AUGUST 27, 2012
FRESH TROUBLE IN TELECOM SECTOR
Senate frowns at non resolution of indiscriminate telecom facility closure By PRINCE OSUAGWU
here are indications that the senate committee on communications is spoiling for war over the inability of the Communications Technology Ministry and its counterpart, the Environment Ministry, to resolve the issue of arbitrary sealing of telecom base stations more than three weeks after public hearing on the issue. More to the committeeâ€™s chagrin is the latest statement credited to National Environmental Safety Regulatory and Enforcement Agency, NESREA, that it
had only sealed 22 base stations from the operators as against the 52 claimed by both the Nigerian Communications Commission, NCC and the operators. The senate is frowning that after allegedly admitting on oath to the 52 base stations, NESREA turned around to claim it had only sealed 22. The committee now suspects that the claim and counter claim between NCC and NESREA may be a ploy to divert attention and continue the indiscriminate closure of telecom
facilities which has contributed largely to the poor services the subscribers have long been grappling with. Information gathered from reliable sources is that the committee was planning to take the bull by the horn, to re-invite the two ministries and give directives that can no longer be flouted. After a public hearing in Abuja, on the issue recently, the Senate committee had given the two ministries two weeks to settle the issue of sealing, unsealing and
resealing of telecom facilities which has hampered telecom services and pitched the two government agencies against each other. However, more than three weeks after, no resolution, if ever reached, has been made pubic. Although, a Communications Ministry official who spoke to Vanguard on the issue said that much ground has been covered. He promised that very soon the issue would be put to rest. It was also gathered that the two ministries were working to arrive at a common guideline acceptable to both, which the operators would have to abide by when deploying base stations in future. NESREA denies sealing 52 base stations Meanwhile, in what it called clarification of its position on the issue of sealed base stations, NESREA through its Chief Press Secretary, Mr Sule Oyofo, was quoted recently as telling journalists that the agency did not shut down any telecom base station Continues on page 18
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The Honourable Minister of State for Federal Capital Territory (FCT), Oloye Olajumoke Akinjide, flanked on her right by the Chairman of the Ministerial Committee on the Clean and Green Greater Abuja Initiative, Engr. Tukur Ibrahim Bakori and the Director of Special Duties to the Minister (left), Alhaji Mohammed Sagir Hamidu, during the inauguration of members of the ministerial committee by the minister in Abuja C M Y K
18 — Vanguard, MONDAY, AUGUST 27, 2012
Vocation and technical education – A key to improving Nigeria’s development (3)
Senate frowns at non resolution of indiscriminate telecom facility closure Continued from page 17 for the purpose of truncating their operation. He explained that various base stations had been sealed up due to the violation of environmental laws in setting up those base stations. According to him, most base stations are cited indiscriminately, close to residential areas without regard to environmental health hazards of those residents living around those places. Oyofo said, “We have shut down only 22 base stations nationwide because they contravene environmental laws. Their actions have demonstrated utter disregard for extant environmental laws and regulations in which public complaints on them remained unaddressed.” He said the agency would not be deterred by any mischief from any agency, as NESREA insists on carrying out its legitimate duty without recourse to blackmail. Oyofo even cited example of a construction company, Gilmor, whose office in Abuja was shut down, saying it has paid its fine of N1 million. NESREA earlier shut down Gilmor offices for refusing to present its Environmental Impact Assessment, EIA, certificate for verification. Senate fumes Meanwhile, a close source to the Senate Committee on Communications has hinted that the Senate is miffed at the statement, suspecting that it could be part of the reasons for the inability of the agencies to unseal the base stations as directed since its last intervention and meeting C M Y K
with both parties. The source, also hinted that after waiting in vain for success reports from the two ministries since the hearing, the committee was considering recalling the parties to give them fresh mandates which must be carried out within a specified time to save the telecom sector from losing its grip on the economy. “The Senate Committee on Communications has expressed worry over the inability of the Minister of Environment, and her Communications Technology counterpart to resolve the matter of sealing of base stations by NESREA within two weeks as promised during the public hearing to forestall the impact of abrupt closure of live base stations given its security and other implications,” the source said. The Senate had at a recent public hearing chided NESREA for arbitrarily sealing base stations which it has found to be contributing to the poor quality of telecom service in the country. Reminiscent of the public hearing At the hearing, the Chairman of the Committee, Senator Gilbert Nnaji, had categorically sought from NESREA if it had unsealed 52 Base stations, to which the Agency’s Director of Inspection and Enforcement Mrs. Ronke Soyombo, replied saying “no Sir. Because most of them contravened the laws and we have about 39 of them in the courts, they are already in the courts, sir”. Her response was said to have drawn serious flaks
from a top member of the Committee, who moved for a scheduling of an urgent session to resolve the matter between the NCC and NESREA because of the implications to the industry. The senator charged at Soyombo saying, “your answer is not satisfactory. I don’t know the law that allows you to physically go and lock up a base station, or switch off a base station or lock it down. I think that quite a number of organisations are behaving from the throwback of the military era, and secondly, in the light of the report of the World Health Organizations, what is the basis of your actions”, he queried the NESREA official. He said: “What we are saying today is very fundamental because there has been a lot of arbitrary exercise of power, not just by NESREA but by lots of agencies in Nigeria and yet these same people, who behave in this manner, are the first to accuse the National Assembly and the politicians, and yet the little authority that you give to them, they get very tyrannical and apply power arbitrarily.” The Director of Telecom and Postal Services in the Ministry of Communications Technology, Engr. John Ayodele, who represented the Minister, then urged the Senate Committee to give a chance to the Minister of Environment and her counterpart in the Communications Technology, as they had already scheduled a meeting within a week of the public hearing Continues on page 19
n entrepreneur is a person who makes plans for a business or a piece of work and gets it going. Anyanwuocha (2001) observes that the entrepreneur is the chief coordinator, controller and organizer of the production process. The entrepreneur combines other factors of production (land, capital and others) in such a way as to obtain maximum production of goods and services at minimum costs. In order to effectively enhance occupational skills in the present day, entrepreneurs need also to acquire information and communication technology knowledge and skills. Mkpozi (1996) observed that a country that is developing and manufacturing its own goods either from Hi-Tech or small/medium scale industries using indigenous skills and exports some of those goods to other countries is usually economically stable. This could be better achieved through the acquisition of entrepreneurial and occupational skills in technology and vocational education. Individuals with technical and vocational skills and good knowledge of ICT are characterized by selfreliance, self-employment and fit properly into today’s technical, entrepreneurial and business world. The entrepreneur should, therefore, possess technical skills, ideas and management skills which are necessary for the success of the venture. One of such skills is information and communication technology which is characterized by employee empowerment and involves the making of unskilled and semi-skilled workers to be skilful and functional in today’s world of work. It also involves the development of task oriented team of workers who no longer depend on individual managers for all their decisions to achieve targets. Technical process reengineering are also required to redesign technical work
processes, jobs, organisational structure, management system, and also in process designs used in manufacturing industries. These components of ICT have great implications for the enhancement of entrepreneurship education in technology and vocational education field of work. According to Azuka, Nwosu, Kanu and Agomuo (2006), classroom behaviour must align with ICT driven environment which is
Vice President Namadi Sambo (3rd right); Ebonyi State Governor, Chief Martins Elechi (left); DG, United Nation's Industrial Development Organization, Dr. Kandeh Yumkella (right); Chairman Senate Committee on Power, Senator Philip Aduda (2nd leftl); Power Minister, Prof. Barth Nnaji (2nd right) and the Minister of State for Power, Alhaji Darius Ishaku during the launching of the Sustainable Energy for All: Towards Full Access to Energy at the Presidential Villa, Abuja. Photo by Adeshida
The entrepreneur should, therefore, possess technical skills, ideas and management skills which are necessary for the success of the venture
constantly shaping and reshaping the work place and consequently, what is learnt and how learning takes place. There are various numbers of opportunities for technology and vocational education graduates with entrepreneurship skills in ICT driven technical and vocational education environment. These opportunities exist in various forms for enhancing entrepreneurship skills. Nwabuona (2004) views entrepreneurship education as the identification of the general characteristics of entrepreneurs and how potential entrepreneurs can be trained in management techniques needed for effective performance of persons for long time survival of an organisation after the
Vanguard, MONDAY, AUGUST 27, 2012 — 19
n Thursday, the United States of America’s Securities and Exchange Commission openly displayed America’s displeasure on corporate bribery by accepting the rule that companies listed in US Stock Exchange must disclose their payments to government officials. The measure was essentially a move to assist African Government, particularly Nigeria to fight the hydra headed monster called corruption that has become a canker worm eating up every aspect of Nigeria. The United States of America’s Securities and Exchange Commission voted 2:1 to adopt the anti-bribery rule that requires energy and other companies to disclose the payments they make to governments out side the United States and for manufacturers to disclose to investors whether their products contain certain minerals from conflict torn African countries especially from the Democratic Republic of the Congo. Both rules were required by the 2010 Dodd-Frank financial regulation overhaul, but the SEC had delayed implementing them amid industry criticism that the rules are too onerous and may reveal sensitive information to rivals. The final version of the so-called conflict mineral rule
removes an obligation required in previous proposals for manufacturers to be responsible for generic products made by a third party, that it puts its logo. Nigerians have been engaged in debates on how to tackle corruption in the country. The US SEC’s rule is a lead to follow. Nearly all companies operating in the country have been involved in one form of bribery or the other in order to make a head way. In a recent study conducted by World Bank in 26 states in Nigeria, released about three weeks ago, indicated that about 80 per cent of businesses in the country paid bribes to government officials in 2011 to stay in business. According to World Bank’s 2011 report on investment climate in Nigeria, one-third of microenterprises agreed that “informal payments/gifts to government officials” were common occurrences, suggesting that registered firms deal more with such requests for bribes.
nly 20 per cent of microenterprise firms were reported to have had foreknowledge of the amount of money required to “get things done,” a situation that means the informal payments are sudden and unplanned for.
These informal payments/ gifts, the report went on, represented approximately 1.2 per cent of annual sales for all micro-enterprises. Manufactured goods attracted larger bribes (6.7 per cent) than those for small services (3.9 per cent). However, firms in the formal sector obviously spent
SEC: Time to toe the path of transparency
over $2 billion. Instead of assisting Nigeria to recover such huge fund, the World Bank would prefer to package jumbo loans for the Federal Government with fraudulent conditionality. Why has the World Bank not supported the current Minister of Agriculture, Dr Akinwumi
Instead of Nigerians to rise up to the occasion of fighting corruption officially, they are engaged in blame games. If the legislative arm of government is corruption free, it will come up with a bill to deal with corporate bribery.
more on corruption, as 47 per cent of formal firms claimed that informal gifts/payments were commonplace in comparison to 33 per cent for microenterprises. But as soon as the report was released, those who always play to the gallery went to work to question the veracity of the report, saying with respect to corruption in Nigeria, why has the World Bank not condemned foreign companies like Halliburton, Wilbros, Siemens, Julius Berger and others which have been indicted and penalised for perpetrating large scale corruption in Nigeria? The NEITI has just disclosed that foreign oil companies have duped Nigeria to the tune of
Adesina, who is determined to arrest the reckless importation of food at billions of dollars per annum? But the damning report shows how deep corruption has gone into the nation’s bone marrow. Instead of Nigerians to rise up to the occasion of fighting corruption officially, they are engaged in blame games. If the legislative arm of government is corruption free, it will come up with a bill to deal with corporate bribery. They will not do so because all levels of governance in the country are neck deep in corruption. How else will funds have been taken from NNPC account to buy
Cover Story Senate frowns at non resolution of indiscriminate telecom facility closure Continued from page 18 to resolve all the issues related to indiscriminate closure of base stations by NESREA. Our source said that one of the recommendations for the meeting was that all base stations constructed before the advent of NESREA Act will remain as they are, as they were not built under that law and there will be no more powers to close base stations because the law says they will first go to court. He added that the Committee is considering holding another public hearing to know why the two ministries have failed to resolve the matter while the controversy has continued to
rage as there were no indications that the base stations have been unsealed yet. It would be recalled that at the first meeting of the two ministers, it was agreed that all base stations that met with NCC requirements of 5-Meter setback be unsealed, but reports said that the NESREA insisted that the operators pay the fines before they are unsealed. Are NCC, NESREA fights endemic? But the struggle between NCC and NESREA over who would regulate the operators is not new. Roughly two years ago, NCC and NESREA
helicopter for the Presidency as a gift without appropriate authorization. It is this kind of gift that makes it impossible for the Presidency to take appropriate measures against NNPC officials despite mounting revelations of high level of corruption.
clashed over the issue of who ought to police and regulate erection of telecommunications masts in the telecommunications sector. The clash was an offshoot of the decommissioning by NESREA of a telecommunications mast belonging to Globacom for allegedly violating the country‘s environmental regulations. The mast, located within OAU Quarters, Maitama, Abuja, boosted the operator’s signal strength around Maitama and its environs and was reportedly erected following complaints of poor quality of service in Abuja and particularly in that area. NESREA, however, stated
that the erection of the mast was in contravention of the procedure laid down for such a structure. It, therefore, shut down the base station without any recourse to the NCC, the official regulator of the sector. The acting Executive Vice Chairman of the commission at the time, Dr. Bashir Gwandu, did not take the development lightly. He publicly criticised NESREA and warned that multiple regulation of the telecom sector would compound the problems militating against the sector and would particularly undermine efforts to improve quality of service in the sector. The then Minister of
t is no surprise that PHCN superannuation was not funded yet pensions were being paid. It is being alleged that the Minister of Power bought bullet proof vehicles from PHCN account as gift items to government functionaries. Nigerian legislators performing oversight functions on government owned companies feed fat on them through gifts in cash and kind. This happens because they know the Nigerian public will never get to know about it. If there was a law that compels companies to disclose payments made to government officials, perhaps Hembe would have had a second thought before approaching Nigeria SEC for what becomes the hunter being the hunted. Perhaps Farouk Lawan will not have attempted to ask Otedola for bribe to cover up his company’s oil deal track. Nigerians, let us put sentiment aside and deal with the real issue. Corruption is killing the nation! Nigerian Securities and Exchange Commission should follow the example of its US counterpart, by applying the same rule here.
