvage VI. Landlords and tenants in VI, who by virtue of what they do look like even who is who in Nigeria, should do more to work as a pressure group and join hands with both the Lagos State and Federal governments in finding a permanent solution to the effect of the ocean surge on the VI environment and property,” he asserted. Prompted on what government can do to arrest the situation, Adediji who is also the immediate past President of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), said government should roll out the required engineering solution which involves a lot of investment. In so doing, he noted, “can transform a larger expanse of that environment into a first class real estate asset arena and through which the funding for that engineering investment can be recouped.” On the safety of Victoria Island in the face of the ocean surge, the chairman of Bode Adediji Partnership remarked that VI is relatively safe. “In terms of my knowledge regarding the cycle of ocean surge in VI in the last 31 yrs, I will say that

VI is relatively safe to a large extent. Also, as an international real estate practitioner, who has had the privilege of visiting other countries with similar experiences and exposures, I will certainly say that VI is safe but with a big caveat that in all those other countries where the certainty of the coast line is stronger and

safer, they have not done those things that should have been left undone, and they have not left undone those things that ought to have been done. “Where you see a serious minded country, any time a particularly strategic environment show some vulnerability concerning the issue of mother nature,

proactive man-made efforts usually provide assurances and safety nets, all of which are unfortunately lacking in our clime. I can expatiate further that the fury of ocean world-wide is known and predictable. For example, one of the most exciting coastal front and beach area anybody would like to go is Miami Beach.

Possible effect of ocean surge

Abuja workers groan under high rent W

orkers in Abuja have continued to groan under the burden of high rents in the Federal Capital Territory (FCT). Some of the workers who spoke to the News Agency of Nigeria (NAN), complained of pains and psychological burden associated with the payment of exorbitant house rents in the territory. Mr. Akubor Yahyah, a civil servant who resides in Kubwa, a satellite town in the FCT, said that he pays about N400,000 for his onebedroom flat. He said that failure to pay his rent before expiry would mean that the landlord or the agent would give the house to another person willing to pay two years rent. He called on the Federal Government to intervene in the matter by putting in place a rent control policy to check the excesses of landlords. Mr. Muhammed Ahmed, a resident of Wuse 2 and a civil

servant, said that he pays N1.3 million for his twobedroom flat. According to him, the rent was N800,000 in 2010 but it was increased last December, stressing that the increment was a burden. Ahmed who is a father of four, noted that as a civil servant, the heavy rent, school fees and other necessities had made it difficult for him to have savings. As for Mrs. Precious Akingbade, a single mother of two, she said that she was forced to pack to Keffi, in Nasarawa State, because she could no longer pay for her one-bedroom flat at Wuse. Akingbade, who works at one of the federal parastatals, said she was paying N750,000 before it was increased to N1.5 million, forcing her to move to the neighbouring state. “I was paying N750,000 when the agent suddenly told us that the landlord has increased

the rent to N1.5 million. With two kids to cater for in this kind of expensive place, I have to move to Keffi, Nasarawa State, where life is cheaper. I plead with government to find solution to these shylock landlords and their agents in Abuja,” she said. Miss Zainab Momoh, a newly-employed civil servant, urged the government to review its housing policy. “I just finished my national youth service and I got employment where l served and was posted to the FCT. Now, I am not sure I can cope with the house rent here with my salary unless they want me to steal. How can anyone be paying N250,000 for a single room in a place like Kuje where there are no social amenities. It is so frustrating to see few people live well while others suffer because they don’t have money, it’s not as if one is not working,” she lamented.

BRIEFS SA bank to boost Nigeria’s real estate with N39.5bn

S

outh Africa’s second biggest financial services company, FirstRand, has concluded plans to invest N39.5 billion into the Nigerian real estate sector. The bank said it is considering real estate investment across major West and Southern African market, particularly, Nigeria, Ghana and Angola. In an e-mailed statement, Michael O’Malley, Director of Johannesburg-based RMB Westport, said the money will be used to supply the strong demand for high-grade retail and commercial property. “Nigeria, Ghana and Angola have been earmarked as key jurisdictions in which to develop retail and commercial property. Over the past decade, African economic output has more than tripled, which is one of the many reasons we believe that Africa today holds the greatest overall investment potential for all frontier markets globally,” he said. A report said that an increasing proportion of Africa’s population is moving into urban areas as economic growth quickens, with houses and malls being built in major cities including Accra, Abuja and Luanda, the capitals of Ghana, Nigeria and Angola respectively.

US mortgage rate falls to near-record low verage US rate on a 30year fixed mortgage has fallen to near its record low set earlier this month. The rate on the most popular mortgage dipped to 3.37 percent from 3.39 last week, mortgage buyer Freddie Mac said. Two weeks ago, the rate reached 3.36 percent, its lowest level on records dating to 1971. The average rate on the 15year fixed mortgage, often used for refinancing, set a record low of 2.66 percent, down from last week’s 2.7 percent. “Mortgage rates remained more or less unchanged this week as home construction builds up steam,” said FrankNothaft, vice president and chief economist, Freddie Mac. The average rate on the 30year loan has remained below 4 percent all year. And rates have fallen even further since the Federal Reserve started buying mortgage bonds in September to try to encourage more borrowing and spending.

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30 —Vanguard, MONDAY, OCTOBER 22, 2012

ICT BRIEFS Oracle boosts Nigerian businesses with SRM suit hief Executive Officer of Oracle, Mr Larry Ellison last week announced that the Oracle Social Relationship Management (SRM) Suite his company has introduced to businesses in the country, will enable Nigerian companies to listen, engage, create, Market and analyze interactions across multiple social platforms in real-time. Besides all these functions, the suite also provides for users, a holistic view of the consumer. Oracle Social Relationship Management Suite is integrated with Oracle’s enterprise applications, including Oracle Fusion Marketing, Oracle Fusion Sales Catalog, Oracle ATG Web Commerce, and Oracle Enterprise Resource Planning (ERP), allowing organizations to use social to transform their corporate business processes and systems.

