Financial Vanguard

FEBRUARY 3, 2014

*Bank of Industry's 2013 Annual General Meeting: From right: Secretary, Board of Bank of Industry, Emmanuel Onoji, Chairman of the Board, Mohammed Dikwa (mni), Managing Director/CEO, Ms. Evelyn Oputu and the Executive Director, Business Development, Waheed Olagunju, during the 2013 annual general meeting of the bank held at Transcorp Hilton Abuja.

$3.8bn Egina FPSO project under threat •Intrigue, underhand dealing may frustrate take off •Nigeria may lose 50,000 jobs acting on the briefs it got and the fact that the latter does not have the needed •$200m local content at risk facility to carry out the project as

BY OMOH GABRIEL, BUSINESS EDITOR

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he contract awarded to Samsung Heavy Industry and Lagos Deep Offshore Logistics by Total for the development of fabrication and integration yards for Egina and future projects is generating furore, bad C M Y K

blood and intrigue, and if not addressed could jeopardise the take off of the project. The matter may become subject of litigation as LADOL is alleging an underhand dealing by some powerful Nigerians to deprive it of its due share of the project.

But the major contractor, Samsung Heavy Industry, has said that it is

planned.

Financial Vanguard investigation has shown that a memo from the State House Abuja dated 20th January, 2014 signed by the Senior Special Assistant to the President to the Minister of Transport and copied the Chief of Staff to the President, approved paragraph 2 i-iv of the prayers of an earlier letter sent to the President from the ministry.

The Ministry of Transport had asked the permission of the President thus,

“that the FPSO project can be located at Agge, Bayelsa State, when the facilities to handle such operations are developed. In addition, the FPSO can be conveniently located at any dedicated oil and gas terminal.

“All Oil and Gas related cargoes must be handled only at the designated terminals as in the letter from BPE. Operators are, however, free to choose ports of discharge of their cargoes within the designated terminals at Onne, Warri and Calabar ports. Vessels coming to Nigeria with cargoes particularly oil and gas related cargoes, except petroleum products, must first go to the appropriate NPA/Concessioned terminals to be cleared by Customs and other relevant authorities, terminal operators, shipping lines etc and to pay necessary dues/charges.

In order to maintain transparency and promote healthy competition in the sector, all port development facilities under the jurisdiction of the Federal Ministry of Transport/NPA should be carried out in accordance with extant public procurement and infrastructure development laws and policies.”

Financial Vanguard investigation th showed that on the 16 of September

Continues on page 18

124.85

4.85

2,896.00

-16.00

15.63

0.64

106.52 98.22 CURRENCY BUYING CENTRAL DOLLAR POUNDS EURO FRANC YEN CFA WAUA RENMINBI RIYA KRONA SDR

154.75 155.25 254.8114 255.6347 209.6553 210.3327 171.5252 172.0794 1.513 1.5179 0.3013 0.3113 236.9715 237.7371 25.5274 25.6103 41.2623 41.3956 28.0904 28.1812 237.7424 238.5106

-0.79 -0.01 SELLING 155.75 256.458 211.0101 172.6336 1.5228 0.3213 238.5028 25.6933 41.5289 28.2719 239.2787

CBN Exchange rate as at 31/01/2014

18 — Vanguard, MONDAY, FEBRUARY 3, 2014

Cover Story

The Basic Guide to Starting Your Business Part 6

$3.8bn Egina FPSO project under threat 2013, ”The Managing Director (MD), LADOL, th through a letter dated 16 September 2013, which was received at the Presidency on th the 25 of November, informed the president that it had finalised its joint venture with Samsung Heavy Industries Limited to build Africa’s only fabrication and integration facility. She further informed the president that “The fact that Samsung is partnering ‘ with a wholly owned indigenous Nigerian company sector to build this facility is a credit to this administration’s effort of ensuring indigenous participation in the maritime and petroleum sector. Over the next two years, LADOL will be investing $350 million in the Lagos facility and an additional $150 million in a new facility in Agge, Bayelsa State; both facilities will create 100,000 direct and indirect jobs. She prayed the president to assist in ensuring smooth operation of its facilities in Lagos and Agge during the construction by directing relevant ministries to assist by: “Allowing all vessels involved in the Egina project that need to call at LADOL to sail directly into LADOL to save cost, time and avoid double handling. LADOL already has approval to receive two international vessels each week. This waiver will only be for Egina project facility construction and operation period; assigning additional personnel as requested to their offices in the LADOL C M Y K

Free Zone to support the construction and operation of the facilities which will be carried out 24 hours a day and seven days a week; ensuring that project cargo not delivered directly into the zone be processed within 24 hours and transferred to the zone within the same time.

Any pending and or operations at LADOL in Lagos and Agge be fast tracked and approved as a matter of urgency; establishing a presidential oversight team to oversee the work being done at LADOL for Egina, harmonise efforts

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Continues from page 17

The NPA had observed among others, that it would not be technically and operationally possible to install a FPSO facility at the proposed location due to the width and draft the Lagos channel which cannot accommodate the facility as a result of limited room for safe maneuvering

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of the various government agencies and to ensure both compliance with government regulations and the smooth running of the construction and operation phases at LADOL”.

Based on this request to the president, the Presidency asked for the view of the Minister of Transport on the issue. According to Financial

Vanguard’s investigation, in his comment on the request of LADOL: the Honourable Minister of Transport (HMT), through a letter Ref. No. T.0160/ s.197/JA·7 dated 22 nd November 2013, informed the president and said: “The Maritime Workers Union had, in June 2013, written the president and copied the ministry, protesting against the construction of proposed floating, production, storage and offloading (FPSO) in LADOL facilities in Lagos.

The ministry had directed the Nigeria Ports Authority, NPA, to look into the matter.

“The NPA had observed among others, that it would not be technically and operationally possible to install a FPSO facility at the proposed location due to the width and draft of the Lagos channel which cannot accommodate the facility as a result of limited room for safe maneuvering.”

The ministry, it was gathered, “ while considering NPA’s observations reviewed the request from LADOL and concluded that it would not be technically and operationally safe to approve the construction of FPSO facility project in Lagos. However, the ministry will support and encourage the construction of the FSPO in Agge, Bayelsa State, being a green field which is with requisite draft and without any objection from NPA.”

Continues on page 19

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everyone to have a vision that is fired up by the desire to live a purpose driven life. My dear you have all it takes inside of you, to be what you want to be. A popular preacher once said “suffering is a choice; so you choose.” Stop waiting for the government, now is the time to seize your destiny and take control, if you work hard on it, you will definitely succeed.

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ndrew Young, the renowned American diplomat, said in one of his lectures: “For 18 years I eyed the United Nations seat as the United States representative, I didn’t let it get off me until I saw it happen”. Your vision is the map of your intentions.

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*From left: Registrar/Chief Executive, Institute of Chartered Accountants of Nigeria (ICAN), Rotimi Omotoso, Chairman, ICAN, Fidelity Bank Chapter and GM, Lagos Bank, Emeka Obiagwu, President, ICAN, Alhaji Kabir Alkali Mohammed, ED, Lagos and South-West Bank, IK Mbagwu and President, Society of Women Accountants in Nigeria (SWAN) and ED, Risk Management, Fidelity Bank Plc, Onome Olaolu at the investiture of executives and patrons of ICAN, Fidelity Bank Chapter in Lagos.

ARE YOU READY FOR YOUR BUSINESS? t this point I believe that you have a huge idea of what a business is. You also understand the pros and cons of owning your business, as well as whom an entrepreneur is. Let’s just say everything I have mentioned and explained are what I call the foundations of the remaining two chapters of this book.

Now having read all this, the question is, “how prepared are you to start your business?” Do you have what it takes to ensure the take off and successful landing of your business? Or are you unsure of your abilities to carry you through the journey of being your own boss?

Whatever is the case by the time we are through with this chapter, making up your mind and measuring your readiness level will no longer be an issue.

The journey of a thousand miles, they say begins with a simple step, and God was kind enough to bless every man with a sense of purpose, but the problem is, a lot of people have not discovered the purpose for which they were created. When I see people without a sense of vision and purpose, I ask myself how can you change a world, when you do not have the slightest idea of why you where put in the world in the first place?

You’ve got to have a sense of purpose, because it is the essence of living; the poor man is not the man who does not have a dime in his bank account, but the man who does not have ideas in his mind. When your life lacks purpose, it loses colour. You cannot afford to sit still and do nothing, you have to get up and put your purpose to good use. There’s a particular line I love in one of the songs written by Mary Mary (a gospel group made up of two sisters), and it says “get up don’t sit here; get up if you want to get there”.

What do you see, what pictures are you painting with your mind, you have to start from the mind, your vision, I remember the story of Abraham and his nephew Lot in the Bible.

When God wanted to separate them, God told Abraham, that He would give him as far as his eyes could see! So you see the creator Himself expects

A man who takes a risk and fails is by far better than the man who takes no risk at all.

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It is a written picture of your journey to greatness; it may take your time, and some reworking, but certainly it is the secret of champions. If you are waiting for the government, you will end up a wretched fellow, with no story or history.

I made up my mind a long time ago, to live my dreams, very far away from the clutches of poverty. Looking back today, I can smile and say “I haven’t done badly after all!” Well, if I had I wouldn’t be writing this book to inspire and encourage you. Stop delaying, now is the time to start, don’t dwell on weighing the possibilities of succeeding or not. “A man who takes a risk and fails is by far better than the man who takes no risk at all.” You have to be decisive and launch out, taking every available chance, life itself is a risk. Like I said earlier you have to be bold and fearless and unforeseen forces will come to your aid. Now is the time to act, wake up and live, stop asking questions, follow your heart and act as though it is impossible to fail.

Vanguard, MONDAY, FEBRUARY 3, 2014 — 19

Reactions to: Time for Nigerians to ditch ethnic arithmetic, state of origin and federal character “ what he thought Nigeria should be that it was not consumed with the passion of a united Nigeria.” And guess what? One of Mohammed’s toxic legacies is the deadly, intractable sectarian turmoil that ravages the land today.

The writer paints a lunatic in the picture of an architect of a “Nigeria that is free from the encumbrance of North-South dichotomy who wanted to see a Nigeria where there was justice and fair play to all, no matter where they come from.”

They can tell that to spring chickens. For the authentic Murtala Mohammed we all know masterminded the July

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arden-'City Boy ' w r o t e : “Whoever posted this dumb comment must either be incurably disillusioned or be looking in from an observatory on some strange galaxy. He goes about it like another 'awusa liar.' “Nigerians will not be interested where the president or governor comes from” believing he may be taken seriously. Sorry, we care where the president comes from, no pretenses. Awusa people and their inveterate absolutism made it so, and so it remains until the country is restructured into a nation of truly federated zones or states.

“TO RESTRUCTURE NIGERIA IS A TASK THAT MUST BE DONE! The fellow compounds his lies and drab foolery with claptrap: “in the late 70s, General Murtala Mohammed came on the Nigerian political scene, he created an unusual sensation”. I would also think that Mohammed indeed created ‘unusual sensation’ as “His words were laden with ‘immediate effect’ he recited over and over with the repetitiveness of a parrot and the mannerism of a hen pecking corn - mannerism that attracted public ridicule.

