JUNE 2, 2014
Hard times ahead for tobacco industry, smokers •Fines, imprisonment await makers, users of tobacco •We won’t accept gifts from tobacco firms — Minister •BAT, other stakeholders react By FRANKLIN ALLI HARD times loom ahead for the tobacco industry in Nigeria, including users of its products — smokers — as the Tobacco Control Bill 2014 becomes law soon. When passed, the law comes with
stiff penalties for companies and individuals who violate the regulations in the country. In 2004, Nigeria along with other nations of the world signed the World Health Organisation (WHO) Framework Convention on Tobacco Control, FCTC.
The objectives were to ensure tobacco free environment for their citizens, promote healthy lifestyle and productivity. According to WHO, smoking kills six million people globally every year and if this trend persist, by 2030, the annual death toll from smoking will
climb to more than eight million. WHO also predicted that smoking will have taken 1,000,000,000 lives by the end of the 21st century. In order to address this problem, over 190 countries have so far domesticated the 2004 FCTC and banned smoking in public places. Brazil is one of them. Since 15 December 2011, Brazil Federal Law 12546 (Article 49) forbids smoking in public spaces in the entire country,
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109.54 -0.43 102.85 CURRENCY BUYING CENTRAL
FINANCIAL LITERACY: Group Managing Director/Chief Executive of First City Monument Bank (FCMB) Limited, Mr. Ladi Balogun (second left), presenting a computer to the Principal of Community Secondary School, AkaOffot in Uyo, Akwa Ibom State, Mr. Jones Obobikpe, as part of the bank’s support for financial literacy among students. They are flanked, left, by the Senior Prefect of the school, Master Joshua Tom and another student, Miss. Rachael Dickson.
DOLLAR STERLING EURO FRANC YEN CFA WAUA RENMINBI RIYAL KRONA SDR
154.73 259.049 210.6494 172.5357 1.5219 0.3021 237.6395 24.7611 41.2547 28.2158 238.3616
155.23 259.8861 211.3301 173.0932 1.5268 0.3121 238.4074 24.8415 41.388 28.307 239.1318
-0.73 SELLING 155.73 260.7232 212.0108 173.6508 1.5317 0.3221 239.1753 24.922 41.5214 28.3982 239.9021
CBN Exchange rate as at 30/05/2014
18 — Vanguard, MONDAY, JUNE 2, 2014
Developing Entrepreneurial Spirit in Nigeria - Part 2
Hard times ahead for tobacco industry, smokers including restaurants and bars. Similarly in Bulgaria, a comprehensive smoking ban has been introduced prohibiting smoking in all public places including bars, restaurants, clubs, workplaces, stadiums, etc. It came into effect on 1 June 2012. However, ten years after Nigeria signed the FCTC, government couldn’t pass the law due to several amendments to the Bill by National Assembly. The Federal Government is however ensuring the Bill is passed into law. Investigations conducted by Financial Vanguard , showed that when the Bill is eventually passed into law, the operating environment might not be easy for tobacco companies in the country, let alone smokers. Financial Vanguard gathered that for defaulting companies, the fine varies from N1 million to as much as N5 million while imprisonment of the Chief Executives of offending companies vary from one year to two years if they break the law. Whereas for individual, that is a smoker who goes to a place clearly designated nonsmoking area, the fine is N50, 000 or imprisonment of up to six months.
ddressing newsmen in Abuja, Professor Onyebuchi Chukwu, Minister of Health, said, “We want to produce hundred per cent tobacco free environment for people who do not want anything to do with tobacco. So places will be clearly designated as non smoking area. If a smoker breaks the law, he will be liable for
prosecution.” “The Bill also proposes to ban advertisement and corporate sponsorship by tobacco companies of any public event such as sports, seminar and so on. “We will not accept gift from any tobacco company. Gifts such as school building, etc, will not be accepted. Some states like Lagos and Cross River have passed their own tobacco Bill into law. Now we want to make it national,” said the Minister. Financial Vanguard interviewed stakeholders in
Continued from page 17
We will not accept gifts from any tobacco company; gifts such as school building, etc, will not be accepted
the industry on the issue. Here are their comments: Freddy Messanvi (Director, Corporate and Regulatory Affairs, British American Tobacco West Africa), said “We remain committed to the passage of a tobacco control law that is balanced and workable. We believe that regulation is key for the industry and as such we support the passage of a workable bill that will achieve the intended objectives of the health advocates and not promote illegal trade in the sector, to the detriment of the legal industry.” Akinbode Oluwafemi, Director, Corporate Campaigns, Environmental
Rights Action/ Friends of the Earth Nigeria (ERA/ FoEN), noted, “We see the Executive Bill as a welcome development; it shows that the Federal Government is beginning to take the issue of tobacco in its entirety very seriously and that domesticating the FCTC is now paramount on government’s agenda. “Our take is that the National Assembly should fast-track the passage of the Bill into law so that Nigerians can have the enabling environment to live a healthy life style. “We are optimistic that the Bill will be passed this year. The Bill had been delayed for so long. We can’t afford to delay it again. So we believe that with the commitment we have been seeing from the Executive arm of government, the Bill will sail through this time and that President Goodluck Jonathan will also append his signature to it since it is coming from the Federal Executive Council, FEC.”
orroborating this, Gbenga Adejuwon, Alliance Manager, Nigeria Tobacco Control Alliance, noted that the law when passed will not only reduce demand and supply of tobacco products in the economy, it will also encourage smokers to quit,” he said. Philip Jakpor, Head of Media, ERA/FoEN, also pointed out that the law will drastically reduce governments’ spending on healthcare, especially tobacco related diseases. “It may interest you to know that Lagos state alone said it was expending over N2billion on tobacco
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frustrated is the huge difference between policy and execution, a problem of developing nations in general. In Nigeria, it is a key concern area because of its close relation to another national catastrophe: rampant bureaucratic corruption. The state of Nigerian corruption is so insidious that it comes with its own name – prebendalism, essentially defined as mass misappropriation of public assets by bureaucratic and political agents. International aid agencies owe much of the
LAUNCH: From left: Head, Corporate Communications Division, Diamond Bank PLC, Mrs. Ayona Trimnell; Deputy Managing Director, Diamond Bank PLC, Uzoma Dozie; Chief Executive Officer, Wakanow, Obinna Ekezie; and Executive Director, Diamond Bank PLC, Victor Ezenwoko at the launch of the Wakanow Prepaid and Corporate card in Lagos.
t the administrative level, Nigeria needs radical changes in fiscal, monetary and industrial policies to both promote new enterprises and aid existing ones. The bulk of the problem is the impaired access for small and medium enterprises to capital markets. To improve this situation, lawmakers have made it mandatory for commercial banks operating in Nigeria to keep aside 10 per cent of pre-tax profits for equity investment in small businesses. While it was a reasonably sensible move, it failed to meet avowed targets because the rate of actual disbursement was significantly lower than expected. In the context of cultivating a wholesome entrepreneurial spirit, policy changes can often be superficial unless followed through with flexible implementation and constant monitoring. An effective revamp of Nigerian financial policy initiatives must focus on three key objectives: *Enhanced regulatory mechanisms to oversee microfinancing operations. *Increased capacity and motivation for financial aid to small businesses. *Improved coordination between various government, private sector and donor agencies. Engineering a country-wide entrepreneurial spirit also calls for simultaneous and massive social restructuring in a way that correctly reflects Nigeria’s historical imperatives and the poverty that blights both its urban and rural landscapes. Even though the country earned an estimated $600 billion in oil revenue in the last half century, it’s GDP per capita of $1,501.72 ranks among the lowest in the world. Added to that are deep-set symptoms of rural illiteracy and gender inequality, both of which are proving acutely detrimental to sustainable enterprise development. The Nigerian Economic Policy for 1999-2003 envisaged far reaching promises on universal basic education, adult literacy and a slew of related programmes aimed at leap-flogging in order to short circuit the longer span of development. Part of the reason these and other objectives have since been
In the context of cultivating a wholesome entrepreneurial spirit, policy changes can often be superficial unless followed through with flexible implementation and constant monitoring
failure of Nigeria’s economic and poverty alleviation initiatives to an intractable bureaucracy that has steadily resisted efficient and fair practices. Creating an aggregate socio-economic environment that is conducive to enterprise development in the fullest sense, through fiscal, monetary and industrial policy changes. *Removing conditions that create high business costs by addressing systemic deficiencies in terms of infrastructure, policy and implementation. *Attracting local private sector finance and equity with the specific objective of creating a mass base of viable small businesses. *Revamping the education sector to provide vocational, administrative and skills development training to rural and urban youths. *Maintaining political stability and building social consensus to ensure broadbased success of macroeconomic policies.
Vanguard, MONDAY, JUNE 2, 2014 — 19
cent years, the Nigerian Small and Medium Enterprise Association, NASSI came into existence. This is aside the numerous bilateral chambers of commerce that dot the nation's economic landscape. The great challenge facing the Nigerian economy is the discordant voices coming out of the so-called organised private sector. Every so often, instead of the operators in the sector to pool their resources together to foster the growth and development of the sector, sectors that are looking to government for a particular favour team up under some name to approach government. Once the need is met, the leader ditches the organisation. In the heydays of the Babangida administration, in the name of promoting economic diplomacy, several private sector organs sprang up. The one that is worth mentioning is the G15 council. That body was the eyes and ears of the military administration. Today, the socalled South-South Economic Cooperation Nigerians were told the council was out to promote, got nowhere. The bilateral chambers that the diplomacy encouraged to spring up are as good as dead. Nigerians are good at answering president and leader but not in service delivery. he 31 business leaders agreed on the establishment of a common platform that will enable them to jointly promote sustainable development initiatives and programmes across the country. At the roundtable in Lagos, the CEOs decided to set up a council for sustainable development which will be affiliated to the Geneva-based World Business Council for Sustainable Development (WBCSD). Are these 31 leaders not
Re-organising Nigeria's unorganised private sector members of Lagos Chamber of Commerce and Industry or MAN? Why in the world do they need a new platform if they have a genuine interest of the private sector at heart? Were these same people not the promoters of the Nigeri-
WO weeks ago, some 31 Nigerian company chief executives and business owners got together to form a council that will enable them jointly promote sustainable development across the country. This was the outcome of a round table discussion held in Lagos. Ordinarily, this would have been a welcome development. However, the claim by members that they lack the platform through which they could intervene in the economy is spurious, suspicious and very dubious. The fact that it was championed by Shell Managing Director makes it worse. Shell operations globally are known to have adverse spillover effect on the community it operates and in almost every situation, it required litigation for it to respond to the cries of those affected adversely by its operations. he leaders of these com panies — Accenture, Coca-Cola, Empretec Nigeria Foundation, Etisalat, First Bank, Flour Mills of Nigeria, Heirs Holdings, Intel Corporation and Interswitch, Standard Chartered Bank, Unilever, the First Bank CSR Centre, BusinessDay Newspapers, Emzor Pharmaceutical Industries Ltd, MTN Nigeria, Guinness, Oando Gas and Power, UBA Group, Seplat Petroleum, Chevron, Stanbic IBTC, Afren Nigeria, Access Bank and Nigerian Breweries, are well aware of the existence of the three arms of the organised private sector. For years, Nigerian organised private sector had operated through Manufacturers Association of Nigeria, MAN, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, NACCIMA, and Nigerian Employers Consultative Assembly, NECA. In re-
In other countries where the private sector is taken seriously, they have one body that speaks for the organised private sector. These bodies elsewhere have well funded institutions that provide alternative source of data on the
Today, the so-called SouthSouth Economic Cooperation Nigerians were told the council was out to promote, got no where; the bilateral chambers that the diplomacy encouraged to spring up are as good as dead
an Economic Summit? Are they tired of the various bodies that they are part of? The proposed council as they claim will work to arouse the interest of the Nigerian business community towards taking collective action for a sustainable future for society. hat has been the role of the various chambers of commerce and industry in the country? Will it not have been better for these men to join and strengthen the existing bodies and reduce the discordant voices in the private sector?
economy. They can generate reliable data from members across board and can authoritatively challenge government data. This is the situation in the US where the US Chamber of Commerce and Industry can authoritatively challenge government on trends in the economy. It is the same in Britain, Germany and the Netherlands to mention a few. Why is the Nigerian private sector so fragmented that nothing serious can come out of it? The only reason is because almost all the successful businesses in Nigeria enjoy government patronage and
the advantages it confers on them through waivers and concessions. The Managing Director of Shell Petroleum Development Company of Nigeria Ltd (SPDC) and Country Chair, Shell Companies in Nigeria, Mutiu Sunmonu, had hosted the roundtable to introduce the idea to the CEOs. He said: "There is no doubt that Nigerian companies support sustainability programmes in their respective areas of influence quite adequately, however, no platform currently exists for businesses across all industries to share experiences, best practices, and advocate for business positions that transform lives and communities from what they are today to the greatness they can be, tomorrow. If there is one area we do not need to compete as businesses, it is in the goodness of our heart to our society and environment." his coming from Shell ex ecutive should be taken with a pinch of salt. The Nigerian private sector operators should hide their faces in shame, come down from their high horses and come under a single private sector umbrella that will have the capacity to affect Nigerians positively. This they can do by pooling resources together to set up structures that can generate accurate data on the progress made in the economy.
Cover Story Hard times ahead for tobacco industry, smokers Continued from page 18 patients. The state government carried out the survey in 11 state-owned hospitals and that there were over 9,000 patients and each was gulping N222, 000 from tax payers’ money plus another N70, 000 that the patients themselves must expend. That was 2006 and that is only Lagos State. If we replicate this across the federation then you can imagine the trillions of naira this country is spending on patients with tobacco related sickness,” he said. A smoker, Obinna Mbamalu,
however dismissed the proposed Bill. He said he has been smoking two packets of cigarette daily for ten years and he will continue to smoke because, he said “Passing the law is not the issue but making it work. Since Governor Fashola passed the law in Lagos, how many people have been arrested for violation? Go to Oshodi under-bridge, go to Ojuelegba or Ojota Garage and see things for yourself. How many of them have been arrested by government? The law can work in other countries, but not here.”
DRAW: From left, Kachikwu Kandozie, Principal Accountant Consumer Protection Council (CPC); Tunde Kuponiyi, Head, Cards and E-banking Business, Ecobank Nigeria; Mayowa Okuyiga, Senior Executive Officer, Legal, Lagos State Lotteries Board; and Nike Kolawole, Regional Head, Mainland, Ecobank, at the Ecobank Card 4 Prizes Promo Grand Draw held in Lagos. C M Y K
20 — Vanguard, MONDAY, JUNE 2, 2014
Business & Economy
BY PROVIDENCE OBUH
South-East MAN laments power supply challenges in Nigeria
he Manufactures Association of Nigeria (MAN) in the South-East zone has expressed displeasure over the nation’s increasing electricity generation and supply challenges in spite of the Federal Government promises. MAN expressed its displeasure in Awka at its 26th Annual General Meeting (AGM) attended by Anambra, Enugu and Ebonyi states. The association also identified multiple taxation and levies by the Local, States and Federal Government as another major obstacle facing its members. Earlier, Gov. Willie Obiano of anambra said that the state was reviewing its entire revenue base. Obiano represented by the Commissioner for Industry, Trade and Commerce, Mr Ifeatu Onejeme, said trade and commerce would boom again in the state.