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MainOne lists in IDC-G global footprints

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igeria’s broadband cable company MainOne, was last week listed among members of the International Data Centre Group, IDC-G’s, global footprints. IDC group is the first global data centre alliance and MainOne’s addition into the alliance represents a debut of West Africa into the global footprint of the group. Announcing the listing, Executive Chairman of International Data Centre Group, Mr Guy Willner, described MainOne’s CEO Ms Funke Opeke, as “an exemplary visionary who has made a great impact on the African market, especially in Nigeria. We cannot be more pleased to have such a major player in West Africa on board,” Responding, Opeke said that “the alliance with the International Data Centre Group will create knowledge sharing platforms which we can leverage to strengthen our data centre operations in West Africa. In addition, the business networking opportunities will help raise the awareness of the tremendous opportunities for data centre operations in West Africa”. C M Y K

STORIES BY PRINCE OSUAGWU

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he Nigerian flag systematically went up to the rooftop of the Birchwood Hotel and Conference centre in Boksburg, Johannesburg, South Africa, last week, when some Nigerian secondary school students drawn from Rivers, Benue and Akwa Ibom held their own and won four awards at the Eskom Expo for Young scientists. The projects that won the awards for the Nigerian students,competed against over 600 projects by students from South Africa and other African countries. The students were sponsored by renowned technology company, Intel, as part of its efforts to improve interest in science education and technology. Calvary Arrows Secondary School, Gboko won a special award for innovation and novelty in Engineering. This school located in a rural community developed a multi-powered lawn mower that can be p o w e r e d b y electricity, batteries or solar energy. They smiled home with two thousand Rand prize money. This is aside another silver medal in the mechanical, aeronautic and Industrial Engineering ca t e g o r y. Ni g e r D e l t a S c i e n c e C o l l e g e Port Harcourt won a bronze medal for their investigation on an automatic multi-phase selector with a generating plant while Community Secondary School Aka Ufot in Akwa Ibom state won another bronze medal for their work

ALL FOR ITU: From right: Executive Vice Chairman, Nigerian Communications Commission (NCC), Dr. Eugene Juwah; Hon. Minister for Communication Technology, Mrs. Omobola Johnson and Director, Regulatory & Government Affairs, Etisalat Nigeria, Mr. Ibrahim Dikko at the Etisalat Nigeria stand during the International Telecommunication Union (ITU) 2012 Conference, held in Dubai recently.

Nigerian students win 4 awards at South African science fair in producing plastic materials from simple cassava extracts. Corporate Affairs manager of Intel, Osagie Ogunbor reacting to the feats, s a i d that t h e performances of the students validate the relentless nature of the Nigerian spirit in the face of daunting infrastructural

challenges especially in the Educational sector. He s a i d that besides flying Nigeria's flag high in foreign land, the students had also done Intel Nigeria proud for its investment not only in sponsoring them to the fair but also organizing the annual National science fair for all secondary school students in

partnership with Shell Petroleum Development Company. The Eskom Expo for young scientists is over 30 years old and about the biggest science fair for secondary schools in South Africa. Intel International also has a Science and Engineering Fair (ISEF), which holds annually in the United States.

Ericsson flags-off annual mobile application awards

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n d - t o - e n d telecommunications solutions provider, Ericsson, has flagged-off its annual apps competition and awards for young mobile apps developers. Developers, startups and anyone who has an idea for a great app, now have the opportunity to enter and win as this year there will be a global competition and several regional competitions. First prize is EUR 25,000, second prize is EUR 10,000 and third prize is EUR 5,000. The Ericsson Application Awards give participants and their team the opportunity to gain a foothold in the app industry while also earning recognition and making contacts within the telecom industry. This year there will be two

categories; one for students and one for small and medium-sized enterprises with fewer than 100 employees. The theme for this year’s ompetition is “Apps for City Life”, in support of Ericsson’s vision for a Networked Society in which – through a combination of mobility, broadband, the cloud, applications and services – anything and everything is connected. Teams need to develop an application based on the Android platform that addresses the theme. Last year’s winner in the company category was a mobile healthcare app developed in Kenya. First prize in the student category, meanwhile, was awarded to a painting and chatting app developed in

China. Finally, a medico-social platform that provides access to medical information developed in Egypt won the Technology for Good prize. In all, 143 teams from more than 50 countries took part and a total of 242 ideas, videos and apps were submitted – twice as many as in the previous year. This year, several prizes will be awarded in each category which includes: First place: EUR 25,000, Second place: EUR 10,000, Third place: EUR Kamar-Abass, Country Manager, Ericsson 5000 and Fourth and Nigeria fifth place: certificates

Vanguard, MONDAY, OCTOBER 22, 2012 — 31

Aviation Stories By LAWANI MIKAIRU

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he Joint Action committee of the Air Transport Services Senior Staff Association of Nigeria,ATSSSAN, and National Union of Air Transport Employee, NUATE, have drawn the attention of the public to what they alleged are offences of the Aviation Minister, Princes Stella Oduah. The unions alleged that the minister single-handedly concessioned the automation of "supposedly revenue collection of the parastatals under her ministry, without recourse to other agencies saddled with the responsibilities of ensuring international best practices. "And that their intervention saved the parastatals and indeed Nigeria about One hundred million US Dollar that would have been stolen by these elements.’’ But in a swift reaction, the Minister through her Special Assistant, Media,Mr Joe Obi debunked the allegations of the unions and said that the unions were consulted and were fully involved in the process of automation of revenue collection at the agencies. According to Mr Obi, ‘’On the automation of revenue collection at the agencies, it is a huge lie, and in fact, mischievous on the part of the unions to insinuate that the Minister single-handedly ordered the exercise. To be sure, the unions were fully involved in series of meetings on the subject-matter after which they unanimously gave their endorsement to the initiative which, it must be reemphasised is aimed at plugging the haemorrhaging leakages in the system.’’ ‘’ Mr Obi further said it is false ‘’ that a certain $100 million dollars may have been saved through the intervention of the unions with respect to the automation procedure.’’ The unions raised alarm about what they call ‘’ invasion of the industry with men and women of various shades of doubtful characters who are being distributed like bread into offices which some of them are unfit, unprepared and unqualified to occupy.’’ Though they admit that the government has the prerogative of transferring and or redeploying staff to other agencies within the industry, but they condemn in very strong terms, ‘’the unscrupulous and unwholesome invasion of our agencies by locusts and grasshoppers who are being compensated by the Minister of Aviation for their involvement in the neighbour to neighbour campaign and through sheer political patronage’’ They further alleged that the Minister has a penchant for undue interference in the day to day running of the aviation