Environment, Mr. John Odey, was to later wade in with a view to finding a common ground between the two government agencies. A meeting was called to deliberate on the issue of telecom masts and their impact on the environment. At the meeting held inside the conference room of the Ministry of Environment, Abuja, Gwandu argued that Nigeria could not have acceptable quality of service in the telecommunications sector if impediments were placed on the efforts of operators to roll out service. He stressed particularly that the gains of the past years could be frittered away if multiple regulation was allowed to take root as it would scare investors away from the sector. C M Y K
20 — Vanguard, MONDAY, AUGUST 27, 2012
Business & Economy BRIEFS Association requests for N101bn cassava loan
he Nigeria Cassava Growers Association (NCGA) has appealed to the Federal Government for a N101 billion soft loan to boost cassava production in the country. Dr Sule Garba, the Niger State chapter of the association disclosed this in an interview with the News Agency of Nigeria (NAN) in Minna. Garba said that the national body of the association had presented the loan request of 100,000 NCGA members with an average of five-hectare farm per farmer to the federal government. According to him, 500 members of the association in the state would be able to access the loan, if approved. “I am expecting 500 members from the state to benefit from the loan in the 2012 cropping season because they have registered with us. “The total loan required from Sept. 1, 2012 to the time of harvest next year is N101 billion, that is 500,000 hectares at N202,000 each.”
OBJ, Aganga, IoD to brainstorm on cost of doing business BY NAOMI UZOR
OLLOWING the high level of unemployment and infrastructural decay in the country, the former President of Nigeria, Olusegun Obasanjo, the Minister for Trade and Investment, Dr. Segun Aganga and the Institute of Directors(IoD) Nigeria will on Thursday, September 6 th deliberate on cost of doing business in the country. The discussion forms the major eventof an advocacy round table forum organised by the Institute of Directors(IoD) Nigeria. According to a release by the IoD, media consultant, Chinenye Anyanwu, the cost of doing business in Nigeria calls for urgent attention. “Is it that those in the helm of affairs are corrupt, void of vision or lack leadership qualities. On this note, the Minister for Trade and Investment, Dr. Segun Aganga and Former president of the Federal Republic of Nigeria Olusegun Obasanjo will on Thursday, September 6th, speak on cost of doing business in the country. C M Y K
he Federal Government has approved 300 million dollars as counterpart funding for the construction of the Zungeru hydroelectric plant in Niger, President Goodluck Jonathan said, in Abuja. Jonathan, who was represented by Vice President, Namadi Sambo, at the inauguration of the UNIDO-sponsored Sustainable Energy for All initiative, said the project, which would be financed by China EXIM Bank in collaboration with the Islamic Development Bank, would inject 700 megawatts of electricity into the national grid when completed. He also said that work on the Mambila hydroelectric plant would begin by the first quarter of 2013, adding that it would produce 3050 megawatts. “I would also like to share with you the fact that all other alternative power generation sources are being exploited. We have also reached an advanced stage in the construction of Zungeru power plant which would add 700 megawatts. “Already the Federal Government has earmarked 300 million dollars as its counterpart funding and the China EXIM Bank has approved funding this project with the partnership of the Islamic Development Bank. We are also working on several of small and medium hydro-power projects that will add about 300 megawatts.” Jonathan further said that the Federal Government had signed a Memorandum of Understanding with SIEMENS of Germany for the production of 450 megawatts of electricity. He said that 30 megawatts Coal-to-Power was
From left: Mrs Jumoke Odeyemi, Director of Finance, Chubbies and Fields; Dr. Akin Ajiboye, Managing Director and Mr Victor Fatula, Partner to the Exhibition at a press conference in Lagos on the First South West Farmers and Food Security Exhibition in Collaboration with Oodua Chambers of Commerce to be held, September 10, in Ekiti State. Photo by Lamidi Bamidele.
FG approves $300m counterpart funding for Zungeru Power Plant being pursued under the Public-Private–Partnership arrangement, adding that Waste-to-Power schemes were also being implemented in various states of the federation. “To support the expected developments in addressing power, we are also addressing other areas that are militating against our growth which include education, transport (railway, waterways seaports, airports) and agriculture,” he said. He called on UNIDO and its development partners
to support Nigeria in the development of technical and financial framework to mobilise its abundant energy resources to achieve the objectives of the Sustainable Energy for All initiatives. According to him, this is the only realistic avenue for the nation to address wealth creation and reduce poverty among Nigerians. He said Nigeria was committed to achieving its targets in less than a decade, pointing out that all tiers of government were being mobilised to play
Investment climate in Nigeria still hostile — Tanko
x e c u t i v e Chairman, Kaduna State Board of Internal Revenue, Prof. Mohammed Tanko, says investment climate in Nigeria is still not conducive. Tanko, in a paper presented during the 12th Kaduna State Productivity Day and Honours Award in kaduna advised businessmen in Nigeria to help revamp the economy. In the paper titled “Transforming Nigeria’s Economy through Productivity Improvement Initiatives”, he said that electricity supply and corruption remained critical factors to economic development in Nigeria. “A recent survey carried out by the World Bank showed that
the nation’s manufacturing companies lost about 4.3 per cent of their sales proceeds to electricity outages. About 2.3 per cent of sales were lost to corruption, while the Services Sector lost 6.3 per cent to epileptic power supply. “The survey concluded that Nigeria’s investment climate is still hostile,” Tanko said. He advised government to be more proactive, adding that “on our individual basis, we need to contribute one thing or the other to grow our economy no matter how small’.’ Tanko said land, labour, capital and entrepreneurship played significant roles in the quantity and quality of outputs. He said some of the factors hindering developing
nations like Nigeria from optimising their production capacity included high cost of doing business due to poor infrastructure and obsolete technology. Tanko said that low quality labour force due to absence of a comprehensive policy on manpower development was also affecting the economic growth of most developing nations. “The combine effect of these factors is low productivity, which ultimately lowers the quality and quantity of outputs,” he said. Tanko said that governments’ policies were the most important determinants to overcome the productivity challenges confronting Nigeria and other developing nations.
their roles to meet the objectives. “This programme is a pledge that we have made to ourselves and to cap it all, only yesterday, the Minister of Power signed a Performance Agreement on project implementation and delivery, mindful that it will safeguard the prosperity of our people,” he added. In his remarks, the DirectorGeneral of UNIDO, Mr Kandeh Yumkella, said that more 50 governments in Africa, Asia, Latin America and other states had engaged with the Sustainable Energy For All (SE4ALL). He said that investors had so far committed more than 50 billion dollars to achieving the objectives of the initiative. “We see new, significant commitment to action; new public-privatepartnerships are being developed on transportation, energy efficiency, solar cooking and finance. Oil Discovery: Sokoto State to make presentation to FG, says Wamakko Sokoto State Governor, Aliyu Wamakko, said that the state would soon make a presentation to the Federal Government on how to exploit the crude oil discovered in commercial quantity in the state. The governor spoke to State House Correspondents in the course of the National Economic Council meeting presided over by Vice President, Namadi Sambo, at the Presidential Villa, Abuja.
Vanguard, MONDAY, AUGUST 27, 2012— 21
Business & Economy
South Korea’s investment in Nigeria hits N30bn BY DOTUN IBIWOYE
he value of South Korea ‘s Foreign Direct Investment, FDI, in Nigeria stand at N30,56 billion at the end of 2011, says Korean Ambassador to Nigeria , Choi Jong -Hyun. According to Jong-Hyun, who spoke at the 67 th independence anniversary of South Korea in Lagos, the FDI value is just 0.1 per cent of its total investment worldwide, adding that the value could have been more, if a number of factors hindering investment in the country had been addressed by authorioties of the country. Nigeria is the third in ranking of African countries with that amount of South Korean investment, while other African countries have are the least compared to countries in South America which have $15.2 billion- eight percent, China $36 billion – 19 percent, South East Asia $20.7 billion – 11 percent South Korean FDI. Madagascar has become Korea ‘s number one destination in Africa with a FDI of $1billion. Jong-Hyun expressed commitment towards building a solid bilateral and trade relation with Nigeria, urging Nigerian government to give a purposeful leadership and ensure that all pending bilateral disputes with Korea are speedily resolved. He explained that the security challenges and political transition were among the major factors that impacted the country’s FDI, to be low in Nigeria which is meant to be the first destination worldwide. To fast-track the inflow of FDI from Korea , the ambassador therefore recommended that Nigeria must ensure that the issue of the prevailing insecurity in the country, infrastructure deficit, resolution of KNOC issue, law of double taxation, pursuance of favorable labour policies are adequately addressed. It would be recalled that seven years ago, the federal government revoked the oil blocks it had earlier awarded to Korea National Oil Corporation, KNOC, which was as a result of the dispute that arose over some conditions involving complementary infrastructure in the Memorandum of Understanding (MOU) in the two oil wells —OPL 321 and
OPL—323. KNOC was to build 1,200 kilometres of gas pipeline for the Nigerian project after the blocks were put on bid round in 2005. With trade volume of $1.07 trillion(2011) and Per capita income of $23,749, which makes Korea the 7th largest trading nation in the world, it has become the global leader
in automobile, cell phone, semi-conductor, ship building, IT, steel, petro-chemical, construction and multinationals like Daewoo, Hyundai and Samsung. Nigerian’s major export to Korea is natural gas, while copper and lead account for the other two exports. He also stressed that businesses thrive on
predictability, transparency and stability. On his part, Nigeria’s Ambassador to South Korea , Desmond Akawor, highlighted possible areas of investment and strengthening of relations between the two countries, Saying that if natural gas and power pricing is got right, South Korea would be willing to invest in Nigerian market. He also said that with huge deposit of uranium in Nigeria which is a veritable source of nuclear, the country was also eager to tap into the resource, to boost Nigerian economy.
Mr. Henk Rypma, project Manager, Julius Berger of Nigeria Plc (left) and Mr. Segun Ajiboye, Vice Chairman, Iru-Victoria islamd LCDA during the handing over of a block of classrooms to the Atlas Cove Communities of Abagbo, Ebute Oko in Iru-Victoria island LCDA, Lagos State.
Lagos, ISEED partner to tackle power, environment challenges BY OLASUNKANMI AKONI
s the Federal Government is finalising move to privatise the power sector with the on-going reform, Lagos State government in collaboration with International Society for Energy and Environment Development, ISEED, is set to address power and environment challenges in the state. This came even as the state stressed the need for FG not only to accelerate the privitazation of the power sector but consider clean renewable sources of energy in order to reduce the level of impact on the environment. It is known that some of the existing power plants in the country utilize gas and coal with some negative impact on the environment. The state Commissioner for Energy and Mineral Resources, Engr. Taofiq Tijani, made the disclosure at the maiden edition of Electric
Power Infrastructure Congress (EPIC 2012) organised by ISEED, in Lagos. Tijani stressed it was necessary that the nation seriously look towards the right mix of non-renewable and renewable sources of energy such as solar and wind not only to sustain the environment but create jobs for the citizens. According to him since the development of any industry brings with it a heightened responsibility to the environment and energy development not an exception, “it is critical that we find the right balance between energy development and environment in the most sustainable manner. We cannot afford to compromise one industry at the expense another; neither should we expose the environment to unnecessary risks as a result of the dire need to solve our energy challenges.” Speaking further, the commissioner said “in my opinion, our energy
policies should be framed in the context that ensures the judicious use and harnessing of renewable and nonrenewable energy resources to match our energy needs as our economy presently, is facing enormous structural challenges relative to population growth, rural sustainability, economic and social development. A strategically developed energy sector will no doubt be one piece of the equation to alleviate some of the pressures facing our nation and citizens. Damilola Ogunbiyi, the general manager of the Lagos State Electricity Board, while also speaking at the congress, decried the nation’s inability to meet the power need of its growing population. Ogunbiyi said the power congress was one platform needed to bring experts together to brainstorm on how to address the nation’s problem, adding however, that the current challenge was not insurmountable.
BRIEFS STDA to employ 300 youths, women to clean-up, green satellite towns
he Satellite Towns Development Agency (STDA) and the Ministerial Committee on Clean and Green Greater Abuja Initiative are to engage 300 youths and women across the six Area Councils of the Federal Capital Territory (FCT) for the cleaning and greening of the satellite towns. The Honourable Minister of State for FCT, Oloye Olajumoke Akinjide, disclosed this in Abuja on Thursday while inaugurating a Ministerial Committee on Clean and Green Greater Abuja Initiative. The minister mandated the committee to build effective and sustainable enforcement strategies in the cleaning and greening of the satellite towns. She also directed the committee members to recommend appropriate and sustainable waste management strategies for the satellite towns.