Fitch affirms Afren at B+, stable outlook
itch Ratings has affirmed Afren plc’s Longterm Issuer Default Rating (IDR) at ‘B+’. The Outlook is Stable. A full list of rating actions is at the end of this release. Afren continues to generate solid operating cash flows, which are sufficient to finance its ambitious exploration and development programme. In the past the company has demonstrated its ability to meet ambitious production targets as it significantly boosted oil output in Nigeria in 2012 and 2013. Afren’s profitability is supported by the tax holiday in place at Ebok, its largest producing field. However, Afren’s production remains highly concentrated, which gives rise to elevated geological, country and tax risk, and its scale of operations is small. We view the possible oil industry reform in Nigeria as a risk, as its timing and key parameters, including tax implications, are unclear. These factors constrain Afren to the ‘B’ rating category. C M Y K
he Organised Private Sector (OPS) and the United Nations Industrial Development Organisation (UNIDO) have resolved to work together to make Nigerian products meet domestic, regional and international standards. The resolution was reached during a meeting on ‘Quality Infrastructure’ in Lagos organised by UNIDO. UNIDO Representative, Dr. Patrick Komawa, said that the private sector has recognised the problems and has shown willingness to work with UNIDO, EU and the Federal Ministry of Industry Trade and Investment, so as to increase the competitiveness of locally made products in the international market place. Komawa said that they have agreed to use five mechanisms which are: Quality Policy, establishment of National Accreditation Body and National Metrology Institute for products certification which does not exist at the moment. He said that the other mechanisms are to build the capacity of the Consumer Protection Council so that it can create awareness for the consumer to ask for quality products. “It is one thing to produce quality product but if the consumers themselves do not know the difference between high quality and low quality products they will not demand for it. “The consultation with the OPS within the national quality infrastructure project is an EU funded project but implemented
AWARD: From left: Mr. Joseph Okomah, Chairman, Nigerian Institute of Public Relations (NIPR), Lagos Chapter; Chief Keith Richards, Chairman, Promasidor Nigeria Limited; and Ambassador Patrick Dele Cole, Chairman of the Panel of Judges of the Promasidor 2014 Quill Awards; at the Promasidor Quill Awards presentation ceremony held in Lagos.
OPS, UNIDO work on competitiveness of Nigerian products by UNIDO with the support of the FMITI. The project has the objective of improving on the quality of products made in Nigeria so that they can be sold internally and in international market. “The time frame for this project is four years and we have already started, we are now half a year into the programme and a lot of consultations have been taking
place both within the public and private sector, “You cannot improve on your GDP if we do not produce products in Nigeria and sell them in the international market. We also will not provide the needed job in this country if we are not able to manufacture products here and trade them in the international or regional market. “But for us to be able to trade
we need to at least meet basic quality requirement, most of the products that are made in this country are rejected because they do not meet certain basic quality requirement,” he said. Also, Executive Director, Business Development, Bank of Industry, Mr. Waheed Olagunju, added,”The markets are used to standards and there is no way you can export in particular, if you do not adhere to international standards or international best practice.
Sterling Bank unveils plan to deepen market penetration By NKIRUKA NNOROM
terling Bank Plc has unveiled strategic plan to deepen its market penetration and expand its retail foot print in the remaining part of the year. The bank revealed that it will commence massive roll out of conventional and alternative in order to increase it products offering, as well as rolling out of agency banking model to drive financial inclusion. The Managing Director/CEO, Mr. Yemi Adeola, said efforts would be geared at upgrading the physical infrastructure of the bank to reflect the retail look and feel, while private banking business targeted at the high net worth individuals will be commenced during the period. According to him, Sterling Bank
will deploy a new core banking application to fully enhance service delivery to the bank’s customers. Already, he said the bank has one million active customer base with 168 branches, 300 ATMs and 5,000 Point of Sales (PoS) machines spread across its branches nationwide. He explained that the bank is in a strong growth phase and controls three percent market share by assets, adding that it has been delivering shareholders’ value having consistently paid dividend since 2011. To improve staff productivity, Adeola said the bank will concentrate on strengthening its performance management system for sales and back-office workforce. On the bank’s financial performance, he explained that its loan book grew by five percent to N344.785 billion in the first quarter ended March 31, 2014
driven by growth in lending to the corporate and commercial segments of the economy. Corporate lending, according to him, accounted for 68.2 percent of total loans, while retail and commercial lending accounted for 12.6 percent and 13.1 percent respectively. Decline in institutional loans, which accounted for meager 6.1 percent as against 8.6 percent was due to pay-down of existing facilities,” he said. Sector-bysector breakdown of the loan structure showed significant exposure in oil and gas industry, which accounted for N111.119 billion of the bank’s total loan and advances for the period, 11.4 percent growth over N99.733 billion accruing to the sector in the same period in 2013. This was followed by real estate and construction, which accounted for N79.550 billion of the bank’s total loan within the
period. “Gross earnings rose by 24 to N24.6 billion in the first quarter of 2014 from N19.8 billion in the first three months of 2013, driven by interest income, which rose by 31 percent and accounted for 76 percent on the back of increase in lending activities. “Net interest margin improved by 240 basis points from 5.2 per cent in first quarter of 2013 to 7.6 per cent driven mainly by increase yield on earning assets”. Despite a high interest rate environment, funding costs moderated by 30 basis points to 5.6 percent,” he said. He further explained that deposits declined marginally by five percent year-to-date to N540.0 billion reflecting management’s focus on balance sheet efficiency, saying that retail deposits accounted for 66 percent of deposits, while wholesale funds accounted for 34 percent.
Vanguard, MONDAY, JUNE 2, 2014 — 21
Business & Economy
Africa must tackle poverty to share benefits of strong growth —IMF
frica is “taking off ” with strong, steady growth but poverty is unacceptably high. As such, governments need to build infrastructure and institutions and educate people to share the benefits more widely, so says the head of the International Monetary Fund, IMF. Sub-Saharan Africa is expected to grow by around 5.5 percent this year - well above the global average with some of its poorest countries expanding by closer to 7 percent, Christine Lagarde, International Monetary Fund (IMF) managing director, told an IMF conference in the Mozambican capital Maputo. But the IMF chief said although the region had become a growing investment destination for both advanced and emerging economies, with a record $80 billion of inflows expected this year, the economic benefits of the growth surge had yet to be widely distributed across the region’s population. “Poverty remains stuck at unacceptably high levels still afflicting about 45 percent of the region’s households,” Lagarde told the meeting of African finance ministers and development experts. Despite forecasts of continuing strong expansion for the region, its positive outlook has been darkened this year with flare-ups of conflict, insurgency and violence. This has ranged from civil war in the world’s newest state, South Sudan, an insurgency waged by radical Islamist Boko Haram group in Africa’s largest economy Nigeria and attacks by Islamist militants hurting tourism and business in Kenya. As African countries tap new sources of funds through natural resource discoveries and international dollar bonds, questions have also arisen about how governments are managing this money in fast-growing economies like Ghana and Zambia. Lagarde said that with the international recovery still looking weak and uneven, Africa’s positive outlook also faced risks from slower growth in the world’s advanced economies and in emerging markets, which are the region’s main trade partners. Other risks included lower prices for some commodities, tighter external financial conditions and market volatility. The IMF head
recommended three priorities to ensure the region’s growth can be wide, inclusive and sustained: “Build infrastructure, build institutions, and build people.” Infratructure, jobs Lagarde said Africa still had big infrastructure gaps, which represented huge costs to businesses and to people. She cited as an example the fact that over the past three decades, per capita output of electricity in Sub-Saharan Africa remained virtually flat. Only 16 percent of all roads were paved, compared with 58 percent in South Asia. The investment needs to address this in the region were estimated at about
$93 billion annually, she said. The IMF chief said Africa also needed to improve governance, transparency and create sound economic frameworks for growth - she called this “building institutions.” This would ensure that revenues and benefits from the continent’s mineral riches Africa has more than 30 percent of the world’s mineral reserves - could be better captured for national budgets and generating more jobs. Lagarde said Africa needed to “build people” to reap the dividends of its rapid population growth. She cited estimates that a one percentage point increase in the working age population could boost GDP
growth by half a percentage point. “For this to happen, however, ‘good’ jobs need to be created in the private sector. Today, only one in five people in Africa finds work in the formal sector,” Lagarde said. “This must change. With wider access to quality education, healthcare and infrastructure services, it can change.” Technology could extend access to financial services to millions, and this was already happening in several countries, such as Kenya. “Africa Rising will benefit the lives of people on the continent. Beyond that, Africa Rising will benefit the world,” Lagarde said.
Nigeria endowed to benefit from global economic trends —Institute
he McKinsey Global Institute (MGI), an international economic and business concern, said that Nigeria was endowed and strategically positioned to benefit from global economic trends. The institute made the disclosure in its report titled “Nigeria’s Renewal: Delivering Inclusive Growth in Africa’s Largest Economy” released in Abuja. The report said Nigeria had an estimated 17 million citizens living overseas, whose remittances back home accounted for about 10 per cent of its Gross Domestic Product (GDP). It said that the country, with an ocean port, had a strategic location which allowed it access other developing economies of the world.
StarTimes to deepen digital television penetration
TARTIMES has an nounced plans to further deepen the penetration of digital television in Nigeria, making it affordable to a vast maTOUR - From left:Danny Gunsham, Operation Manager, Chicken Republic; Mrs Susan jority of Nigerians within the Rotimi, Head Marketing & PR; Gloria Negbenebor, Head Quality & Central Kitchen; Abiodun shortest possible time. Ayorinde, Human Resources Manager,Chicken Republic, at the Official tour of Central To this end, the company is Kitchen of Food Concept PLC, owner of Chicken Republic in Lagos. rewarding customers for their patronage, with the Extra Time Promotion, where 50 individuals won 32 inch LED TV, while one customer, Mr. David Abayomi won the star prize of a brand new Toyota Yaris 2014 car. Speaking at the May edition still not here. So we considered how best we of the promotion, Mr. Anetor BY JONAH NWOKPOKU can bring these services and products into Irete, Public Relations ManagAulic Nigeria Limited, the promoter of this country, and then we decided that the er, NTA-Star TV Network Limitspecialised trade fair Fair, has said that its best way to do it is to try to match the ed, said the decision of the cominternational trade exhibition coming up next Nigerian business community and the pany to deepen digital television penetration in Nigeria is commonth is intended to bring local and foreign producers of these products and services. “I am very happy that when we introduced ing on the heels of the planned businesses together and inspire a mutual partnership that would make for Nigeria’s this concept to our business partners and digital migration which is schedassociates overseas, they were very happy uled to commence by 2015. economic growth. He said the company currentThe Managing Director of the company, Dr. about it. Some of them even went ahead to ly has 1.8 million subscribers and Chika Eze made this known during a press source more companies in their various countries to come in and pick up partners in is presently in 32 cities across briefing to announce the exhibition in Lagos. She said that about 148 firms from Europe have Nigeria. We have informed the small and the country, with plans to expand indicated interests in taking part in the third medium scale business people in Nigeria to 16 more cities within the next specialised trade exhibitions kicking off by 6th and they are also excited about the idea and couple of months. According to him, Startimes is have indicated interest en masse to attend of June. working to ensure that digital She said that out of the 148 firms, 129 will be the exhibition.” She further explained that, “It is an television is not seen as a luxusending representatives while twenty-nine will opportunity for businesses to meet ry item, but as a necessity and be present on their own. According to her, “The exhibition is basically themselves and establish partnerships that for the pleasure of every one. Irete noted that the company organised to match upcoming businesses with will not only help individuals but will also suppliers. It’s an exhibition where we plan to assist Nigeria in her development is committed to offering the very bring into this country, services and products, endeavour. It’s an exhibition where we expect best to its customers and is rewhich have not been here. Some who travel to see new products and services. It’s also warding them with various gifts overseas will know that there are a lot of beautiful an opportunity for our businesses to learn to make them bond with the company. products and services that we need which are new ways of doing important things."
Aulic drives local, foreign business partnerships through trade exhibition
C M Y
22 — Vanguard, MONDAY, JUNE 2, 2014
Banking & Finance
Ecobank rewards customers in card promo
he grand draw of the Ecobank’s Card 4 Prizes promo has produced additional winners, including three customers that went home with the grand prizes of Honda Cars. The winners are Awoyera Peter, Lagos/south-west region, Asoanya Jerry, south-south/ south east region, and Aliyu Yelwa, Federal Capital Territory/ North region grand prize winners. Others won Trip to Brazil, 300 thousand Naira worth of scholarship, smart phones, LCD TVs, air conditioners, home theatres and generators The Card 4 Prizes Promo which was based on the customers’ use of all the electronic channels of banking that range from the use of: cards, debit cards, credit cards, pre-paid cards, Point of Sale transactions, Online shopping, purchase of recharge cards with the ATM machine and withdrawals with the ATM machine, has made many customers of Ecobank to be beneficiaries of the promo. One of the grand prize winners, Asoanya Jerry, from south-south/south east region, said “I used the Point of Sale machines, made online payments of staff salaries.
Diamond Bank upgrades mobile banking application By EMEKA AGINAM
ommitted to proving cutting edge banking services to its customers, one of the leading retail bank, Diamond Bank PLC has upgraded of its mobile-based banking application, the Diamond Mobile app. With this development, subscribers to the mobile app can carry out more banking transactions beyond funds transfers and bills payment in a secured environment at any time of the day. Some of the unique features recently added to the App, according to the Bank will include flight bookings, credit card repayments, account statement generation and debit card activation or deactivation. These are in addition to previously available services like funds transfer to Diamond and non-Diamond Bank accounts, payment for BlackBerry Internet Services (BIS), bills payment, airtime purchase, Diamond Bank branch and ATM locators, etc.
UNVEILING - From left: Former Chairman, Skye Bank Plc, Mrs. Morounkeji Onasanya; Chairman, Mr. Tunde Ayeni; Former Chairman, Princess Agnes Adeniran and Managing Director/CEO designate, Mr. Timothy Oguntayo, at the unveiling of Skye Plus Software by Skye Bank in Lagos.
Shareholders endorse Wema Bank’s fresh capital bid By NKIRUKA NNOROM
hareholders of Wema Bank Plc have approved the bank’s quest to raise fresh capital to support its growth plan. The shareholders also commended the bank for steering the bank back to profitability despite the difficult operating environment. At the 2013 Annual General Meeting, AGM, in Lagos, the shareholders authorised the Board and management to raise the capital through the issuance of tenured bonds, notes, debt instruments or loans in any currency. They also authorised the bank to raise the money by way of a private placement, bond issuance, notes issuance, or book building in one or more tranches, while the pricing and terms of the issuance will be determined by the Board. Speaking on behalf of other shareholders, the trio of Boniface Okezie, Odoemena Demian and Sola Abodurin, commended the bank for turning the fortune of the bank around. Speaking, Boniface Okezie lauded the bank for escaping nationalistion, saying, ‘I wonder what would have been our fate if the bank had gone the way of the other banks that were nationalised.’
“Every case that we had in 2013 was peacefully resolved; that is why we have this type of result. This shows that the management is top of their game,” he added. “Non-payment of dividend notwithstanding, the good thing is that the bank has been turned around. Having done that, we implore the management not to rest on its oars, but to continue to steer the bank forward,” said Mr. Odoemena. He added, “Despite the challenges, Wema
Bank has not embarked on share reconstruction. We enjoin the bank not to consider that option because it will dilute our shareholding.” Adding his voice, Abodurin said, “Our total assets grew by 35 percent, deposit grew by 25 percent, while our profit before tax rose by 139 percent. This is commendable, but I hope that our ‘Project LEAP’ will move the bank forward because we need dividend going forward.” In his response, the managing director/CEO, Mr.