Murtala Mohammed was not even sure if he was Rufai or Ramat. For quite some while during his intrusive involvement in “Nigeria’s politics”, the public was at a loss as to which deadly Mohammed it was really to deal with -Ramat or Rufai. In that confused state of mind, the man’s myopic vision was

aim was to visit personal vendetta on Maj. Nzeogwu’s kinsmen."

Dr George Inyang wrote: and said “You are advocating confusion in Nigeria. For your education, the main problems of Nigeria are corruption, lack of punishment for corruption and poor leadership. The national conference must endorse ethnic ID, state of origin, federal character and six zones because Nigeria is a diverse country. Zoning is wrong because it encourages mediocrity. Qualifications for leadership should be good education and competence not

You are advocating confusion in Nigeria. For your education the main problems of Nigeria are corruption, lack of punishment for corruption and poor leadership.

1966 coup – the world’s bloodiest.

He and his accomplices murdered over 300 fellow officers of Southern extraction, mainly Igbo officers, including Gen. Ironsi and Col. Adekunle Fajuyi in what they characterise as a “REVENGE COUP.” It is on record that top on his “vision” at the time was to have the North secede from Nigeria as “the basis for unity did not exist.” That motive was made clear in Yakubu Gowon’s first broadcast after their insane coup.

Not only did Mohammed’s cup get full, it spilled over. His

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by any means or by buying votes or rigging ok.”

Ehizelé Osazuwa who resides in Paris, France wrote: “Corruption in China of high magnitude”? Where have you been, to the Pluto? You have this naive approach to the institutionalised corruption that is so visible as a garment even to the infants to experiment as though a sine qua non to the success in life.

Is it not logical that corruption of any level, much less of “high magnitude” could not bring any development to a country?

As a mater of fact, it’s due to China’s intolerance toward any corrupt individual or corporation that makes China the fastest developing nation on earth. Where were you of recent when a government official in China was arrested and jailed for long time for having a Rolex watch on that drew the attention of the anticorruption body to thoroughly scrutinize him?

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ou sound like your Father is one of those looting Nigeria's money that you shy away to talk about corruption but rather complaining about lack of unity that is less or secondary in priority if things must be put right in Nigeria.

However, I am not saying that your rather tagged rhetoric has no element of traits responsible for all the problems facing Nigeria but I guess you should have linked it to the virus itself — corruption. See, the level of academic, social and political development in Nigeria are dissipating so fast as you all are witnesses due to the culture of corruption and impunity that those outside the border gaze in shock and question if Nigeria is worth being called a country any longer.

Corruption has become a dogma to Nigerian politicians as it’s to the man on the street — it’s so accepted and practiced that any that questions the system would be considered a fool.

Obiora Uzo · Nnamdi Azikiwe University Awka wrote: “My question is why will this Nigeria be one and what happened when we have many countries from this Nigeria? Smaller countries succeeded better as big ones”.

Jossy Jossy of the Institute of Management and

Technology, Enugu in response to the article said: “Nigerian politicians are the major problem our country is facing today. This is the right time to teach them a lesson.

APC should go to hell.”

Efeturi Ojakaminor on his part said: “I agree with you.

First, let us begin to see ourselves as Nigerians.”

Chukwuka Okoroafor said: “This certainly is a dream, but the way our elite play us off against each other should also be addressed via corruption, riots, etc.

GEO: “These zones were artificially created along political leanings...” Divide up Nigeria along its NATURAL language lines. There is no strength in numbers in the Nigerian situation. China works because she has a common natural language that is dominant. It also has a national natural religion that is also dominant. Most Chinese citizens ascribe to the same common ideals.

UnapologeticallyYoruba said: "I am very pragmatic.

This would be an utopia, a Nigeria of our dreams.

Unfortunately, the political class has sold us dummies and divided us horribly.

Maybe when we return to regionalism and have each matured to the state where we can all reason along those lines, then we can give it a shot. For now, the NC will resolve all the other issues you have raised!

Esaulogbon said: "Nigeria is not ripe for that. Ethnicism still reigns supreme, and some believe they own others or they develop others. Until this mentality of ‘ we are better than others’ is removed, what you are proposing will be an invitation for disasters."

Cover Story Continuation Continues from page 18 The memo signed by the Chief of Staff to the President said, “The basis of the claim of LADOL that approval has been granted to it to receive two international vessels a week is rested on the Federal Republic of Nigeria Official th Gazette dated 4 December, 2008 wherein the effective date of the government notice th is stated to be 27 September 2010.

“However, the authenticity, and legality of the Gazette are in doubt for the following; “The clarification issued by the Bureau of Public Enterprises (BPE), dated 10th July 2008 showed the types of cargoes designed for each

$3.8bn Egina FPSO project under threat concessioned terminal; the Nigeria Customs Service in December 2010 drew the attention of the Minister of Finance that the earlier approval given to LADOL to receive ships from foreign waters contravened provisions of Section 12 of the Custom and Excise Management Act (CEMA) Cap C. 45 LFN 2004 which states that such authority lies with the president.

“Consequently, the Minister of Finance in February 2011, advised the Ministry of Transport to obtain the explicit

approval of the president to enable LADOL operate within the law as the Ministry of Finance had earlier in 2010 indicated support for declaring the LADOL Free Zone as a Deep Offshore logistics base with Apapa Pilotage District.

The Federal Ministry of Justice had indicated, vide letter Ref No. S.I. 885 of 20th November 2013, among others, that “Government Notice No. 284 was irregularly issued and is ultra vires because of the unnamed Permanent Secretary who

purportedly issued it.” In addition, the law under which the designation was made was not stated. Furthermore, no person or authority took responsibility for the designation.”

Last week, based on the emerging controversy, LADOL took Samsung Heavy Industry and its allies to court, over what it termed plots to exclude it from the juicy $3.8 billion Egina Oil platform project, which it jointly won late last year. Also joined in the suit at the Federal High Court before Justice Aneke on Friday,

January 24, are, Total Upstream Nigeria Limited (Total), Nigerian Content Monitoring Board (NCDMB), and the Minister of Petroleum Resources.

The $3.8 billion facility located 130 kilometers offshore was conceived by Total Upstream Nigeria Limited in collaboration with the Nigeria National Petroleum Corporation (NNPC), and is expected to take off by the end of 2017.

The Egina platform will be

Continues on page 20 C M Y K

20 — Vanguard, MONDAY, FEBRUARY 3, 2014

Cover Story Continuation

Etihad Airways to support development of aviation biofuel industry in UAE

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tihad Airways, Takreer, Total and the Masdar Institute of Science and Technology have announced they will collaborate on a new initiative, BIOjet Abu Dhabi: Flight Path to Sustainability, to support a sustainable aviation biofuel industry in the United Arab Emirates.

BIOjet Abu Dhabi was announced a day after Etihad Airways conducted a demonstration flight with a Boeing 777 powered in part by the first UAE-produced biokerosene from an innovative plant biomass-processing technology. The biofuel was partially converted from biomass by Total and its partner, Amyris. Takreer, a wholly owned subsidiary of Abu Dhabi National Oil Co. (ADNOC), did the final aviation biofuel distillation, adding the UAE to a handful of countries that have produced and flown on their own biokerosene.

BIOjet Abu Dhabi will engage a broad range of stakeholders to develop a comprehensive framework for a UAE biofuel supply chain, including research and development and expanded investment in feedstock production and refining capability in the UAE and globally.

Arik Air carries 2.7m passengers in 2013

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rik Air has announced a steady growth in the number of passengers it carried between 2012 and 2013. The end of year figure released by the airline shows that a total of 2.75 million passengers were carried in 2013. The figure represents 18.6 per cent increase over the 2012 passenger figure of 2.32 million.

According to Mr Adebanji Ola, Communication Manager, Arik Air, “ The month of March 2013 was significant in that the airline recorded the highest passenger figure for the year with a total of 260,132 passengers carried across its wide network of 30 destinations. This was against the 171,794 passengers carried in the same month in 2012. A significant increase was also recorded in the month of April when a total of 249,854 passengers were carried. This represents about 33.7 per cent increase over the 2012 figure.”

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$3.8bn Egina FPSO project under threat Continues from page 19 the first of its kind in Africa with a projected production capacity of 200,000 barrels per day (bpd) and a storage capacity of 2.3 million barrels.

In the proceedings which were issued for LADOL by Professor Fidelis Oditah, QC, SAN, LADOL seeks 19 relief against Samsung and other defendants, asking the court to make a declaration that a contract awarded by Total to Samsung on or about 15 March, 2013 for the construction and installation of a floating production storage and offloading unit (FPSO) at Total’s Egina oilfield in oil mining lease (OML) No 130 in deep offshore Nigeria (the “Egina FPSO Project”) is subject to the Nigerian Oil and Gas Industry Content Development Act 2010.

Other relief being sought by the company includes a “declaration that the Egina FPSO Project contract was awarded by Total to Samsung, with the approval of the Nigerian regulatory authorities including NNPC, NAPIMS, NCDMB and the Ministry of Petroleum, on the basis inter alia that a significant proportion of the steel fabrication and the integration of the FPSO topsides would be carried out at L ADOL’s yard in the LADOL Free Zone, Tarkwa Bay, Lagos.

“A declaration that the Egina FPSO Project contract was also awarded by Total to Samsung on the basis inter alia of Samsung’s representations and assurances to the Nigerian regulatory authorities that Samsung would build and operate training facility in the LADOL Free Zone for the training and education of Nigerians.

“A declaration that the Egina FPSO Project contract was bidded for and obtained

by Samsung on the basis of a joint venture and/or arrangement between Samsung and LADOL for the development, construction and operation of an offshore fabrication yard and FPSO integration facilities in the LADOL Free Zone for the purposes, amongst others, of the Egina FPSO Project (Joint Arrangement).

“A declaration that having bidded for and represented to the Nigerian regulators that

LADOL was its local content partner and on the basis of the Joint Arrangement, obtained the award of the Egina FPSO Project contract; it is not open to Total and Samsung unilaterally to exclude LADOL from the execution of the said contract”.

LADOL, said to be the only wholly Nigerian indigenous oil and gas service provider, is further seeking a declaration

that the purported exclusion of the company from the execution/performance of the Egina FPSO Project contract

by Total and Samsung is a violation of the Act and consequently is of no effect whatsoever.

Also being sought are, “an order, pursuant to section 68 of the Act, cancelling the Egina FPSO Project contract, on the basis that the purported exclusion of LADOL from the performance/ execution of the Egina FPSO Project contract and Samsung’s failure to build a

training school in Nigeria (as it had promised it would) are a violation of the Nigerian National Content law.”

The company further wants a disqualification of Samsung from bidding for or participating in any capacity whatsoever in any projects, operations, contracts or subcontracts in the Nigerian oil and gas sector.

Findings revealed that the collaboration between LADOL and Samsung began in early 2010, when Total announced its intention to begin the development of its Egina oilfield.