Aviation workers, Minister bicker over automated revenue collection

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Aviation Minister, Princes Stella Oduah

The aviation sector should be saved from in- fighting as the safety of air travellers could be affected. A work force that is unhappy cannot perform their duties diligently. Considering the delicate nature of the aviation industry, an inappropriate action or inaction on the the part of staff on duty could compromise safety

agencies. And that their members who have been examined, tested, interviewed and found suitably qualified to become management staff and awaiting approval letters and or promotion letters to

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these higher offices have been denied because of recent redeployment and promotions in the ministry. According to them ‘’ some unqualified elements are being decorated with the toga of General

Managers without the prerequisite experience, expertise, skills and qualification as stipulated in the public service rules and or the subsisting Conditions of Service in the various agencies. To add insult to an already sore wound, the Minister of Aviation has approved that a fresh four year old University graduate, without any sense of public service duties, be made a General Manager whereas it takes about twenty to twenty five years to attain the prestigious title of a General Manager in this industry’’ But the Minister has countered this by saying the union members are employees of the Federal government and have to abide by service rules . "The point has to be made that union leaders in the agencies are first and foremost, employees of the federal government. They are therefore subject to the same rules and regulations governing Civil Service in respect of transfers, redeployment, postings, etc’’. On the ongoing remodelling of airports which the unions said did not follow due process; contractors are unknown and nobody knows the costs of the projects ,Mr Obi said ‘’ In order to carry everybody along in the transformation of the sector, the Honourable Minister initiated a process of stakeholder engagements that culminated in the Aviation Sector Road Map and Master Plan. It is pertinent to mention that all the Aviation sector Unions were part of this stakeholder engagement process. Their views in support of the repositioning of the sector along these lines are on record.’’ The aviation sector should be saved from in- fighting as the safety of air travellers could be affected. A work force that is unhappy cannot perform their duties diligently. Considering the delicate nature of the aviation industry, an inappropriate action or inaction on the the part of staff on duty could compromise safety.

FAAN concerned about handling of toilet facilities by concessionaires F

ederal Airports Authority of Nigeria, FAAN, has expressed concern over the poor state of the toilet facilities at some airports, as a result of concessionaires’ inability to maintain the facilities to international standards.

A statement by Mr Yakubu Dati , General Manager, Corporate Communication, FAAN, said all concessionaires handling toilet facilities at all airports have been directed to live up to expectation in the discharge of their duties, or have their contracts reviewed.

The statement further said that FAAN finds it unacceptable that its brand new facilities, meant to enhance the comfort of the travelling public are rendered unusable, as a result of poor maintenance by the concessionaires’ in-charge.

BRIEFS Automation: NAMA tells employees not to panic By DANIEL ETEGHE head of the planned automation of all the aviation agencies by the Federal Government, Managing Director of the Nigerian Airspace Management Agency (NAMA), Engr Nnamdi Udoh has assured employees of the agency that such automation will not lead to loss of jobs. Assuring the staffs during a meeting of the National Union of Air Transport Employees (NUATE), NAMA branch Engr. Udoh said that he would not be a party to signing any dismissal letter of any of his workers.He however implored the workers to work together in harmony as that was the only sure way to move the agency forward as well as bring progress. According to him, NAMA has continued to forge ahead in spite of all criticisms stressing that the agency was based on solid foundation and strong focus of its management. “Automation will never lead to job losses in this agency. I will not be party to signing any dismissal letter of any of my workers” he said. While appreciating Engr. Udoh for his gesture, the President of the National Union of Air Transport Employees (NUATE) Comrade Safiyanu Mohammed said the union does not have any misunderstanding with the management of NAMA adding that there was only breakdown in communication between the duo.

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FG seals firm in Port Harcourt for contravening Weights law

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r Abeng Ovat, an official of the Federal Ministry of Trade and Investment, has announced the sealing of a construction firm, PRODECO, in Port Harcourt for violating a federal law. Ovat, the Coordinator of Weights and Measures Department of the Ministry in Port Harcourt, said that PRODECO was sealed for “non compliance with Section 17 of the Weight and Measures Act, 2004``. He told newsmen in Port Harcourt that PRODECO was sealed to serve as deterrent to others. ``