Segun Oloketuyi, explained that raising fresh capital will help the bank to not only increase its lending capacity, but to also pursue its growth plan. He said, “We are raising money because of our growth plan. Some shareholders are asking for dividend, we can only do this if we grow and we have enough capacity. “Most of the business we do requires lending and we need more money to be able to do this. Also, any asset we acquire or any branch we open takes away from our capital, so we need additional capital to be able to do this.” “To lend, we need capacity and this entails having enough capital adequacy ratio. The CBN also recommends that we have a buffer; that means having capital adequacy ratio above the 10 percent industry requirement.” On the bank migration to national bank status, he said that application has been made to the CBN and its approval is being awaited. Speaking earlier, the chairman, Adeyinka Asekun, attributed the 2013 performance to the success of the management’s turnaround plan. He added that despite the challenging operating environment, Wema Bank achieved a significant milestone as it returned to full profitability following concerted effort at implementing the first phase of the bank’s turnaround project. Asekun also assured all stakeholders that Wema Bank was confident of achieving its growth targets whilst remaining nimble, efficient and responsive.
Forex volatility drops to seven year low
oreign exchange volatility slowed to the lowest level in almost seven years as central-bank polices of monetary stimulus and forward guidance restrain price swings. The dollar was little changed against the yen after a report showed business activity in the Chicago area unexpectedly increased to a seven-month high in May. The Japanese currency strengthened earlier as a government report showed inflation accelerated to the fastest in more than two decades in April, reducing the prospect of additional stimulus by the Bank of Japan. The krona declined versus most of its 16 major peers after Sweden’s economy unexpectedly contracted and amid speculation the Riksbank will cut rates. The Canadian dollar fell as first-quarter economic growth slowed. “The forward-guidance policy by the central banks is keeping a lid on rate expectations,” said Peter Kinsella, a senior foreign-exchange strategist at Commerzbank AG in London. “We’re increasingly going to see very flat volatility. It doesn’t seem at present that there’s going to be any catalyst to shake us from the malaise.”
JPMorgan Chase & Co.’s volatility index for the currencies of the Group of Seven nations fell to 5.94 percent at Friday, reaching the lowest level since June 2007. A separate JPMorgan index measuring global foreign exchange volatility also reached a 2007 low. The dollar was little changed at 101.77 per yen, after dropping as much as 0.3 percent. The euro gained 0.2 percent to $1.3635. The shared currency added 0.3 percent to 138.79 yen. The Russian ruble and Chile’s peso have gained 2.4 percent against the dollar this month, leading winners among 31 major currencies, according to data compiled by Bloomberg. The Swedish krona dropped 2.6 percent, while the Czech koruna slipped 1.9 percent, the biggest losers. Canada’s dollar dropped 0.2 percent to C$1.0858 against its U.S. counterpart after data showed gross domestic product grew at a 1.2 percent annualized pace in January through March, compared with a downwardly revised 2.7 percent in the prior three months. Economists surveyed by Bloomberg predicted growth would slow to a 1.8 percent pace.The krona slid as much as 0.6 percent to 9.0894 per euro, the weakest level since May 6.
Vanguard, MONDAY, JUNE 2, 2014 — 23
Banking & Finance
External reserves fall by $995m •As CBN sells $2.63bn at RDAS By BABAJIDE KOMOLAFE
he nation’s external reserves fell by $995 million last month even as the Central Bank of Nigeria (CBN) sold $2.63 billion at the Retail Dutch Auction System (RDAS) sessions during the month. Data from the CBN website showed that the external reserves fell to $37.147 billion by May 27th from $38.142 billion on April 28th. This implies a reversal of the modest increase in external reserves recorded in April. It will be recalled that the external reserves fell persistently from $48.85 billion in April 2013 to $37.83 billion in March 2014, before rising to $38.1 billion in April. The persistent decline in the reserves is driven by huge foreign exchange sales by the CBN in order to defend the naira. This is reflected in the dollar sales by the apex bank at the RDAS sessions held in May, which showed a marginal increase in the amount of dollar sold by the CBN. From $2.62 billion in April, dollar sales rose to $2.63 billion in May. Cumulatively, the apex bank sold $14.83 billion through the RDAS sessions from
January to May. In January, dollar sales rose by 48 per cent to $2.94 billion from $1.99 billion in December 2013. It rose by another five percent in February to $3.1 billion, and in March it rose by 14 per cent to $3.54 billion. The amount of dollar sold in the first five months of this
year represents 58.45 percent of the $25.37 billion sold by the apex bank in 2013. Meanwhile the naira depreciated by 213 kobo at the interbank foreign exchange market in May. Data from the Financial Market Dealers Quote (FMDQ) showed that the interbank exchange rate opened the month at N160.67
per dollar, but declined to N162.8 per dollar at the close of business on May 30th. The naira however remained stable at the official market with the official exchange rate remaining at N155.73 throughout the month.
CHILDREN'S DAY - Enterprise Bank’s Executive Director, Lagos and South-West Banks, Mrs. Nneka Onyeali-Ikpe, a customer of the bank; Mrs. Nonny Rosemary Nwajei with her child, Chukwudiebube Obiora John, and the Divisional Head, E-Business & Retail Segments, Mrs. Ori Ogba, at the annual Children’s Day Party that the bank organised for children in Victoria Island, Lagos.
Banks need real time reporting to comply with Basel 2-SAP Africa
AP Africa has said that banks need to embrace real time reporting in order to become Basel 2 complaints. “As the Nigerian banking sector races to become Basel 2 compliant, innovation becomes critical in helping banks establish more efficient processes, increase transparency and become more customer-centric,” the company stated in a statement. SAP Africa strives to provide the banking sector with agile financial solutions designed to deliver detailed regulatory reporting on a single data platform with the ability to handle mass analysis within seconds. Countries all over Africa – including Nigeria which is the largest economy - are making every effort to increase their levels of regulatory compliance to keep up with legislative and economic requirements for analysing financial data, including threats and risks. “SAP Africa, in partnership with EY (Ernst and Young), are committed to transforming the banking sector in Nigeria to become Basel 2 compliant
and take advantage of the Big Data analytics solution for real-time reporting,” says Darrel Orsmond, Head of Financial Services for SAP Africa. Through this technology, the banking sector will be in a competitive position to provide rapid assessment of capital, reporting to the Regulator for compliance and delivering of reports in real time, according to Orsmond. Orsmond adds, “The average timeframe for banks to become Basel 2 compliant can be as much as 18 months, and banks should start preparing well in advance for Basel implementations. These preparations should include technology investments in risk management, real-time reporting, data analysis and cleansing capabilities.” “By identifying and eliminating risks in advance through the use of real-time reporting, banks can satisfy the needs and demands of stakeholders thereby reducing risk and increasing regulatory compliance.” Orsmond commented,”
Banks that are not Basel 2 compliant could run the risk of not pricing their loans correctly, thereby not holding the appropriate levels of capital.” He further added that accurate bank data is vital to reach Basel 2 compliance and often the biggest challenge and cost of implementation is not the software itself, but rather the time it takes to implement, caused by inaccurate bank data and a shortage of the required mathematical and modelling skills. Precise records of losses and the legal processes involved, are essential inputs to ensure the accurate prediction of potential losses. Banks need to hold just the right level of capital, and poor data usually leads to Banks having to carry excess levels of capital. Darrel Orsmond addressed the issue of regulatory compliance at the SAP Basel 2 – Regulatory and Reporting Demands for Big Data event being held in Lagos, Nigeria on 27 May 2014 and is available for comment.
US seeks more than $10bn penalty from BNP Paribas BNP Paribas SA fell the most in 15 months in Paris trading after a person familiar with the matter said U.S authorities are seeking more than $10 billion to settle federal and state investigations into dealings with sanctioned countries including Sudan and Iran. BNP Paribas S A (BNP) fell in Paris trading after a person familiar with the matter said U.S. authorities are seeking more than $10 billion to settle federal and state investigations into dealings with sanctioned countries. The shares declined as much as 6.1 percent, the largest intraday drop since February 2013, and closed 2.4 percent lower at 51.37 euros. BNP Paribas, the largest French bank, has fallen 9.3 percent this year, compared with a 3.8 percent increase in the Bloomberg Europe Banks and Financial Services Index. A final deal between BNP and the U.S. is probably weeks away, said the person, who asked not to be identified because the talks aren’t public. The amount to settle has escalated: the bank said in April that it might need to pay far more than the
Central banks outline ways to boost ABS market
he European Central Bank and Bank of England on Friday outlined options to reinvigorate the market for bundled bank loans, which was “tarnished” by the global financial crisis, saying a better-functioning market for asset-backed securities can help boost lending to the private sector, particularly small businesses. Improved harmonization of the rules applied to such packaged loans, the creation of principles to improve transparency and enhanced data on loans would help develop a deeper market for these types of securities, the banks said in a joint paper. “Looking ahead, the banking system is likely to need access to a wider range of funding sources,” the ECB and BOE said. “The revival of the ABS market can therefore play a useful role in ensuring that there is not a renewed buildup of systemic risk, including from excessive reliance upon any single source of financing,” they said. C M Y K
24 — Vanguard, MONDAY, JUNE 2, 2014
Flour Mills invests N220b in agro-allied businesses
lour Mills of Nigeria Plc has emerged as one of the biggest food companies in the country with over N220 billion investments in agro-allied businesses. The company has also rewarded the distributors of Golden Penny Products, for their loyalty to the brands. Speaking during the customers forum in Lagos, Mr. Paul Gbededo, Group Managing Director, said, “As one of the largest agro-allied initiatives in Nigeria, Flour Mills has invested over N220 billion in agro-allied businesses which extend to large scale cultivation of soybean, maize, palm, rice, and cassava. “From cultivation, we are also processing these raw materials into animal and fish feed, edible oils, rice, sugar and high quality cassava flour in different parts of the country.”
Shares near alltime high; bond yields slip to 11month lows
lobal equity markets hovered just off alltime highs last week as investors brushed off a weaker-than-expected reading on the U.S. economy, while benchmark U.S. Treasury yields fell to 11-month lows. On Wall Street, the S&P 500 hit another intraday high early in the session despite first-quarter GDP data showing the U.S. economy contracted one percent. Better-than-expected jobless claims pointing to a strengthening labour market and merger and acquisition activity also boosted sentiment. The dollar trimmed early losses against major currencies as traders focused on signs of the U.S. economy strengthening “Once you get beyond the headline number and look under the hood, things don’t really look so bad,” said Boris Schlossberg, managing director of FX strategy at BMO Capital Markets in New York. “Inventories were to blame for a lot of it and that bodes well for the future.” C M Y K
Low domestic participation threatens Nigeria emergence as African market leader BY NKIRUKA NNOROM & WILLIAM JIMOH
perators in the Nigerian capital market have identified the relative absence and insignificance of indigenous companies listed on the Nigeria Stock Exchange, NSE, as a major threat to the countr y ’s attainment of African market leader status. The operators th said this at the 10 Annual PEARL Awards public lecture for capital market development in Lagos, adding that it is important Nigeria develops the size and liquidity of her market by ensuring additional domestic participation against current domination by multinational companies which account for more than 50 percent of the market capitalisation. Delivering this year ’s lecture, tagged, “Actualising Nigerian Capital Market Quest for Leadership in Africa: Issues, Challenges and Options,” Chairman, National Association of Securities Dealers (NASD) Limited, Mr. Tola Mobolurin, said the domination of the market by foreign investors underscores the weakness of the domestic market, adding that Nigeria cannot attain leadership without a significant contribution of the domestic institutional, high networth and retail investors. He said, “Indeed foreign investors have accounted for as high as 70 percent of the transactions in the market since 2009 to date without hindrance. The significant volatility that attended this has been largely looked on benignly by the regulators whose gaze have been fixed on the stability the inflow have accorded the local currency; Naira. “There is no gainsaying that Nigeria is far from being the African leader. Focusing on the current African leader (South Africa) may not provide the vision that can propel the quantum leap needed to overtake it. It is best to set the vision against the benchmark of the world leading light while breaking down the achievement into steps and milestone to sustain the desire for its attainment. “By the world bank benchmark for a developed market, our market needs to have a minimum of five companies, whose market capitalisation is at least $ 2.065 million each and have
a free float in the market of 50 percent of its capitalisation ($ 1.032 million) with liquidity measurement Annualized Traded Value Ration, ATVR, of 20 percent.” He explained that the quest for leadership cannot be achieved without active commitment of the government. “What is however expected of the government does not go beyond the ambit of good governance and sound economic management to which government should ordinarily be committed,” he enthused. Speaking further, he said the only demand on the government is to pay a little
more attention to the element that could accelerate the growth of the capital market because the rapid economic growth is also hinged on such effort. Also speaking, Alihaji Kasimu Garba Kurfi, council member, NSE and Managing Director, APT Securities & Fund Ltd, noted that for the Nigerian capital market to attain leadership position, there is need for everybody concerned, including operators, regulators and the shareholders to change their perception towards the market. According to him, while Nigeria local investors holding on to their shares, their foreign counterparts,
who understand the market work round the clock and reap all the capital appreciation from their shares. He lamented that some shares have gained as much as 30-35 percent in the few months, but the local investors were not part of the gain due to their attitude to the market. “The government also is not helping matter. When they licensed the telecommunicatin companies, nobody made mention of listing in the stock exchange. When they renewed their licences, again, the stock market was not mentioned. They have just issued licences for private ownership of power but nobody mentioned the capital market.
APPRECIATION - From left: Mr. Solomon Oyetunji, Delaer, Total Alapere Service Station; Mr. Alex Vovks, Managing Director, Total Nig. Plc; with Mrs. Emilly ShakaMomodu, Retail Safety and Training Manager attending to a customer at the Total top Service Customer appreciation week 2014 at the Ketu Alapere Service station
NSE: Local investors’ participation satisfactory —Onyema By NKIRUKA NNOROM
he Chief Executive Officer of the Nigerian Stock Exchange, NSE, Mr. Oscar Onyema, has said that local investors’ participation in the stock market year-to-date outweighs foreign participation. He said this in his opening remarks at the 2014 ‘Putting Investors First’ day organised in conjunction with CFA Society in Lagos. He observed that local investors’ participation accounted for close to 60 percent of transactions in the market as at the end of first quarter, 2013, while
foreign investors were responsible for about 40 percent. “This turn of events contrasted sharply with the circumstances between 2009 and the first half of 2012 when local investors eschewed the market on account of losses they sustained in the aftermath of the meltdown of 2008 with transaction values being controlled by foreign investors to the tune of 80 percent in certain instances,” he affirmed. Represented by Haruna Jalo -Waziri, Executive Director, Business Development, NSE, Onyema pointed out that the Exchange in 2012
commenced financial literacy programme as a first step in protecting investors. “This programme aims to enhance investors’ understanding of the basics of investing around portfolio construction, asset allocation and risk diversification. The “Investor Clinic” aspect of the program, which is a flag ship product for our financial literacy efforts, has been delivered in partnership with stellar organisations such as Morgan Stanley, Stanbic IBTC, Greenwich Trust and FBN Capital, just to name a few. “These have primarily been focused on particular segments of the investing community to discuss the finer details of investing and to shed more light on the capital market ecosystem,” he said.