*From left: Head, Media & External Relations, Mr. Babatunde Lasaki, Head, Marketing & Corporate Communications, First Bank, Mrs. Folake Ani-Mumuney, President, Brand Journalists Association of Nigeria, Mr. Goddie Efose and Head, Stakeholder Management, Mr. Ogechukwu Udeagha at the First Bank Brand Journalists Media Parley in Lagos.

Transcorp, GE partner to improve power generation in Nigeria

By NKIRUKA NNOROM

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ransnational Corporation of Nigeria Plc has announced partnership with General Electric, GE, to expand the capacity of Transcorp Ughelli Power Ltd, TUPL, power plant to 1000 mega watts in the next three to five years.

Transcorp said in a statement that both companies have also signed a separate agreement to rehabilitate the damaged GT 15 turbine at the Ughelli Plant, which will add 115MW to the plant’s output.

The company added that the agreements would dramatically increase capacity at the Ughelli power plant in 2014.

Currently, the Transcorp Ughelli power plant generates 360MW of electricity, up from 160MW on November 1, when Transcorp took ownership of the plant. With the additional 115MW, as well as other rehabilitation works planned at the plant, output at Ughelli will increase to 700MW

by December 2014, the company said.

The Ughelli power plant is Nigeria’s largest gas-fired electricity generation asset. Purchased by Transcorp during the

2013 power privatisation programme, the $300 million plant is part of the $2.5 billion investment pledge made by the Chairman of Transcorp and Heirs Holdings, Tony O. Elumelu, to deliver affordable, accessible power to Africa under the Power Africa Initiative.

“The agreements were signed at a closed door meeting between executives of both companies, led by Elumelu and the Global Chairman of General Electric, Jeffrey Immelt.

They follow a cooperation agreement executed by Transcorp and GE in 2013,” the company said in the statement.

A publicly listed conglomerate with strategic investments in the power, hospitality, business and energy sectors, Transcorp, through TUPL, is committed to transform and bring the plant to profitability by increasing its generating capacity to impact positively on the socio-economic development of Nigeria.

GE, one of the world’s most reputable companies is the global leader in the design, manufacture, supply, installation and maintenance of technology and services for the Power, Aviation, Oil & Gas, Healthcare and Transportation sectors.

Vanguard, MONDAY, FEBRUARY 3, 2014 — 21

Business & Economy

Customs collects N833.4bn revenue in 2013 *Seizes goods worth N8.5bn

By GODWIN ORITSE

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he Nigeria Customs Service (NCS) collected a total of N833.4 billion revenue in 2013 out of a targeted sum of N1.4 trillion, according to an official document obtained by our correspondent.

The 2013 revenue was N17.5 billion less than N850.9 billion it collected in 2012. The Service explained that the money was collected from duties, fees and levies.

The document also showed that the Service seized goods worth N8.5 billion also in 2013, even as it explained that the seized goods were those that entered into the country through illegal routes.

The Customs said that the value of the impounded goods was N3.1 billion higher than the N4.6 billion worth of goods seized in 2012.

It stated that the seizures were made at the seaports, airports and border posts, adding that it would strengthen the antismuggling strategies and ensure that smuggling was reduced to the barest limit.

The Service explained that the cost placed on the seized goods were their market values and the duty that ought to have been paid on them.

On the revenue collected in 2013, it said that N387 billion was collected as cash on import duty, while N68.9 billion came from Negotiable Duty Credit Certificate import duty. The statement added that it collected N24.4 billion from excise duty, N1.8 billion from fees, N21.4 billion from “CET” special levy and N329.1billion from levies collected on behalf of agencies.

A breakdown of the revenue

collected on behalf of agencies showed that port levy accounted for N30.50 billion; sugar levy, N4.8 billion; wheat grain levy, N38.3 billion; and wheat flour, N313.5 million. Other collected agency fees, according to the document, are: rice levy, N10.3 billion; steel levy, N584.9 million; and wine, N22.1million.

Others are: textile, N90.8 million; cement, N830.6 million; cigarette, N913.6

million; and National Automotive Council levy, N13, 505. It was also said that some special levies, including Comprehensive Import Supervision Scheme and National Export Supervision Scheme accounted for N44.1 billion.

The value of the goods was N7.1 billion, while the duty payable on them was N1.4 billion. It stated that rice and vehicles topped the list of the goods in 2012.

From left Dharmendra Jain, Operations Director, Nigeria; Adeola Tejumola, CEO, West, East and Central Africa; Dorotha Bimoeller, Head of Field Work Efficiency, Global; Tyson Mckeown, Regional Operations Director, all of TNS RMS after the launch of TNS RMS computer Aided Telephone Interview (CATI) Centre held at the company''s head office in Lagos.

FG begins disbursement of N10bn cassava funds

By FAVOUR NNABUGWU

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he Federal Government will begin the disbursement of N10billion for Cassava Bread Development Fund, CBDF, to peasant farmers that have been registered to benefit from the initiative next week. The cassava bread initiative launched in 2011, seeks the inclusion of up to 40 percent High Quality Cassava Flour in bread. The policy started with a request for bread makers to include 20 percent in their flour. UTC was first to adopt the policy, followed by Butterfield and now Park & Shop.

While giving update on Nigeria Cassava Project at a press briefing in Abuja, the National President of the Nigeria Cassava Growers Association, NCGA, Pastor Segun Adewumi, said the fund would help in research and development, training of master bakers and other stakeholders, establishment of local production plants for enzyme among others.

He explained that the association through its executive council and all state chairmen has agreed to access the fund for the incoming rainy season to C M Y K

boost cassava production in the country.

The Federal Government had last year earmarked a start-up fund of N10 billion to enhance development in the cassava value chains through the CBDF aimed to be generated from the tariffs on importation of wheat flour.

CBDF, the Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina, had informed would also be used to support research and development efforts on cassava bread, training of master bakers, support for master bakers for the acquisition of new equipment for production.

“The fund is ready for disbursement, and has been deposited at the Bank of Industry for bakers and processors and at the Bank of Agriculture for growers.

“We were at the Bank of Agriculture in Kaduna and we all reached an agreement that we will not give the funds out until the rainy season comes.

50 percent of the money is a grant while 50 percent will be paid back by individual farmers in form of loan,” he explained.

Adewumi said that the peasant farmers’ programme of the cassava initiative was aimed at curbing unemployment, as well as diversifying

the economic and revenue base of the country through graduate youth empowerment via agriculture.

On the sustainability of the initiative, he pointed out that the Federal Government has taken the right step in sustaining it with the launch of the Growth Enhancement Support, GES, scheme, adding that all his members across the country have keyed into the scheme.

According to him, every member has been directed to cultivate not less than two hectares of cassava farm as part of efforts to enhance the cassava GES programme apart from different levels of support to the Federal Government’s agriculture transformation agenda, ATA. Adewumi, who faulted the opinion of a Zimbabwean farmer, Mr. Shadrack Madlion, on the Federal Government’s on-going intervention to salvage the cassava industry, commended President Goodluck Jonathan, Dr. Akinwumi Adesina and other stakeholders for giving “a new life to Nigerian farmers”.

“Cassava is one of the positive stories about Nigeria. The global leadership position of Nigeria in cassava production is not questioned. It is our birth right and a source of pride to us.

UK partners Kogi on harmonised revenue bill

By WILLIAM JIMOH

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he United Kingdom Department for International Development (DFID), through its GEMS3 project is partnering with the Kogi State government to train officials of the Kogi State Board of Internal Revenue and officials of the 21 Local Government Areas in the state on the state’s proposed Draft Harmonised Revenue Bill.

The one day workshop held in Lokoja last week, presented the LGA representatives an opportunity to discuss and review pertinent issues such as tenement rates for private and commercial properties, right of occupancy fees and other levies currently being implemented in the state.

The bill, which is aimed at promoting fair taxation across the state, proposes that “If any person disputes an assessment, he may apply to the relevant Local Government Council by notice of objection in writing to review and to revise the assessment and such application shall state precisely the grounds of objection to the assessment and shall be made within 14 days from the date of service of the notice of assessment/demand notice”.

FG moves to revitalise Nigeria’s iron, steel sector

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he Federal Government concluded plans to develop and implement a comprehensive Backward Integration Policy for the iron and steel sub-sector of the Nigerian economy. The Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, who said this during a one-day stakeholders’ forum on ‘Transformation of Minerals, Iron and Steel Sub-Sector for Industrial Revolution in Nigeria’, in Lagos noted that the initiative was in line with the Nigeria Industrial Revolution Plan (NIRP).

The stakeholders’ forum, which was organised by the Ministries of Industry, Trade and Investment and Mines and Steel Development, provided the platform for all players in the iron and steel sub-sector to fashion out workable and sustainable plans of action to leverage the BIP to support the development of critical industries across the country. has

22 — Vanguard, MONDAY, FEBRUARY 3, 2014

Business & Economy

FG to tap from $90bn Open Data resource T

he Minister of Communication Technology, Mrs. Omobola Johnson, says Nigeria is prepared to tap from the $90 billion dollar resource from Open Data Initiative.

The minister disclosed this at the inauguration of the world’s first Open Data Development Initiative in Abuja. She said the move was aimed at tapping from the huge economic

By EMMANUEL ELEBEKE benefits that accrue from the initiative, with a Global Positioning System, GPS, data worth $90 billion.

According to her, the step was also aimed at supporting Federal Government’s objective of driving innovation, investment and economic growth by enabling access to

government data.

The initiative is a consultative and inclusive process that will open up high value datasets from across government ministries to Nigerian citizens, businesses and the rest of the world for free.

The commencement of this process makes Nigeria the world’s first federal Open Data initiative to simultaneously launch inclusive and

c o n t i n u i n g consultations, with both government and nong o v e r n m e n t communities on their Open Data priorities to develop the country’s national Open Data implementation plan.

So far, over 50 countries have launched federal-level Open Data initiatives. The impact on economic growth has been transformative.

An analysis by global consulting firm,

McKinsey, indicates that Open Data generates more than $3 trillion of new economic value for the U.S. economy alone.

Also the weather data of the US generates $30billion annually, while the total worth of Global Positioning System GPS data is worth $90billion.

The Nigeria Federal Open Data Initiative, supported by the World Bank and

DFID is meant to highlight the potential efficiency, innovations and public value that can be achieved when government uses technology to open its data.

The minister stressed t h a t F e d e r a l Government considers the partnership with World Bank on Open Data Initiative as a priority to promote economic growth and ensure value addition to the data in the government Ministries, Departments and Agencies.

She said that data has increasingly become important among government and private sector operators as it plays a pivotal role in major decision making and planning, and as such can’t be ignored. ‘’Data is becoming increasingly important in all aspects of our life.

When analysed and presented in an intelligent format, data is essential to making informed decisions that produce value. The essence of publishing non-sensitive government data online is to deliver valueadding insights that benefit citizens” ‘’ We would like to ensure that our Open Data initiative is driven by demand. We will be guided by the practical needs of Nigerians to ensure that Open Data fuels innovation and grows the Nigerian economy,” she added.

The launch of the Open Data Initiative was heralded by an Open Data stakeholder engagement workshop that brought together more than 120 representatives from across MDAs, and the private and non-profit sectors to identify priorities and actions to inform the implementation of the Nigeria Federal Open Data. The Workshop is designed to explore the role of Open Data in organisational innovation; highlight the public value that can be created by opening government data, as well as challenges and mitigation strategies associated with these efforts.