32— Vanguard, MONDAY, OCTOBER 22, 2012

Interview By OMOH GABRIEL and EMMA UJAH who were in Tokyo

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t the just concluded IMF/World Bank Annual Meetings in Tokyo Japan, the Nigeria delegation led by Dr. Mrs Ngozi Okonjo-Iweala had an interactive session with the Nigeria media representatives at the Imperial Hotel, Tokyo. In the company of the CBN Governor Sanusi Lamido Sanusi, the duo fielded questions from reporters. They spoke of the lessons learnt from the meeting, the rationale for the $75 per barrel oil benchmark for 2013 budget, the effects of the dollarisation of the Nigerian economy, the World Bank facility waiting for Nigeria to use among others. Excerpts What plan do you have in engaging the legislatures to see reasons with you in maintaining the 75 oil benchmark? Okonjo-Iweala On the issue of the benchmark, the president presented the budget at the benchmark of $75 but the House of Representative said they want it at $80 per barrel. The Senate has made no pronouncement on the issue of benchmark price at the moment, so I do not know the full position of the National Assembly. But I believe because what I have heard from the members of the Senate is that they also believe that $75 is a reasonable price but for the House of Representative, I heard them are saying they will like to make some inputs. They are insisting on making inputs into the budget. We are working with the finance and the appropriation committees. We have been talking to them both in the senate and in the House of Representative. Our job is to present all the logical reasons why this is the right thing to do for the economy, and try to show them that this is not out of sentiment because benchmark prices are not issues one will just sit down in a room and make up, they are based on fundamental economic analysis and we actually have a model which we have been using to project the Nigeria oil benchmark over the past two years. So, we have to have an approach because if you do it in an arbitrary fashion, which means that at any point in time, you don’t have a base to defend why it is this number as opposed to the other number. So, we are very much ready to discuss with our colleagues. We understand the issue that they want; they are saying that they want to reduce the deficit, they want us to spend more, and we have addressed the issue of spending more. I think we have given enough room, actually the figure should have been $72 a barrel and to give the country the room to spend more, we adjusted the model a little bit and came up with $75 to allow a little bit of a buffer, and accommodate the concerns. Now saying that because we did that they will now jump it by another $5 to $80, is taking

Increasing crude oil does not increase g

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First of all, historically, even when we got the benchmark of $75, if NNPC under-performs in crude oil output, your effective benchmark is less than that $70 because you have already budgeted how much you are going to spend

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the economy in a direction and I can’t say it enough. Professionally, neither the central bank governor nor myself advised that this is good for the economy and you have universally heard all the economic analyst in the economy. None of them has said that the $80 is the right way to go; none that I have listened to, from Bismark Rewane to Frank Nweke Jr, all those that had so far commented; no one has said this is not the right way to go. Two things here, first you have to listen to those who will be impacted by the budget and we have to listen also to basic professional reasons why this should not be done. Managing the economy is not a popularity contest, and there is a bit of reason to it, that is why we went to school to study how to do it. If anyone can just wake up and then just manage the economy anyhow; that is why economy is going the wrong direction, because sometimes, something that is populace or you think this is the right thing to do may not be the right way to make that economy work. The only reason why African economies are growing today is simply because African countries did the right thing in terms of economic policies in the last ten years and now they are reaping the rewards; so that is what I have to tell you about our engagement What was the second question, or you want to comment. Sanusi If I can talk on the benchmark, because I think we also need to help guide some of the arguments. First of all, increasing benchmark does not increase government revenue; government revenue

comes from how much oil you sell and at what price. Increasing the benchmark increases the amount of money to be spent and I think it is important to note that. Now how do you address some of these issues? First of all, historically, even when we got the benchmark of $75, if NNPC under-performs in crude oil output, your effective benchmark is less than that $70 because you have already budgeted how much you are going to spend. Okay some of the work that is being done now is to make sure that NNPC performs on output. If NNPC produces and the bulk of the production is in deep offshore, government earns less, which hurts government revenue. If you have leakages from bunkering, that hurts government revenue and we think we need to look at what finance is doing. All well and good, increasing the benchmark is not the solution, the solution is to block those loopholes and that is what I told the National Assembly don’t focus on moving from $75 to $80. What you are looking at is $5 dollars per barrel difference, you are getting much more by stopping bunkering, by

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increasing transparency and accountability in NNPC, by pushing NNPC to meet up with production benchmarks and by renegotiating the fiscal terms of the oil companies as well. If you look at FIRS, diversifying the revenue base of the government, increasing all revenues sources— from the port reforms; all of these things are bringing in much revenue than just increasing the benchmark because that benchmark simply reduces the amount of saving by spending it today. The second thing to remember is, they talk about infrastructure and the needs of Nigeria, there is not enough money in government to meet infrastructure. You achieve much more by creating an environment that allows private investment to come in by trying to intermediate, say all the money you have in pension funds into these infrastructure requirements, so people should not just say that the government balance sheet is only source of finance for the economy. Capital expenditure may be 20 per cent of the budget, but if you put in enough reforms to attract money for every $1 the government puts into the economy, you can get $5 or 6 of private capital into the economy and these are the kind of things that I think as economist, we need to be looking at. These are the questions you need to be asking in terms of what are the reforms taking place that are likely to result into this kind of inflow.

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igeria is not attracting enough foreign investment, what is the true position? Sanusi: Now, the point you

I think we have given enough room, actually the figure should have been $72 a barrel and to give the country the room to spend more, we adjusted the model a little bit and came up with $75 to allow a little bit of a buffer, and accommodate the concerns

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Okonjo-Iweala made about investment. Nigeria had the highest level of foreign direct investment among African countries this year. We got 25 per cent of all direct flows into Africa, we keep the numbers, we keep them at the Central Bank because we are hearing about what is hot money, what is stable money; we don’t want to have currency crisis. If you ask Sarah, she can give you today, as at today on a weekly basis, we have the total amount of foreign funds that has come in and into what areas. With what is happening to power, with infrastructure reforms, we wouldn’t get money into those areas, so we wouldn’t get FDI; FDI will come once the reforms move on and people like the stability and they like the yield and they like the returns, so it is not correct that Nigeria is not attracting foreign investment. Nigeria is getting the lion share of FDI into Africa. What I feel is important is to get that FDI into the right areas, the areas the CBN is promoting - power, infrastructure, the structural changes that we want to achieve. These are the kinds of arguments that we need to put up so that we wouldn’t get bogged down with increase benchmark from $75 to $80.

Vanguard, MONDAY, OCTOBER 22, 2012 — 33

Interview

e oil benchmark price se government revenue

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Sanusi I think one of the things we felt consistently is that they felt that we are doing the right thing

There is no magic that adding $5 per barrel you have some immediate solution. It doesn’t solve the problem of quality of spending, it doesn’t solve the problem of attracting foreign investment, in fact it may make it worse, and it may hurt our credit rating. We’ll be seen as irresponsible when everybody is doing austerity we are spending; when everybody is saving, we are throwing it away. It might hurt our credit rating and increase the cost of borrowing for us.