Vanguard, MONDAY, JUNE 2, 2014 — 25
CSCS targets 15% annual revenue growth DFID partners states governments to boost IGR
Stories By NKIRUKA NNOROM
he Central Securities Clearing System, CSCS Plc, said it is enhancing its capacity to grow its revenue by 15 percent on annual basis. Consequently, the company said it has started investing in new product creation as well as diversifying into other business areas, adding that it is positioning itself to sustain the continuous patronage of key stakeholders through active engagement with the market with the aim of increasing revenue growth. Furthermore, CSCS noted that it will engage in aggressive marketing of existing and potential services and re-sourcing the business development center for effective customer service delivery. In his address to the members of the company at the 38 th annual general meeting in Lagos, the Managing Director, Mr. Kyari Bukar, said in order to increase annual contribution of new and ancillary products, the company will embark on huge investment in research and development to determine the market needs, saying that this formed the foundation for development of new products
By KAYODE AMOLEGBE
LAUNCH - From left: Ms Deola Oyegbade, Divisional Head, SME, Mainland, GTbank; Mr. Ayodele Adewumi, Divisional Head, SME, Lagos Island and Lola Odedina, Head, External Communications and Public Affairs during the GTBank SME Markethub launch in Lagos. Photo Lamidi Bamidele. that offer value added Central Security Depository (CSD) and clearing house services to market participants. On information technology upgrade, he said, “As a CSD, technology is very instrumental to the success of our business as it allows for the secure transmission and management of large amounts of information. It is therefore imperative that we implement
the best technologies to achieve business growth.” “In a bid to improve post trade services to market participants and the recent evolving trends in the Nigerian capital market, CSCS has commissioned the “CSCS new CSD. Platform Project”. This project is geared towards providing the organisation with a world class platform that will provide efficient clearing, settlement
GTBank empowers SMEs, launches e-commerce portal
n a bid to empower small and medium scale enterprises operating in the country and improve their visibility in the e-commerce space, Guaranty Trust Bank, weekend launched e-commerce portal for local SMEs – The SME Market Hub. The GTB SME Market Hub, the first of its kind, is a free, secure e-commerce and business directory platform where businesses can list, promote and sell their products and services online. On the SME MarketHub platform, customers receive free web page with ecommerce tools, unique SME Market Hub website address, personalised online storefront, shopping cart with no consignment fee, inventory payment gateway, as well as order and enquiry notifications. Addressing the newsmen at the formal launch in Lagos, Lola Odedina, Head, External Communication and Public Affairs, said the platform is open to small to medium business owners from every sector of the economy that have registered business in Nigeria and operate GT Business Account, Corporate Current Account or GT Max Account. She noted that the e-commerce and business directory portal is part of GTBank’s strategy to empower and support Nigerian SMEs and also contribute to the growth and
development of the Nigerian economy. She said the portal is designed to enable Nigerian entrepreneurs migrate their businesses online and take advantage of the vast international and local sales opportunities within the e-commerce space. “SME owners will also have access to a wide variety of business tools that will enhance profitability as well as a community that will allow them forge relationships with other business owners,” she said. She noted that GTB has registered a total of 5,200 (five thousand, two hundred merchants) todate, saying that the Ghana and East African versions will be launched before the end of the years as both countries have critical mass of small businesses. “There is no getting away from the fact that economic conditions remain challenging for small and medium scale enterprises (SMEs) in Nigeria. It is however vital that this integral sector of the economy gets all the support it needs to drive growth and development. “With the introduction of the SME Market Hub, GTBank has provided SMEs an e-commerce platform that allows small and medium business owners create and maintain an online presence and expand their business frontiers to new markets and millions of buyers that are online.
and depository services to the Nigerian capital market. “To improve our services and efficiently manage the positive growth experienced by the capital market with the introduction of new products, services and market participants, the new CSD application will provide seamless communication among market participants. It would also have the ability to support real-time processing, support e l e c t r o n i c dematerialisation, interaccount transfers, corporate actions and account closures. This project has been commissioned with its estimated completion date scheduled for the third quarter of 2015,” he added. He also pointed out that the volume of dematrialised shares within the year dropped to 44.3 billion in contrast to 44.5 billion recorded in the previous year. In his address, the chairman, Mr. Oscar Onyema, said that in terms of expansion of its operation, CSCS had in 2013 commenced the clearing and settlement of transactions on the Overthe-Counter platforms to the NASD and the Financial Markets Dealers Quotations (FMDQ) platforms, adding that the company has been engaged to provide clearing, settlement and warehousing services for transactions that will take place on the floor of the Nigerian Commodity Exchange (NCX).
United Kingdom Department for International Development, DFID, programme - Growth and Employment in States (GEMS3), is working closely with the states in Nigeria to improve tax payment options and to reduce nuisance taxes to make life easier for all Local Government Areas, LGAs and taxpayers. To this end, GEMS3 has entered into partnership with the Kogi State government to deploy advanced systems in the state’s payment system. According to a statement by Victoria Ndoh, spokesperson for the programme, the project, which is funded by United Kingdom Department For International Development, DFID, is aimed at promoting growth and employment as it focuses on areas of tax administration and harmonisation, land administration and investment promotion at both state and local government levels.
‘Fidelity Bank adjudged most outstanding Family Friendly bank
idelity Bank has been adjudged the bank with the most outstanding family friendly policies in Nigeria. In a survey conducted amongst corporate organisations in Nigeria by the Institute for Work and Family Integration (IWFI) in collaboration with the Lagos Business School and the Great Place to Work Institute, the institute said that Fidelity Bank emerged tops in all the measuring indices. Specifically, the IWFI, which has consistently promoted work family balance and good work ethics, through policy research, seminars, conferences, and training; working with major organisations and institutions in the last eight years with its principal objective of building better family, better business and better society said that they were impressed with Fidelity Bank’s efforts at improving the welfare of its staff members. C M Y K
26 —Vanguard, MONDAY, JUNE 2, 2014
Vanguard, MONDAY, JUNE 2, 2014 — 27
Commodity index May 23 -May 29, 2014
UPMfB kicks off cashless policy, extend operation to Abuja Stories by PROVIDENCE OBUH
he Enugu based Umuchinemere Pro-credit Micro Finance Bank (UPMfB) will commence Cashless policy initiative as established by Central Bank of Nigeria (CBN) on July 1, 2014, while extending its operation to Federal Capital Territory, Abuja. As a CBN approved State MFB, the bank is authorized to have a branch at the capital city of the country, hence its decision to extend its operations to Abuja, which is the country’s capital territory. Speaking at a joint session of the bank’s Investors and Customers Forum cum Extraordinary General Meeting at Enugu, Managing Director, UPMFB, Mrs. Nnenna Ekete, said that it is not going to be taken unawares by the deadline of the apex bank, as it is set to implement and
integrate the new cashless policy into its banking operations. She said, “the bank has plans to embark on the acquisition, installation and operation of software application that will enable our customers to access their funds easily and transact other financial businesses with their accounts with our bank at any point in the country, through access
Children's Day: AMfB donates items to pupils
s part of Corporate S o c i a l Responsibility (CSR) cum Children’s Day celebration, Accion Microfinance Bank (AMfB) donated writing materials, bags, others to pupils of Agidingbi Primary School and Olomu Primary School Ajah. Speaking during the presentation ceremony, Managing Director/Chief Executive of the Bank, Ms Bunmi Lawson, said,
ICAN captures 58 schools from Lagos Mainland
he Lagos Mainland and District Society (LMDS) of Institute of Chartered Accountants of Nigeria (ICAN) has captured about 58 schools for its annual Catch Them Young and Quiz Competition for students of Secondary Schools in its catchment area. Out of the 58 schools, only 15 qualified for the grand finale competition and some of the areas covered by the LMDS includes Apapa, Surulere, Shomolu, Yaba, Ebute-Metta, Ido, Iganmu, Akoka, Fadeyi, Obanikoro, Anthony, Jibowu, Ijora, Palmgrove, Onipanu, Oworoshoki, Bariga, Gbagada, Alagomeji and its environs. President of ICAN, Alhaji Kabir Mohammed, said that the initiative has taken place in almost all parts of the country and so far observed in about 15 district societies such as: Abakaliki, Owerri, Port Harcourt, Lagos, Ikorodu, Ijebu Ode, Kanu, Jigawa, Sokoto and Katsina. Mohammed revealed that the two best qualifying students who did outstandingly in Ijebu Ode was given scholarship to any tertiary institution of their choice in Nigeria to study accountancy.
to Point of Sale (PoS), ATM, mobile banking, mobile money, epayments, debit/credit cards and e-banking services.” She assured customers of the bank that the necessary software technological applications for easy cashless banking will be in place by the bank at its various branches by July.
“The Lagos Mainland District Society of ICAN is following the foot step of the council to the extent that we need to grow attention of bearing in mind that we have in this country values and ethics of our profession, integrity and accuracy and for them to be able to do that they need to be a member, that is why we think that we should start from the grass root and choose the best minds and encourage them.
“We are happy to celebrate Children’s Day with the children and motivate them to bring out their best by believing the future is bright. We also use this opportunity to encourage the authorities to bring back our girls as we believe it is the responsibility of everyone to protect children.” She said that the bank is committed to enriching the lives of young Nigerians through education focused corporate citizen initiatives and has continued to demonstrate this in a variety of projects which include the presentation of educational material to schools. “There are also plans for employees of the bank to donate their time and resources to volunteer in their host communities. ” In his remarks, Education Secretary, EtiOsa Local Government Education Authority, Mr. Taiwo Lukman, expressed gratitude to the bank, encouraging the children to focus on their studies so as to have a bright future.
Honeywell celebrates with SOS village, little saints orphanage, others
oneywell Flour Mills Plc has reiterated its commitment to positively impacting on humanity by giving back to the society as part of Corporate Social Responsibility (CSR) activities. The company paid courtesy visit to some orphanage homes in Lagos, including; SOS Village, Isolo, Little Saints Orphanage and Bethesda Home for the Blind, where it donated products, equipment, cash, and also sponsored a jolly train ride with children of selected schools in Lagos, as part of the Children’s Day celebration. The train ride, took off from Ebute Metta Station went through Oshodi, Ikeja, Abule Egba to Ijoko and back to Ebute Metta. Managing Director, Mr. Lanre Jaiyeola, said that the company will continue to support good cause in the society especially those that have direct impact on human development. He added that it will continue to seize opportunity to make its impact felt in the society, listing such opportunities to include: support for sporting events, entrepreneurship programs, vulnerable groups, and others. Jaiyeola said, “It is our own way of adding value to the people that we believe should have needs within the society, and our own way to alleviate poverty, suffering in the land.” C M Y K
28 —Vanguard, MONDAY, JUNE 2, 2014
Where We Stand—Africa’s Take-off Let me start with where we stand. SubSaharan Africa is clearly taking off— growing strongly and steadily for nearly two decades and showing a remarkable resilience in the face of the global financial crisis. Economic stability has paid off. More than two-thirds of the countries in the region have enjoyed 10 or more years of uninterrupted growth. This growth has delivered a more educated population, with significant declines in infant mortality. In Benin and Madagascar, for example, primary
Transparency can help increase accountability and help ensure that these resources are harnessed for the benefit of all
school enrolment has increased by more than 50 percentage points. This may be from low levels, but it is still a huge improvement. And for good reasons, Africa is now a growing investment destination for both advanced and emerging economies— with a record $80 billion inflow expected this year. Indeed, it is no surprise that ‘frontier economies’ such as Kenya, Uganda, and Botswana are challenging old stereotypes and roaring loud as Africa’s lions. And yet, the tide of growth has not lifted all boats. Poverty remains stuck at unacceptably high levels—still afflicting about 45 per cent of the region’s households. Inequality remains high. And some countries, still facing recurring internal conflict, are struggling to exit from fragility. Africa’s success journey has been truly remarkable. But if the global crisis has taught us anything, it is the importance of making the benefits of growth more broadly shared. When everyone benefits, growth is more durable. Over the years, the IMF has been a close partner in Africa’s journey—including during the crisis. We have listened, we have learned, and we have responded. We have reformed our lending instruments to increase access and flexibility to countries in need; extended our zero-interest policy; and streamlined conditionality. We have tailored our policy advice to better address the very specific challenges facing the region. And we have supported this advice with five regional technical assistance centres—in Gabon, Ghana, Côte d’Ivoire, Mauritius and Tanzania. Today, the largest share of IMF’s capacity development services is devoted to Africa. We look forward to continuing and strengthening this fruitful partnership. Challenges ahead—Nearterm worries and longerterm challenges Africa’s future lies with itself and its people. True, the outlook for the region is very positive. Africa is expected to grow by about 5.5 per cent this year and next, and the poorest countries even faster, close to 7 per cent. But it must keep a firm eye on what’s going on beyond its horizons. Globally, even as the world turns the corner of the Great Recession, the recovery remains weak and uneven. What does this mean for Africa?
Africa Rising: Building to the By CHRISTINE LARGADE
Near- term worries In the near term, the region’s outlook could be clouded by three main worries: slower growth in advanced economies, and in particular emerging market economies which are major trading partners for Africa; lower prices for some commodities; and tightening external financial conditions and potentially increased market volatility as monetary policy is normalized. Policymakers will no doubt have their hands full. But they know what to do. The IMF stands ready to help with its policy advice, its technical assistance, and if needed, financial support. Longer-term challenges eyond these more immediate worries, there are a number of longer-term challenges that can dramatically affect the outlook for Africa; some for the better; others not so much. Demographic challenges: Africa is the youngest continent in the world. By 2040, the continent is projected to boast the largest labour force in the world one billion workers strong - more than China and India combined. Channeling this increasing reservoir of human
HILE Nigeria celebrated the 15th anniversary of the return to civil rule Thursday May 29, ore than 300 leading policymakers from Africa converged in Maputo, capital of Mozambique to take stock of the continent’s economic performance. The two-day meeting, tagged Africa Rising will assess Africa’s increased resilience to shocks and ongoing economic policy challenges. Managing Director of the International Monetary Fund, Ms Christine Lagarde in a keynote address charted a roadmap for the summit, which, IMF's Senior Communications Officer in charge of Africa, Ismaila Dieng, said will also focus on how best the continent can sustain the current growth. Excerpts from Lagarde's address: This conference offers a unique opportunity to reflect—together—on the lessons learned from Africa’s success and the challenges ahead. There is still much to be done. The continent is very diverse, and some countries risk being left behind, especially those faced with recurring conflict. In others, the rapid growth is yet to be widely shared across the population, with many Africans failing to see the fruits of economic success. In that spirit, I would like to share with you three perspectives: Where we stand— taking stock of Africa’s achievements; What near-term and longer-term challenges are emerging; and What are the key policy priorities to address these challenges and help deliver on the promise of Africa’s future.
Africa must keep a firm eye on what’s going on beyond its horizons
capital to productive sectors offers unrivalled economic and social opportunities. To take full advantage of them will require skillful management and vision. Technological challenges: Technological innovation offers great possibilities. It can help support global integration, improve productivity, and foster inclusion. Harnessing its power effectively and efficiently is the challenge. Environmental challenges: Climate change and sustained demand growth press on the sustainability of natural resources - further exacerbating inequality and exclusion. The challenge is to implement policies to foster growth that is, in turn, inclusive and environmentally sustainable.
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Today, only one in five people in Africa finds work in the formal sector. This must change. With wider access to quality education, healthcare and infrastructure services, it must change
resource flows. Côte d’Ivoire has also implemented a new legal framework for the mining sector that would help attract higher foreign direct investment. These are areas where the IMF has helped bring a wide range of crosscountry experience to bear. And we look forward to helping even more.
These investments are critical for growth to be sustained and broadened. High quality infrastructure can be a magnet for foreign investment. It can accelerate diversification and employment creation, and support further regional integration. Yet the costs of closing this infrastructure gap can be daunting. The investment needs for the region are estimated at about $93 billion annually. In most cases, the investments are large and upfront. They need to be carefully selected, managed and implemented within a medium- to long-term budget perspective. Here, the Fund can help. We are working with many of our member-countries through our capacity building centres and on-the-ground technical assistance to strengthen public investment and debt management capacity. This helps to put these countries in a much better position to take advantage of increasing financing options.
Future Building to the future—Three policy priorities So what are the policy priorities to ensure that these challenges become opportunities? I see three: build infrastructure, build institutions, and build people.
Build infrastructure irst, build infrastructure—energy, roads, and technology grids. These are the foundations of any strong and durable edifice. What does this mean in practice? Closing Africa’s infrastructure gap. Over the past three decades, per capita output of electricity in SubSaharan Africa remained virtually flat. Only 16 per cent of all roads are paved, compared with 58 per cent in South Asia. These shortfalls represent huge costs to businesses - and to people. Many countries in the region are taking encouraging steps to close this infrastructure gap. In Ethiopia and Mozambique, for example, investments in the energy sector are being scaled up, including through projects that promote cross-border trade in electricity. Kenya and Côte d’Ivoire are also initiating regional infrastructure projects in electricity, and road and railroad networks.