Vanguard, MONDAY, FEBRUARY 3, 2014 — 23

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24 — Vanguard, MONDAY, FEBRUARY 3, 2014

Banking & Finance

By MICHAEL EBOH

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icro, Small and Medium Scale Enterprises, MSMEs, in Nigeria are to earn about N2.624 trillion this year, if their financing challenges are addressed.

Part of the amount is 60 per cent of the sum budgeted for capital expenditures in the 2014 budget, currently before the National Assembly, while the remainder, about N1.7 trillion will be contracts to be awarded by private organizations in the year.

Mr. Diji Atoyebi, Head, Support Desk, Access Bank Plc, who gave this breakdown at a forum for contractors in Lagos, said the year will be remarkable for MSMEs, especially contractors, noting that the MSMEs will only be in a position to benefit from the contracts to be awarded this year if they are adequately supported and financed.

He said, “This year is crucial for contractors, especially as it is the period of electioneering and the year before the general elections.

This is especially as the current administration, both at the Federal and State levels, will want to wrap up ongoing contracts and issue new ones, in order to win the support of electorates.

“The N4.92 trillion proposed in the 2014 budget, had N1.54 trillion budgeted for capital expenditure. It is estimated that contractors will take up over 60 per cent of the capital expenditure budget.

“Also, it is estimated that over N1.7 trillion worth of contracts are awarded by companies in the private sector annually. This is the market that MSMEs, especially contractors are expected to play in 2014.”

He further stated that despite the high number of players in the contractor segment of the MSMEs market, the sector is still profitable, noting margins are as high as 30 per cent in some instances.

He explained that factors that will position contractors and other MSMEs to benefit from the opportunities in the sector, include Access to requisite funding to execute jobs, networking and good government policies and the track record of the contractor.

By BABAJIDE KOMOLAFE

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t was a very familiar road with a familiar destination which the Lamido Sanusi led Central Bank of Nigeria chose to embark on.

At the end of January 2013, the official exchange rate stood at N155.74 while the parallel market rate was N159 per dollar. The difference between the two rates, referred to as the parallel market premium was N3.26 or 2 per cent, well below the five per cent global benchmark. But by the end of the year, the premium had widened to 11 per cent or N17.3. Though the official exchange rate remained stable at N155.7 per dollar, the parallel exchange rate had risen by 8.8 per cent to N173 per dollar.

“The Committee also expressed concern about the widening gap between the official and the BDC exchange rates, noting that this could precipitate speculation and round-tripping. Though, the BDCs represent a small component of the foreign exchange market, the widening spread appeared to have fed into creeping increases in core inflation”, lamented the CBN Governor, Lamido Sanusi at the Monetary Policy Committee (MPC) meeting held on January 21st.

But this should not have happened in the first instance but for the fact that the apex bank surprisingly forgot what happened in 2011. That year, specifically in June, the CBN, restricted to $250,000 the amount of autonomous foreign exchange each bank could sell to BDCs. The apex bank observed that much of the foreign exchange demand in the interbank market and causing the interbank rate to rise persistently is not consistent with economic realities. It was informed that most of this demand was coming from BDCs. Of course the demand was actually been fuelled by politicians who have suddenly adopted the dollar as their currency of trade because of its portability. Thus the apex bank decided to restrict dollars that banks can sell to BDCs. The restriction though caused the interbank exchange rate to fall and converged with that of the official rate and hence close the gap between the two rates, it however caused the parallel

•Lamido Sanusi

market exchange rate to rise from N158 per dollar to N167 per dollar, with the gap between the official exchange rate and the parallel market rate widening from N3.19 to N16.54.

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hus, it was surprising, when the CBN in September last year introduced a set of restrictions on the foreign exchange market. It banned foreign currency collection of proceeds of international money transfer, banned importation of foreign currency by banks, and pegged dollar sale of banks to BDCs to $250,000 per BDC per week.

According to former President, Chartered Institute of Bankers of Nigeria (CIBN) and Managing Director, Maxifund Securities Limited, “It was a bad policy.”

In simple economics, the restrictions were reductions in foreign exchange supply and in response to the law of demand and supply, the parallel market exchange rate begin to rise.

Furthermore, the restrictions empowered the banks as the major source of foreign exchange supply of autonomous foreign exchange in the open market.

Consequently they became price givers and dictated the foreign exchange rate at which they sell to BDCs. When the CBN introduced a circular that pegged their margin to one per cent above interbank rate, the banks resorted to hoarding and round tripping. “Some of the banks would even post the rates but when you want to buy they will say that they don’t have”, noted Alhaji, Aminu Gwadabe, President, Association of Bureaux De Change Operators of Nigeria

(ABCON), which is the umbrella body of BDCs. It was this scenario that caused the parallel market exchange rate to rise from N163 per dollar at the end of September to N173 per dollar at the end of December. It was a problem caused by forgetfulness of history.

Though very harmful to the economy, the parallel market premium is however caused by the government or its monetary agency. This lesson which is also the conclusion of many

,

MSMEs to earn N2.64trn in 2014

Foreign exchange: CBN and the painful lesson of history

Earlier that year the apex bank following introduction of Wholesale Dutch Auction (WDAS) had achieved convergence of the official exchange rate and the interbank exchange rate.

,

academic works on parallel market and parallel market premium is summed up by Babajide Komolafe (2009) as follows.

“The parallel market derives its importance and power from the premium. Also the size of the premium reflects the amount of official restriction of external transactions in the official foreign exchange market and it is the motivating factor for diversion of foreign exchange from the official market to the parallel market”.

It is for this reason that the Professor Soludo led CBN in 2006, introduced the policy titled, “Further Measures To Liberalise the Foreign Exchange Market." The aim of the policy was to address the

widening gap between the official exchange rate and the parallel market rate.

Earlier that year the apex bank following introduction of Wholesale Dutch Auction (WDAS) had achieved convergence of the official exchange rate and the interbank exchange rate. But while the interbank rate declined and converged with the official exchange rate at N130 per dollar, the parallel market exchange rate rose from N142 per dollar on February 20th when WDAS was introduced to N152 per dollar on March 26th. Thus the gap or premium between the official/interbank exchange rate and the parallel market rate widened to N20 from N10.

The strategy adopted to arrest the situation was to increase supply of foreign exchange in the parallel market and at the same time reduce demand in the market.

To achieve the former, the CBN admitted BDCs into the official market through direct dollar sale, and also allowed them to act as brokers in the interbank market. To achieve the later, the CBN removed restrictions on foreign exchange purchases by widening the scope of transactions that can be funded by official foreign exchange.

The effect was phenomenal. In the first month of implementation, the parallel market exchange rate dropped to N142 per dollar and by July 13th, it converged with the official and interbank rates at N130 per dollar. Thus for the first time in the history of the nation’s foreign exchange market the elusive parallel market was arrested and the influence of the parallel market especially the black market was whittled down.

That is the lesson of history which the present administration of CBN learnt bitterly in 2011, and had to learn last year. In realisation of this blunder, the apex bank on Friday 24th January removed the limit of $250,000 imposed on foreign exchange sales to BDCs by banks. That is the first step. The parallel market exchange rate has dropped to N168 per dollar and the premium reduced to N12.25 or 7.8 per cent but this is still huge and quite above the 5.0 per cent global benchmark. The solution is to remove other restrictions to foreign exchange supply, and thus weaken the monopoly of the banks in the market.

Vanguard, MONDAY, FEBRUARY 3, 2014 — 25

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26 —Vanguard, MONDAY, FEBRUARY 3, 2014

Banking & Finance

BY BABAJIDE KOMOLAFE

Nigeria’s sovereign wealth fund invests $10m in agric fund

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igeria’s sovereign wealth fund, referred to as the Nigeria Sovereign Investment Authority (NSIA) has invested $10 million in a small and medium enterprises focused agricultural fund.

The investment was announced on Friday via a statement titled; NSIA makes a $10 million commitment to the SME focused Fund for Agricultural Financing in Nigeria FAFIN. The statement said, “The Nigeria Sovereign Investment Authority (“NSIA”) through its Nigeria Infrastructure Fund is pleased to announce a US$10 million total commitment to the Fund for Agricultural Financing in Nigeria (FAFIN or The Fund) as one of 3 collaborating sponsors, alongside the Nigerian Federal Ministry of Agriculture and Rural Development (“FMARD”) and KfW, the German governmentowned development bank.

“The Fund is an innovative initiative, designed to transform the agriculture finance landscape in Nigeria. With a US$100 million target, FAFIN will provide tailored equity and debt capital and technical support solutions to commercially-viable small and medium-sized enterprises (SMEs) and intermediaries across Nigeria’s agricultural value chain.

“The Fund will be dedicated to catalyzing an agriculture-led inclusive economic growth in Nigeria through enhanced agricultural productivity, valueadded processing and market linkages. The $100 million target will be reached through further contributions from private sector investors.

“The participation of the NSIA in this initiative is a firm demonstration of its agriculture strategy as one core area of focus alongside power, housing, healthcare, motorways etc.

Through this strategic act, the NSIA hopes to support the realization of the Federal Government of Nigeria’s Agriculture Transformation Agenda and facilitate Nigeria’s food security.

“Uche Orji, Chief Executive Officer of NSIA commented ”Agriculture is a sector of strategic importance to the NSIA and an area we see opportunities for significant growth and profit through the facilitation of the enhancement of Nigeria’s critical agriculture infrastructure.”

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oreign portfolio investors withdrew $12.8 billion from the economy last year, even as the nation’s external reserves maintained it downward trend last week.

Speaking at the Monetary Policy Committee (MPC) meeting held last month, Deputy Governor, Central Bank of Nigeria (CBN), Corporate Services, Alhaji Barau Suleiman disclosed that the withdrawal of funds by foreign portfolio investors was responsible for the aggravated demand for foreign exchange last year.

He noted, “The aggravated demand for foreign exchange (for transfers/Letter of Credit valid) that we have seen in 2013 is largely in the area of invisibles which has increased by 23.8 per cent from 24 per cent ($13.3 billion) to 48.2 per cent ($26.1 billion) during corresponding period in 2012.”

The withdrawal of foreign portfolio investments from the country was attributed to a number of factors slowing down of quantitative easing (increasing money supply via bond purchase ) by the United States Federal Reserves, concerns about the appointment of a new CBN Governor and decline in the nation’s external reserves. This was reflected in the communiqué issued at the end of the MPC meeting, which stated, “The MPC also noted the reduction in portfolio inflows driven by the commencement of the QE3 tapering by the Fed, transition

From left: Daniella Okumagba, Head, Expatriate and Diaspora Banking, Stanbic IBTC Bank; Ebere Nwaolikpe, Western Union, Assistant Marketing Manager – ECOWAS; Catherine Ezegwu, Head, Money Transfer, Enterprise Bank and; Elohor Obeido, Product Officer, UBA Plc, during the Western Union “My WU” loyalty campaign.