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he question of the dollarization of the Nigerian economy Sanusi: The dollarisation of the economy is a big problem for all of us and it is something that we are going to work toward somehow, but one major plank of that dollarisation was the N5000 Note because one of the reasons people go for Dollar and this is the reality, if you fight devaluation over sometime, the Naira is not just a medium of exchange, its still of store value. If your currency looses competitiveness as a store of value, you have a problem. You want to carry people, carry $10,000 that is

N1.5 million in your pocket. 70 per cent of the dollar that people buy from outside are not for transaction outside Nigeria; they move the dollar from one part of the country to another. In fact, from one part of Abuja to another part, and in a brief case you can carry hundred thousand dollars, that’s N50 million. Part of the logic for reducing high denomination is to provide genuine high value cash users with a note that is a store of value as our first step towards our attempt to eliminate because the dollar has become the second national currency. We are all worried about it and we have been coming out to make policies where we are going to stop selling cash to other…create the account, if you want to pay for medical bills abroad, give the hospital account, if you want to pay school fees, do transfer like everybody else, if you want to travel, do travelers checks and get the card, instead of all these people moving around with dollars. But then, what will happen, you want N3 million transaction, you have to carry two bundle of you know this part of the logic of bringing in a higher denomination for people who

The dollarisation of the economy is a big problem for all of us and it is something that we are going to work toward somehow, but one major plank of that dollarisation was the N5000 Note

do high value cash transactions to reduce the amount of papers and why do I ask that question, it is because you are now beginning to see some of the concerns that we have as managers of the economy because we have to print so much paper and its because people don’t want to carry so much load that they are carrying dollars, that is part of the reasons why they are caring dollars and we cannot let it happen in America. You can’t just go and transact with Pounds Sterling, you cannot do it…but we will deal with it, it will stop. hat are we taking away from these meetings?

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Okonjo-Iweala Firstly, the global economic environment is still uncertain. The Eurozone has contracted, America’s recovery is fragile, therefore countries have to take care to build buffers, particularly countries that are growing like Nigeria has to take care to build up some buffers as some safeguard now. We are already doing it that is the good news. That is what CBN Governor is talking about; the collaboration between fiscal and monetary policies. You know on the monetary policy side he is doing what he needs to do in reaction to what the fiscal authority do. If we spend too muc,h he has to protect and defend the naira and fight inflation, so he has been

doing that. On our own side, we have been trying to be prudent, that is how I will put it because I believe we have also given quite enough room for spending. Like the governor said, the quality of spending is important so we are taking away the message from this place. Build the buffers; channel your spending into the right areas so that you can get impact and the impact we are looking for in Nigeria is the creation of jobs because we just do not want to grow. We want those sectors like agriculture, we are channeling resources into agriculture, into infrastructure, and even to human development in other to make sure that we grow inclusively, meaning we also target those who are at the bottom line of the ladder and generally, we are getting an endorsement for these approaches. The third message is on disaster management and reduction, we are also getting the message that we should build into our economic development approach. You know the issue of how to prevent and manage disaster and the Japanese have written a paper for everybody because of the disasters they have had, and they gave a lead paper where they talked about the approach for doing this and we have also taken away that message from there. Giving a slot, first thing is letting the international community know that we have had flood disasters and that Mr. President is doing everything to try and help us deal with this issue with our own resources and that, those who will also want to support us are welcomed to do so. Sanusi I think one issue the minister mentioned now is that we have just met with the World Bank team, and we are going to meet with the IMF and this is not something to be discussed publicly. I think one of the things we felt consistently is that they felt that we are doing the right thing. We are actually doing the right thing at this point in time and I think we should continue to do exactly what we are doing. I think it is an important message in form of feedback using Nigeria as an example for what other Africa countries should be doing. You heard her when she said it publicly in her speech and this is the message we continue to repeat privately that they have encouraged us to continue to do what we are doing and I think it is important for opposition back home to understand that those who are in this field, that are saying what we are doing is the right thing and for them, they should at least trust the judgment of the people. When they said, ‘look what you people are doing is the right thing, we encourage you to continue doing it.

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“Why is it that the principles of economics which work anywhere else in the world don’t work in Nigeria”, asked President Ibrahim Babangida, IBB, out of exasperation in the 1990s. In my letter to the Guardian Editor, my reply to IBB, was simple. The principles of economics presumed that the people adopting them are reasonable and honest. Nigerians are neither reasonable nor honest”. We still are the way we were during IBB’s government. AMCON is another testimony to the fact that measures and policies which have produced outstanding results worldwide fail in Nigeria because those placed in charge collude with dishonest people to guarantee failure. The Assets Management Corporation of Nigeria, AMCON which was established in July 2010, when trillions of bank loans became toxic, similar to the Troubled Assets Relief Programme, TARP, in the US, during the global financial crisis, has failed to turn the fortunes of Nigerians around because the funds provided for AMCON operations have again fallen into the hands of the same dishonest people who made AMCON inevitable in the first instance. Consequently, banks have no funds to lend, domestic investment has come to a halt and jobs are not being created – while government officials lie about it. The Nigerian Government is one organization which operates according to the counsel of not letting your right hand know what your left hand is doing. A sign should be placed on the front entrance of every Ministry or government agency saying Situation Normal, Everything Fouled Up, SNEFU. Secrecy is even strictly maintained between agencies and their supervising Ministries. Many

AMCON, Bank lending and jobs –2

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AMCON became necessary because the Central Bank of Nigeria, CBN, under Professor Soludo, allowed banks to siphon funds out of the banks for illegal and corrupt practices. It is only now that the CBN and the National Assembly, which should have been performing their statutory oversight and supervisory functions, are now paying attention

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readers, with not even long memories, would recollect how one Minister announced that his Ministry had created 1.3 million jobs. When I raised an objection, it turned out that the figures originated from a bank supervised by the Minister. When contacted, the bank reported back that only 300,000 jobs had been created. Even that claim could not be substantiated. Lying, with a straight face, is rapidly becoming the trademark of many officials of the Jonathan administration.