Build institutions et me turn to the second policy priority: build institutions. This means governance, transparency and sound economic frameworks. We talked about the foundations for the building; now think of institutions as the systems that ensure that the building functions properly and lasts a long time - like the heating, cooling and water systems. We all know that Africa has tremendous potential. It is home to more than 30 per cent of the world’s mineral reserves. Properly managed, these endowments offer unparalleled opportunity for economic growth and development. Moreover, these resources can be instrumental in relieving the large constraints in infrastructure that I just talked about. Yet, and let me be frank, in too many countries, the rents from extractive industries are captured by just a few. Mining can account for an important share of output and export earnings, but often contributes relatively little to budget revenues and job creation. This corrodes the fabric of the economy and its social cohesion. What can be done? Strengthening the institutional and governance frameworks that manage these resources is a good place to start. Transparency can help increase accountability and help ensure that these resources are harnessed for the benefit of all. Many countries have taken steps in this direction. For example, Sierra Leone and Uganda are setting new fiscal rules in anticipation of large
Build people So, we have the foundations of our building (infrastructure); we have set up the systems to ensure that it functions effectively and efficiently (institutions); now we need to let the people in. This brings me to my third priority: build people - children, youth, workers, and in particular, women. Let me be clear: Africa’s greatest potential is its people. They are the key for the region to fully capture the dividends from population growth. By some estimates, a one percentage point increase in the working age population can boost GDP growth by 0.5 percentage points. This is huge. For this to happen, however, ‘good’ jobs need to be created in the private sector. Today, only one in five people in Africa finds work in the formal sector. This must change. With wider access to quality education, healthcare and infrastructure services, it change. Similarly, technology can be tapped to extend the reach and access of financial services to millions of people. Here, Kenya’s experience offers valuable lessons to the rest of the world on how to empower the poor through financial access. By combining mobile banking with financial services provision, 75 per cent of Kenya’s population now has access to financial services. Crucially, it is the poor that have benefited the most from this expansion. Which brings me to a topic that is close to my heart: women. I know that most of the women in Africa cannot afford not to work. But when they do, they are mostly employed in informal activities. We all know what this means: low
productivity, low incomes, low prospects. We also know the constraints: access to education, credit, and markets. The gains to be made by overcoming these constraints are immense— particularly through girls’ education. By some estimates, the economic loss in developing countries from the education gap between girls and boys could be as high as $90 billion a year almost as much as the infrastructure gap for the whole of Sub-Saharan Africa! As the old African adage goes: “If you educate a boy, you train a man. If you educate a girl, you train a village.” My bottom line: invest in women. It has a great rate of return—economically and socially for the future. Let me conclude: e are all witnessing a momentous transformation in Africa. Five years ago in Tanzania, Africa’s economies were under challenge as the global economy faced its most severe crisis since the Great Depression. We meet now in Mozambique with an outlook of optimism and high hopes. The opportunities are vast and the challenges, while significant, can be overcome through sustained strong policies, both economic and social. Now is the time to go further, to work together towards an inclusive, job-rich and sustainable growth strategy. Now is the time to extend the gains that many countries have enjoyed to those that have been left behind by helping them overcome fragility and build strong institutions. I want to end by quoting from the words of Mozambique’s national anthem: “Pedra a pedra construindo um novo dia. “Stone by stone, building a new tomorrow,” that is what Africa Rising is all about. Africa Rising will benefit the lives of people on the continent. Beyond that, Africa Rising will benefit the world. An Africa ever more integrated in the world and the world learning from Africa.
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Homes & Housing Finance
Anambra sets up committee on housing
nambra State government has inaugurated an interministerial committee on delivery of housing estates in the state. Governor Willie Obiano inaugurated the committee to be chaired by Commissioner for Housing and Urban Development, Mr. Lawrence Chinwuba, in Akwa, the state capital. He charged members to provide first class housing estates, noting that was why persons with experience in the delivery of homes were selected to constitute the committee. The governor listed the terms of reference for the committee to include: identifying suitable and strategic locations for the construction of housing estates; to resume the provision of infrastructure in existing government land slated for housing construction and to enter into partnership with willing developers on Public-PrivatePartnership initiative with a view to providing decent and affordable houses in wellplanned environment.
Ogun to focus on affordable housing
gun State government is set to focus more on affordable housing and urban renewal to meet the yearnings of the people. Governor Ibikunle Amosun nd stated this at the 2 Ogun State Investors’ Forum held in Abeokuta recently. According to him, the state government is committed to the provision of housing for all; hence, it has evolved creative and participatory processes between the public and the private sectors to achieve affordable housing for the people. “The ultimate goal is to intervene in the housing delivery process and ensure that citizens own and have access to decent, safe and affordable housing,” Amosun declared. The governor said the government had put in place varieties of two-, three- and four-bedroom housing units at Plainfields Estate; a 170hectare site-and-services residential scheme at Kobape; and MITROS City and New Town in Isheri. C M Y K
he National Housing Fund (NHF) scheme was established by Act 3 of 1992 to enable Nigerians in all sectors of the economy, particularly those within the low and medium income levels who cannot afford commercial housing loans, such as civil servants, traders, artisans, and commercial drivers etc., to own houses. The Act stipulates that funding of the scheme will come from mandatory contribution of 2.5 percent of monthly income of Nigerians earning N3000 and above per annum, in both public and private sectors; commercial and merchant banks to invest 10 percent of their loans and advances portfolio; insurance companies to invest 20 percent of non-life and 40 percent life funds in the housing sector, with 50 percent of these directly in NHF and; financial contributions of the Federal Government. The pool of funds created by these becomes available to any contributor to borrow from, after contributing for a minimum of six months. Purpose The aims and objectives of the fund include: Mobilisation of fund for the provision of houses for Nigerians at affordable prices; Ensuring constant supply of loan to Nigerians for the purpose of building, purchasing and improving of residential houses; Providing incentives for the capital market to invest in property development and; Encouraging the development of specific programs that would ensure effective financing of housing development, in particular low cost housing for low income workers. Others are: Providing proper policy control over the allocation of resources and fund between the housing sector and other sectors of the Nigerian economy and; Providing long term loan to mortgage institutions for on-lending to contributions to the fund. Any intending beneficiary must be registered contributor and up to date with his/her contributions. Benefits Benefits available to contributors include: Housing loan of up to 90 percent of the cost of the house; Interest on loans remains fixed throughout the life of the mortgage at 6 percent per annum; Long period of repayment of up to 30 years; Contributions
Easy – to – construct prefabricated housing
How to access the National Housing Fund Stories by YINKA KOLAWOLE, with agency report can serve as additional old age security; Refunds with 2 percent interest on retirement and; Maximum loan of N15 million can be borrowed. Eligibility To be eligible for the NHF loan, a contributor interested in obtaining NHF loan must apply through a registered and duly accredited mortgage loan originator, e.g. a Primary Mortgage Bank (PMB), who packages and forwards the application to FMBN. Applicants are required to provide satisfactory evidence
of regular income. Deducted monthly contributions must be remitted to FMBN promptly, and at least 6 months contributions should be made. Documents required to process NHF loan include: Completed application form; Photocopy of title documents; Current valuation report on the proposed house to buy or bills of quantities (BOQ) for the house to build and; Three years tax clearance certificate. Others are: Evidence of NHF participation; Copy of pay slips for the previous three months and; Equity contribution or personal stake of 30 percent, 20 percent or 10 percent depending on the
loan amount applied for. NHF loan cannot be used to purchase piece of land to build a house. A prospective applicant who wishes to obtain a loan to build a house is expected to have his/her land as well as an acceptance title to the land prior to the application for NHF loan. Contributors can apply as an individual for NHF loan to develop a land or buy directly from government consort estate or private estate developer. A contributor can only obtain NHF loan facility once in a life time. The only collateral needed for NHF loan is the property in question. No other collateral is required to secure the loan.
FG removes Gemade as FHA boss T
HE Federal Government has announced the removal of Mr. Terver Gemade as the Managing Director of the Federal Housing Authority (FHA) following the dissolution of its interim management team. A statement by Tunde Ipinmisho, Head, C o r p o r a t e Communications, FHA, said Engr. David Kpue has been appointed as acting Managing Director of the organisation. He was deputy general manager in the Authority. An Assistant General Manager, Mr. Jonah Saidu, has also been
directed to take charge of the Finance department of the Authority. In their letters of appointment, they were directed to take charge pending the appointment of a substantive management. The statement noted that Gemade became Managing Director of FHA in May 1989. After he had completed his first tenure of four years, government last year reappointed him with a new team to drive the commercialization of the Authority for an interim term of 12 months which was renewable subject to good performance.
While handing over, Gemade said he did his best to fulfill the mandate of FHA during his tenure. Responding, Kpue thanked him for his service to the Authority and wished him well in his future endeavors. Kpue urged him not to hesitate to make his experience available whenever it was needed. He urged the staff of the Authority to brace up to the challenge of meeting the housing needs of Nigerians. He said he was satisfied that the Authority’s staff had the expertise, experience and will power required to turn the Authority around.
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C M Y K
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China to cut reserve requirement ration for some banks
hina said it will cut the reserve requirement ratio for some of the nation’s banks, the government’s latest step to support growth in the world’s second-biggest economy. Policy makers will “appropriately lower the reserve requirement for banks that have extended a certain amount of loans to rural borrowers and smaller companies, the cabinet said yesterday after a regular meeting led by Premier Li Keqiang. It didn’t give more details about the reduction. The State Council also pledged to fine-tune policy when needed, while reiterating it will maintain a prudent monetary stance. China’s economy is forecast to expand 7.3 percent this year, which would be the weakest pace since 1990, according to a Bloomberg survey of analysts this month. Premier Li called last week on regional authorities to help stabilize expansion as he seeks to ensure that the government meets its goal of about 7.5 percent growth for 2014.
UBS probed over money laundering, organised crime
BS AG, Switzerland’s biggest bank, is being probed by Belgian authorities over allegations of money laundering and organised crime. Judge Michel Claise is leading the investigation, Anja Bijnens, a spokeswoman for the Brussels prosecutor, said by telephone yesterday. UBS employees approached wealthy Belgian taxpayers including chief executive officers and sportsmen over a 10-year period, encouraging them to open undeclared accounts in Switzerland, M... Belgique magazine reported, without saying where it got the information. UBS Belgium, the bank’s local arm, helped to organize the transfer of large amounts of money to Switzerland, the magazine said. Prosecutors began the probe at the end of last year and it is based on “very detailed testimony, the magazine said.
UNVEILING - From left: Acting Chief Executive Officer, Etisalat Nigeria, Mr. Matthew Willsher; Etisalat customers, Mr. Soni Irabor, Mr. Obi Somto, Mr. Mai Atafo and Director, Consumer Segment, Etisalat Nigeria, Mr. Oluwole Rawa, at the unveiling of Etisalat Mobile Number Portability (MNP) Testimonial Campaign, held at Eko Hotel & Suites on 28th May, 2014.
Associated Airlines plane not insured in Nigeria — NAICOM Stories by ROSEMARY ONUOHA
he National I n s u r a n c e Commission (NAICOM) has said that the Associated Airline aircraft that crashed last October was not insured by any insurance company in Nigeria. Commissioner for Insurance, Mr. Fola Daniel, who disclosed this, denied knowledge of payment of claims to families of victims of Associated Airline. He refuted claim by the company that the Commission was contacted for the presentation of cheques to the families of the victim. He insisted that the Commission was not invited for the presentation, adding that the claim by the airline was untrue. It will be recalled that early this month Associated Airline said it had paid $480,000 (about N77m) as compensation to the families of those who died on October 3, 2013, when its aircraft crashed. The aircraft, which was taking the corpse of a former Governor of Ondo State, Dr. Olusegun Agagu, to Akure for burial, came down shortly after take-off and killed 13 out of the 20 people on board instantly.
The airline in a statement said that each of the relations of the 16 victims was paid $30,000 as the first tranche of compensation in accordance with the International Civil Aviation Organisation standards. International flights are governed by the Montreal
Convention, a global air carrier treaty adopted in 1999 by ICAO, a United Nations agency. The Montreal Convention of 1999 states that airlines wishing to operate on domestic routes shall adopt the approved liability limits in line with the requirement of
ICAO, which states that the airline shall pay compensation, in the case of death, or injury of passengers, of $100,000 per person; destruction, loss or delay of baggage shall be $1,000; and destruction, loss damage or delay of cargo shall be $20.per kilo. The carrier said in the statement that the balance of $70,000 per victim would be paid as quickly as possible when other matters pertaining to documentation would have been resolved. The statement said the compensation was paid to the relatives at the airline’s Lagos office, adding that they were individually presented with a “certificate of release and discharge”. The Chief Operating Officer, Associated Airlines, Mr. Taiwo Raji, stated that there had been lots of insinuations that the carrier was shirking its responsibility to the victims’ families. He, however, said that the airline had to do a lot of paperwork and had been putting things in place to ensure that the relatives were settled as quickly as possible. “We have been meeting with our insurers but it has been very slow. We are working with them to resolve the whole issue. The insurers and the airline have resolved to pay 30 per cent of what should be paid now, while the 70 per cent balance will also be paid as quickly as possible,” he said.
NAICOM targets improved service delivery
he National Pension Commission, PenCom, said a number of measures have been adopted in the pension industry to improve service delivery. Acting Director General of PenCom, Chinelo Anohu-Amazu, made the assertion th at the 8 annual business law conference in Lagos while delivering a paper titled “Contributory pension scheme as a catalyst for economic development,” in Lagos last week. Anohu-Amazu said that part of the measures on the part of PenCom is the establishment of zonal offices in the six geopolitical zones of the country to among others attend to complaints, enquiries and the provision of other customer services to all stakeholders as well as the establishment of contact centre to centralize, track and resolve stakeholder complaints. On the part of Pension Fund Administrators (PFAs), Anohu-Amazu said that the measures adopted include Know Your Customer (KYC) techniques for proper monitoring of client needs and client feedback mechanism. The PFAs also adopted the development of follow-up models for settlement of outstanding client issues as well as establishment of contact centres. According to the Acting DG, pension assets have grown to N4.13 trillion while the proportion of the assets to Nigeria’s GDP grew from 1.4% in 2006 to 9.5% in 2013, which represents an average yearly growth of 30%.
She said that the most significant proportion, about 63% of the assets (equivalent to N2.64 trillion) was invested in FGN securities and the asset invested in authorized markets with portfolio limits. On the role of pensions in an emerging economy, Anohu-Amazu said that it provides social security by alleviating old age poverty; ensures that every pensioner receives pension as and when due; stems further growth of pension liabilities; fully funded towards future pension obligations as well as curtailment of the burgeoning pension liabilities of federal and state governments. She said that the Contributory Pension Scheme, CPS, supports economic development; is an efficient avenue for infrastructure and economic development; as well as provides availability of investible funds to support the development of the real sector. According to her, the CPS stimulates job creation through employment generation both directly and through third party service providers to the pension industry. She said that the number of registered contributors is over 5,980,415 as at February 2014 even as there are 95,840 retirees currently receiving pensions as and when due under the CPS as at March 2014. “Total pension fund assets had grown to over N4.13 trillion as at March 2014. Nigerian CPS has become a model for other African countries: Study visitations from Ghana, Malawi, Uganda, Tanzania,” she said.