Foreign portfolio investors withdraw $12.8bn in 2013 *External reserves maintain downward trend *CBN sells $2.9bn to defend naira concerns at the CBN and continued depletion of the ECA, thus dampening investor confidence. The reduction of the US stimulus especially, could in addition, trigger capital flow reversals and put greater pressure on the naira exchange rate.”

Meanwhile the nation’s external reserved declined further by $10 million last

week, falling to $43.12 billion as at Tuesday from $43.22 billion the previous week.

Cumulatively, the external reserves have declined by $490 million dollars, from $43.61 billion at the beginning of the year. Last year, it rose from $45.98 billion in January to a peak of $48.85 billion before falling steadily to $43.61 in December.

FBN Holdings targets new market segments with refreshed identity

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BN Holdings, the parent company of First Bank Nigeria Limited has unveiled refreshed brand identity, aimed at retaining its competitive edge and gain entry into new market segments.

“Our new identity will help us to preserve our heritage and make us appealing to a more diverse market segment”, said Chief Executive Officer, Bello Maccido at the unveiling ceremony.

To signal this, the bank is now represented by an Elephant, with head raised in a forward marching position, with the ‘FBN Holdco’ behind.

According to Dr. Oba Otudeko Chairman, FBN Holdings, “The elephant is the respected and instantly recognizable icon of our brand identity and as such, we have retained the elephant. We have however re-ignited this iconic symbol with a number of enhancements that communicate a robust evolution relevant for today.

“The raised head of the elephant in our refreshed identity is our promise to all customers that with us in their corner, every financial challenge they face, they can face with their head held high. The deep blue colour represents momentum, innovation and evolution. These principles ensure that we continue to develop solutions that are at the

heart of all their challenges. The raised foot of the elephant in the refreshed identity is a promise that we will always put our best foot forward for each and every one of our customers. And finally, the adoption of complimentary colours platinum and gold into our logo, precious metals identified with value serves as a reminder of the inherent value and durability of our brand. Our brand refresh marks a renewed promise to all our stakeholders - a promise to continue to set the gold standard of value and excellence in financial solutions across Sub Saharan Africa.”

Also speaking, the Head, Marketing and Corporate Communications, Folake AniMumuney enthused; “the refreshed identity embodies our internal values and the direction we are headed in as a group, like the iconic elephant, which signifies strength and resilience, two of the greatest traits to have as an individual, as an institution and as a nation.

Since launching in 1894, the FBN brand has established itself as a brand of strength and dynamism, with the vision to be the leading international financial services group in Sub Saharan Africa. Our brand is at the heart of the holistic experience we seek to deliver to our stakeholders, an essential part of retaining patronage and the competitive edge that keeps us at the coveted position of market leader.

On the other hand, the CBN last month continued its effort to defend the naira by selling $2.939 billion through the Retail Dutch Auction System (RDAS). This represents 49.7 per cent increase when compared with the $1.99 billion sold in December. Last year, the apex bank sold $25.37 billion, up by 32.9 per cent from $19.1 billion sold in 2012. The amount sold in January represents 39.3 per cent increase when compared with the average monthly foreign exchange sales for last year, which was $2.11 billion.

Despite the sharp increase in foreign exchange sales, the naira however depreciated at the interbank foreign exchange market by N3.64 in Januar y. Data from the Financial Market Dealers Quote (FMDQ) revealed that the interbank foreign exchange rate rose from N158.84 per dollar on January 2nd to close at N162.48 per dollar last week. Similarly the naira depreciated by five kobo at the official market, as the official exchange rate etched up to N155.75 at the end of the month from N155.7 at the beginning of the week. But the naira appreciated by N5 at the parallel market courtesy of the removal of limit imposed on foreign exchange sales to bureaux de change by banks. This prompted the parallel market exchange rate to fall to N168 per dollar from N173 per dollar at the beginning of January.

Vanguard, MONDAY, FEBRUARY 3, 2014 — 27

28 — Vanguard, MONDAY, FEBRUARY 3, 2014

Corporate Finance

Oando subsidiary to raise US$50m via private placement

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ando Energy Resources Inc (OER), a subsidiary of Oando Plc, has unveiled plans to raise US$ 50 million through a private placement.

In connection with the offering, OER intends to acquire a five percent interest in OML 131 in exchange for common shares of the company (the “OML 131 Acquisition”).

The private placement, according to a notice filed with the Nigerian Stock Exchange, NSE, will consist of 35.07 million ordinary shares and 17.54 million common share purchase warrants (the “Warrants”) at a unit price of C$1.57.

Each whole Warrant will entitle the holder to acquire one common share of the company at a price of C$2.00 per common share for a period of 24 months from the date of the closing of the ConocoPhilips, COP, acquisition.

The company stated that if, after a period of six months from the closing of the COP Acquisition, the common shares of the company trade on the Toronto Stock Exchange (“TSX”) at a price greater than C$3.50 for a period of at least 10 consecutive trading days, the Warrants will expire on the date which is 30 days following the last day of such 10 consecutive trading days.

Wall Street gains on signs of growth

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all Street rose on Thursday, with the S&P 500 climbing more than one percent, buoyed by data showing the U.S. economy grew as expected in the fourth quarter.

Facebook Inc (FB.O) shares shot up 15.7 percent to $61.95, driving the Nasdaq up more than two percent by midday. The social media company delivered its strongest revenue growth in two years on Wednesday, beating analysts’ estimates.

The S&P 500 has turned positive for the week, thanks to the day’s gains. The broad market index, however, was still down nearly three percent for the month.

Investors are concerned that recent bold efforts by central banks in emerging economies to stabilise their currencies may not be enough to staunch an exodus of funds from those markets.

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Brokers to NSE: Enforce directive on financial statement submission Stories by NKIRUKA NNOROM

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here is increasing dissatisfaction among the stockbroking community over the failure of the Nigerian Stock Exchange, NSE, to begin implementation of the directive to quoted companies that statement of accounts should not be submitted separately from interim corporate action for a given accounting period.

They posited that the practice is distorting activities in the market as it does not allow investors and investment advisers to make informed investment decision.

Corporate action is an intention of a given company to reward its shareholders with either dividend or bonus issue in a given financial period.

In most cases, companies intending to pay dividend or give investors bonus shares fail to release this information

alongside their financial statement for the period.

Issuing a warning last year at a training for journalists on the NSE’s X-Compliance and Brokers Trak, Hauwa Zoaka, Head, Listings Compliance, Listings Regulation Department of the NSE, said that the practice would no longer be tolerated.

She had stated that the practice is creating confusion in the market, insisting that any company that intends to propose either interim

dividend or bonus should endeavour to do so alongside the financial statement being submitted.

She said, “Going forward, we will not take this kind of information to the market. We have told the companies that once there is board meeting, the Exchange should be notified immediately about the outcome of such meeting.

Interim dividend and interim account should be submitted at the same time; otherwise, such statement will not be published.

“Failing to do that, we will tell the company to hold on to the account until such time it is ready to submit everything in details.”

Speaking on nonimplementation of the order, stockbrokers said that it is causing confusion in the market, while calling on the NSE to make it mandatory that companies must feed the investing public with full financial details, including the profit and loss account, balance sheet, dividend and bonus where applicable and all the things associated with it to save investors from making lopsided decision.

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From right: The Ogun State governor, Senator Ibikunle Amosun welcoming Mr. Giovani Caprio of the World Bank to the Ogun State 2014 Retreat for top government officials held at Ota, while Mr. Gboyega Aiyemomi also of the World Bank looks on. Photo By: WUMI AKINOLA.

Investors commend PZ Cusson over interim dividend declaration

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nvestors have expressed delight over declaration of 19.91 kobo dividend by the Board of Directors of PZ Cusson Nig. Plc, describing it as a good development for shareholders.

PZ Cusson Nig. Plc had announced intension to pay 19.91 kobo to its shareholders as interim dividend for the half year ended November 30, 2013.

Information available to Vanguard shows that only shareholders whose names appear on the register of member as at February 3-4, 2014, will benefit from the dividend, while payment date will fall due on February 12, 2014. The unaudited financial statement for the period showed that the company posted 52.90 percent increase in profit after tax to N2.31 billion from N1.51 billion in equivalent period of 2012.

The profit before tax rose by almost the same margin, rising by 53.61 percent from N2.010 billion in 2012 to N3.077 billion.

The earnings per share for the period snowballed to 58kobo compared to 17 kobo in 2012, representing 243.39 percent growth over the period.

However, the revenue increased marginally by 4.70 percent to N34.461 billion from

N31.045 billion in the corresponding period of 2012.

Commenting on the result, Ambassador Olufemi Timothy, President, Renaissance Shareholders Association, said, it is a very good development since PZ Cusson does not have the tradition of paying interim.

He observed that with the amount paid, the company would likely not declare less that N1.00 as final dividend.

Olufemi, however, attributed the declaration to the adoption of International Financial Reporting Standard by companies, saying that the accounting system is forcing companies to be more transparent in their financial disclosure.

“One should be thankful to IFRS accounting system; it is making these companies to tell the truth about their earnings and profit,” Olufemi said, calling on other big chip companies to follow suit. Speaking in the same vein, Gbadebo Olatokunbo, another shareholder, commended the company over the payment, saying it is an indication that PZ has finally overcome its challenges.

“I am not surprised about the interim dividend; PZ has for some time been having problem and has been working on it.

ccording to Dele Odusanya of Quantum Securities, “the practice does not allow for good investment decision because it is not only dividend that should be considered when making investment decision. You have to consider what proportion of profit made that is being returned back into the system for further investment by the company and you want to know what proportion of profit made that is being paid out as dividend.

“At times, you have companies that pay out 80 to 90 percent of their profit as dividend. Such companies do not allow for future growth. So, you are not only considering dividend alone; you are considering the totality of the company’s performance in that financial year. That will enable you to make investment decision. If the financial statement does not come in total, you won’t be able to review the whole financial statement using all the necessary aspects of finance to make your investment decision,” he said.

He noted that in a situation where a company sends out just part of the financial statement without stating the dividend to be paid, it distorts investment decision on that particular stock.

Vanguard, MONDAY, FEBRUARY 3, 2014 — 29

Corporate Finance

BY PETER EGWUATU

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he corporate bond worth N29.29 billion floated by four firms in the Nigerian capital market is expected to mature this year 2014.

Findings from the Debt Management Office (DMO) show that three of the firms which are listed on the Nigerian Stock Exchange, NSE accounted for 93.2 per cent worth of the bond that will mature in 2014, while one firm which is not quoted accounted for 6.8 percent worth of the bond.

The three companies which are listed on the NSE include: Guaranty Trust Bank (GTBank) Plc, C & I Leasing Plc, and Lafarge (WAPCO) Nigeria Plc. NGC Sterile Limited is the fourth company and is not a quoted entity.

The corporate bond market presently has a low level of secondary market activities, apparently because of the dearth of corporate bonds in the segment.

It should be noted that GTbank bond which was rated Aa- by Agusto and Co. Limited, were placed through a book building exercise with institutional investors conducted by GTB Asset Management Limited, WSTC Financial Services Limited and FBN Capital Limited, acting as Issuing Houses/ Book Runners.