Diageo raises dividend on Asia, Africa prospects
he world’s biggest spirits group, Diageo Plc, increased its payout to shareholders, confident that buoyant demand for whisky and spirits in Asia and Africa would help it hit medium-term targets. The Johnnie Walker whisky and Smirnoff vodka maker on Thursday said it was raising its full-year dividend by 8 percent to 43.5 pence per share, after an increase in sales and profit driven by emerging markets. Exposure to fast-growing markets in Africa, Asia and Latin America meant Diageo outshone Dutch brewer Heineken NV, which posted a decline in first-half profit on Wednesday, hurt by weak European sales. “Diageo has delivered on its promises today. The 8 percent increase in dividend reads encouragingly,” Investec analyst Martin Deboo said. The UK-based company has a dividend yield, a measure of the return investors get on the stock, of 2.9 percent for the 2011/12 financial year, according to Thomson Reuters Starmine. That’s more than the 2.1 percent ratio of arch rival and world No. 2 spirits group Pernod Ricard, which is due to report its annual results on August 30. C M Y K
22 — Vanguard, MONDAY, AUGUST 27, 2012
Banking & Finance BRIEFS
CBN’s currency restructuring, cosmetic, counter-productive — Stakeholders
Germany, France want results of …Say review will induce inflation, promote financial crimes Spanish banks audit soon necessarily result in inflation. BY MICHAEL EBOH
erman Chancellor Angela Merkel and French President Francois Hollande discussed Spain in their meeting on Thursday and would like to see results soon of an audit on its banking sector, which has already sought a 100-billion euro European lifeline. “The topic of Spain was also talked about yesterday and there was agreement that it would be nice and would make sense if the report on the Spanish banks would be available soon,” Merkel’s spokesman Steffen Seibert said. Seibert declined to comment on the likelihood that Spain would seek a full bailout. Reuters reported on Thursday that Spain is negotiating with euro zone partners over conditions for aid to bring down its borrowing costs, though the country has not made a final decision to request a bailout.
HSBC in settlement talks with US over money laundering
SBC Holdings Plc which is under investigation by U.S. regulators for laundering funds of sanctioned nations including Iran and Sudan, is in talks to settle the matter, two people with knowledge of the case said. The bank, Europe’s largest by market value, made a $700 million provision in July for any U.S. fines after a Senate Committee found it had given terrorists and drug cartels access to the U.S. financial system. That sum might increase, Chief Executive Officer Stuart Gulliver has said. An HSBC settlement regulators and the Manhattan District Attorney were aiming to conclude as early as September may have been slowed when New York’s banking superintendent accused Standard Chartered of laundering $250 billion for Iran. Regulators had been talking with both banks about universal accords when Benjamin Lawsky on Aug. 6 threatened to revoke Standard Chartered’s license. Deals with the London-based banks next month are still possible, said the people, who asked not to be identified because the investigations are confidential.
takeholders in the fi nancial sector have kicked against plans by the Central Bank of Nigeria, CBN, to restructure the country’s currency, saying it is cosmetic, a clear contradiction of the cashless policy and will induce inflation. CBN said it will introduce N5,000 note, N50, N100, N200, N500 and N1,000 notes, while lower banknote denominations of N5, N10 and N20 will be coined, under its currency restructuring exercise, code-named "Project Cure.” The stakeholders, who are chief executives of various financial institutions, said the proposed currency restructuring will only facilitate corruption, money laundering and terrorism financing. “It is clearly a wrong move; it signals the interment of all the currencies which are to be turned into coins and will no doubt induce inflation. The cash culture of Nigerians and our history with such actions point to these facts. The sad thing is that we never seem to learn from history,” said Mr. Eghes Eyieyien, Chief Executive Officer, Pharez Consulting. Also commenting, Mr. Opeyemi Agbaje, Chief Executive Officer, Resource and Trust Company Limited,RTC, said, “It is a purely cosmetic exercise that actually contradicts the Bank’s stated policy of Cashless Banking, as have been pointed out. It makes movement of large volume cash easier, thus facilitating corruption and money laundering.” The Governor of the CBN, Mallam Sanusi Lamido, in announcing the restructuring, said the is aimed at achieving numerous objectives, ranging from upgrading the design of the entire existing range of currency; denominations in order to enhance the quality and integrity of the banknotes and achieving an optimal currency structure that will ensure cost effectiveness, balanced mix and utilization of all the currency denominations. He said the proposed restructuring was due to the fact that Nigeria’s currencies were last reviewed between seven and 13 years, as against five and eight years as obtained globally and which is in line with international best practices. Sanusi also stated that the CBN conducted several stakeholders meeting on the proposed restructuring and it
Sanusi Lamido Sanusi was advised to coin lower denominations of currency up to N100, encourage the usage of coins, enhancement of the quality of banknotes; introduce higher denomination banknotes to discourage dollarization and reduce the volume of banknotes. Eyieyien queried the rationale for the proposed review and call on the Presidency to immediately call Sanusi to order or sack him from office. He said, “Sanusi is too fixated on being applauded as a ‘Reformer,’ such that he would introduce any kind of change for its mere sake. That President Goodluck Jonathan cannot see the destructive impact of Sanusi’s many illconceived ideas is perplexing. “Some examples of Sanusi’s many ill-conceived and inane ideas are: Stopping banks from having Automated Teller Machines, ATMs, in nonbranch locations after their huge investments and later reversing the policy at more costs; The “Cash-lite” Lagos fiasco which has seen frequent adjustment of the minimum amounts for withdrawal. “There is also the AMCON charade that has created an over N4 trillion liability (almost equal to the annual Federal Budget!) through ‘bonds’ that can never be repaid; illegal and unconstitutional Islamic Banking; huge margin of about 2500 basis points between average bank deposit
“The only positive argument may be the lower cash processing cost that may be incurred by banks with higher currency denominations. I don’t consider this benefit sufficient justification for this seeming diversionary policy.” In his own opinion, Mr. Tunde Salman, a financial analyst, advised the CBN to wait till 2020 before considering introducing higher currency denominations. He said, “With steps already taken by CBN itself to address money laundering in the country such as know-yourcustomers re-validation of banks’ customers and the on going cashless Lagos, one wonder if the propose higher denomination of N5000 will not undermine that effort, coupled with our inability to discover and disrupt terrorism financing. “This is because, the proposed N5000 naira note appears to me as counterproductive to the effort towards fighting the menace of money laundering especially for a nation that still finds it very difficult if not impossible to discover the sources of funding. “What we needed now is
The stakeholders, who are chief executives of various financial institutions, said the proposed currency restructuring will only facilitate corruption, money laundering and terrorism financing
rates and lending rates consequent of CBN’s failed monetary policies and its unwillingness to deal with it. “These are just some examples of the very disappointing actions of the CBN under Sanusi which make one wonder why the President is unable to show him the door out of office.” Also, Agbaje said that the only positive side of the review is the lower cash processing cost, noting however, that this is not enough justification for the introduction of the policy. He said, “It will also cost money; a cost I find indefensible, given the quite recent notes (polymer etc) introduced by immediate past CBN governor, Soludo. It does seem that unclear motives and logic permeates this proposal. “I, however, do not accept that there is scientific or econometric evidence to support the position that higher denomination currency automatically, without more, will
how to replace the polymer notes (N5, N10, N20, and N50) that seemed not to have secondhand value in terms of durability. If, however, they are desirous of introducing the N5000 note, I think the CBN can wait till year 2020 when we might have achieved that tall dream called 20/2020 for the introduction and elaborate launching. However, Mr. David Adonri, Chief Executive Officer, Lambeth Trust & Investment Company Limited, said, “The proposed introduction of higher denominated currencies may reduce the cost of producing currency notes. Fewer notes will be required for high volume transactions. “I am not convinced about the causal relationship between higher denominated currencies and increase in inflation as believed by some critics of the policy. I believe that structural deficiencies in the economy, exacerbated by fiscal indiscipline are the main factors fueling inflation in Nigeria.”
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24 — Vanguard, MONDAY, AUGUST 27, 2012
Tax Platform BRIEF Lotteries have potential to boost govt revenues —experts
Self-Assessment Practice in Nigeria
ome financial experts have advised the government to invest more in lottery business. They said that the business had positive implications for the economy and was capable to boosting the revenue base of government. The experts made their observations in separate interviews in Lagos. Mr Chris Nemadia, a former director of the Central Bank of Nigeria, (CBN), said that the participation by a large segment of Nigerians in lotteries was not an indication of high poverty rate. He said that participation in lotteries should not be misconstrued as antisocial behaviour, but an impetus for national development. Namedia said that the government could also use lotteries to boost investment in the country. FIRS Acting DG Alhaji-Kabir-Mohammed-Mashi
he self-assessment tax system was in troduced in the Nigerian tax laws in 1991 with operational effect in 1992 and initially restricted to a threshold of taxpayers and extended to the rest in 1998. However it was not until 2011 that its implementation became effective, through a Project based system. The Self assessment system requires that:The taxpayer accurately calculate his tax liability, pay the tax due at designated bank, collects e-ticket and file self-assessment return on or before the statutory (due) date for filing such tax return; Tax returns are accepted, by the tax authority, as filed, subject to on-the-spot simple checks to ensure that tax return forms are correctly completed. The returns are later subjected to further administrative processing including risk assessment of all tax returns and audit, where necessary, determined by riskbased case selection; Where the taxpayer fails to meet his obli-
Tax returns are accepted, by the tax authority, as filed, subject to on-the-spot simple checks to ensure that tax return forms are correctly completed
gations, late returns penalty and interest are imposed without fail, as the case may be. The tax authority exercises its right under the law by issuing administrative assessments on taxpayers who fail to file tax returns on due date. Information for such assessments are obtained by an on the spot audit of the taxpayer ’s records and from third-party sources. It is not-
ed that ahead of due dates for filing tax returns, taxpayers are reminded about their obligation to file and pay taxes due. The Tax Authority relies heavily on post-filing controls such as risk-based audits, collection enforcement measures, et cetera to elicit compliance. The implementation of selfassessment tax system as reinvigorated since 2011 has brought about changes that resulted from a re-designed work-flow processes, which gave the taxpayer his full right to assess himself/herself. The Self-assessment system eliminated the 100% examination of tax returns that was hither-to in practice and replaced it with risk based case selection for audit. The Tax Administration (Self Assessment) Regulations gazetted on December, 2011 has clarified provisions of the Tax laws on Self Assessment and provided rules for processes. The fact that some publishers of tax laws have included the Regulation in new Compendium of Tax Laws is a measure of acceptance. It is worthy of note that field offices and officers have embraced the system of self assessment and made giant strides in not only their collections but Taxpayer education and information through Stake holder engagements on Self-Assessments and Tax administration in general. The buy in of the internal stakeholders who are also champions of change in the Administration has impacted positively and endeared partnership between the Service and various segments of taxpayers. Some of the engagements that were held within the 2nd Quarter 2012 where Self assessment was extensively discussed are as follows: Stakeholders Engagement / Sensitization and enlightenment programme on Self Assessment ion Lagos, 4th of April 2012. It was well attended by Large taxpayers. Presentation of paper titled “Self Assessment Issues and Challenges” at CITN engagement in Lagos - 05/07/2012. The fact that CITN is a major stakeholder speaks volumes about the acceptance of Selfassessment. Stake-Holder Engagement for Abuja Region. Titled “Self-Assessment and Regulations- what the Taxpayer need to know and/ or do”. 11th July 2012
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Banking & Finance
From left: Coordinating Minister of Economy and Honourable Minister of Finance, Dr. Ngozi Okonjo-Iweala, Agric Minister., Dr. Akinwumi Adesina and President, International Fund for Agricultural Development, Dr. Kanayo Nwanze after the signing of the $105.2 million agreement in Abuja.
Banks should give accurate report of fraud cases — NEFF *NIBSS unveils anti-fraud portal BY BABAJIDE KOMOLAFE
he Nigeria Electronic Fraud Forum (NEFF) has called on banks to give accurate report of fraud cases. Meanwhile, the Nigeria Interbank Settlement System (NIBSS) has developed an anti-fraud internet portal for the banking industry. Speaking at the August monthly meeting of the Nigeria Electronic Fraud Forum (NEFF) held on Friday, Chairman of the Forum, Mr Emmanuel Obaigbonna challenges banks on the accuracy of report on fraud cases. He said many banks are not giving accurate report of fraud cases because they see it as de-marketing but doing so is saving the industry. He said by giving accurate report of fraud cases banks will help their colleagues to learn from their experience and this will go a long way in reducing fraud in the industry. He said this is in line with the aim of the Forum, which is to be proactive in the fight against electronic fraud, by nipping in the bud likely fraud attempt before they occur. “Our aim is to have a centralised data base for fraud incidences, review such incidences to learn from them to make sure they don’t reoccur,”
he said. Obaigbonna said that the Forum will soon introduce sanctions to compel banks to make accurate report on fraud incidences. “We have set up a subcommittee to look into the issues of sanctions for inaccurate reporting,” he said. He said in addition to introducing sanctions, the Forum is working with the Nigeria
Interbank Settlement System to change the reporting format for electronic fraud by banks. Executive Director, Operations, NIBSS, Mr Niyi Ajao corroborated Obaigbonna’s observation saying that banks are not forthcoming on information on fraud cases, adding that this is not helpful for the system.
He said in order to enhance reporting of fraud cases in the industry, NIBSS has developed an internet based antifraud portal. The portal he said was designed to enable chief inspectors of banks to report fraud cases, and for other approved banks’ officials as well as regulatory bodies view reported cases of fraud. He said the portal has two categories of users. The first category is chief inspectors of banks, and they are the only users that can create report on fraud incidence. The other categories are labelled Users only, as they can only view the fraud reports for their own official use. This category, he said, comprise banks’ chief executive officers or designated senior management officials, regulatory officials like Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC), Nigeria Financial Intelligence Unit (NFIU). He said the fraud reports on the portal will contain name, account details, picture of the suspected fraudsters (for individuals) or the Registration number (for corporate). It will also contain the type of fraud and when it was committed as well as the amount involved. He the portal also has a news update segment, where chief inspectors of banks can use to immediately alert the industry about fraud or robbery cases. He said that the portal will be hosted on a very secure server, security measures to ensure that unauthorised persons cannot access it. He called on the industry suggest ideas that can add value to the portal before it is launched. He said by using the portal, banks will be enhancing efforts to checkmate fraud in the industry and the economy.