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People in Business
More Northern women are becoming entrepreneurs — Jelena Zivkovic
Africa's biggest fund manager CEO resigns
lias Masilela resigned as the chief executive officer of South Africa’s Public Investment Corp., Africa’s biggest fund manager and the largest shareholder on the Johannesburg stock exchange. Masilela, 50, will take outstanding leave immediately and officially step down on June 30 after more than three years in the job, the Pretoria-based PIC, which manages 1.6 trillion rand ($153 billion) in assets. Chief Financial Officer Matshepo More will be acting head of the manager of the pension funds of South African state workers. The PIC has used its shareholding to prevent foreign takeovers of South African companies including pharmaceuticals maker Adcock Ingram Holdings Ltd. (AIP) and to force the departure of the chief executive officer of Togo’s Ecobank Transnational Inc. (ETI).
By EBELE ORAKPO
anadian-born Jelena Zivkovic is the Acting Director, Academic Advising & Retention at the American University of Nigeria (AUN), Yola, Adamawa State. In this chat with Vanguard, Jelena whose real interest is entrepreneurship, especially women entrepreneurs, says northern women who were hitherto very conservative, are beginning to enter the workplace or business place so she decided to find out why. Excerpts:
What do you think could have led them into smallscale businesses? It could be a cultural shift, a mindset or as a result of financial need. I only have 60 women at this stage and I am hoping to get up to 100. I am noticing that these women are obviously getting support from their family members. They see it as an economic need and contributing to their families’ economies.
What kind of businesses are they into? They are into informal businesses. Some are hair dressers, tomato sellers, wholesalers for clothing, baby clothes, retailers, I even met a lawyer who has her own practice; you know, going against the norm. All the women I met agreed that they are seeing more women entrepreneurs.
ow easy was it getting the support of their husbands? They said they needed the permission of the men otherwise it would not have been possible. I know of families with 20 children and none has the shoes, and they are not in school but the male family members just refuse that their women go to work. This would have been enough reason for the men to encourage the women to work so they can contribute to the upkeep of the children. So I don’t know at what point we are going to see what the men really need to encourage their sisters, mothers and wives. Remember that if society accepts it, then it is a lot easier but if society does not accept it, it will be very difficult. So this is what I am finding fascinating and trying to understand. I noticed that when I asked the women why
What led to the study? We know the northern region is generally conservative and there are certain stereotypes and expectations on women and women in business is not one of them. It’s more like women have their role at home but we are seeing a trend, where more and more women are entering the workplace or business place so I was kind of curious why they are doing that. What is going on in their lives and family structure that is supporting them to do that because surely, they cannot just go on their own, there must be support from the husbands. I met with about 60 women entrepreneurs in three states – Abuja, Adamawa and Kano over the last couple of years and I wanted to understand and try to get a better picture of how they became entrepreneurs.
The northern region is generally conservative and there are certain stereotypes and expectations on women and women in business is not one of them
they went into business, most of them said they were doing it to be able to send their children to school - but I rarely heard any of them saying she did it for her personal development or satisfaction. So they don’t see being an entrepreneur or getting into the business world as fulfilling their own desires.
While women in other parts of the world see it as something for personal development; to make them better people, something that will make them fulfilled, but here, the women are driven by external influences – children’s education and provision for the family. I asked a woman why she is selling soft drinks and she said: “Because I will have extra money to make a really good meal for my husband.” She said her husband compliments her on the wonderful meals without asking her where she gets the money from. Then she said that more and more women in their society now come out with make-up and dress differently so she is worried that they may take her husband away from her so she has to work to make more money to make good food because she feels that will make the husband stay with her. Meanwhile, she doesn’t tell him where she gets the money from neither does he ask. And I said: “ Wow! That’s a very different perspective.”
Online banking thefts in Japan prompts compesation rethink
ackers stole nearly $2 million from the online bank accounts of Japanese businesses in April, a surge in theft that has prompted some banks to curtail online services and rethink compensation policies, executives and regulators say. In April there were 50 cases of theft from online accounts held by Japanese businesses with nearly 200 million yen stolen, according to a person with knowledge of the industrywide tally, which has not been made public. That was more than the entire previous year. Japanese businesses reported 34 cases of online banking theft for the year ended March with a total of 182 million yen ($1.8 million) stolen, according to data released by the Japanese Bankers Association. Earlier this month, a senior official with Japan’s Financial Services Agency told regional bank executives that regulators were concerned that online theft could cause a chain of small business failures and bankruptcies, according to participants who attended the closed-door meeting. C M Y K
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Technology major setback to travel agencies says Okezie By DANIEL ETEGHE
anaging Director of Wakanow Travels and Tour Agency, Mr. Obinna Okezie weekend identified technological problems as one of the major setbacks in the travel and tour agencies stressing that one of it component was transparency. Disclosing this development to newsmen during the official launching of the Wakanow Corporate credit card in partnership with Diamond Bank in Lekki, Lagos, Mr. Okezie stressed that the company was introducing new technology so that they could improve on the technology with the aim of doing well in the travel market and on the web. He said “We are bringing in technology so that we can improve in order to be enabled to do well on the web and on the mobile but like I said leakages has been one of the major challenges and MD’s of most of these corporations, transparency has been an issue and we have been able to tackle it to some extent, on the retail space customers can go on our website and see the prices even if you don’t book with us, you have an idea what the prices are so that is where transparency comes in.”
NAHCO FTZ to attract $500 Million investment By LAWANI MIKAIRU
hairman of the National Aviation Handling Company (NAHCO) PLC, Mallam Suleiman Yahyah, has revealed that the establishment of Free Trade Zone at the Murtala Muhammed Airport Lagos by the company would attract nothing less than $500 Million investment to the nation’s economy within five years . Speaking at the national executive council meeting of the Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) in Ijebu Ode, Ogun State, Yahyah said when the Free Trade Zone is fully operational, it would create employment opportunities for quite a number of Nigerians and the economy would surely feel the impact of the operation of the FTZ. C M Y K
DRAW - From left: Vice President, Flight Operation, Arik Air, Capt Ado Sanusi, Arik Air Ambassador, Tobi Sanni-Daniel (Ice Prince) Senior Vice President, Commercial, Arik Air, Mr. Siva Ramachadran and Director, Consumer Protection, Nigeria Civil Aviation Authority (NCAA), Mr. Adamu Abdullahi, during Arik Air Brazil 2014 promo draw, held at Arik Corporate Headquarters, Ikeja, Lagos.
Why we queried Aviation Ministry over 174bn debt — UZODINMA By LAWANI MIKAIRU & DANIEL ETEGHE
hairman of the Senate Committee on Aviation, Senator Hope Uzodinma, has said the Senate Committee on Aviation demanded explanations from the supervising Minister of Aviation, Dr. Samuel Ortom, on the N174 billion debt incurred by the ministry since 2011 because the expenditure was not within the ministry’s budgetary framework. And the National Assembly, especially the Senate Committee on Aviation was not informed about the debt. According to Senator Uzodinma: “When we say we are not carried along it is because they didn’t allow the National Assembly to play their own role.” Uzodinma gave this explanation while
fielding questions from Aviation reporters at the Murtala Mohammed International Airport, Lagos after an oversight visit to the airport by the Senate Committee on Aviation. Explaining further, the chairman said: “Yesterday, ( Monday), while we were at the ministry., we discovered and it was confirmed by the
ministry that under the phase three remodelling that FAAN and the Ministry of Aviation are indebted to the tune of over N174bn, these are funds not within the budget.” “You will agree with me, they didn’t carry us along and that is why it is not in the budget so we now queried how they over-committed government without prior
AON kicks against inspection of aircraft in Nigeria By LAWANI MIKAIRU & DANIEL ETEGHE
irline Operators of Nigeria, AON, has condemned the call for the inspection of aircraft by the Nigerian Civil Aviation Authority, NCAA, in Nigeria after it has been flown into the country from abroad.
The chairman of AON, Captain Nogie Meggison who made the condemnation said such proposal could make Nigeria a dumping ground for bad aircraft if, after bringing the aircraft into the country, it was discovered that the aircraft had a major fault which could not be repaired. Captain Meggison stressed that such proposal may affect
ATSSSAN shelves warning strike, as Presidency backs down on merger By LAWANI MIKAIRU & DANIEL ETEGHE
approval. Now the only way to go because some of those projects are also as critical as important, we now said that there will be a committee by the Federal Ministry of Aviation to look at those projects and then reprioritise them and see what the ministry will be able to shoulder given the lean resources under their envelop for 2014.” “ And then talk with us and see how we can work together to now look for money to pay because there is already a commitment on the side of government. So you see when we say we were not carried along it is not because we didn’t share money but it is because they didn’t allow the national assembly to play their own role. “ Commenting on the Airfield lighting hitherto handled by Nigerian Airspace Management Agency, NAMA, Senator Uzodinma said “ now that the air fielding light has been transferred back to Federal Airports Authority of Nigeria, FAAN, we now know that FAAN has the technical and financial capacity to rise up to the challenges and ensure that we have all the runways light up for night navigation, it is something that we must do because we must get value to every expenditure that we have done.”
embers of the Air Transport Services Senior Staff Association of Nigeria, ATSSSAN, have shelved its planned two days warning strike to protest the proposed merger of aviation parastatals as feelers from the Presidency indicate that government has backed down on the planned merger. After a two day National Executive Council Meeting at Ijebu Ode, Ogun State, ATSSSAN said the information at its disposal shows that the federal government will not go ahead with the planned merger. The union said in a communique that “ the planned strike was suspended due to the credible and
authoritative overtures from the Presidency which indicate that President Good luck Jonathan has listened to the cries of the aviation workers.” It will be recalled that aviation unions and stakeholders have been kicking against the federal government acceptance of the Chief Steve Oronsanye panel which recommended the merger of Nigerian Civil Aviation Authority, NCAA, who is the regulator of the aviation industry with service providers like Nigerian Airspace Management Agency, NAMA, and NIMET who forecast weather. ATSSSAN also explained that it considered the “ country’s keeping of global standards, procedures and practices in order to sustain safety and security of the airspace and general operations.”
the safety and development of the aviation sector as aircraft that do not fit into the Nigerian NCAA’s specifications in terms of airworthiness could be flown into Nigeria. He said the usual practice where, aircraft safety inspectors from the NCAA, travel to the maintenance facility or the manufacturers facility or country of sale to carry out the necessary check on the aircraft before being flown into Nigeria is better and safer. He said defects or faults found by NCAA inspectors on any aircraft requiring rectification could be carried out at the seller’s C Check Maintenance Repair Organization (MRO), before such planes are flown into Nigeria. According to him “If you say the aircraft should be flown into Nigeria first , before NCAA inspectors carry out technical checks on arrival in Nigeria and it is discovered that there is a major defect or the aircraft does not comply with Nigerian specification, what do you do “?
Vanguard, MONDAY, JUNE 2, 2014 — 35
So you want to be governor in 2015?
ooking from the fact that the funds from the Federation Account are not judiciously utilised by the states and they are not accountable to the people and the state legislature, our concern is that even if they get money from bonds and it is not invested, the state will be left with a huge debt burden which will hurt in the long term.” Dr Usman Muttaka, Head of Department of Economics, Ahmadu Bello University, Zaria. That statement credited to Dr Muttaka was quoted in the PUNCH of May 25, 2014, in a report titled States raise N514bn through bonds in five years, written by Simeon Ejembi. The report could not have come at a better time as elections are about to be held in Osun and Ekiti states in a few weeks; and the rest of the country next April. For too long, elected governors in all the states of Nigeria had taken it upon themselves to get their states into long-term debts, mortgage the future stream of state revenue long after they have left office – with hardly anybody asking questions. And all these in a democracy. League Table of Bond Debts by states: Below are the current levels of bond debts owed by some states. Those are not the only
heavily indebted states, however. How much Akwa Ibom and Rivers as well as Ogun and Oyo states owe is not included yet. Naturally, the State of Excellence should set the pace and Lagos State has not disappointed in this respect. But, some of the other states should give their people a lot to worry about given their ranking, see below, on the revenue from the Federation Account – which still constitutes the bulk of their revenue. The figures and the capacity of some of the states to carry the debt burden, in the event of a drastic downturn in crude oil prices, should frighten those wanting to take over from outgoing governors. · Osun has drawn only N30b out of the N60b it planned to eventually borrow under the state government’s debt issuance programme; which means that the figure could rise any time from now. The first thing which strikes a casual observer is the penchant for states with low revenue ranking to borrow comparatively more than those with high revenue profile. Lagos is unique among all the states on account of its relatively high Internally Generated Revenue, IGR, as a percentage of total revenue collected. But, most other
League Table of Bond Debts by states:
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.
STATE Lagos Bayelsa Delta Osun* Ondo Edo Ekiti Gombe Imo Kwara Ebonyi Niger
states depend almost exclusively on the allocations from the Federation Account. Most spend virtually every kobo collected now and they still experience difficulties in meeting their financial obligations. With federally allocated revenue on the decline, the states will experience increasing difficulties in meeting their financial obligations. Debt defaults loom as distinct possibilities. Ordinarily, there is nothing wrong with governments borrowing to finance capital projects. But bond financing is supposed to be used for projects which will generate the funds with which the loan will be repaid. That means that funds meant for a project
DEBT N187b N50b N50b N30b N27b N25b N25b N20b N18.5b N17b N16.5b N15.6b
RANK 5th 4th 3rd 18th 11th 23rd 34th 36th 13th 32nd 33rd 12th
cannot be diverted to any other purpose –however urgent or meritorious. In mature democracies, the legislature ensures that this is done. But, there is probably no single independent State House of Assembly in Nigeria today. All without exception have become appendages or rubber stamps of the state governors. It is, therefore, most likely that some, if not most of the funds collected for some specific projects have been diverted to other end uses. It would have been bad enough if those projects are also yielding revenue to help repay the debt. It is worse when they go into drain pipes leading inexorably to private pockets.
The lame duck governors, who can keep their lawmakers at bay, have had the benefit of enjoying a free hand to disburse public funds as they chose. They have enjoyed the benefits of exercising power unchecked and they can depart while passing the bill to their successors to pay. That explains why, with the exception of Osun and Ekiti, as well as Anambra and Edo, whose governors are not departing in 2015, every governor is eager to select his own successor. None wants to pass the baton of office to a hostile or uncooperative new governor who might expose any shady deals that might have been associated with those projects. The would-be successors are warned to be wary of the booby traps awaiting them in the Governor’s office. Once you have been imposed on the people by the outgoing governor, you will be expected to live with the problems which a mortgaged future will mean for the state. And, if it means sacking a lot of state workers, then the burden will be yours not that of the man who got the state into the mess in the first place. V i s i t : www.delesobowale.com or Visit: www.facebook.com/ biolasobowale
Business & Economy
Al Grain enters noodles market with N7bn investment By PRINCEWILL EKWUJURU & NAOMI UZOR
he N7 billion green field manufacturing plant investment of Al Grain Foods Limited has delivered a new entrant into the noodles market with Al Grain noodles. With the entrant consumers of noodles now have more
choices to make with the formal entry of the new product, positioned as a healthy choice. Al Grain is a whole grain noodles product manufactured in the N7b green field plant of Al Grain Foods Limited, Isolo, Lagos. Economist and founder of the Centre for Values in Leadership Prof Pat Utomi led a star cast of guests from banking, industry, government
as well as Nollywood at the unveiling of the product in Lagos. Speaking at the launch, Utomi called for greater focus by both Government and private sector players on agriculture and manufacturing, remarking that a synergy between both sectors would be the surest route to creating jobs to reduce unemployment amongst Nigerian youth.
Utomi said he had tasted the product before the formal presentation and confessed his love for its formulation and presentation. Professor Utomi
who was the guest of honour, disclosed: “I do not have a particular food I crave for, but sincerely Al Grain noodle has become part of my menu.” Utomi confessed that he has become a convert of the noodle and enjoined consumers to enjoy it and make Al Grain part of the items in their hampers always. “I’m a convert to Al Grain.