The bond was issued at par value and has a coupon of 13.5 per cent per annum, which is the cut-off price determined by the Bank and the Issuing Houses/Book Runners upon the conclusion of the book building exercise.

An application was filed with the NSE for the listing and

FCMB rewards more customers with N1m, gifts

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From left: Executive Director, WEConnect International Nigeria, Miss Comfort Sakoma, Group Head, Inclusive Banking, Access Bank Mrs Ope-Wemi Jones, Country Director World Bank, Dr Marie-Francoise Marie-Nelly and Head, Inclusive Banking, Access Bank, Mrs. Titilola Familoni at the WEConnect International Nigeria Launch in Abuja.

Nigeria’s corporate bond worth N29.29bn to mature in 2014 admission to trading of the bond. The offering was the first tranche under the Bank’s N200 billion Debt Issuance Programme, through which it raised debt from time to time over a period of two years in order to significantly enhance its funding/lending capabilities. The offering was also the first Nairadenominated bond issue by the Bank. In January 2007,

the Bank successfully issued US$350 million Eurobond Notes due 2012 in the international capital markets without the guarantee of either the Federal Government or any international financial institution.

For the C&I Leasing, its placing of N2.24 billion unsecured variable coupon redeemable convertible loan

Unity Bank to sell 50.3% holding in UnityKapital

By NKIRUKA NNOROM

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nityKapital Assurance Plc has announced plan by its major shareholder, Unity Bank Plc, to divest its 50.30 percent holdings in the underwriting firm.

Consequently, Capital Assets Limited has been appointed as the Financial Adviser to the transaction and a “Request for Expression of Interest, EOI,” for the sale of the shares has been prepared for publication.

The divestment, according to a statement from Unitykapital is in compliance with the Central Bank of Nigeria (CBN)’s directive that all banks in Nigeria should divest from non-banking subsidiaries or adopt a holding company structure in keeping with the new licensing regime.

It would be recalled that Unity Bank had last year secured shareholders approval in an extra-ordinary general meeting to divest

about N5.4 billion of its nonbanking subsidiaries.

The Group Managing Director, Falalu Bello, had informed the shareholders that the bank’s investment in non-banking subsidiaries was in three categories which include; subsidiaries, associates and other investments, saying that it was divesting from Unity Investment & Capital Limited which it owned 100 percent in the sum of N307.21 million and Unity Registrars Limited which it owned 100 percent in the sum of N143.64 million.

Unity Bank also divested its 55 percent stake in Northlink Insurance Brokers Limited, which cost N35.23 million; Newdevcom Investments & Securities Limited in which it controlled 54 percent in the sum of N166.40 million.

Others include: Hexalix Properties Limited which it owned 100 percent and costs N137. 27 million; FUG

Pension Limited in which it had 55 percent stake costing N255.11 million and Unity Bureau De Change which is 100 percent owned by the bank with the cost of N287.30 million.

The three associate companies from which the bank divested include Caranda Management Services Limited, which it controlled by 42 percent at the sum of N97.18 million; Pelican Prints Limited (40 percent), costing N11.84 million and Unity Kapital Assurance Plc (49.49 percent) costing N4.05 billion.

Other investments and holdings it divested from include Knight Rook Limited (25 percent); Kakawa Discount House Limited (six percent); FSDH (eight percent); ICHL Nigeria Limited (15 percent); NIBBS ( four percent); CSCS (one percent); Jaiz International Limited (one percent); and Afrexim Bank (one percent).

stock commenced in 2009 to mature 2014. The coming on board of this unsecured convertible loan stock was as a result of low activities in the capital market especially in equity market occasioned by the global economic crisis.

Institutional shareholders such as Leadway Assurance Company Limited, Crusader Insurance (Nig.) Plc, African Development Insurance Company Limited, Credit Alliance Financial Services Limited, Continental Reinsurance Company Limited, OUT Consortium Finance Limited, and UBA Trustees Limited control about 40 percent of the company’s equity.

For Lafarge (WAPCO), GCR accorded its bond a national scale Naira currency long term rating of AA(double A minus) to the N11.88bn .The Programme rating was derived by applying a notching up approach, starting from the long term corporate credit rating of Lafarge WAPCO of A (single A). Supported by the nature of the Security Package and the underlying t r a n s a c t i o n documentation, the degree of asset coverage implies high recovery prospects, allowing for the up notching.

The NSE admitted on its daily official list N11.88 billion, 11.5 per cent Fixed Rate Bond (Series 1) 2011/ 2014 in favour of Lafarge Cement WAPCO Nigeria Plc on March 5, 2012. The Bond was part of the company’s N50 Billion Debt Issuance programme.

irst City Monument Bank (FCMB) Limited has rewarded customers with cash and various gifts after it conducted its second monthly regional and zonal electronic selection of customers for the bank’s 30th anniversary promo held recently.

This resulted in an additional 133 lucky customers, from 26 locations around the country, winning various cash and prizes. Three customers won N1million each, while 130 others won LCD Televisions, Fridges, Generators and other cash and prizes.

At the Lagos/South-West Regional draw held at IjebuOde in Ogun state, Mrs. Yetunde Adeyemi Oludaisi was rewarded with N1million, while Mr. Abubakar Isah Saba won the N1million at the North Regional draw held in Kaduna. The third N1million winner, Mr. Kevin Osekemen Atama, resulted from the South-East/South-South Regional draw which took place in Enugu.

GE Africa, Standard Bank sign $350m financing partnership

E

fforts to increase access to power infrastructure in Africa has received a boost with a US$350million financing agreement between global infrastructure giant, General Electric and one of Africa’s leading financial institutions, Standard Bank.

The partnership seeks to provide affordable access to power infrastructure to augment traditional large scale grid capacity development.

The partnership will target 10 priority countries: Nigeria, Angola, Tanzania, South Africa and Ghana. Others are Kenya, Mozambique, Uganda, Ethiopia and South Sudan. Financing activity will center on project finance, equipment finance, trade finance and advisory. The program will be open to independent power producers (“IPPs”) and non-recourse infrastructure projects, industrials and manufacturers, natural resource companies, food and agricultural processors, small to medium enterprises (“SMEs”), and other potential borrowers.

C M Y K

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

Opening Price (N) 0.50

Daily Stock Market Report Closing Price (N) 0.50

Opening Price N

Quantity Traded 2,000

Year High 0.50

Year Low 0.50

E.P.S.

P.E. Ratio

0.50 40.60 43.45

105,000 165,886 750,594

0.50 24.58 8.30

0.50 14.53 6.40

0.10 7.33 2.75

50.00 2.77 4.37

3.85

4.04

3,093,508

0.66

0.48

0.11

15.00

1.78 3.95 1.40 5.32 3.57 69.00

1.78 3.95 1.40 5.32 3.92 68.01

8,148 4,500 89,500 208 17,009,668 2,373,094

2.54 7.60 8.82 8.28 1.82 42.50

1.45 6.43 5.89 5.52 0.50 28.70

0.16 0.31 0.00 0.35 0.24 6.89

5.18 20.74 0.00 15.77 3.64 4.14

69.00 8.46

5.30 2.13

31,443 5,172,253

4 2,720,390.38

69.00 8.46

37,562 42,564

62.26 8.28

32.96 3.01

4.11 4.73

10.11 2.26

19.04

19.99

173,350

20.15

11.59

1.69

7.33

100.00 50.00

100.00 50.00

250 -

100.00 -

97.00 -

11.75 -

8.51 -

0.50

E.P.S

P.E Ratio 9.71 18.03 6.71

2.23

785

10.54

9.52

0.00

0.00

0.50

387,550

0.50

0.50

0.00

3.91 3.64 2.90 69.00 2.26 1.65 7.36 1.68

3.51 3.46 2.90 69.00 2.26 1.57 7.36 1.85

5,000 135,039 1,226,065 14,149 246,196 199,153 2,195 4,500

5.31 1.45 3.20 23.11 5.61 1.96 12.91 200

5.31 0.70 0.83 2.58 3.61 0.95 0.95 4.28

ICT Computer Based Systems Courteville Investment Plc

0.81

0.83

422,500

0.52

0.50

0.10

10.00

Computers and Peripherals Omatek Ventures Plc

0.50

0.50

80,000

0.50

0.50

0.00

12.50

16.83 2.07

16.83 2.07

598 360

9.31 3.59

3.25 3.25

0.00 0.01

1.43 0.00

0.50

0.50

100

50,000

0.50

0.50

4,000

1.47

0.50

0.00

0.00

18.29 9.05 46.99 10.30 235.00 0.50 1.51 114.00 5.79 1.95 10.00

18.70 9.05 47.68 10.30 234.49 0.50 1.45 114.00 5.51 1.85 11.00

525,586 24,960 153,765 970,285 761,746 100,000 101,530 364,213 155,020 100,000 123,564

30.00 12.57 43.98 15.49 132.51 0.75 3.51 48.05 5.28 3.36 13.40

12.00 8.10 15.16 4.16 95.00 0.50 1.02 36.58 5.11 0.51 10.93

2.14 1.09 2.28 1.47 7.56 0.00 0.00 4.10 0.44 0.23 0.00

7.86 4.97 8.88 2.31 13.17 0.00 0.00 42.86 14.19 2.89 0.00

1.71 2.70

1,000 2,717,101

6.91 3.60

7.85

40

8.69

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

2.01

Year Low

1,299,771 26,034,956

ICT Telecommunications Starcomms Plc

103.50 21.00 2.14

Year High

10.56 0.87 0.21

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

103.50 21.01 2.30

Quantity Traded

103.50 10.64 0.03

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

20

Closing Price N

103.50 15.69 1.41

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

0.09

0.50 40.60 44.01

5.05 2.35

Sim Capital Alliance Plc Stanbic IBTC Bank Plc UBA Capital Plc

as at Friday, January 31, 2014

0.19 0.44 2.62 0.20 0.09 0.00 0.00

0.00 88.50 0.00 3.07 9.05 14.13 0.00 0.00

0.50

0.50

8,900

0.50

0.50

0.00

0.00

15.27 226.00 29.90 159.45 0.77

14.51 222.00 29.61 156.50 0.77

4,625 635,162 345,885 3,838,248 10,000

4.63 255.00 7.10 100.00 1.01

2.23 186.00 5.23 72.50 0.93

0.00 9.95 0.41 5.08 0.00

0.00 19.98 16.29 22.22 0.00

Beverages-Non-Alcoholic 7-UP Bottling Company Plc

71.40

71.40

31,035

51.49

,39.00

2.69

13.92

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

Tools and Machinery Nigerian Ropes Plc

7.85

9.50 11.50 88.00 3.59 13.21 0.64

9.50 11.60 88.00 3.76 13.87 0.61

105,318 672,853 112,544 1,455,031 575,145 254,144

19.90 16.20 95.00 6.60 6.70 0.88

4.31 4.02 57.00 2.31 3.80 0.50

0.00 0.91 4.09 0.39 1.01 1.13

16.91 14.38 16.89 16.92 5.75 8.83

NATURAL RESOURCES Chemicals BOC Gases Plc

6.66

6.66

1,000

9.20

6.80

Metals Aluminium Extrusion Ind Plc

7.75

10.50

500

12.39

10.70

0.13

85.77

Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc

60.68 1,120.95

60.88 1,125.00

262,805 335,714

37.27 840.10

8.33 400.00

Non-Metalic Mineral Mining Multiverse Plc

0.50

0.50

3,000

0.50

0.50

0.01

0.00

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

1.35 25.43

27.61 32.84

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

32.27 5.30 1.65

32.27 4.96 1.52

60 1,136,147 101,500

36.19 5.54 2.88

33.96 2.91 2.88

13.89 0.61 0.00

2.44 7.07 0.00

Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc

37.70 55.00

38.00 54.00

1,234,322 1,557,325

41.02 47.39

21.02 27.60

0.82 1.44

4.39 32.91

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

9.00 6.90 14.70 2.38 4.75 27.79 3.70 2.32 7.75 8.77 0.50 1.06 23.90

9.10 6.92 14.70 2.42 4.75 27.50 3.88 2.31 8.16 9.20 0.50 1.10 23.30

13,365,163s 15,663,190 6,485,017 4,170,875 865,336 20,570,535 9,206,606 2,496,853 11,096,181 563,708 343,300 3,650,671 8,508,459