Skye Bank donates building to YabaTech Alumni BY RITA OBODOECHINA
kye bank Plc has built a modern two-storey multi purpose building for the Yaba College of Technology Alumni Association. According to a statement by the bank, the building which has a large multi purpose hall, also houses an information technology centre and numerous offices for the use of the alumni association. Speaking at the commissioning of the building, Mr. Gbenga Ademulegun, Executive Director, Commercial Banking and Public Sector, Ske Bank, said the bank embarked on the
project as a way of discharging its social responsibility to the community where it operates Commending the association for leaving behind a worthy legacy to the college, he enjoined other alumni to emulate the example. He assured the association of the bank’s continued support , noting that such complementary efforts from alumni bodies would assist in lifting standards in institutions Also speaking, President of the alumni association, Chief Emmanuel Unachukwu said the association chose to honor their alma mater by constructing the edifice to ameliorate the infrastructural
challenges facing the institution. Expressing his gratitude to Skye Bank for funding the project from the beginning to the end, he said, the association’s accomplishments in developing the school were in great part due to the support of the bank. The Rector of the school, Dr. Magareth Ladipo, commended the bank for responding to the plea of the association in helping to develop the school by financing the big edifice. Ladipo urged other corporate organizations to follow the Skye Bank example by offering a helping hand to higher institutions in the country as government alone could not fund education.
BRIEFS Irish covered banks’ deposits rise in July, ECB funding down
eposits held by Irish banks covered by a government guarantee increased in July, while the banks’ reliance on funding from the European Central Bank fell at its fastest pace in more than a year, Ireland’s finance department said on Friday. Deposits at Allied Irish Banks Group, Bank of Ireland and permanent tsb rose by 1.0 percent, or 1.5 billion euros ($1.9 billion) to 154.4 billion euros in July, their highest level since January 2011, just after Ireland asking for an international bailout. Irish banks, at the root of the country’s financial crisis, suffered tens of billions of euros in deposit outflows in the run-up and aftermath to the signing of the country’s 85 billion euro EU-IMF aid package. The outflow of deposits left the lenders reliant on the ECB for funding. The finance department said that reliance had fallen by 4 billion euros to 61 billion in July, down from a peak of 93 billion in January 2011. The Irish banking system now accounts for around 5 percent of total Eurosystem funding, down from a peak of 18.1 percent, it added.
Malaysia reforms could aid Islamic banks in rural areas
inancial reforms in Malaysia could spur the growth of the country ’s Islamic banks by giving them more opportunity to tap into rural areas, which have a greater proportion of Muslims than urban centres. But concerns about profitability may slow the expansion. The central bank issued new agent banking guidelines this month that expand a pilot programme allowing lenders to offer basic financial services through non-bank retail outlets. “It will be a cost-effective channel for financial institutions to reach out to the underserved parts of the population, particularly those in rural areas,” said central bank governor Zeti Akhtar Aziz. C M Y K
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28 — Vanguard, MONDAY, AUGUST 27, 2012
Interview By Franklin Alli
Why w make c availab
r. (Mrs.) Gloria Nwakakego Elemo is the first female Director General/Chief Executive Officer of the Federal Institute of Industrial Research, Oshodi (FIIRO). She talked to Financial Vanguard on why the Federal Government introduced the cassava bread policy. She also explained why the Institute wants to go into commercial production of cassava bread and the impact of the Institute’s Resarch and Development on the industrial sector, among other issues. Cassava bread has become a burning issue in Nigerian. What informed the Federal Government’s decision to initiate the policy? Thank you very much. It is on record that in 1984, the Federal Government mandated the use of cassava flour for bread making. Unfortunately, the policy faded then with the administration of President Shehu Shagari. However, the birth of the current interest in 10 percent cassava bread came into being during the visit of the former President Olusegun nd Obasanjo to FIIRO on the 22 March, 2004. During his inspection of some products on display by the Institute, he was attracted to the cassava products especially cassava bread/confectioneries. He ate various samples (0 percent-30 percent cassava wheat bread) and finally chose the 10 percent HQCF/Wheat Flour Bread. Having eaten the bread, he developed interest in promoting the production of Cassava/Wheat Bread and getting it to the market. Obasanjo gave a directive to the then Director-General of FIIRO, Dr. O. Olatunji to summon a meeting of the well known Flour Millers like Dangote Group and others to watch the proceedings as they claim that no matter how low the percentage, cassava flour will not allow the dough to rise. Thereafter, the President summoned a meeting of all stakeholders in bread production - the Legislature, the Executive, the Research Institutions, the Cassava Farmers Association, the Flour Millers Association and the Master Bakers to the State House on “Incorporation of 10 percent Cassava Content into Wheat Flour.”
s a follow up to the State House Meeting, a number of activities took place: The President constituted a Committee on Cassava in bread which the AttorneyGeneral of the Federation and Minister of Justice then, inaugurated. The Honourable Minister of Science and Technology then, made a financial request to the President for FIIRO to demonstrate the innovation of 10 percent Cassava Composite Bread Production in all states of the federation. A draft bill for the legislation needed for actualising a policy on 10 percent cassava content in bread was prepared. By 1 st C M Y K
January, 2005, legislation on the policy took effect, but due to shortage of cassava flour to the millers, the federal government then instructed that the implementation of the policy should take off with 5 percent. Also, a minimum quality requirement for cassava flour inclusion was set by the Standard Organization of Nigeria (SON). The Institute has worked on this innovation for over three decades and has since been training many prospective entrepreneurs including cassava processors on the technology
We are going into commercial production of the commodity in order to make the bread available to more Nigerians. Many people are complaining that they don’t have the bread, they don’t know what it looks like and they don’t know how it tastes.
major health the pre really t held vi differen flour (w and con 71, wh Cassav 46. Cas & 60.46 a bette
of High Quality Cassava Flour (HQCF). This was done to ensure steady supply of high quality cassava flour to the flour millers. The Institute was also mandated in 2005 to train Nigerian master bakers on the use of 10 percent cassava flour for bread and confectionery products. Tilldate,bakers in Akwa Ibom, Oyo, Ogun, Rivers and Lagos States have been trained accordingly. So, FIIRO made cassava the golden crop it is today. Is your cassava bread now available in every market in the country?
ur products are not generally available in the market yet, but we have samples and we produce them on regular basis to show that they are commercially viable using our technology. For quite sometimes now, we have been selling our 10 percent of cassava infusion bread in the Institute and it’s environ and that is what we have been eating. Indeed, FIIRO baking laboratory has been producing composite (cassava/wheat) bread which it sells to staff on a daily basis as a demonstration of the feasibility and economic viability of the technology. Now we are scaling up by going into commercial production of the commodity in order to make the bread available to more Nigerians. Many people are complaining that they don’t have the bread, they don’t know what it looks
like and they don’t know how it tastes. So, the whole idea is to showcase this technology for people to see the prospects of investing in commercial cassava bread production , and because of the dimension and the direction we are going now, very soon you will be seeing these products in the markets. FIIRO alone cannot satisfy the population of 160 million people; we can’t satisfy the population of Oshodi let alone the entire country. Indeed, it will be my joy if all of us can buy one or two of this technology and establish them in the market. Again, at the Institute, we don’t work on assumption. So, we want to tell Nigerians that they can make big amount of profit by investing in cassava bread making. What about quality? The composite bread produced by FIIRO has been adjudged by all those who eat it to be of very high quality. In addition to baking bread with the 10 percent composite cassava, FIIRO has also successfully baked various acceptable confectionery products with over 20 percent cassava flour inclusion in wheat flour. Cassava contains chemical called cyanide. What is your take on the health implication of eating cassava bread? The policy of substituting cassava in wheat flour for bread making and other confectionery products has come under serious criticism. Those opposed to the policy argue that cassava is a
Vanguard, MONDAY, AUGUST 27, 2012 — 29
we want to cassava bread ble nationwide
cause of diabetes and that it can worsen the of people who are already diabetic because of esence of cyanide in it. These assertions do not tally with scientific facts. In contrast to generally iew, results from several studies by FIIRO and nt organizations have shown that white wheat which is the preferred flour for bread making nfectioneries) has a very high glycemic index of hich implies that it is unsuitable for diabetics. va, on the other hand, has a glycemic index of ssava/wheat composite flour GI is between 59.34 6, placing it in the medium range, and making it er choice for bread making for health conscious
rs.) Gloria Nwakakego Elemo
diabetics than white wheat flour. So, cassava bread is not poisonous; it has no negative health implication on consumers; rather it is an avenue for wealth creation. You talked about commercialisation of FIIRO research results? IIRO being an old organisation that came into existence in 1956, we have done a lot and have achieved landmark results. We have more than 50 commercialisable research and development results, which are mostly lined on the shelf. Why we are having most of the results on the shelf is due to poor funding. The new policy direction for Federal Ministry of Science and Technology, which happens to be the parent ministry for FIIRO is commercialisation of our research findings. Before that policy direction, when I came in as the Director General, I had a vision of commercialisation. I didn’t plan to sit back and watch our R&D results gather dusts on the shelf. My target is the commercialisation of our research and
The proliferation of Instant Pounded Yam Flour (IPYF) production companies in Nigeria is due to the Institute’s activities in R&D
Ideally, there should be FIIRO offices in every state of the country. I know we will get there, we have taken the first step and the most important thing is to see that we are there.
development results. Now, looking at your R&D, what are their impacts on the economy, especially manufacturing sector? They cut across different sectors of the economy. For instance, the10 tons/ day mechanized garri plant designed at FIIRO was licensed to Newell Dunford, UK to mass produce with plants sold at Brazil, Ghana, SierraLeone and royalties paid to the federal government. Also, the proliferation of Instant Pounded Yam Flour (IPYF) production companies in Nigeria is as aresult of the pioneering activities of the Institute in R&D. Based on our current survey of 45 IPYF companies in Nigeria, over 1,500 jobs were created directly by the IPYF companies like Ayoola Foods, and it is estimated that over 4,000 jobs were created indirectly. Foreign exchange is also earned through export of pounded yam flour. Furthermore, as a result of our R& D efforts, local production of ginger powder has reduced its importation significantly and foreign exchange has been saved.
n the ‘80s, importation of Barley malt by the breweries was over $500m. FIIRO’s collaborative research led to production of Sorghum malt, Sorghum beers, Burukutu and Pito drinks from Sorghum. Upgrading of indigenous production of Burukutu and Pito drinks had generated many rural jobs especially amongst women. Our research findings indicated that Sorghum malt was a better substitute
for the imported Barley malt for brewing. This gave rise to the ban on barley malt importation which saved the country $570 million between 1987 and 1988 alone. Multinational companies especially Nestle Plc, Cadbury Plc, Glaxo Laboratories, etc took advantage of the Institute’s R&D results in the areas of soybean processing (Some of the products developed from Soybean are: Soy Ogi, Soy milk, Soy flour, Soy dawadawa, Soy garri, Soy ice cream, Soy yoghurt, Soy bread, Soy snacks, Weaning foods) to produce popular brands of weaning foods and breakfast cereals such as Nutriends, Golden Morn, Cerelac, Babeena, etc, thus reducing importation of such products, and stimulating domestic industrial production and utilisation of local raw materials and indigenous technologies. Lastly, how many offices do you have across the country? With regard to our spread in the country, we have actually for a long time been here In Oshodi, but we have spread now to the north. We have opened liaison offices in Kano and in Abuja that handle the central part of the country. Our flagship project in Kano is tomatoes. We are hoping to establish in all the six geo-political zones of the country, and we have actually requested for approval so that we can establish offices in all the geopolitical zones. Ideally, there should be FIIRO offices in every state of the country.
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30 — Vanguard, MONDAY, AUGUST 27, 2012
Barclays set to take over Doux mid-Sept — Union
arclays is set to assume control of debt-burdened French poultry group Doux next month, a union said on Thursday, enabling the UK bank to pursue a turnaround plan for the business supported by the family that controls the company. Barclays is expected to take an 80 percent stake in Doux, which went into court administration in early June, in exchange for forgiving debt of 140 million euros ($175 million). The plan received implicit backing from a French court on August 1. “The transformation of Doux’s Barclays debt into 80 percent of its capital should be implemented on September 10,” Raymond Gouiffes of the CGT union told Reuters following a meeting of the company’s works council.