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MCON is the latest of the many agencies of government which we establish for the accomplishment of a lofty aim but which soon become bogged down in corruption and endless probes. Meanwhile its original

mission, which is to buy toxic loans from banks, and to negotiate with the debtors, more like dead beats, to accept more lenient repayment terms, on condition that they will then repay, as and when due, for the funds to be returned to the pool for lending to new ventures. Almost all the toxic loans were incurred by large companies owned by people close to the corridors of power. Small and medium scale enterprises accounted for next to nothing among the toxic loans for two reasons. While banks, for reasons soon to be disclosed, don’t waste time perfecting the loan agreements with small scale enterprises and very speedily move to recover their loans when necessary, they seldom move against the “billionaires” whose

companies have taken loans. Yet, it is the BIG businesses which continue to attract loans from banks. Furthermore, on account of deliberate corrupt practices, loans to habitual bad dead beats are never fully perfected. Thus when they default, the bank has a tough time collecting. Another variation of the scam is for the directors of the banks, especially the Managing Directors, to lend to their own companies, or those of their relatives. When those loans become toxic nobody can collect. That was made clear in the Cecilia Ibru case and the same pattern is repeating itself in all the cases now going on in court. Invariably, funds, meant for lending to hundreds of thousands of honest small business people, are taken out of the banking system by a few people who don’t pay back. AMCON became necessary because the Central Bank of Nigeria, CBN, under Professor Soludo, allowed banks to siphon funds out of the banks for illegal and corrupt practices. It is only now that the CBN and the National Assembly, which should have been performing their statutory oversight and supervisory functions, are now paying attention. That is akin to bolting the ranch gate after all the cows have fled because, once again, public funds have, through deliberate corrupt practices have been allowed to disappear into private nonproductive pockets. Unlike the Troubled Assets Relief Programme, TARP,

which had helped to sanitise and stabilize the US financial markets, AMCON has made very little progress in that regard and is even prone to deepen the problems in the future. While TARP had recovered $256 billion by August of 2011, more than the $245 billion which the US government pumped into it, AMCON has failed to recover up to half of the taxpayers’ money that was devoted to that copy-cat measure.

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he reason is not hard to discover. While the managers of TARP, without exception, were people with names and integrity to protect, the same cannot be said of their Nigerian counterparts. And, while TARP, operated in a country with respect for institutions, ours is a nation in which persons selected to manage institutions, especially those controlling large sums, regard their appointments as their own share of the national cake. No Nigerian institution, especially where large sums are involved, had lasted for more than two years without a scandal erupting. AMCON is now under suspicion of a major scandal involving high profile debtors who have also been involved in serial questionable financial transactions. Nothing points to deliberate collusion more than the list of those who were recently blacklisted by the CBN from obtaining bank credits until further notice. Let us focus on two, whose names have appeared on virtually every scandal in this country in the last five years. This is vital because every professional banker or financial expert knows that one of the principal criteria for granting credit is character –which has many elements. But, the cardinal attribute is wellestablished integrity.

Business & Economy

Wamakko orders payment of salary before Sallah, sets up subsidy fund management ov. Aliyu Wamakko of Sokoto State on Friday directed the state Ministry for Finance to pay the October salaries of civil servants before Sallah. The directive was contained in a press statement issued in Sokoto by Mallam Sani Umar, the Senior Special Assistant to the governor on Media. It said the governor also directed for the payment of N18,000 minimum wage to local council workers within the next 30 days. The statement said the Ministry for Local Government and Chieftaincy Affairs was ordered to liaise with the

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office of the Head of Service to effect the payment. Meanwhile, Wamakko has inaugurated a 13-man

committee on fuel subsidy fund reinvestment, under former governor of the state, Alhaji Yahaya

Abdulkarim. He directed them to develop a plan to ensure prudent management of the fund and

its investment in viable projects that would have positive impact on the lives of the people.

Shipper advises FG to expedite maintenance dredging of River Niger shipper, Mr Christopher Okorie, has advised the Federal Government to expedite action on maintenance dredging of River Niger to avoid recurrence of flooding. Okorie, the Chairman, Phonic Marine Ltd., told the News Agency of Nigeria (NAN) in

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Port Harcourt that maintenance dredging, which should be quarterly, should also apply to other waterways. The News Agency of Nigeria (NAN) recalled that the National Inland Waterways Authority (NIWA) said it had completed the capital

dredging of the river more than two years ago. Okorie said that maintenance dredging would facilitate regular usage of the river by vessels and would also checkmate the water level. “This is why government should pay proper attention to maritime sector and

encourage water transportation. The flood will not have taken us by surprise if we have been using vessels and boats on our rivers and seas. We would have known practically the surge of the water if we have been conversant with the waterways.

Vanguard, MONDAY, OCTOBER 22, 2012 — 47

Advertising, Media & Marketing

Telecom industry: Marketing strategy freak out, challenges & resilience

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Shoprite staff Ibrahim Yau (second left), Administrative Manager Shoprite, Aisha Bolakale and the matron of the Kwara State Children Reception Centre, Hajiya Iyabo Aduke Maiyaki, the children and staffs of the centre during Shoprite Help-Change-A-Life donation to the Centre recently. The issue of affordability was huge (but as huge as it was in the fixed telephony days); road networks to traverse rural towns to plant network masts and maintain them were either unavailable or in bad shape. There were also the issues of contending with traversing the hinterlands. In summary, penetration and sustainability were issues. Notwithstanding, MTN set out to surmount the scales of challenges in their degrees by a sheer ‘can-do’ spirit that meant, back then, the

company was prepared for the distance. While some of the early starters have witnessed about five transitions, MTN has sustained its brand image, thanks to the brand’s ‘can-do’ spirit, continuous network swap outs and expansion – strong reasons it stays top. As tricky as the map of survival appears, the testimony of those who took the route can never be undermined. Econet Wireless was sold to Vodacom, then to

Vmobile, to Celtel, Zain and Airtel. The thin line that still sustains the network is not managerial competence or innovations. It is the viability of the business itself which only the strong can hold for long. MTN has thus proven with an admirable strength of soul and force of habit – that it is a long distance runner. The same fundamental objectives that brought in the aforementioned companies have also brought in telecoms companies like Glo and Etisalat.