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

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

1,000 2,256,187 455,439 4,511,259 35 9,054,578 31,104,000 62,500 417,734 150 786,218 1,670,890 3,000 100 1,300 465,543 900 6,171,226 43,500 1,200 768,775 100 1,000 200 4,000 7,464 502,000 15,000 15,810,521

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

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

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

0.50 0.85 1.13 0.50 0.50 2.00 0.50 0.50 0.58 0.50 0.58 0.50 0.50 0.50 0.50 2.35 0.50 0.78 0.50 0.50 0.67 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.95

0.50 0.85 1.12 0.51 0.50 2.06 0.50 0.54 0.57 0.50 0.60 0.50 0.50 0.50 0.50 2.35 0.50 0.80 0.50 0.50 0.65 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.99

6.60 0.81

6.60 0.79

4,100 380,199

6.00 1.18

0.00 0.92

0.04 0.92

150.00 10.56

1.49 0.50 0.50 0.50

1.49 0.50 0.50 0.50

50 50,000 400,000 25,000

1.57 0.50 0.50 0.50

1.37 0.50 0.50 0.50

0.19 0.02 0.00 0.00

47.6 7 25.00 0.00 0.00

3.04 0.50 0.99 14.45 552.20 0.60

3.19 0.50 0.99 14.45 552.20 0.62

7,714,736 22,000 100 22,676,968 1,698,771

0.75 0.50 2.02 20.00 100 0.78

0.00 0.50 2.02 8.57 552.20 0.50

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

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

0.19 0.00 0.00 2.03 12.68 0.13

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

9.16 0.00 0.00 9.85 43.55 6.00

Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company

1.71 2.74

5.94 1.47 8.26

0.5 0.25 0.00

0.78

39.60 9.16 0.00

7.37

Paper/Forest Products Thomas Wyatt Nig. Plc

0.83

0.87

43,412

1.38

1.38

0.00

0.00

Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc

2.05 0.50

1.97 0.50

381,363 840

2.50 2.58

1.62 2.58

0.11 0.00

13.15 0.00

1.44

1.44

2,000

1.51

1.33

0.03

28.80

3.98 17.67 12.68 4.30 1.05 2.92 0.63

3.98 17.67 12.68 4.30 1.05 2.78 0.66

6,888 109,200 150 29,198 200 84,311 2,749,340

3.98 15.58 15.03 4.30 1.86 2.92 0.63

3.98 12.71 13.97 3.60 1.05 2.92 0.63

0.00 3.90 0.90 1.22 0.30 0.07 0.00

0.00 3.26 0.00 3.52 6.18 41.71 0.00

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

0.55

0.56

7,379,912

0.97

0.87

0.19

6.06

Intergrated Oil and Gas Services Oando Plc

18.98

19.16

22,021,125

78.97

27.99

1.73

4.17

20.50 0.50 51.99 90.20 120.15 54.44 180.00

20.50 0.50 51.99 90.20 123.50 54.44 180.00

37.10 0.70 5.59

0.50 0.50 3.89

4.93 0.00 0.61

7.40 0.00 6.99

163.50 2,100 240.00

141.00 63.86 195.50

6.11 2.98 14.63

11.11 19.23 17.07

0.50

0.50

0.50

Mortgage Carriers, Brokers and Se Abbey Building Society Plc INDUSTRIAL GOODS Packaging/Containers Abplast Products Plc Beta Glass Co. Plc Greif Nigeria Plc Nampak Nigeria Plc Poly Products (Nig) Plc Studio Press (Nig) Plc W.A. Glass Ind. Plc

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

1.33 4.30 0.56 4.55 0.73

82,191 10,000 3,018 401,436 168.020 4,993 35,531 10,000

200

0.50

100

0.72

1.30

622,565

3.65

1.30

0.21

2.65 0.25

0.60 11.12

4.20 2.50

1,121,000 2.75

3.67 280,623

0.56

2,690,075

1.64

4.55 0.73

1,000 2,719,700

400 2.07

Media/Entertainment Daar Communications Plc

0.50

0.50

10,000

0.50

Printing & Publishing.

Academy Press Plc Learn Africa Plc Studio Press Nig. Plc University Press

2.43 1.91 2.52 4.07

2.43 1.91 2.52 4.35

1,000 1,336 24,120 266,220

3.68 0.00 6.82

0.94

Road Transportation Associated Bus Company Plc

0.01 0.51

0.90 3.00 1.33

0.00

0.04

12.75 8.19 4.91 11.25

0.34 0.92

34.09 2.12

0.48

0.00

0.00

3.17 0.30 0.00 3.60

0.25

12.19

0.54

27.69

0.00

0.00

0.94

105,900

0.80

Speciality Interlinked Technologies Plc

4.90

4.90

1,050

5.15

4.90

0.50

0.00

0.00

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

3.38 5.72

3.23 5.99

224,750 278,210

2.78 11.75

1.57 6.50

0.60 12.53

4.22 8.75

30 — Vanguard, MONDAY, FEBRUARY 3, 2014

Capital Market

Vanguard, MONDAY, FEBRUARY 3, 2014 — 31

Micro Finance

Commodity Index Jan. 24 - Jan. 30, 2014

BoI to empower NLNG host community

T

he Bank of Industry (BoI) has promised to support Bonny Island, in Rivers State, host community to Nigeria Liquified Natural Gas (NLNG), in the area of capacity building.

Managing Director of the BoI, Ms. Evelyn Oputu, made the disclosure during a visit of the Council of Chiefs to the bank’s corporate office in Lagos.

Oputu explained that the partnership will be done in the area of capacity building to train the youths on relevant skills, saying, “a lot of the problems of the youths why they do not have jobs, is that they have nothing to do because they do not have skills. They require skills to be able to find jobs that are relevant.

Because it's one thing to go to school and be educated, and another to actually know specific areas where jobs are, and then the second aspect is to acquire the skills that are relevant to be able to be self sustaining and to be an entrepreneur.

“Second step is to find out from the community what they have as comparative advantage over the other communities and therefore develop the community to be an economic zone that will benefit and sustain them outside of the natural resources they have.

For funding, she said that fund is not a limiting factor, “We are going to be looking at who is available and

what is available. Where we feel there is a gap, we will come up with ideas, it is a partnership and we are going to be working together because they have come with one of their partners which is one of the communities in the society that is the NLNG. They have demonstrated that they are interested in working with the people.

We are going to have funds from them and we are going to merge it and we will also bring our development partners, who are already in that area of development, UNIDO, UNDP, all of those development partners to be able to change things and occupy them.

On the other hand, Chairman Bonny Chief Council, Chief Amin Pepple, said that the visit would further strengthen its partnership, pushing development of the kingdom forward.

According to Pepple, Bonny kingdom plays host to so many multinational oil companies, saying that Shell, Mobil, NLNG are all sited on the island of the kingdom. "We know they are all there for profit and the government at all levels have complained of inadequate funding to develop everything at the same time.

“It then behooves us to look for alternative sources of funding to develop our people and develop our kingdom by extension developing the country."

IFRS: ICAN raises alarm over FRCN’s power to sanction

T

he Institute of Chartered Accountants of Nigeria (ICAN), has raised alarm over the powers vested on Financial Reporting Council of Nigeria (FRCN) to punish errant members, especially audit firms.

Speaking at a forum organised by the Audit, Investigations and Forensic Accounting Faculty, with the theme: “IFRS Implementation: The Journey So Far, Auditors and Regulator ’s Perspective,” President of the Institute, Alh. Kabir Mohammed, cautioned members of the institute, saying, "let me sound a note of warning that the Act has conferred a power of investigation of professional misconduct on the Financial Reporting Council of Nigeria. This is a welcome development, as it is in line with the institute’s disciplinary measure for errant members. I trust you will guide against this.” Highlighting some of the institute’s contribution on financial reporting to audit practitioners, Mohammed said that as members of the International Federation of Accountants (IFAC) it is part of the institute’s responsibility to adopt standards issued by the global body for Nigeria.

To this end, he said, “the professional practice monitoring department was created to monitor audit firms and ascertain the level of their compliance

with Nigerian standard on quality control and professional code of conduct and guide for members.

“The council of ICAN has established the Nigerian Auditing Standards Committee (NASC) to develop and issue, on its behalf, standards and statement on auditing and related services. The issue of such standards and statements will help to improve the degree of uniformity of auditing practices and related services.

“The institute also published guidelines for merger of small and medium audit firms to create awareness and guidelines for merger of small and medium sized audit firms aimed at encouraging sole practitioners to exploit the benefits of size in their operations and provide effective guidelines to be adopted by firms contemplating merger process.

Chairman, Audit, Investigations and Forensic Accounting Faculty, Mr. Francis Medessou, said that the adoption of the IFRS by all listed companies since January 1, 2012 has had profound implications for financial reporting in the country. Medessou added that it has not been a smooth transition, hence there are issues and challenges that border on the reporting processes and outputs, financial compliance and control activities as well as the extent and depth of financial disclosures that are yet to be resolved.

C M Y K

32 — Vanguard, MONDAY, FEBRUARY 3, 2014

Interview IN 20 days time, the 35th Kaduna International Trade Fair will hold in the state. Dr. Abdul Alimi Bello is the President of Kaduna Chamber of Commerce, Industry, Mines and Agriculture, the organiser of the yearly exhibitions. He spoke with Vanguard about the thrust of this year’s edition, their preparations so far and what is new for local and international exhibitor, among other issues.

EXCERPT

Nigeria has been consistently in policy somersaults — Alimi Bello

By OMOH GABRIEL, Business Editor, FRANKLIN ALLI & PROVIDENCE OBUH

•Dr. Abdul Alimi Bello

C M Y K

country’s over-dependence on oil as more or less the only source of revenue sustaining our economy despite enormous potentials available in other areas particularly agriculture.

“We try as much as possible to always choose a theme that relates to the current realities. Recall that the theme of last year ’s fair (34th) was on combating security challenges.