Citi to withdraw $500m from Paulson’s funds
he hits keep coming for hedge fund manager John Paulson, with Citi Private Bank deciding it will withdraw up to $500 million from Paulson & Co’s flagship Advantage funds, according to a person familiar with the decision. Citi mentioned its decision to pull capital from Paulson’s Advantage funds, which have recorded double-digit losses so far this year, on a Thursday morning conference call with its private bank adviser, that person said, adding he was not on the call. The Advantage Plus fund sank 18 percent through the end of last month, and the Advantage fund declined 13 percent over the same period. Hedge funds gained 2.88 percent on average through July 31, according to hedge fund tracking firm HFR, while the broader stock market rose 7.41 percent over the same period. Armel Leslie, a spokesman for Paulson & Co, declined to comment on the withdrawal. Citi did not return requests for comment. The redemption was first reported by Bloomberg. As returns faltered earlier in 2012, Citi put the Paulson hedge funds on a so-called “watch list.” It was not the only bank platform invested with the $21 billion fund that showed signs of cold feet. C M Y K
By PETER EGWUATU
r. Adebola Akindele is the Group Managing Director, Courteville Business Solutions Plc, a quoted company on the Nigerian Stock Exchange (NSE). He spoke to capital market correspondents on the benefits of the company’s new investment tagged 'Egole', and other issues that affect shareholders' returns on investment after his return from London where some quoted companies on the Nigerian Stock Exchange (NSE) participated in the African and Caribbean 2012 London Business Expo. Excerpts: How much are you expecting to get from the new investment tagged “ Egole” In the first year, we will hope to achieve up to 10 percent in terms of Courteville’s revenue projection for 2012, that’s what we hope to achieve. We started midway into the year, we started in July as I earlier affirmed and we would go out to achieve this; because we are going to put in a lot of resources to achieve this by creating awareness of what the facilities and opportunities are on the Egole platform. What is this new investment all about? Egole is our key efforts at making sure that we diversify our business base; from Government related activities and we hope that within five years, Egole will be in the forefront of being an entirely private sector established and driven business on the Courteville platform. We expect that in five years, we should be doing up to 50 percent or more of what Courteville will achieve in terms of revenue. Our success will speak for Egole, our antecedent and the believe that people have in Courteville, in our structure, integrity and ability to deliver on everything that we have always promised to do, we will sell Egole; but more importantly, we always will continue to put a lot of effort into marketing and work with the people who would project the successes of the Egole. How would the anticipated successes of new investment benefit shareholders be the foremost business It’s straight forward, when solutions Company in there is no business; there is Nigeria and the world. no revenue, if you are careful What are the benefits of the that translates to profit, if there new investment to people in is no profit, there is nothing diaspora for shareholders to benefit; as we have stated, in five years, gole is a Nigerian word if we are able to achieve our in local dialect for “What target, it could translate to is the Price”, what Courteville improved dividend payout to has done is to establish an shareholders of the company. online shopping Mall for How is the company going businesses and Consumers to to tackle the issue of interact; without necessarily competition? needing a Physical Structure Competition is good and as to be able to do their you have stated, there have businesses; what can satisfy been attempts by several their daily requirement of companies to do this before buying and selling. now; but we did not just It is not restricted to just launch Egole in July of 2012, Nigeria, even though we have we have spent some years just started it in Nigeria, and working on it, it has taken us it is catching up at a fast since year 2008 and this is the pace. Currently, it is the most fourth year of our effort in robust Online Shopping trying to establish a very Platform in Nigeria and West strong base, we had the time and resources to execute this. Again, we had the expertise, background and antecedent to be able to achieve this level of success. Everything that we have tried putting out in the Market has been successful to a certain extent and we pray to God that this will also succeed. There are a number of other small efforts both in Nigeria and outside Nigeria; but like I earlier said, in everything we do, Egole will
•Mr. Adebola Akindele, CEO, Courteville.
Shareholders will benefit from our new investment —Akindele
Africa at this time. What we have come to do at African and Caribbean Business Expo (ACCBE) essentially is to try and project this to the people in Diaspora. There are lots of Nigerians and West Africans who are here and on the average; there is a need for them to transfer or to make transfers back and forth. Egole has been designed to do so many things as regards people’s shopping. Buying monthly provisions, seasonal stock and so on. This can be done without necessarily transferring cash or sending cash physically across borders. People in London will be able to buy any product online, pay for same product Online and have them delivered to their destination in Nigeria.
Egole has been designed to do so many things as regards people’s shopping. Buying monthly provisions, seasonal stock and so on
Again, we are the Cosponsors of the Africa Fashion Week London (AFWL); that was concluded on Saturday and there has been a lot of inquires from Marketers and Sellers of various products; who participated at the AFWL about how they could come online and shop. Interestingly, people from places like Zambia, Zimbabwe and Uganda actually requested to know how they could come on Board. This is a better system of carrying out commerce and that is what Egole is all about. How much did Courteville invest in the new investment?
irst and foremost, what we have done is to say that the ACCBE experience should give us the leverage that would probably allow us to move our business faster into countries outside Nigeria and Sierra-Leone; where we currently operate; but between Africa and the Caribbean in the first instance. We have targeted a very significant percentage of our Turnover as the marketing expense for this and that is part of what we have done. I don’t want to quote exact figures; but I can tell you it’s in Millions of US Dollars.
Vanguard, MONDAY, AUGUST 27, 2012 — 31
Corporate Finance BRIEFS Kewalram introduces Foton brand of trucks to Nigeria
From left: Charter President, Merit Club, Dr Abayomi Aiyesimoju; Charter President, Royalty Club, Mr Anthony Ajayi; and General Manager, Federal Palace Hotel & Casino, Mr David Kliegl at the Formal Charter Presentation/ Change of Guard and Annual dinner of Royalty and Merit Toastmasters Clubs hosted by Federal Palace Hotel in Lagos.A
Equities value records N82.28bn improvement By LAZARUS IBEABUCHI
alues of equities list ed on the Nigeria Stock Exchange, NSE, recorded an upward trend last week, as market capitalisation appreciated by N82.28 billion. Specifically, the market capitalisation which opened the week at N7.366 trillion rose by 1.12 per cent to close at
N7.448 trillion. Another key performance indicator, the All-share index gained 258.5 points to close at 23,399.58 basis points from 23,141.08 points at which it opened. Thirty equities appreciated in prices during the week, lower than thirty three in the preceding week. Nestle Nigeria Plc led on the gainers’ table by 5.01 per cent to gain N25.06, closing at N525.06 per share, followed by Guin-
ness Nigeria Plc rising by 2.81 per cent or N6.80 to close at N249.00 per share, while Dangote Cement Plc rose by N2.98 or 2.71 per cent to close at N113.00 per share. Other price gainers in the top 10 category include: Cap Plc N1.26, International Breweries Plc N1.14, Lafarge Wapco Plc N0.75, First Bank of Nig. Plc N0.55, University Press Plc N0.44, Okomu Oil Palm Plc N0.40 and Roads Nig Plc N0.33, among others. On the other hand, thirtyfour stocks depreciated in price lower than twenty-eight in the preceding week. 7-UP
ECB uncertainty weighs on investors
nvestors generally sold riskier assets across fi nancial markets on Friday, remaining to a certain degree in limbo until they learn how much of a punch central banks will give to the stumbling global economy. The euro zone’s struggle to prevent its own break up continues to dominate markets and play on economic confidence. European shares, which have suffered their worst run in over a month in the last few days as euro zone uncertainty has returned, were flat. But MSCI’s main global index was down around a third
of a per cent on the day. “We are in a vacuum policy wise ahead of the Jackson Hole meeting and the European Central Bank (ECB) meeting on September 6 so we are in a wait and see mode,” said Saxo Bank chief economist Steen Jakobsen. Federal Reserve Chairman Ben Bernanke and other central bank leaders will meet in Jackson Hole, Wyoming, next week for an annual get together that often hints at what monetary policy is to come. “We are waiting to see whether we get QE3 (another round of asset buying from the Fed) and to see how the ECB
is going play. ``It promised that it will help the peripherals, so right now the market is just concentrating on procedures.” Key global stock markets have risen 15-20 per cent since June as hopes of a resolution to the euro zone crisis have sustained investor optimism despite a deterioration in company earnings outlooks. But the rises appear to have come to a halt over the penultimate week. The S&P 500 has failed to break through 1425-30 points, while Europe’s top shares have been unable to climb above 1115 points.
Bottling Company Plc led on the price losers’ table, dropping by 4.04 per cent or N1.62 to close at N38.50 per share, followed by Nigerian Breweries Plc with a loss of N1.61 or 1.33 per cent to close at N119.70 per share, while Conoil Plc lost N1.09 or 4.99 per cent. Other price losers in the top 10 category include: Arbico Plc. N0.70, P Z Cussons Nigeria Plc N0.46, Nigerian Ropes Plc N0.41, Guaranty Trust Bank Plc N0.28, Eterna Plc N0.22, Cement Co. of Northern Nig. Plc N0.18 and Pharma-Deko Plc N0.15, among others. Equity trading depreciated by 5.8 per cent in the week under review, as investors exchanged 878.53 million shares valued at N9.907 billion in 11,633 deals, in contrast to a turnover of 932.58 million shares valued at N7.277 billion in 17,711 deals in the penultimate week. The Financial Services sector was the most active during the week under review with 694.02 million shares valued at N4.56 billion exchanged by investors in 6,905 deals. Volume in the sector was largely driven by Banking sub-sectors led by shares of Zenith Bank Plc, First Bank of Nigeria Plc and Diamond Bank Plc. Trading in the shares of the three banks accounted for 254.87 million shares, representing 48.72 per cent, 36.72 per cent and 29.01 per cent of the turnover recorded by the sub-sector, sector and total turnover for the week, respectively.
ith over 150 years of marketing experience in Nigeria and sub sahara Africa, Kewalram Chanrai Group is poised to bring succour to the automobile sector of the Nigeria’s economy with the new range of Foton medium and Heavy duty trucks. The new Foton Auman trucks manufactured by Beijing Foton Daimler Automotive Co., Ltd (BFDA) are being introduced in Nigeria by Kewalram Chanrai group thru its automobile subsidiary Kewalram Nigeria Limited (KNL) which has its showroom and workshop at Isolo in Lagos with branches at Abuja & Port Harcourt. Foton has experienced rapid growth since entering the truck business in 1998. Last year it sold over 100,000 medium- and heavy-duty trucks, making it a key player in China’s truck market. A second truck plant is currently being ramped up in Beijing’s Huairou district to give the BFDA joint venture a total production capacity of 160,000 trucks.
Privatisation: NCP names 7 successful firms for PHCN generation coys he National Council on T Privatisation (NCP) on Friday named seven successful firms for the bid of five generation companies created from the unbundled PHCN. Mr Atedo Peterside, a member of the council, said this after a meeting of NCP presided over by Vice President Namadi Sambo at the State House. He said the council arrived at the decision after evaluating the report of the technical committee which had reviewed respective bids of interested investors in the generation companies The power plants whose preferred bidders were announced are: Ughelli, Sapele, Geregu, Kainji and Shiroro. Peterside said the council approved Phoenix Electricity, Transcorp Consortium and Ampiron Power Distribution Limited as preferred bidders for Ughelli Power Plant. C M Y K
32 —Vanguard, MONDAY, AUGUST 27, 2012
Micro-Finance BRIEFS TEF urges AMIP graduates to strengthen Africa’s entrepreneurial network
AMCON urges corporate bodies' support for CIBN
he Managing Director/ Chief Executive Officer, Asset Management Corporation of Nigeria (AMCON), Mr. Mustafa Chike-Obi, has called on corporate bodies to support Chartered Institute of Bankers of Nigeria (CIBN). Obi who made this call during a stakeholders’ dialogue with the Institute, led by Mr. Segun Aina, OFR, FCIB, President/Chairman of Council, at AMCON office, Lagos, said the call is in the interest of the banking industry coupled with efforts geared towards enhancing the Institute. He noted that CIBN plays significant roles in the banking industry and deserves to be supported by all the corporate stakeholders to enable the Institute discharge its responsibilities to the industry better. He assured that AMCON would continue to support efforts and initiatives of the Institute, explaining that the company was established in the interest of the banking industry and will continue to discharge its mandates professionally.
MFB donates to orphans in Kaduna
he Kaduna Microcred Microfinance Bank has donated items to orphans at Jamiyar Matan Arewa Orphanage home, in commemoration of the Eid-ElFitr to mark the end of Ramadan by Muslims all over the world. The items donated include NAN baby food, Indomie, Juice and pampers among others. Making Presentation of the items on behalf of the bank to the orphanage home, Head of Corporate Services, Mrs. Emem Ekpikhe, said the gesture was borne out of the policy of the company, which includes caring for the poor and giving back to the society where they make profit. Ekpikhe said: “We are to identify with the orphans following the mission of our bank which is to support the poorest of the poor. So at a time of celebration like this, we have come to show love to these little ones, support and encourage them as well as give them hope for tomorrow. C M Y K
A typical Nigerian market were micro businesses strives
Simplified operation model key to MFBs' growth – Asha boss Stories by POVIDENCE OBUH
he Managing Director of Asha Microfinance Bank Limited, Mr. Aminul Haque Bhuiya, has said that adopting a simple operation model would fast track the growth of MFBs in Nigeria. Bhuiya made the statement at a seminar where he spoke on the topic “Lending Methodologies and Product Developments in MFBs” organized for credit and marketing staff in the industry. He said, “For Nigerian MFBs to grow, they must adopt the simplified model as those in Bangladesh where operations are on the low side. Asha is a leading MFB in Bangladesh, and in Bangladesh, we are not extravagant. We don’t use luxuries; customers seat on bench when they come around, no TV set, no executive chairs and air conditions etc. “Loan assessment and monitoring is easy in Bangladesh because of the simplified model of operations the banks have adopted.” He pointed out that Nigeria is a very good market for the sub-sector and also a good place for microfinance operations compared to that in Bangladesh. According to him, “In Nigeria, most females are directly involved in the business. They do businesses
without interference from their husband. They are not depend on their husbands, this is the basic difference between Bangladesh and Nigeria. “Bangladesh women depend on their husbands but the Nigerian women do not fully depend on their husbands. If you give them loan, they will handle it themselves, they will not hand it over to their husbands, but in Bangladesh they hand it over to their husbands.” On his part, the Zonal Chairman South West Zone, Mr. Olufemi Babajide, said that the banks have changed their operation model by operating the low fix cost. “We did not operate with the
right model. The model we had was high fixed cost but when the Asha came, we now realized that we can operate the low fix cost. The future of the sub-sector is bright, but we have challenges,” he said. On his new position as the zonal chairman, Babajide revealed that the executive members would meet with all the stakeholders in the south west to improve on the outreach and to deliver its service to micro-finance. He said, “My agenda is to have a prosperous microfinance banks in Nigeria, and in achieving that, we need to start from a number of things, like capacity building, secondly we need to really know ourselves.”
he Tony Elumelu Foundation, TEF, has advised graduates of the African Markets Internship Programme (AMIP) to fill the knowledge gap in the business environment and further strengthen Africa’s entrepreneurial connection with the world. This is consequence upon the rising need for talented homegrown leaders, as well as international business partners that understand the continent’s unique business environment. There is a huge knowledge gap in terms of what is available out there, on how businesses have been successful and stable in Africa and because of that, entrepreneurs often have to make decisions based on almost re-investing in the real rather than see what others have done before them, says Dr. Wiebe Boer, Chief Executive Officer, TEF. Boer who spoke at a press briefing to officially announce the successful conclusion of the second year of the AMIP added that the programme marks the foundation’s continued commitment to the development and celebration of African business leadership. According to him, the foundation makes fund available to entrepreneurs through direct investment in small businesses but also find a way to help them access capital from other source to as well leverage additional capital.