GHD: Break chain of infection —Dettol tells kids ...targets 1.2m kids ettol, the flagship brand of Reckitt Benckiser Nigeria Limited has urged children to break the chain of infection as it embarks on Handwashing campaign in schools to mark 2012 Global Handwashing Day (GHD), even as it targets 1.2 million kids. The campaign tagged; ‘Good Health in our Hands’ was fused into the programme, “21 days to a Healthy Hands habit with Dettol” and was organised to sensitize the students on the importance of hand washing and how to wash their hands properly, the company said. Speaking, Mrs. Ofulue Esther, Head of Primary, Queensland Academy,

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Shoprite opens in Ilorin hoprite, a South African multipurpose retail store group will be opening in

Stories by PRINCEWILL EKWUJURU look at the telecommunications industry, one will conclude it has fared well despite challenges inherent on achieving their objectives. History, they say, accounts for great leaps, endurance, and extraordinary drive. We hardly recognize them when it is past, but only recognised in comparison. Simply, resilience is the ability to survive extraordinary challenges. Challenges come in diverse forms, human or machinery. Challenges have degrees and the Nigerian telecommunications industry has known a higher degree of that. Overtime, the telecommunications industry was chaotic and restricted to a regimental portfolio which lined the Nigerian cosmopolitans with muddled cables and poles that made an eyesore of a civilized society. We have to remember that it was into this unwholesome environment that the GSM network operators that have invested in the nation, put their resources with a courage that has never received enough appreciation. MTN and others are references. Consequently, these companies were a few of the gains of Nigeria’s democracy. In a stuttering economy that proved a challenge to the returning titans of the nation’s democratic re-emergence, what was needed was a clear departure from the old order. The challenges were visible.

BRIEF

Nursery &Primary School, where the hand washing demonstration was made, said the school has been undertaking handwashing in the school, but not to the magnitude Reckitt Benckiser and Dettol have taken it. According to her, the hand washing lesson is important for kids everywhere, but it’s especially important in parts of the world where people don’t have easy access to clean water and toilets. “Diseases are easily spread from hand to mouth by tiny germs too small to see. But hand-washing with soap can help prevent diarrhea-related diseases such as typhoid and cholera, and respiratory infections including

pneumonia and flu.” she said. Speaking on the 2012 campaign, Israel Opayemi, Chief Strategist, Chain Reactions Nigeria, the Public Relations Consultants to Reckitt Benckiser, said the campaign underlines the commitment of the company to the environment where it operates. “As a caring company, the consumers are at the centre of decision-making in Reckitt Benckiser. That is why all the products are carefully selected in a manner that they continue to build brand equity that delivers value to the consumer at all times. So, the various initiatives on hygiene from the company demonstrate Reckitt

Benckiser's leadership in innovation. The company is pleased to be at the forefront by promoting the general well-being of the Nigerian people, thereby giving them maximum protection against germs so they can be more active,” he said. On the impact of the campaign in the past three years on the brand, Opayemi said “I think first and foremost the greatest impact that has been recorded through this campaign is the memorability test we have conducted by going back to the schools where the campaign have taken place over the years when we have come back to ask the children, which brand can they identify with when it comes to hygiene and over 80 per cent response we have is Dettol."

Ilorin, the Kwara State capital, in the next couple of days. The new Shoprite outlet would be commissioned later this month and would be located within the newly built Kwara Mall, which is a joint venture between Kwara State Government and Persianas Group, owners of the Palms Shopping Mall in Victoria Island, Lagos as well as Polo Parks, Enugu. The Store, when it is commissioned according to the Human Resources Manager, Adeola Kagho will create sustainable employment opportunities in the state. Kagho said the Ilorin outlet will create approximately 200 direct jobs and over 1000 indirect employment for the people of Ilorin and environs. Compared to the Palms Shopping Mall outlet, the Ilorin store will boast of 3,700m2 shopping space, and will also have some international brands such as KFC and Max Clothing as neighbours. Apart from job creation, the store has already begun discussions with local farmers and suppliers to ensure efficient delivery of products and services. In another development, the brand, for the first time extended its corporate social responsibility initiative- HelpChange-A-Life campaign to state by donating shopping groceries worth thousands of Naira to Kwara State Children Centre. Presently, Shoprite has outlets in Ikeja, Surulere, Victoria Island all in Lagos, Enugu and Abuja.

DDB wins Luerzer’s award DB Lagos, a creative advertising agency has again affirmed its position as one of the leading agencies in the country, as it declared that it has won the Luerzer’s award. The firm recently had one of its creative works named ‘Luerzer’s Archive print Ad of the week.’ Luerzer ’s Archive, the foremost advertising magazines in the world, had after a rigorous process selected DDB Lagos’ Ad over other print advert materials collated from around the globe. The “Speechless” Ad was created for DDB’s numerous clients, Girl Hub. A nongovernmental organization, Girl Hub, strongly believes that the typical girl child in Northern Nigeria faces series of social vices namely: poverty, disrespect and abuse.

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48 — Vanguard, MONDAY, OCTOBER 22, 2012

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n the light of the usual extended recess during the forthcoming Id elKabir and the Christmas/New Year celebrations, the Legislature may have, possibly less than two months within which to consider and approve the 2013 budget, which President Jonathan laid before the National Assembly last week.