Director says skills acquisition will reduce unemployment, security challenges
irector, Jobs Creation, Lagos State Ministry of Special Duties Mrs Bisi Onayemi has urged government at all levels to use skills-based education to manage the nation’s unemployment and security challenges. Onayemi said in Lagos that unemployment was
a major driver of kidnapping, armed robbery and the current insurgency. She said the state’s 18 skill acquisition centres trained about 18, 000 people annually in various needs based crafts to make them selfemployed and self-sufficient. “We have skill acquisition centres started
about 10 years ago where youths learn various trades such as fashion designing, catering, metal fabrication, welding and carpentry. Anybody can register to learn. It is for all categories of people. School leavers, drop outs, graduates, school certificate holders and illiterates,” she said.
LAUNCH - From left: Managing Director, Nokia West and Central Africa, Nick Imudia; Marketing Campaign Manager, Nokia West and Central Africa, Yetunde Ogeroju; Director, Consumer Channels Group, Microsoft Nigeria, Mark Ihimoyan and Retail Customer Marketing Manager, Nokia West and Central Africa, Olajide Adeyemi during the launch of the first Windows Dual SIM smartphone, Nokia Lumia 630, held at Protea Hotel, Ikeja.Photo byAkeem Salau. C M Y K
36 — Vanguard, MONDAY, JUNE 2, 2014
Business & Economy
SUMMIT - From left, Christian Louboutin, John Obayuwana and Burak Celet during the Financial Times Business of Luxury Summit in Mexico.
Luxury industry in Lagos worth $3bn — Polo MD
ohn Obayuwana, the Founder and Managing Director of Polo Luxury Group, has projected that Lagos alone could generate $2-3billion in luxury sales. He made this projection while addressing delegates at the just concluded Financial Times Business of Luxury Summit in Mexico. In a presentation on ‘The challenges and opportunities that exist for international luxury brands in Africa particularly in Nigeria,’ Obayuwana, said that the current consumption of luxury goods by Nigerians in shopping destinations such as Paris, Dubai, UK etc. show the spending power of Nigerians in the luxury sector. “Wealthy Nigerians have a huge appetite for luxury shopping abroad. In Nigeria, customers are not just looking for logos; they are looking for quality and great service.” In addition, he spoke about the challenges that have inhibited the luxury industry in Nigeria such as lack of power supply, high cost of operation, lack of human capital, and the lack of retail infrastructure.” He stressed the importance of paying attention to the middle class in order to ensure the sustainable development of the luxury industry. Mr. Obayuwana has played a significant role in shaping and defining the landscape of the luxury industry in Africa. He continues to do so with his ongoing effort to ensure the application of international standards in the retail luxury industry in Nigeria, which is evident at Polo
Limited and Polo Avenue. The Financial Times Business of Luxury Summit this year attracted senior executives, industry leaders, brand experts, executives and decision
makers of the luxury industry. Theses include the likes of Stella McCartney; Christian Louboutin; Caroline Brown; LapoElkann; William Lauder; Marco Bizzarri and Vanessa Friedman.
Firm plans sustainable corporate governance practice in Nigeria By NAOMI UZOR
CSL Corporate Services Limited said it is set to enthrone sustainable corporate governance practices with the establishment of an academy to properly equip those who have responsibilities within the governance framework. In a parley with pressmen, the Managing Director, DCSL Corporate Services Limited, Mrs Bisi Adeyemi, said they are of the opinion that corporate governance serves as a tool for ensuring accountability, transparency,responsible and ethical management of resources, adding that, good corporate governance impacts positively on a company’s operations and acts as a panacea for corporate failure. She disclosed that the academy is designed to be a governance and corporate secretarial training & resource centre of specialized learning for company secretaries, In-House legal counsel, compliance officers, interns and all those seeking training in these areas and that the academy would assist participants to have a better understanding of
the principles of good corporate governance and equip them with the knowledge required to assist their respective organizations to imbibe these principles for the overall benefit of all stakeholders. “DCSL is a private limited liability company which provides company secretarial, g o v e r n a n c e , immigration and training services to diverse governmental, corporate and individual clients across several business sectors in Nigeria and over the past few years, has through its corporate governance series of open enrolment seminars, roundtables and publications contributed to thought leadership on the subject matter “ she stated. Furthermore, she said in continuation of their corporate governance series, they have a few seminars and training programmes slated for later in the year for Directors, company secretaries, risk officers and members of the audit committees and in conjunction with the Hawkamah institute of corporate governance in Dubai, they are cohosting a corporate governance training for directors in Dubai in the 12th and 13th of November 2014.
Vanguard, MONDAY, JUNE 2, 2014 — 37
Tax Matters (43,000)
The CGT – An Untapped Revenue Goldmine
axation is arguably as old as mankind. In his book, Income Tax Law and Practice in Nigeria, Ola, C. S. said apart from revenue to the government, taxation is important to everyone and taxes collected come back to the taxpayers in the form of social amenities. Almost everything we own and use for personal or investment purposes is a capital asset. Examples include a home, personal-use items like household furnishings, and stocks or bonds held as investments. Capital gains are the profits realized from the sale of assets at a price that is higher than the purchase price. When a capital asset is sold, the difference between the cost sale and the sales price is a capital gain or a capital loss. You have a capital gain if sales price is higher than cost of sale. The reverse is the case for a capital loss. Capital Gains Tax (CGT) is a type of tax levied on capital gains accruing to individuals and corporations. The Federal Inland Revenue Service (FIRS) and State Boards of Internal Revenue are responsible for the administration of the CGT in Nigeria. It is a tax applicable to capital gains accruing to any person (company or individual) on the disposal of a chargeable asset. Capital gains taxes are triggered when an asset is realized, not while it is held by an investor. An investor can own shares that appreciate every year, but the investor does not incur capital gains tax on the shares until they are sold. Not all disposals are subject to CGT; only chargeable assets are. Chargeable assets are all forms of property, including options, debts and any form of property created or acquired by the person disposing it, or otherwise coming to be owned without being acquired. Landed properties and buildings are the main income yielding assets in Nigeria. Most countries’ tax laws provide for some form of capital gains taxes on investors’ and individuals’ capital gains, although CGT laws vary from country to country. In Nigeria, CGT was originally introduced by the Capital Gains Tax Act of 1967 with a rate of 20% but effective from 1998, the CGT rate was revised down wards to 10%. The legislation currently governing taxation of capital gains is the Capital Gains Tax Act CAP C1 LFN 2004. Capital gains are excluded from taxation under the Companies Income Tax Act (CITA) to avoid double taxation since such gains are subject to tax under the CGT Act. Assets situated outside Nigeria are chargeable to CGT on the amount received in or brought into Nigeria. In the case of a non-resident, CGT is charged on any part of the gains received or brought into Nigeria. Disposal to a Connected Person When a taxpayer transfers his capital asset to say, his wife, this is seen as a
By EMBUKA ANNA
Capital Gains Tax (CGT) is a type of tax levied on capital gains accruing to individuals and corporations
transaction between ‘connected persons’. In this case, the chargeable gains will be calculated on the basis of the market value of the asset at the date of transfer. Section 24 of the CGT Act, 2004 provides that a person is ‘connected’ if: a. That person is the individual’s spouse. b. A trustee of a settlement with any individual who in relation of the settlement is a settler. c. A person is connected with any person with whom he is in partnership and with any person the spouse or relative of any person with whom he is in partnership. A company is connected with another company if: a. The same person has control of both or he and persons connected with him has control of the other. b. Where a group of two or more person has control of each company and the group either consists of the same persons or could be regarded as consisting of the same persons by treating a member of either group as replaced by a person with whom he is connected. c. A company is connected with another person if that person has control of it or if it and that person connected with it together have control of it. d. Any two or more persons acting together to secure or exercise control of a company shall be treated in relation to that company as connected with another and so will any person on the directions of any of them to secure or exercise control of the company. Capital gains is the net consideration accruing to a person on the disposal of capital assets after the sum of the total consideration and expenses for acquiring the asset has been deducted. It is arrived at by deducting from the proceeds accruing to any person on disposal the following: a) The amount or value of the consideration (in money or money’s worth) given wholly, exclusively and necessarily incurred in providing the asset. b) Expenses wholly, exclusively and necessarily incurred on the asset for the purposes of enhancing its value being expenditure reflected in the state or nature of the asset at the time of disposal. c) Expenses wholly, exclusively and necessarily incurred on the asset
Net sales proceeds: 107,000 Less cost of acquisition: (60,000)
in establishing, preserving or defending the title or right over the asset. d) T h e incidental cost of making the d i s p o s a l , incidental costs of the acquisition of the asset or of its disposal includes
fees, commissions or remuneration paid for professional services of any surveyor or valuer or auctioneer or accountant or agent or legal adviser and cost of transfer or conveyance including cost of advertising. Expenses Allowable and Computation of CGT Expenses allowable as a deduction in computing the gains or losses of a trade, business, profession or vocation for income tax purposes are not to be deducted in the course of determining the applicable CGT. So also are premiums or other payments made under a policy of insurance against the risk of any kind of damage or injury to lose or depreciation of any asset. This does not prevent the deduction of expenses allowable in the computation of capital gains under the CGT if the assets have qualified for capital allowances. According to Ayua, I. A. in his book, The Nigerian Tax Law, the above position on deductions is to the effect that capital gains are liberally calculated for the purpose of the CGT law. In practice, capital gains are calculated by deducting the total cost of acquisition from net sales proceeds. Example: Ola sold his property for nd N150,000 on the 2 of June, 2005. He incurred the following expenses in the course of the sale: Adverts (online and print): N 8,000 Legal service charge: N15,000 He bought the property on 13th December, 1981 at N60,000 and incurred the following expenses: Agency: 000 Renovation
N 10, 000
Here is a computation of the amount of CGT due from Ola: N Proceeds from sale:
Less expense: Adverts: 8,000 Legal service charge: 15,000 Agency: 10,000 Renovation: 10,000
Capital Gains Tax = 10% of N 47,000 = N 4,700 Exemptions The CGT Act exempts gains accruing to the following: a) Ecclesiastical, charitable or educational institutions of public character. b) Any statutory or registered friendly society. c) Any co-operative society registered under the Trade Union Act, in so far as the gain is not derived from any disposal of any asset acquired in connection with any trade or business carried on by the institution or society and the gain is applied purely for the purpose of the institution or society as the case may be. d) Gains accruing from any local government council. e) Companies being purchasing authorities established under any law in Nigeria empowered to acquire any commodity in Nigeria for export. f) Superannuation funds (pension provident or other retirement benefits fund, society or scheme approved by the Joint Tax Board under Section 20 (1) (f) of the Personal Income Tax). g) Decorations, stocks and shares (the Act provides that where a person disposes a decoration awarded for valour or gallant conduct which he acquires otherwise than for consideration in money or money’s worth, such is not a chargeable gain. The Act also recognizes disposal of Nigerian government securities, stocks and shares as non-chargeable gains). Reliefs To prevent double tax relief on disposed assets, the Act provides that relief would be given in respect of replacement of business assets, compensation for assets lost and destroyed and in respect of delayed remittances from abroad. The relief would be in the form of tax deferred. Offences and Penalties With regards to the FIRS’ jurisdiction, offences and penalties under CGT is as provided for by Part VI of the FIRS Establishment Act 2007. On failure to deduct or remit taxes, Section 40 of the FIRSEA 2007 provides that “any person who being obliged to deduct any tax under this Act or the laws listed in the First Schedule of this Act but fails to deduct or having deducted fails to pay to the Service within 30 days from the date the amount was deducted or the time the duty to pay arose, commits an offence and shall upon conviction be liable to pay the tax withheld or not remitted in addition to a penalty of 10% of the tax deducted or not remitted per annum and interest at the prevailing Central Bank of Nigeria minimum rediscount rate and imprisonment for a period not more than three years”. On general penalty, Section 49 (1)
38 — Vanguard, MONDAY, JUNE 2, 2014
FG unveils ‘Mara Mentor’ to support young entreprenuers
N a move to show re newed focus on entrepreneurship, federal government has rolled out ‘Mara Mentor ’ a mentoring technology application designed to ‘enable, empower and inspire’ young business leaders across the country. The app, launched in partnership with the Mara Foundation, a social enterprise set up to support budding young entrepreneurs in Africa, is used by the government to bolster the SME sector and boost job creation and further develop and diversify the region’s economy. President Jonathan made the announcement the Democracy Day celebrations in Abuja last week. President Jonathan said: “I am a firm believer in youth empowerment and support any efforts to drive our youth agenda forwards. The Mara Mentor app is a fantastic initiative, and I would like to express my sincere appreciation to Mara Foundation and its Founder, Ashish J Thakkar, for choosing Nigeria for the pilot launch in Africa.”
Airtel Nigeria introduces free access to Wikipedia
IRTEL Nigeria has part nered with the Wikimedia Foundation to launch Wikipedia Zero to its subscribers in a move that will see 21 million users access free knowledge and information via their mobile phones minus data charges. Airtel Nigeria’s Chief Commercial Officer, Maurice Newa, said the new service will empower Nigerians with relevant knowledge and information so that they succeed in their daily personal and professional endeavors. “We are excited with our partnership with the Wikimedia Foundation and we will continue to provide innovative solutions that will uplift Nigerians in line with our brand promise of becoming the most loved brand in the daily lives of Nigerians,” he said. Newa added that Airtel is passionate and committed to creating solid educational and youth empowerment platforms that will enrich and transform the lives of telecoms consumers across the country. C M Y K
Offline retail is e-commerce’s greatest competition - Fashpa CEO Stories By JONAH NWOKPOKU
HE founder/Chief Exec utive Officer of Fashpa.com, an exclusive online fashion merchant, Honey Ogundeyi has said that online retailers’ greatest competition is the offline market. She stated this during an exclusively interview with Vanguard on the operations of Fashpa.com and the state and future of e-commerce in Nigeria. “In terms of competition there is lot of sites still coming up online, offering fashion but our real competition is in the offline market where we see a lot of people going to buy from. So offline market can be considered a strong competition,” she said. She noted that for Fashpa.com, as far as competition is concerned, “We basically benchmark ourselves against what our customers want. And I think the opportunity lies in serving real fashion conscious customers; and we are lucky that we are the first to offer fashion, the way that we do and mix both fashion e-commerce and fashion content.” Explaining the offerings of Fashpa.com, she said: “Fashpa is an online fashion retailer. We are one of the leading fashion retailers in Nigeria and Africa. And basically, we are dedicated to providing our users with access to fashion and lifestyle brands. If you know Nigerians, and Africans in general, we love fashion, and lifestyle and what we are trying to do at Fashpa is give
people better access to that. “Our online platform sells clothes, footwear, and other accessories. We ship to all states in Nigeria. We also ship worldwide. What we do is we look at fashion trends, and we sell international high street brands that people are looking for. We also sell African brands. We also have our labels which is Fashpa.com. Apart from that, we also know that our customers are also interested in fashion contents, so we also give them fashion and lifestyle tips.” She explained that Fashpa has been making significant
efforts to blend the offline and online experiences just to serve and adapt the online shopping culture to the Nigerian market, through unique payment channels and prompt delivery systems. “People still like the feeling of seeing and touching goods before purchase. So what we do is we try to understand and we allow our customers to get the item and we offer them cash on delivery. So you can send you up to three items in different sizes and you try them on and we will wait for you to try it on and then take it. So what we are trying to do is to bring
a lot of things that people like from shopping offline to the online experience,” she said. “And I think what is interesting about developing online platform is that you can’t just apply what happens in Europe and America to this market. So, you have to adapt it and make it relevant to our Nigerian and African customer,” she added. Ogundeyi further explained that Fashpa’s idea of worldwide delivery was inspired by the need to get Nigerians and other Africans in the Diaspora, to stay connected with their culture through fashion.