2015 MDG: CBN tasked on regulation of MFBs
o achieve the 2015 M i l l e n n i u m Development Goal (MDG), the Central Bank of Nigeria (CBN) must ensure that MicroFinance Banks in the country are properly regulated for micro-financing activities. A source who chose not to be mentioned, commended the CBN’s effort in establishing and licensing micro-finance banking in Nigeria. “In order to use micro finance to achieve the number one goal of the MDG in 2015, the CBN needs to take steps to ensure that the licensed microfinance banks are indeed not only used to achieve the
purpose but properly regulated for the micro-finance activities so as to take good roots and acquire credence,” the source said. It would be recalled that the policy direction towards the millennium development goals is that one per cent of the annual votes of the state and local governments should be channeled to Micro-finance banks for onward lending to the poor and low to medium scale entrepreneurs. The source explained that very few states have taken steps to get this started, saying that Lagos State is a good example that has taken
the lead to effectively and efficiently put microfinance banking into focus. He said, “Nigerian Microfinance banks have what it takes to m a n a g e m i c r o funds for states and international bodies, as such should be given the chance to do so under strict supervision and control.” The CBN approved frameworks and guidelines in order to return sanity to the sub-sector, MFBs now operate u nder three categories Unit, State and National rather than the former two category."
Vanguard, MONDAY, AUGUST 27, 2012 — 33
Homes & Housing Finance
Urban renewal: Lagos unveils resettlement estate project Stories by YINKA KOLAWOLE n a bid to mitigate the Ieffect of its urban renewal programme on displaced residents, the Lagos State government has embarked on the development of a resettlement scheme, along with the delivery of more housing projects in the state. Commissioner for Housing, Mr. Bosun Jeje, made this known recently during an inspection tour of some housing projects in Ikorodu. He said the state government decided to build the resettlement estate in order to accommodate some people that may be affected during urban upgrading of some flooded or blighted areas in the state, adding the idea was to ensure homelessness is reduced to the bearest minimum. The resettlement scheme which comprises of 70 blocks of flats and designed in 1, 2 and 3 bedroom flats with 3 bedroom terrace houses, is located in Odo, Ayandelu/ Odo- Onosa Village along Agbowa, Sagamu Road, IkosiEjirin
Local Council Development Area (LCDA), Agbowa. At the time of the visit, the scheme which is occupying a wide expanse of land space, was at foundation stage. The commissioner noted that a total of 22 contractors were engaged to work on the scheme, out of which seven have been mobilised while eight contractors were already working on site. Jeje also noted that government embarked on the construction of more residential estates in the state to help deliver affordable homes to more residents of the state. Among these are the 320 units of flats under Igbogbo Housing Estate Phase II, located within Ikorodu Satellite Town. The commissioner added that the project is billed for delivery mid 2013, designed in 1, 2 and 3 bedroom
apartments, with basic infrastructure such as a miniwater works, roads and drainages as well as lock-up shops. He further stated that the Igbogbo housing estate is part of the government’s programme at reducing the state’s housing shortfall, especially through its Home Ownership and Mortgage Scheme (HOMS), which is yet to formally take off. “We want to address the housing hic-cups. With this type of project, we are already working to make the supply aspect of the programme available, so that when the mortgage scheme eventually takes, we would
not have problem with demand. That is why we want to have the houses in excess at least to meet the demand. “Igbogbo Housing Estate Phase I is already completed. We have been calling and encouraging private sector to partner with us. Very soon the government will hand off from directly building housing estates, what it would do is to provide conducive environment and allow the private sector to do the construction,” he stated. The commissioner assured that on completion, the estate would be allocated through a transparent process, which he said the state would soon put in place, adding it has been the state government desire to partner with private investors on delivering of homes to her people.
BRIEFS Ogun woos cooperatives on housing schemes gun State government O has advised cooperative societies operating in the state to embrace government’s housing schemes across the state. Commissioner for Housing, Mr. Daniel Adejobi, gave the advice while inspecting some housing projects across the state. He urged them to encourage their members to enroll with primary mortgage banks (PMBs), which will enable obtain loans from the National Housing Fund (NHF) and facilitate their becoming homeowners. Adejobi urged cooperative societies as veritable vehicle for mass housing programme to utilize the opportunity offered by the state government’s house ownership scheme, spread across the three senatorial districts of the state. According to him, for cooperative societies to benefit from the scheme, they must have a minimum membership of 50 people and must have two years audited accounts.
US home sales up 3.6%
•High end housing development
Oyo reviews housing loans for workers O
yo State government has approved an upward review of housing loans for civil servants in the state to enhance their capacity to own houses. Commissioner of Lands, Housing and Survey, Ajiboye Omodewu, said that the move was part of government’s plans to restore dignity to the state’s civil and public service. According to him, the approved upward review of the housing loans by Governor Abiola Ajimobi would ensure that civil servants on Grade Levels 01 – 06, who hitherto enjoyed a loan of N500, 000, had their
loan ceiling increased to N800,000, while those on GLs 07 – 08 had theirs increased from N600,000 to N1,000,000. Also civil servants on GLs 09 – 10, whose loan ceiling was pegged at N800,000 was increased to N1,500,000, while those on GL 12 and above, whose loan ceiling was N1,000,000, had an upward review of a 100 percent, to N2,000,000. In a statement by his Special Adviser on Media, Festus Adedayo, the governor noted that the review is part of the government’s plan to
improve the living condition of civil servants. He added that the state government was in discussion with mortgage institutions on how to facilitate easy access to the National Housing Fund (NHF) by civil and public servants in the state. He further said that government has discovered that the sum of N2 billion was available to contributors to the NHF scheme, adding that the administration had set up a committee which had kickstarted the process of returning the workers of the state to the scheme. “The NHF scheme, which the state government
abandoned some eight years ago due to complaints from some civil servants on alleged lack of accountability in the management of their funds, would be put on stream presently,” he assured. Omodewu said that the state government has concluded arrangements to partner private developers to build houses for civil servants at the Ajoda New Town and on another expanse of land on the Ibadan-Oyo road. He asserted that the initiative will, among other things, ensure that a three-bedroom flat was available to civil servants for between N3 million and N3.5 million.
ales of new homes in the US rose 3.6 percent in July to match a two-year high reached in May, the latest sign of a steady recovery in the housing market. The Commercial Department said that newhome sales reached a seasonally adjusted annual rate of 372,000. That’s the same as in May, which was the highest since April 2010. In the past 12 months, sales have jumped 25 percent. Still, the increase is from a historically low level. New-home sales remain well below the annual pace of 700,000 that economists consider healthy. One trend holding back sales is that there aren’t many newly built homes available. New homes for sale dipped last month to 142,000, the lowest on records dating back to 1963. The housing market is making a modest but steady recovery in part because homes are more affordable: Mortgage rates have fallen to near-record lows. Housing prices are about one-third lower than at the peak of the housing bubble in 2006. C M Y K
34 — Vanguard, MONDAY, AUGUST 27, 2012
“If fuel subsidy removal is going to be your opening gambit in this complex game of economic-chess, you might as well return to your desk at the World Bank.” Dele Sobowale, August, 20II. Advice given to Dr Okonjo-Iweala. hen that piece of advice was given, there was no illusion that it would be taken seriously. There was also no doubt in my mind that you will ruin your credibility with large segments of Nigerian society if you ignored it. Predictably, you went on the offensive with calls for fuel “subsidy removal”. I watched from a hospital bed as you and the Minster of Petroleum Resources, Mrs Diezani Alison-Madueke, danced around the stage at the Muson Centre trying desperately to convince the audience that what was a monumental fraud perpetrated by a few people in collusion with NNPC officials was actually subsidy. One nurse coming into my hospital room saw tears in my eyes and assumed that I was in serious pain. I was indeed; but not from arthritis. I cried for you; because you have been misled by Mrs Allison-Madueke and others. You not only believed them totally, you failed to cross-check their figures. Then you hastily produced a SURE document, more figment of imagination than a real guideline to action. Even a good primary five pupil could see that there was no way all the projects listed could be financed with NI.34 trillion. That was a self-indictment – publishing deliberate “inexactitudes”. By now, millions of copies of the SURE document have gone up in smoke – at a cost of millions of naira to our country. That
Time to go Dr Okonjo-Iweala – Part 3
Dr Okonjo-Iweala did your reputation no good. You moved from one calamity to another very rapidly. The National Assembly, NASS, was busy exposing the fraud, you called subsidy, when you made the bid for World Bank President. Granted, anybody has the right to aspire to any position on earth. But, for two reasons, your bid was in bad taste. One, any student of economics, invariably, takes a course in international financial institutions – World Bank IMF, African Development Bank etc. We all know that the two Breton Woods institutions, World Bank and IMF, had been “zoned” to the United States and Europe permanently. And, until the fundamental agreements are changed, no citizen of another continent can aspire to the positions of World Bank President or Managing Direc-
tor of IMF. So, what were you doing, playing to the gallery of “know-nothings” in Nigeria and contesting for the job? With the US dollar, as the universal reserve currency, did you really expect the US to hand the World Bank to a Nigerian? Come on, Madam, some jokes are too expensive. Two, when asked why you accepted to be Finance Minister for the second time, your answer was very inspiring. According to you, as a patriotic Nigerian, you have a duty to help your country. But, less than six months after, with your country in turmoil over “subsidy removal”, to which you contributed, you were eager to bolt back to the World Bank; and you would have gone – if the door was not slammed on your face. To be candid, Madam, you
lost my respect right there and then, and, if I were Jonathan, you would have been sacked after your failed attempt to leave us a second time. Nobody, not even you, is indispensable. As late President Charles De Gaulle reminded us, “The graveyards are full of indispensable people.” (VANGUARD BOOK p I02). No nation should entrust its most vital functions to people wanting to add to their cvs. Finally, we are confronted with three major perils on account of functions within your portfolio. First, budgets are either poorly or not being implemented at all. Legislators now call you “a liar” openly. Others, more polite, dispute your figures – which are actually dodgy. And, you probably know it. Second, debts, which you came to remove in
2003; and, which you preached against, are rising again. Yet, there is nothing to show for it. Instead of helping us, you now justify the rising load. People now ask, “Where does she stand?” Third, funds are being siphoned from the Federation account, illegally, by the NNPC, the CBN and the Presidency, without your knowledge. Illegal accounts, probably operated as slushfunds are opened while you sleep. Over N500 billion (I2.5% of the year’s budget) was paid secretly to an oil and gas company, whose major stakeholder conveniently is from Bayelsa State, behind your back. All you are asked to do is to defend each and every illegality. That, to me, is the perfect definition for a figure head. The truth is, Madam, you are not in control. Your boss needed a heavy-weight window dressing and he procured your services. Now, the curtain is being shredded. Your credibility has been damaged; perhaps irreparably. It’s time to move on; for your own good and for Nigeria’s. The man, or woman, for all eras, no longer exists. In many respects, you don’t fit into this team of mostly incorrigible liars. P.S. I don’t expect this advice to be accepted either. Power is enticing. Dr Ndidi Okereke-Oyiuke received similar admonition in 2008, asking her to leave the Nigerian Stock Exchange, NSE, before the roof caved in. She didn’t. Now, there will never be a send-off party for the former DG-NSE.
BUSINESS & ECONOMY NICON re-launches travellers’ personal accident insurance policy
ICON Insurance has announced the reintroduction of Travellers’ Personal Accident Insurance Scheme (TPAIS). TPAIS provides coverage for passengers against accident induced death, permanent disability and medical expenses. Mr. Emmanuel Jegede, the Managing Director of NICON Insurance, disclosed this in Lagos. Jegede said that the product was being reintroduced to provide insurance coverage for
passengers traveling across the country. “This product serves the need of organised transporters, especially the mass transit buses moving passengers within and outside the states. The product provides compensation for death from accidents, permanent disability and medical expenses to passengers,” he said. According to him, the insurance product is designed to complement the National Insurance Commission’s (NAICOM) efforts in ensuring
that road accidents victims are compensated. Jegede said that additional three new products had been approved
by NAICOM. They include Overseas Travel Insurance Policy, Directors and Officers’ Liability Insurance and Events
Management Insurance. The NICON boss said the Events Management Insurance (EMI) policy was designed to provide insurance coverage during marriage ceremonies, parties, burial ceremonies and festivals.
NUPENG inaugurates committee on oil theft
he Port Harcourt Zone of National Union of Petroleum and Natural Gas Workers (NUPENG) says it has set up a committee as part of its efforts to tackle oil theft. Mr Godwin Eruba, the Chairman of the union, disclosed this in an interview in Port Harcourt. He said that the union was working with security agents to ensure that oil theft in the Niger-Delta region was curtailed. Eruba identified oil theft as a
major challenge facing the development of the oil and gas industry. “We have been working round the clock and collaborating with security agents to check oil theft. Whenever we notice such illegal oil bunkering, we report to the relevant authorities. Our union also assists the task force in patrolling oil pipelines on daily basis in the Niger-Delta,” he said.