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Instructively, in successful economies elsewhere, budgets would traditionally be laid before parliament at least four months before the New Year, to ensure that minute details and implications of budget proposals would have been thoroughly assessed without the burden of time pressure. However, the National Assembly’s current insistence on full implementation of the 2012 budget before its approval of the 2013 projections may suggest that, as in the past, legislative endorsement may not come until sometime in the first quarter of 2013. Incidentally, the proposal submitted by President Jonathan makes no apparent provision for the payment of controversial fuel subsidy; indeed, there is no indication that contrasting subsidy figures from critical government agencies on subsidy values have been resolved. In other words, in view of subsidy payments of over N2tn in 2012, we may assume that Mr. President may have adroitly subsumed subsidy payments as a first line charge on the total revenue projection of N10.84 trillion in 2013. Indeed, it is not clear how the Executive arrived at the projected total revenue figure

Understatement of projected revenue in 2013 budget?

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In summary, therefore, total revenue projection for 2013 should be over N14tn, made up of N8.6tn (about $50bn) from crude oil sales, N5tn internally generated revenue and N500bn customs duties and levies

of N10.84 tillion, as indications of revenue inflows from government income streams suggest that the 2013 revenue projections may be grossly understated. In the first place, oil revenue traditionally contributes over 80 per cent of totally collected federal revenue each year; that is about N8.64 trillion of 2013 total projected revenue. In other words, other sources of internally generated revenue may account for the balance of about N2.2tn.

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his relatively paltry figure would appear to be a contradiction of the vastly improved performance of the Federal Inland Revenue Service (FIRS), which reports suggest may actually surpass the N5tn threshold this year. Incidentally, FIRS confirmed actual revenue collection of

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about N4tn by third quarter of 2012; so, a 2013 projection of N5tn total revenue should be quite feasible. In addition, from available reports, the Customs Service revenue collection has also exceeded N400 billion as at August 2012. This may suggest that all things being equal, we may also confidently expect up to N500 billion revenue contribution from the Customs Service in 2013. In summary, therefore, total revenue projection for 2013 should be over N14 trillion, made up of N8.6 trillion (about $50bn) from crude oil sales, N5 trillion internally generated revenue and N500 billion customs duties and levies. Indeed, NNPC’s reports of crude output often in excess of 2.5 million barrels with crude prices hovering at an average of $100 per barrel in

spite of world economic downturn in 2012 may suggest that the above revenue projection of N8.6 trillion may not be an overstatement. In any event, even if we accept President Jonathan’s total projected 2013 federal revenue of N10.84 trillion as fairly accurate, the component of N3.89 trillion total revenue available for the federal government budget would also seem to be a gross understatement. The constitutional revenue sharing formula of 52 per cent for federal, 26 per cent state and 22 per cent local governments would suggest that federal allocations should be a minimum of about N5.5 trillion, instead of N3.89 trillion indicated in the 2013 budget statement.

expenditure budget, and remains the highest sectoral allocation well above the N426 billion allocated for education, N279 billion for health, and the paltry N81 billion for rural development and agriculture (which presumably also includes provision for water resources).

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a r a d o x i c a l l y , government’s heavy borrowings have not brought any commendable improvement to the welfare of Nigerians; that notwithstanding, the commercial banks, who appear to be government’s favourite children, now post enviable profit figures, which, according to Aig Imokhuede, Managing Director of Access Bank, may exceed 10 per cent of the compounded profit figures of all European banks this year. In the light, however, of the apparent reluctance of the banks to provide low-cost funds to the real sector, Nigerians may wonder about the source of these huge bank profits. The answer to this, of course, is not farfetched; why, for example, would anyone expect banks to abandon the juicy yields of between 12 and 17 per cent for government’s risk-free borrowings for the sake of the huge challenges of the real sector?

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hus, in the event that total federal expenditure projection is only N4.92 trillion for 2013, we may, in fact, actually have a budget surplus of over N500 billion instead of the apparent deficit of almost a trillion naira in Mr. President’s budget 2013 statement. In the light of the average cost of about 15 per cent for such government borrowings, this would reduce the debt burden, and also reduce debt service charges by over N150 billion! Incidentally, the allocation of N591.76 billion for debt service accounts for over 12 per cent of the 2013

SAVE TH E NAIRA, SAVE NIGERIANS!!

Business Economy

Deloitte opens academy to maintain IFRS momentum kintola Williams Deloitte has launched one of its most important projects since it took the leading role in International Financial Reporting Standards (IFRS) with the unveiling of Deloitte IFRS Academy in Lagos, designed to help trainees to appropriately apply IFRS to their various functions. Israel Nnanna, speaking on behalf of Uwadiae Oduware, Deloitte IFRS Leader and head of faculty, said the Academy will continue to run until IFRS is fully implemented in Nigeria. The Academy is the platform for finance professionals and graduates, executives and organisations in need of International Financial Reporting Standards (IFRS) training and offers a blend of theory and practices to enable participants apply the

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standards, as well as the underlying concepts and principles. “Our approach to IFRS learning is interactive and is based on skills transfer. In drafting the training curriculum, we recognized that learning needs will vary based on individual’s role, knowledge level, experience and industry. "We therefore designed four distinct programmes to meet the learning needs of various classes of people as follows,” says Oduware. The Academy is built around platforms. Graduate Academy (DGA) platform is designed for finance graduates to be trained in IFRS. It is aimed at assisting them develop expertise in international financial reporting and have smooth transition into the workplace. The programme is built

around the work environment .Successful incumbents are admitted for six months comprising three months classroom learning and three months of practical training. The Professional Academy (DPA) is for preparers of financial statements and those who make input to the preparation financial statements. The programme is divided into modules made specific to industry and consistent with the functional areas within the organisations. The Deloitte Executive Academy is another key platform designed for busy executives to help them navigate the issues of IFRS. ”IFRS must be learned by the executives because of the critical role financial reporting plays in decision making. This programme is designed to assist executives to fast

track their learning process,” says Oduware who says the training will be run in streams to accommodate the trainees. Oduware said that this is on-

demand training, available entirely at the discretion of the executive and structured to align with the schedule of the participating executive.

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

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

CONTRIBUTORS Princewill Ekwujuru Naomi Uzor Providence Obuh LAYOUT

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Media/Marketing Industry Capital Market Graphics Department C M Y K