AGM: From left; Chief Emmanuel Ukpabi, former president; Mr. Sunil Sawhney, immediate Past Vice President; Mr. Paul Gbededo, newly elected President and Mr. Aderemi Adegboyega, Executive Secretary at the 35th Annual General Meeting of the Association of Food, Beverage and Tobacco Employers.
Kaymu empowers youths with entrepreneurship training T
O celebrate this year ’s Children’s Day, Nigeria’s online marketplace Kaymu.com.ng treated students of Kiddie Quest Montessori to a workshop titled Kaymu Future Entrepreneurs Training. The company said it unveiled the initiative because it is committed to driving the development of entrepreneurship, especially small and medium enterprises in the country. This,it said, has led to the
brand putting strategic measures in place to drive entrepreneurship in youths, like the Kaymu Entrepreneurial Workshop conducted in universities and the KaymuVarsity initiative for SMEs. ” We believe that children are future leaders, with unique passions and aspirations and will like to give entrepreneurial children the ability to observe first-hand the work space and engage them in practical activities that the work environment
presents,” stated Massimiliano Spalazzi, Managing Director of Kaymu.com.ng To this end, Kaymu hosted ten children from Kiddie Quest Montessori School to work a half day in Kaymu office on Tuesday, May 27th for an educative, interactive and engaging training and practical session. Speaking on the opportunity, the Deputy Head Girl of the school, Olubukola Falayajo expressed her gratitude at the opportunity pre-
sented through the Kaymu Future Entreprenueur Training. “It was a great experience and we learned a lot about being an entrepreneur and the qualities of a successful entrepreneur,” she said. Also speaking, Head Teacher of the school, Rotimi Akapo said,”It is an insightful initiative by Kaymu and a very educative and captivating experience for primary school children.”
Vanguard, MONDAY, JUNE 2, 2014 — 39
Advertising, Media & Marketing
Three events hinder Nigeria’s brand building efforts — Bruce Stories By PRINCEWILL EKWUJURU
hree historical events have hindered Nigeria’s brand building effort, said Mr. Ben Bruce, Chairman of Silverbird Group. He highlighted the Nigerian Civil War, the 2001 Miss World Beauty Pageants and the current Boko Haram insurgency as bane to positioning Nigeria as a global brand. Bruce disclosed this during the second edition of Marketer’s Evening organised by the Advertisers Association of Nigeria (ADVAN) while delivering a speech titled, “From local to global, Building the Nigerian Brand. He stated that these events became a point of bad global reputation for Nigeria as a result of the government’s inability to effectively use the media to manage some of these crises. He said that over the years the Nigerian state has made effort to become a global brand, but such effort had met brick walls due to governments inability to explore the media to win some of the wars that rattled its global brand valuation, hence the events turned out to be a bad press that undermined Nigeria’s crave for a global brand status. According to him, “What is happening today in Nigeria on the Boko Haram and the
negative publicity it generated for us has happened three times in Nigeria without appropriate way to manage the crisis through the media,” he said. According to him, the three events denied Nigeria the opportunity to market its potential to the world. He narrated that the civil war which was the first of the three events showed how Nigeria failed in the use of the media to douse the effect of propaganda on its reputation. He said the Biafra warlord, Late Gen. Odimegwu Ojukwu used the media effectively as
a propaganda tool to dent Nigeria’s image and got the French Government backing. “Nigerian won the war but Biafran won the battle using the media, the Radio Biafra. The attack on Nigeria by the French and those who believe what Nigerian did against Igbos was genocide really prevented the country from being accepted across the world. Ojukwu used the media very well and Nigeria image was dented. That prolonged war got him support from Ivory Coast, Mali, Gabon and others who supplied weapons for the Biafra,” he said. Bruce also cited the Miss World Beauty Pageant in 2001 which was stopped when the whole world had gathered to experience Nigeria as a destination brand, that event
PARTY - From Left: Beat FM On-Air Personality, Olisa Adibua; Marketing Director, Sola Oke and Brand Manager, Absolut Vodka, Akintayo Akinseloyin, both of Pernod Ricard Nigeria, during the Absolut Art Party 2014 at the Lagoon Crest in Lekki, Lagos recently.
Chivita bags Africa’s Best Quality Juice Award 2014
n recognition of its ability to deliver authentic consumer experience, Chivita Premium Fruit juice, has emerged as Africa’s Best Quality Juice Brand at the 2014 Africa Quality Achievement Award. The Award initiated by the Africa Quality Institute, AQI in collaboration with IBMN Integrated Services, the Africa Quality Achievement Award is organised with the support of South Africa Quality Institute (SAQI) and the Chartered Quality Institute (UK). Chivita Premium Fruit juice with 100 percent fruit juice content from the stable of Chi Limited was adjudged the winner because of its consistency in the market, creativity and value as well as the bespoke packaging of the juice that allows for the best delivery. Speaking after receiving the award in Lagos recently, Managing Director of Chi Limited, Mr. Roy Deepanjan, said the award did not come to him as a surprise. C M Y K
“We are happy to receive this accolade for Chivita Premium from Africa Quality Institute (AQI), as it validates our core values as a responsible and ethical organisation.” The award not only underscores Chi Limited’s
commitment to and passion for creating the highest quality juice available on the market today, but also to successfully growing an ethical business dedicated to helping people live longer, healthier lives through the consumption of natural, organic fruits.
Euro Global introduces 25cl red wine pack
uro Global Foods and Distilleries Limited, maker of Sabrina Gin has expanded the Amphora wine range with the 25cl Amphora Tempranillo wine pack. The wine was originally available in 75cl and 35clbottles, the new product will allow Euro Global the opportunity to reach masses who has the desire to consume wine. Speaking on the new wine, Mr. Felix Aighobahi, Sales Director, Euro Global Foods and Distilleries Limited said, “AmphoraTempranillo wine is a beautiful wine that pairs well with all kind of foods. It is produced to emphasize the vintage lifestyle.The new 25cl packaging makes it lightweight, easy-to-use wine that also travels easily and doesn’t require a corkscrew. It will definitely make a hit with party-goers and picnickers want to avoid the hassles of using a corkscrew. Amphora Tempranillo is a full bodied Spanish red wine with the flavor of leather along with cherries, the finish is mild, smooth and lingers with tannin on both side of the mouth. Its taste is quite close to Cabernet Sauvignon. The Amphora range comes in red and white wine. Red wines variants are Merlot, Cabernet Sauvignon, Shiraz and Tempranillo while the white wine is Chardonnay from France.
Things Customers Hate – Part 5 Continued from last week
f we go on discussing those things customers hate, we would have enough material for one whole year, and we would still not be done. What’s more? Going by the feedback I have received, many readers are interested in this topic. It appears that there are, indeed, many things that irritate customers. Today, we will discuss a few more customer peeves and rest the series for now. Appearing busy but unhelpful For some unknown reasons, some people look perpetually busy, doing nothing. At least, that’s the way they appear to customers. And as a customer, I see quite a lot of such people in our banking halls. Some tellers leave their seats (ostensibly) to attend to the needs of some customers, but they never seem in a hurry to get back to their seat to conclude the service process. Their slow, slouching movement says it all. In situations like this, customers make some snide comments: Where is he going again? Wetin she dey do sef? Rushing customers on the phone This may not always be the fault of the service employee. It happens often in organisations that cherish unhelpful data such as the length of time spent on the phone with a customer. In such situations, the customer feels rushed. Some poorly trained employees may even suggest that the customer hang up as they have other customers waiting on the line. Now the question arises: how long should a customer spend with a frontline employee, considering that some customers are rather garrulous? I’d say: as long as is necessary to resolve the customer ’s issues and leave them with a good impression about the company. Outdated website information Some organisations see having a corporate website as an end on its own. Once the website is up and running, (they believe) their job is done. The product of such a mindset is that the website is never updated with current information. Examples of outdated information that features on some company websites: phone numbers that don’t work or that belong to former employees, office addresses that have changed, products that have been phased out, etc. Customers are never happy when they come up with outdated information on a company website. Dead website links For more information, please click here. To download the catalogue, please click here. You click. But nothing happens! The links are simply dead! And you wonder whether the company is dead as well. The company may be healthy. It’s just that the people who run it don’t care enough to check these little details. I think it’s better not to have a website than to have one that doesn’t work. “No warranty” Why would anybody sell products that have no warranty of any sort? Insisting that there is no warranty on your products is another way of saying “buyer beware” or “goods bought at buyer’s risk.” If you have ever bought electronic products from Alaba International Market or computer products from the Computer Village in Ikeja, you’ll understand what we are talking about. Of course, there are many professional business people in those markets who give customers warranty on their products, which builds trust and gives assurance. If you’re sure of the quality of your products, why not offer some form of warranty or even money-back guarantee?
40 — Vanguard, MONDAY, JUNE 2, 2014
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So, who is afraid of a stronger naira? dollar certificates for their allocations of dollar-derived revenue; however, these certificates must first be converted to naira at a properly designated commercial bank, before spending. What is the difference between naira substituted by the Central Bank and naira exchanged for dollar certificates from the banks? The naira substituted by CBN is actually additional fresh naira supply, which the banks may leverage on to instigate over tenfold increase in money supply. Thus, the process of substitution continuously promotes the presence of surplus naira and induces the disenabling environment of high inflation and interest rates, weaker exchange rate, increasing national debt, severely constrained industrial subsector, high rate of unemployment, increasing fuel subsidy, and widening gap between the rich and poor. Conversely, the exchange of dollar certificates directly through commercials banks by beneficiaries will not increase money supply to induce the disenabling encumbrances listed above. In fact, the banks will become more protective of their naira stock, so that their cash positions are not unduly jeopardized, whenever depositors want access to their funds. Ultimately, in such ambience, the naira exchange rate will become stronger, as more dollar certificates chase the relatively stable existing stock of naira in the system. What will be the economic
n last week’s article, we identified the advantages of a stronger naira exchange rate to include much lower inflation and interest rates, increasing industrial expansion, with rapidly rising employment opportunities. We also explained how a stronger naira will eliminate fuel subsidy and also reduce the size and cost of our national debt. ( S e e “Advantages of a Stronger Naira” at www.lesleba.com). This week, we will examine why the Central Bank of Nigeria still consciously promotes a monetary strategy that deliberately weakens the naira; we will also, in the following interrogative narrative, identify the major beneficiaries of a weak naira exchange rate. Why does CBN consciously promote a weaker naira with its substitution of naira allocations for dollar-derived revenue? The CBN hinges its defence of this economic buccaneering on Section 162(1) of the Constitution, which stipulates that all financial accruals must be consolidated in a federation account before sharing, in line with current provisions on revenue allocation. Unfortunately, the CBN has wrongly interpreted Section 162 to also imply that all non-nairadenominated revenue must first be converted to naira before sharing. Nonetheless, it is evident that CBN’s substitution of naira allocations for dollar-derived revenue instigates the unyielding dark clouds of excess naira, and the collateral burden of a weaker exchange rate, with its diabolical train of economic distortions. If the CBN does not substitute naira for dollar revenue, how can beneficiaries spend their allocations, since dollar is not legal tender in Nigeria? The constitutional beneficiaries of dollar revenue would receive
The process of substitution continuously promotes the presence of surplus naira and induces the disenabling environment of high inflation and interest rates, weaker exchange rate
implication of a stronger naira exchange rate? Quite simply, the result will be the direct opposite of the adverse consequences listed above, for a weaker naira. Thus, perceived systemic surplus naira will be exorcised from our monetary system, with the welcome development of sustainable singledigit cost of funds across the board to the real sector, with inflation rate (closer to best practice inflation rates elsewhere), at well below 4%. Consequently, with subsisting low cost of funds and the absence of excess liquidity, the size and cost of servicing our national debt will also fall remarkably. Such an enabling environment with a stronger naira purchasing power will rapidly create millions of jobs nationwide, while the increase in the number of paid workers would further stimulate consumer demand, which will in turn, instigate further industrial
expansion, with still more job opportunities. Ultimately, with a much stronger naira below N80:$1, fuel prices will fall below N97/litre, and we will save the princely sum of about $12bn (N2tn) annually from the total elimination of fuel subsidy; fuel smuggling into neighbouring countries will also become unprofitable. So, if it’s all so simple, who are those afraid of dollar certificates and a stronger naira, and why? Those who are fervently patriotic about the sovereignty of the national currency, but are ignorant of the process, which determines the naira/dollar exchange rate are misguidedly opposed to a stronger naira. The other bastion of opposition expectedly comes from the major beneficiaries of the current economically poisoning process of CBN’s substitution of naira for dollar revenue. For example, CBN’s recent unbridled unconstitutional interventions and the reckless spending, which characterized Lamido Sanusi’s term as governor, were funded from the apex bank’s self-styled buoyant ‘own’ forex reserves, which were ironically consolidated simultaneously with deepening poverty induced by CBN’s substitution of naira allocations for dollar revenue. How does CBN’s substitution of naira for dollar-derived revenue fund corruption? The liberal latitude for corruption in public service is facilitated by the ‘eternal’ presence of surplus naira in an economy, without requisite accountability; for
example, the church rat will expectedly be lean and trimmed of excess fat, when compared to its close cousins, who live in holes and crevices in an active bakery, replete with surplus food. Is the public sector the only beneficiary of the substitution of naira allocations for dollar-derived revenue? No, the banks are also major beneficiaries of this skewed system. For example, the banks earn over N300bn annually from the simple business of receiving government deposits at zero per cent and lending such funds back to government at double-digit interest rates. Indeed, with such high returns, it is not surprising that banks show little interest in supporting the real sector. Curiously, government has become heavy debtor to the same banks that have custody of its free funds. Furthermore, banks also promote capital flight, and make huge gains from round tripping and speculative consolidation of foreign exchange, despite the adverse consequences on the economy. The Bureaux De Change (BDCs) are also proxy beneficiaries of the current system, and they nonchalantly fund the millions of dollars couriered across our borders daily. The BDCs evidently also fund the activities of smugglers who do considerable damage to our local industries, and constrain employment opportunities. It is curious that CBN is reluctant to relinquish dollar revenue to constitutional beneficiaries, but the apex bank willfully allocates dollars to BDC operators, who may, in turn sell at a profit to any customer, including the original owners of the dollars; i.e. government and MDAs. SAVE THE NAIRA, SAVE NIGERIANS
Cover Story Africa loses $242bn to tax exemption yearly — Oxfam
he Executive Director, Oxfam International, a non-governmental organisation (NGO) Ms Winnie Byanyima says Africa loses $242 billion to corporate income tax exemption and unpaid taxes by companies annually. Byanyima disclosed this at the Africa Rising Conference in Maputo. She said about $138 billion were lost to corporate income tax exemption while $104 billion was lost to unpaid taxes by companies operating in the continent yearly. “This is double what Africa needs to meet the Millenium Development Goals (MDG) C M Y K
needs on Health and Education put together. It will equally solve the $93 billion requirement to close infrastructure gap,” the official said. According to her, a balance of $30 billion will still remain out of the money to be used for other development issues. Byanyima attributed the loss of the revenue to absence of legal framework in financial system in Africa, and called for a change of policy. She said some of the gaps which allowed tax exemption in doing business in Africa should be removed and made illegal.
“This will help Africa to get adequate revenue through effective tax system,” the NGO official said. She said additional tax officials would be needed in the region in order to have effective tax collection, and efforts must be geared towards capacity building. Byanyima called for companies which are willing to do the right things to invest in the growth and development of the region. Mr Bob Collymore, Chief Executive Officer of Safricom, also urged government to put the right policies in place to tackle the corporate income tax exemption.
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