Vanguard, MONDAY, AUGUST 27, 2012 — 35
Over 10,000 contributors' fund trapped in PFAs Stories by ROSEMARY ONUOHA
ver 10,000 contributors to the new pension scheme who have retired as well as some that will soon be due for retirement have their funds trapped with their various Pension Fund Administrators, PFAs. This is due to the fact that most PFAs cannot locate many of such contributors due to death or wrong addresses while majority are yet to commence the necessary documentation regarding their pension entitlements. It will be recalled that the number of PFAs in the country came down to 18 from initial figure of 28 after the mandatory recapitalsaition exercise by the National Pension Commission, PenCom. Meanwhile, according to Pension Fund Operators, PenOp, there are so contributors whose retirement many benefits have been remitted by their employers but are yet to attend the PFA documentation exercise. Lamenting this development, Chairman of PenOp, Mr. Dave Uduanu, said that the situation is posing a serious challenge to operators because announcing the names of such people might compel unscrupulous elements to come and claim their entitlements. Uduanu said “We have contributors to the new
pension scheme that have died and their next of kin have not shown up. If somebody goes and say Mr. X is dead and I am looking for the next of kin, his whole village people might turn up and say ‘ah the man has five million here and we are suffering. They might kill the genuine next of kin so that he does not show up.” Stating that the development is an industry issue, Uduanu charged nextof- kin of contributors to the new pension that have died to show up to their PFAs so as to be able to claim their entitlements. “So if there is anybody that has lost anybody who is working, the chances are that
the dead person has a PFA. The relative should find out where the PFA is and go there and complete the documentation. Next-of-kin are normally the spouse but we find out that most people use their children and the thing is that if the child is below 18, he needs a legal guardian,” Uduanu said. “So the woman might be scrambling and asking ‘how do I train these children’ meanwhile, the husband left money but the woman was not named,” he said. To prevent such occurrence happening on regular basis, Uduanu advised that people should procure wills so that when they die, the PFAs can dispose off the benefits
From left: Segun Balogun, Managing Director, Wapic Insurance Plc; Mrs. Lawunmi Idowu, representing the Director General, Nigerian Insurance Association, Mr. S.O Thomas and Taukeme Koroye, Board member, Wapic Insurance Plc at the introduction of new Wapic Insurance Plc Corporate Identity in Lagos
Intercontinental Wapic reverts to Wapic Insurance
he board and management of Intercontinental Wapic Insurance Plc have changed the company’s name to Wapic Insurance Plc consequent upon Access Bank Plc’s assuming the controlling interests in Wapic. The company also unveiled a new visual identity. At a media briefing to announce the change in Lagos, Managing Director of Wapic, Mr. Segun Balogun said that shareholders of the company unanimously resolved, at the 53rd Annual General Meeting to revert to the name Wapic. The change of name also applies to the subsidiaries, Wapic Life Assurance Limited (formerly Intercontinental Wapic Life Assurance Limited) and Wapic Insurance (Ghana) Limited (formerly Interconti-
according to the will. Uduanu also stated ‘Another challenge we are facing is that we have people that have retired, have relocated from a place where we use to know them to a place where we can no longer reach them.” “So if you retire from Kaduna and you relocate to my village for instance, there is no Etisalat in my village, the number we know you with is Etisalat. We call your employer, he said the man has retired and have paid him whatever is due to him and he is gone. But the PFA cannot reach him,” Uduanu said. Uduanu said that in the cases mentioned, the PFAs have the monies of the contributors intact but many of them cannot be reached.
nental Wapic Insurance (Ghana) Limited), Balogun said. He said “The return to heritage is a wholesome change; giving rise to a modifications in our visual identity revision along with adjustments in our corporate philosophy. The thrust of the Company’s new philosophy is the vision to become the most respected insurance company in Africa. The ideals of respect speak to a culture of quality service, ethical and sustainable business practices and professionalism. It also connotes a commitment to the highest level of value to shareholders and host communities. Wapic has returned to these age-long ideals and is poised to redefine the business of insurance across Africa.” Balogun said that the company’s business model has
been refined to engender higher levels of efficiency and transparency, adding “The Company’s alignment with its heritage further positions the company to deliver first-class risk management services across markets.” In his welcome address, Deputy Managing Director of Wapic Mr. David Aluko said that earlier in the year, Access Bank Plc completed the merger and acquisition with Intercontinental Bank and this consequently makes Intercontinental Wapic Insurance Plc one of the subsidiaries of Access Bank Plc. Aluko said “Reputed as one of Nigeria’s oldest and most established insurance companies; with presence in the key commercial and industrial centres of the country and a clientele spanning various
sectors of the economy, Wapic has a distinguished history of providing innovative and client-focused insurance services to individuals and corporate clientele.” Executive Director, Access Bank plc, Mr. Taukeme Koroye said “We recognised the unique brand value inherent in the company ’s over 50 years impressive track-record of delivering efficient and transparent insurance services to Nigerians, hence our reverting to the company’s original name. The values demonstrated by the company as Wapic Insurance Plc align with our vision of transforming the company into Africa’s most respected insurance company. “As one of Nigeria’s oldest insurance companies, Wapic Insurance has built enviable expertise in risk management and actuarial services.
BRIEFS Life insurance giants fined for claim payouts
tate insurance regulators have sanctioned four of the largest life insurance companies that operate in Minnesota for allegedly steering death-benefit recipients to keep the money in special accounts the companies run, instead of taking lump sum payouts. The companies — Prudential, John Hancock, MetLife and ING — were each fined $200,000 and ordered to change their claims forms in Minnesota and re-establish cash lump sum payouts as the default option, according to the consent orders the state Department of Commerce released Thursday. The pacts don’t provide direct compensation for individual consumers. The department estimates that thousands of Minnesotans were affected by confusing paperwork and said the practices have gone on for years and, in the case of some companies, decades. The companies agreed to the penalties without admitting wrongdoing.
Financial advisors offend women, survey finds
ow many women have had the experience of a financial adviser calling at home only to ask if he or she might speak with her husband? According to a Boston Consulting Group survey, 73 percent of women say that they are dissatisfied with the financial services industry. Women claim they are overlooked, excluded, receive contradictory or poor advice and get worse deal terms than men. In “Anatomy of a Business,” author Sasha Galbraith writes that communication is and has been at the heart of every business transaction - whether it’s trading saber tooth tiger furs or negotiating a complex international corporate merger. Women are experts at communication, especially when it comes to transmitting subtle and complex ideas such as the importance of understanding one’s values and goals before making investment decisions. The Federal Reserve reports that women control 51.3 percent of all wealth in the United States. C M Y K
36 — Vanguard, MONDAY, AUGUST 27, 2012
C M Y K
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Appointments & Promotions email@example.com 08033348923
Abass now Ericsson Nigeria’s country manager
NIVERSITY of Lagos, UNILAG graduate of Civil Engineering, Mr. Kamar Abass, has been appointed Country Manager of Ericsson Nigeria. His appointment took effect 1st of August, 2012. Kamar, who has more than 20 years experience in global telecommunications services industry, according to Ericsson’s head sub Saharan Africa Lars Lindén, has skills and deep Telco experience that align with the specific needs of the business and therefore has earned the company’s confidence to lead the Nigerian operations of Ericsson. According to Linden, “we are confident that his insights into the business needs of Telecom operators will enable him to effectively drive initiatives that deliver value to our customers and build upon our position as a global leader.” Kamar joined Ericsson in
Mr. Kamar Abass 2008 as the Vice-President, Marketing & Business Development for one of the organization’s largest global customer accounts. Prior to joining Ericsson, he held various
senior positions at Vodafone Group, FirstMark Communications, BT plc, PriceWaterhouseCoopers and Buchanan & Partners. Linden said that Kamar had a passion for the industry and would along with the rest of Ericsson’s executive team, focus on advancing the company ’s leadership through innovation, technology, services and sustainable business solutions. Apart from holding a bachelor ’s degree in Civil Engineering from the University of Lagos, he has an MBA from Cranfield University ’s School of Management. Accepting the offer, Kamar said “Nigeria is an exciting, versatile and dynamic market. I look forward to building on our existing capabilities and fostering local competence to deliver value to our customers and drive stronger growth in the overall industry.”
Diageo appoints Ufomba marketing director
Mr. Austin Ufomba
HE Board of Directors of Diageo Plc, the parent body of Guinness Nigeria Plc, has appointed Mr. Austin Ufomba as its marketing Director. Effective August 1, 2012, before the appointment, Austin began his marketing career at Guinness in 1995, as a management trainee in the sales and marketing function. He rose up to occupy several positions in the marketing department including Brand Support Manager, Brand Manager in charge of Malta Guinness and the flagship brand, Guinness Extra Stout. In 2002, he was seconded to Diageo Plc in the UK, the parent company of Guinness Nigeria as a Global Marketing Manager. Ufomba joined Coca-Cola Nigeria & Equatorial Africa Limited in 2005 as Strategic Marketing Manager (Flavours). In 2006 he was appointed Strategic Marketing Manager (Colas) and subsequently, Strategic Marketing Manager for all Sparkling Beverages, with responsibility of building
brands Coke, Fanta, Sprite, Schweppes, Limca and Gold Spot. As Marketing Director, Ufomba drove the marketing vision and strategy of the Coca-Cola Company in Nigeria after succeeding Kofi Amegashie. Starting as a Graduate Management Trainee (GMT)at Guinness Nigeria, Ufomba over a ten year period held various positions in Diageo including Brand Manager, Global Marketing Manager, Guinness (in the UK) and Project Manager, Marketing. From 2005 to date Austin has held senior leadership roles in First City Monument Bank, FCMB, and CocaCola. While in FCMB, he was the Vice President Brand Marketing and
communication where he positively drove the marketing and communication unit, recording many success stories for the organization. He has attended various local and overseas management-training courses in reputable institutions including Harvard Business School when he finished his first degree from Federal University of Technology, Owerri. Ufomba re-joins Guinness from Coca-Cola Nigeria Limited where he is the Marketing Director at a critical moment to lead the marketing team and make solid contributions in the quest to win big and beat the competition in F13 and beyond.
ARTNERSHIP I n v e s t m e n t Company, PIC, Plc, has announced the appointment of Mr. Frank Ogiamien as Executive Director, ED. He also serves as the chief compliance officer of PIC as he liaises with capital market regulators to ensure the company is in good standing at all times. Mr. Ogiamien joined PIC in September 2008 and has since re-organized the risk management function and assisted to execute several
Amobi takes over as AIAE ED
he Board of Directors of the African Institute for Applied Economics, AIAE, has approved the appointment of Dr. Ifediora Amobi as the new Executive Director, ED, of the Institute. The appointment took effect from August, 2012. He took over from Professor Eric Eboh, who had been the ED of the Institute since 2003. Prior to his appointment, Amobi was the Investment Policy Adviser with UK Department for International Development, DFID, Growth and Employment in States, GEMS3, in Abuja, and Managing Consultant/Executive Director of Skoup and Com-
Mr. Frank Ogiamien
Ogiamien named PIC ED
Dr. Ifediora Amobi
corporate finance transactions and business advisory services. Prior to joining Partnership, Mr. Ogiamien worked with the Nigerian American Bank Limited, NAMBL, and First City Monument Bank Plc, FCMB, as Credit/Investment Analyst. He moved over to Ecobank Nigeria Plc in 2007 and was responsible for the management of several large corporate clients. The early part of his career after graduation was at
Industrial Training Fund, ITF, where he rose to the position of Senior Accountant. Mr. Ogiamien is a member of the Institute of Chartered Accountants of Nigeria, ICAN, and the Chartered Institute of Stockbrokers, CIS. He obtained an MBA (Management) from the University of Lagos and a certificate in Deliverable Strategies from Cranfield University, Bedford, United Kingdom. The new ED has also completed a training on Leadership and Performance Management at Howard University, Washington DC, USA.
pany Limited, Enugu. He holds Doctorate Degree (Ph.D.) in Economics from Howard University, Washington, DC, United States of America (USA), Masters Degree (M.Sc.) in Economics from Clemson University, Clemson, SC, USA and also Bachelor of Science (B.Sc.) degree in Economics from Nebraska Wesleyan University, Lincoln, NE, USA. With over 25 years of professional experience, Amobi has served in different capacities including Senior Special Assistant to the President on National Development Matters, in the Office of the Vice President from 2007 to 2011. He was a Strategy Manager at Accenture, and a Relationship Manager at Citibank Nigeriain Lagos. Between 1986 and 1992, he was a Lecturer at Howard University as well as an Economic Consultant in the Office of the Chief Economist, South Asia Region of the World Bank in Washington, DC, and in1999 he became a Lecturer in the Graduate School of the Department of Economics, Enugu State University of Technology Business School. With more than 15 publications including presentations to his credit, Dr. Amobi has consulted widely for some international organisations including World Bank, International Financial Corporation (IFC), UK DFID. He also consulted for the Federal Government of Nigeria, some states and local governments in the country. Amobi was a recipient of Outstanding Research Initiative at Howard University in1991 and Citibank’s Salesperson of the Month for Africa, September 1997 among others. The Anambra State born technocrat has been the Chairman of some Federal Government Presidential Committees. These including Presidential Technical Committee on Cassava Production, Presidential Committee on the Arbitration of the Dispute Between Plateau and Nasarawa States over a 1982 Midland Bank (UK) Loan, Editorial Sub-Committee, Nigerian Economic Summit, Economic and Finance Committee, League of Anambra Professionals in his home state. Dr. Amobi has been a member of several Nigerian Federal Government Committees including Nigeria Vision 20:2020 National Steering Committee, Inter-Ministerial Committee on the Concession of Nigeria’s Seaports, Technical Committee to Analyze the Design and Cost for Construction of the Niger Delta East-West Coastal Road, Anambra State Governor’s Economic Advisory Council, Nigerian Economic Society; South East Nigeria Economic Commission, American Economic Association; Omicron Delta Epsilon (Econs Honor) to mention but few.
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Advertising, Media & Marketing Stories by
t a time the dust seems to be settling down,, Outdoor Advertising Association of Nigeria (OAAN) members appear to be facing another round of demolition in Kano State. The present situation in Kano State has moved advertising practitioners under the auspices of OAAN to drag the Kano State Urban Planning and Development Authority to court over what it described as indiscriminate demolition of its members'’ billboards. The association said it instituted the legal action to avoid a repeat of what happened in Lagos where a similar action by Lagos State Signage and Advertising Agency (LASAA) made OAAN members lose millions of Naira , while some died in the process, leaving huge debt for their families to pay. In the ensuing court action, OAAN has secured a motion exparte via suit number k/340/ 2012 dated 1st August 2012 in the High Court of Kano State before Justice Ibrahim Musa Muhammad, restraining Kano State Urban Planning and Development Authority, Chris Parkes Marketing Solutions (CPMS) Limited and the Attorney General of Kano State from further pulling down billboard belonging OAAN members. The exparte reads thus; the respondents are hereby restrained jointly and severally and by themselves, agents and privies, staff and officials from further destroying, pulling and bringing down, blanking out the billboards or signs belonging to member companies of the plaintiff in Kano State pending the hearing and determination of the motion on notice already filed in this siut Just like OAAN president, Mr. Charles Chijide had pointed out presumably at the 2012 Advertising day forum where he spoke on the topic, “Outdoor Advertising Regulation and Control in Nigeria” organised by Advertising Practitioners Council of Nigeria (APCON), that the regulation and control of advertising processes be x-rayed in the areas of inherent complications, excesses and challenges as they affect stakeholders. However, observations have shown that the new trend among state governments to engage the services of consultants for regulation, monitoring and control of outdoor advertising within their state is becoming a routine. Some of the consultants do not have the basic knowledge of outdoor advertising or been a member of a regulating body like APCON or a member of OAAN. Some of the consultants do not know or understand what it takes to erect a billboard and the financial involvement in the business, whilst embarking on wanton demolition of C M Y K
Afe Babalola to bag 2012 Brand Personality award fe Babalola, a Senior A Advocate of Nigeria (SAN) has been picked to
From Left; Chief. Afe Babalola, SAN being presented with a manifesto by Mrs. Neta Nwosu President, Brand Journalists Association of Nigeria (BJAN) in Ondo recently, prelude to the 2012 personality award to be conferred on him.
Outdoor industry in limbo ...As OAAN drags Kano to court structures worth millions of Naira.
he major thing to do is engage the services of a professional as a regulator in the state who understands the outdoor advertising system, who understands the pain when billboards are pulled down. Where dilapidated billboards are pulled down it is understandable as a measure to give a befitting aesthetics to the environment for businesses to grow and thrive, because businesses thrive in serene and beautiful environment. The Kano state government should draw example from its Oyo State counterpart, particularly from states that have toed or toeing the line they intend to follow. To carry out sanitisation like Kano State council is doing presently, there should be stakeholders forum where to feel the pulse of the practitioners, rather than giving a mandate. It is important states increase their internally generated revenue (IGR), but such step should take cognizance of the provisions of the relevant sections of the constitution of the Federal Republic of Nigeria which has vested the collection of display of rates on the local government. The present business environment shaped along the line of aggressive income
generation by states has led to increase in practitioners operating costs which has also led to the fall out over 70 percent of hoardings now vacant and many more agencies have had to reduce their staff strength by over 50 percent, thereby increasing the number of unemployment in the country. Added to this huge operating cost is the burden of multiple taxation and levies from various signages and advertisement agencies, local councils and their agents in some cases, Federal Water agencies, Federal Ministry of Works, Environment, Concessioniers e.g like the Lagos-Ibadan express, Relevant waterways in the state etc. On these reasons, the outdoor which is a major component of the advertising practice, in recent years had suffered some decline, especially as a result of various regimes of regulation at various levels resulting in high cost of operations for the practitioners making the hoardings too expensive for clients, this was the candid submission of Mr. Lolu Akinwunmi, APCON, Chairman at the 2012 advertising day celebration. Expanding the scope further, Akinwunmi warned, and said, “Nigeria as a signatory to many international protocols on trade and investment
which makes it possible for foreigners to set up and own majority interests in advertising and related companies, “special care should be taken in allowing foreigners own majority interests in our communication companies. Who controls the channels and organs of communication will control the minds of the people. There is no foreigner who can communicate better with Nigerians that Nigerians.
his however gives cre dence to giving professionals advertising jobs and being a marketing practitioner does make one an advertising practitioner. The appointment of CPMS to regulate and control, as well incease the IGR of Kano State is not a better dummy sold to the government, there are ways to go about the regulation in the state rather than the express ultimatum handed the practitioners via an advert in one of the national dailies to before it on or before May 31, 2012. Before embarking on any demolition, the Kano state government should note that there is a provision by the constitution that billboard owners reserve the right to be compensated for demolished billboards, because there was a financial commitment abinio to the government.
receive the 2012 Brand Personality award courtesy the Brand Journalists Association of Nigeria (BJAN), an arm of the Nigeria Union of Journalists (NUJ). The association, according to its president, Neta Nwosu, unanimously picked Afe Babalola, the founder of Afe Babalola University for his hard work, philanthropy and tenacity of purpose. BJAN instituted the Award two years ago to reward individuals and institutions who have demonstrated exemplary quality worthy of emulation by Nigerians as part of its contributions to building Nigeria into a formidable brand and encouraging consistent value creation that will constantly improve the lives of Nigerians. “ Vision and branding are critical to success in all aspects of life. These are two features in the Brand Afe Babalola that we all should appreciate and strive to imbibe.
Preparations concluded for MarketingWorld awards reparations have been P concluded for the second edition of the 2012 MarketingWorld Awards (MWA) designed to promote excellence in branding & marketing in Nigeria will honour and entertain C Level and other top outstanding marketers. According to the CEO, Instinct Group, publisher of MarketingWorld, Mr. Akin Naphtal, the awards pay tribute to brands that present product distinctiveness that adopts measurable and continuous improvement process with long term returns in terms of goodwill and revenue growth. “ It aims to highlight brands that deliver a full spectrum of maintaining the highest standard of quality, exemplify creativeness, developing a corporate culture and provide positive benefits that exceeds customers and stakeholders’ expectation ” he added. This year ’s event promises to be bigger and better than ever before.
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Nonetheless, the Hon. Minister has advised that N25bn will be set aside from monthly budget allocations into a sinking fund to service and ultimately repay our debts as and when due. Curiously, the honourable minister has chosen to create a repayment fund rather than identify the actual cause of our burgeoning debt base, and drastically reduce the spate of ‘purposeless’ government borrowing.
Why are we still borrowing? our social welfare. What is patently evident, however, is that most of the $40bn current domestic debts were in fact incurred from Central Bank’s huge borrowings with treasury bills and the issue of bonds by the Debt Management Office (DMO). Incidentally, since its inception,
he national debt bur den, which was about $32bn in 2006 was regarded as excessive and unsustainable. Consequently, we were encouraged to part with $18bn in order to cancel most of our external debt. Inexplicably, just six years down the line, Dr. Ngozi Okonjo-Iweala, who as Finance Minister incidentally ‘midwifed’ the controversial debt payout in 2006, now confidently assures Nigerians that our current debt burden of about $45bn is nothing to worry about, since, at only 17%, it falls well below the critical debt to GDP benchmark of 40%! The Coordinating Minister of the Economy is obviously unfazed that the average cost of servicing over N6 Trillion of these debts annually is in excess of 15% in place of 1 – 7% for such riskfree sovereign debts elsewhere.
Curiously, the honourable minister has chosen to create a repayment fund rather than identify the actual cause of our burgeoning debt base, and drastically reduce the spate of ‘purposeless’ government borrowing
the DMO debt portfolio of N3.714 trillion is responsible for over 60% of total domestic debt, while CBN’s borrowings with treasury bills and bonds account for the balance. While the object of CBN’s borrowing is targeted at taming the ever-present ‘ghost’ of excess liquidity (excess cash) in the economy, the DMO’s bond issues were initially tar-
Nigerians are naturally alarmed that the rapid debt increase over the last six years has not tangibly improved our infrastructural base, neither has it enhanced
geted at establishing a benchmark for long-term borrowing and deepening of the market for government securities. Subsequently, in response to critics of these expensive and non-impactful debts, the DMO began to include funding of budget deficits as part of the purposes for its borrow-
ings. Instructively, however, discerning Nigerians have doubted the claim of budget deficits in the recent past. Such analysts argue that crude oil price has never fallen below budget benchmark in the last seven years! In addition, crude exports have also on average generally exceeded budget benchmarks. Government’s
claims of substantial deficits, when actual incomes from productive revenue streams exceed approved expenditure budgets have become worrisome to analysts; a case in point is that of revenue expectations in budget 2012. We recall that in spite of the budget benchmark of $72 per barrel, and output benchmark of 2.4mbpd, in reality, crude oil price has hardly fallen below $90/barrel, while output has not only been stable above budget benchmark but has in fact been reported by the NNPC to have exceeded 2.7mbpd for some months. Fortuitously, also, the Federal Inland Revenue Service (FIRS) has reported that almost N2.5 Trillion has so far been collected as revenue between January and June 2 0 1 2 . (See “FG earned N2.43tn from taxes in six months”, Punch of 24/07/ 2012, pg 23). If this excellent performance is projected for the rest of the year, then, we may expect that internally generated revenue alone for 2012 may exceed the N4.8 Trillion aggregate expenditure vote in the 2012 budget! In such event, the rationale for DMO’s borrowing spree becomes questionable, as it is inappropriate for the agency to borrow money for ‘undisclosed’ expenses, which have not been captured in the approved budget statement.
Indeed, the DMO’s borrowing binge in spite of apparently extant surplus funds becomes more bewildering when considered alongside additional monthly accruals from crude oil exports. If earlier budgets are anything to go by, export crude revenue (even in times of unstable crude prices) has traditionally accounted for over 80% of government income,; in this event, we may realistically expect minimal additional inflow of over N4 Trillion (over $24bn) into the federal treasury this year. In summary, therefore, total revenue expectations from the foregoing sources would be a total of N9.5 trillion, made up of N5 Trillion internally generated revenue, N4 Trillion from crude export and at least a minimum of N500bn from customs duties!! Indeed, the above revenue estimate may still be a gross understatement, as crude prices and output have remained well above budget benchmarks this year, and consequently, crude export revenue could exceed $40bn!! The component of about N1.5 trillion debt accumulated via treasury bills becomes more farcical when we recognize that the CBN self-inflicts the eternal scourge of excess liquidity which the apex bank turns round to mop up with borrowing cost often in excess of 15%! SAVE THE NAIRA, SAVE NIGERIANS!
BUSINESS & ECONOMY
NAICOM begins cross-border supervision pact with 8 countries …Signs MoU with Ghana
efinite about protect ing the interest of Nigerian insurance companies operating outside the shores of this country and
By FAVOUR NNABUGWU
C M Y K
Omoh Gabriel Babajide Komolafe Clara Nwachukwu Peter Egwuatu Yinka Kolawole Favour Nnabugwu Godwin Oritse Godfrey Bivbere Yemi Adeoye Oscarline Onwuemenyi Franklin Alli Michael Eboh Amaka Abayomi Ebele Orakpo Ifeyinwa Obi
Group Business Editor Acting Finance Editor Energy Editor Head, Capital Market Snr Bus. Correspondent Insurance Correspondent Maritime Correspondent Maritime Correspondent Energy Correspondent Energy Correspondent Industry Reporter Capital Market Reporter Money market Reporter Energy Reporter Maritime Reporter
CONTRIBUTORS Princewill Ekwujuru Naomi Uzor Providence Obuh LAYOUT
Media/Marketing Industry Capital Market Graphics Department
to also project the image of the nation in the operations, the National Insurance Commission, NAICOM has began moves to sign Memorandum of Understanding, MoU with eight host countries to Nigerian insurance companies. It was on this premises that Mr Fola Daniel, Commissioner for Insurance on behalf of Nigerian insurance industry, weekend, signed an MoU with Ghana Commissioner of Insurance, Mrs Nyamikeh Kyiama of behalf of that country. The other countries that are also playing host to Nigerian insurance companies include Sierra Leone, Gambia, Liberia, Sao Tome & Principe, Rwanda, Cameroon and Uganda Nigeria’s Fola Daniel said that the aim of the MoU was to formalize and strengthen the existing relationship between the two insurance markets through information sharing and investigative
assistance which he said conformed with the international Association of Insurance Supervision, IAIS. According to him, “This is the first MoU with a fellow regulator in Africa and indicate the reliance that both regulators place on the quality of regulatory standards administered in the other ’ jurisdiction” Daniel during the signing witnessed by representatives of the Central Bank of Nigeria and the Ministry of Finance, Mr Oluwatoyin Jokosenumi of the Department of FSS 2020, and mr Ayo Fadola. "The MoU underlines NAICOM’s goal to build effective working relationship with regulators in the West African region and beyond” The commission had issued licenses to 12 insurance companies to open offices abroad since 2007. The companies that have crossed the borders are Industrial & General In-
surance Plc; Law Union & Rock Plc; Mutual Benefits Assurance; Regency Alliance; Nem Insurance, Equity Assurance, Intercontinental Wapic, International Energy Insurance, Standard Alliance Plc; Capital Express, NICON Insurance and Continental Reinsurance Plc. He stated, “Insurance industry like other components of the financial system is changing in response to a wide range of social and economic forces. In particular, insurance and insurance-linked financial activities are increasingly crossing national and sectorial boundaries. Consequently, insurance supervisory systems and practices must be continually upgraded to cope with those developments to mitigate possible financial and systemic stability concerns arising from the insurance sector as they emerge”