In arriving at a choice of this year’s theme, we considered the expressed concerns and discussions on the country’s over-dependence on oil as more or less the only source of revenue sustaining our economy despite enormous potentials available in other areas particularly agriculture. It is therefore the position of the chamber that focus should shift to agriculture and industrialisation.

The opening ceremony for this year’s fair will be on Saturday, February 22nd in honour of our exhibitors.

Our presence in your office today is to request for your usual support and cooperation by giving the trade fair activities the much needed publicity both before and during the trade fair periods.

Editors, on behalf of my team and the chamber, I once again thank you for your time and I hope we are going to have a mutual and r e w a r d i n g relationship. Thank you very much.

I am well acquainted with K a d u n a International Trade Fair. I used to cover the trade fair when I was a finance reporter.

What is new to me that I am not aware is the inclusion of quiz competitions for secondary schools. What is the essence of the quiz competition and who is it targeted at?

You just said something about the future readers of

your newspaper; that they are generations yet unborn. As a form of corporate social responsibility, what can the chamber do to create awareness among secondary school students in the 19 Northern states? So the essence of the quiz competition is our social responsibility for the educational sector of the economy in these states.

It is supposed to add value to the educational sector.

This year’s competition will be the fourth in the series. We also have a one day seminar on the theme of the fair. At the seminar, we are expecting General Theophilus Y. Danjuma, retired; former minister of Defence, Prof Ango Abdullahi, former Vice-Chancellor of Ahmadu Bello University/ former Special Assistant to the President on Food and Security. The event comes up on Monday February 24 at the conference Hall of the trade fair. On Tuesday, 25th we intend to have interactive session with major stakeholders in the financial sector. It is scheduled to hold in the evening at Hamdala Hotel. Again, in the evening of March 2, there will be a farewell dinner in honour of our exhibitors.

M

ost of the products at our intentional trade fairs are imported, why are you not using the platform to promote our domestic products?

I am happy the Chairman, Organising Committee, Alhaji Awwalu Makarfi, is here. He shall respond to that question.

He has been in contact with so many manufacturers locally and outside the country.

He has been working round the clock and I would like him to add a word. To a very large extent, you and I and other persons know the situation of the economy.

Generally, our market is flooded with foreign products and what you see at

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W

e are indeed very happy to receive you and your team. As you are aware, Vanguard was established 30 years ago by the Chairman/ Publisher, Sam Amuka. Today, one million people read our paper everyday on the web and hard copy. So no platform gives your chamber a better exposure than Vanguard. What is the purpose of your visit today?

We want to thank you for the support you have been giving the chamber in all its activities, particularly during its annual international trade fairs. We want to request for such continuous cooperation especially now that the chamber is coming up with a number of issues with the aim of promoting the business environment of our great community.

The purpose of our coming here today is to inform you about the preparations for the 35th Kaduna International Trade Fair. The preparations have commenced; the fair is scheduled to start from February 21st to 2nd March 2014, at the usual venue -Kaduna International Trade and Investment Centre, Zaria Road, Rigachikun.

Our theme for this year is Agriculture Transformation For Industrial Development: Public-Private Partnership Approach. This theme was chosen by the Council of the chamber to reflect on the

People see the trade fair as a place to display and sell items, we allow that to happen now because it adds glamour to the fair, if this feature is not there, people are not likely to come

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the trade fairs is a reflection of the economy.

Many people think trade fairs are platform to buy and sell. This is very wrong. In reality, a trade fair is a forum where ideas are exchanged; it is a place where you explore investment opportunities that are available in a country; it gives you information about what is available here and there.

The chamber serves as bridge between our members, the government, manufacturers in Nigeria as well as

Vanguard, MONDAY, FEBRUARY 3, 2014 — 33

Interview We want a situation whereby the next agric minister continues from where Adewunmi stops and not to somersault the policy he introduced, if we have consistent policy, banks will put their money in agric projects with the hope of getting it back

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•Dr. Abdul Alimi Bello

those that are coming from outside the country. So, we are yet to be where we should be. A lot of the time, people see the trade fair as a place to display and sell items. We allow that to happen now because it adds glamour to the fair. If this feature is not there, people are not likely to come. So, your observation is very right. It is a reflection of our society.

What value will your trade fair this year add to the economy?

As you could see from the theme we have chosen this year, Agriculture Transformation for Industrial Development, it was deliberate because last year, for instance, the theme was combating security challenges because last year, we were at the height of security challenges particularly the Boko Haram issue and it is our duty to look at the situation on ground and formulate the theme along that line to reflect the reality on ground. Having attained reasonable peace, what Nigerians are concerned about today is to go to farm. Generally in Kaduna and even in Maiduguri, Adamawa and Yobe before this time, the situation has been more or less normal for now.

A year ago, the situation was so bad that we postponed the fair. This year, we have not had security issues. When you are bringing local and international

people to attend your fair, you have to do everything possible to protect their lives and property. Coming back to the issue of the theme, there has been a lot of discussions on Federal Government’s Agric Transformation Agenda. Nigeria basically is an agricultural society. We have the land which is fertile and we have the population. And in almost each state in the country, there is one resource or the other that can grow very well and meet the demand of local consumption and even exporting it to other countries.

There is no doubt about it. Every state has agric potentials. And now that there have been so much discussion on the agric issue, we feel that we have to go beyond these discussions by motivating Nigerians to go back to agriculture. We believe if agriculture is given due attention and you have mass production through commercial farming, I can tell you this country will be better. I can tell you even if you want to export; it is not everything you export.

That is why we feel if agriculture is transformed, it will lead to industrialisation. Kano and Kaduna are where a lot of tomatoes are produced.

But these are perishable items and they need very few days to move them to the market. Now that we don’t have railway, they take them in vehicles to the market and by the time they get to places like Lagos, half of the tomatoes would have spoilt. This is because we do not have means of processing them in Kano and Kaduna. We believe if we have to achieve agric transformation, we have to collaborate. Government has to collaborate with farmers and other stakeholders and look at how we can get a better result, particularly on the issues of production- how do you process what we produce? We all have the responsibility to move Nigeria forward.

Sometime in the past, multinationals like UAC were the first to go back into agriculture with a view to backward integration. I was part of the team that set up UAC farm. At that time, the manufacturing sector was competing in the open market. The then government asked what we can do to encourage the manufacturers. UAC had their farm in Kaduna State; Nestle in Niger and Nigeria Breweries. This led government to grant multinationals single digit loan to encourage them. You asked what happened. By the time the Federal Government established the commercial agricultural credit guarantee scheme, I asked the Minister of Agriculture what his focus is. He said the large scale farmers will access loan at single digit – but have we sat down to find out what affected the multinationals - why did all of them abandon their farms? What happened?

This is deliberate.

When I was farming in UAC Farm,

despite our serious mechanization and investment, what we could get was three to four tons of maize per hectare but when we travelled to South Africa, a single farmer harvests 10 to 12 tons of maize per hectare, while we were struggling to harvest four tons and we are a member of World Trade Organisation (WTO). Why are we not getting 10-12 tons of maize per hectare? This is an example of areas where we need to pay attention to, and be able to move forward. What is happening is a diseasereliance on a monoeconomy.

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ow far are you collaborating with the Agric Minister, Dr. Adewunmi Adesina?

Well, I had a one-on- one discussion with him and I said to him - 'I hope and I pray you would be able to take the Transformation Agenda to a peak of no return.' This is because our country has been consistently inconsistent in policy summersaults. Do you understand what I mean? If you stand for 5 to 10 minutes with Dr. Adesina, you will be convinced he has what it takes to transform this sector. I participated in some of his agenda and I am waiting for stakeholders' meeting. Each time we write him, he gave us audience. In fact, what we have done in Kaduna Chamber is not only to carry out annual international trade fair, we have introduced some other things so that we are engaged in activities all round the year.

Agriculture fairs is another thing we will be doing. We shall invite you when it kicks off in the year. The minister is even looking forward to the actualisation of such fairs. I was in the southern part of Brazil recently. If you could recall, Brazil was one of the worst nations – their monetary policy, everything was bad. They used to be the highest debtor to the IMF. But now, Brazil has a very strong economy. They are even creditor to IMF now. They borrow IMF money.

The farmer I slept in his house has an abattoir. On an average, he slaughters not less than 1000 heads of cattle a day.

Do you think we cannot do it? We are coming to that one day. There are so many things we need to do. Whether we like it or not, we will be forced to go back to the farm and I kept on saying one thing - God has given us abundant land. There are just one or two things to do if only we put the interests of the nation first above our personal interest.

It is not that we can’t do it.

Do you still farm?

Yes, of course but not commercial farming. I manufacture things that are agric-related. I manufacture animal feeds.

What is your position on the current fertilizer policy?

On a serious note, we have policies that are never consistent. Let me tell you a typical example of what happened

•Dr. Abdul Alimi Bello

when we started UAC Farm. It was 5,000 hectares of land. In fact, fertilizerr applications were done by aircraft.

What happened that time was that government controlled fertiliser. You pay your money in advance and when it comes to the time for planting, they give you the fertilser. Either you go and collect it from Minna or Port Harcourt or any destination which government controls. We paid around November / December against coming planting season. Did you know we did not get the fertilizer -meanwhile we had spent a lot of money on land preparations?

We had spent millions of naira and above waiting for fertiliser . We couldn’t afford to fail to farm that year.

That is what we call window planting.

There is a particular hectare you must cover for you to break even. If you invest, say, N5 million, you must be able to cover 2000 hectares and if you don’t and there is a period between which you must do your planting because rain in the north comes at a particular time. If you plant maize, it requires 140 days of consistent rain but if the rain stopped at a particular period in the year and the maize didn’t get enough water, you are in trouble. Count yourself as a loseryou have lost money.That is why the present Minister of Agriculture took away fertilizer distribution from the government to the private sector.

Another thing you want to ask yourself is the level of nutrients in the soil.

From our social study or Integrated Science, if you plant something here in Lagos or at Iseyin, it can grow but it requires a particular nutrient for it to grow well. Soil has nutrients but not all soils have complete nutrient. That is why you have to find out which nutrient the soil is lacking and then you add fertilizer. But how many of us take time to find out which nutrient is deficient in a particular soil, and what quantity is needed? Not only that, the fund that government said they are making available to farmers - are they really available? They make the loans condition so difficult for farmers to access.

These are things we want to look at and that is why we are organising the seminar; we want a situation whereby the next agric minister continues from where Adewunmi stops and not to somersault the policy he introduced.

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34 — Vanguard, MONDAY, FEBRUARY 3, 2014

Homes & Housing Finance

Ogun plans low cost housing scheme

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gun State Housing Corporation said it’s planning to deliver low and middle income housing estates across the state.

In a statement, the corporation said its flagship scheme, Plainfields Estate, was already being developed as a community housing prototype that would provide the citizens an opportunity to buy into its plan over the next few years.

According to the statement, the estate will, upon completion, have a variety of apartment units. “The corporation will deliver houses and serviced plots across the three senatorial districts, but will avoid a blanket approach.

This means that these projects will be tailor-made to suit the needs of the locality and the market. Everyone who has recognisable means of livelihood in the formal and informal sectors is qualified to buy. However, the corporation is keen to help those who need mortgages and who are first time buyers. Because our objective is to encourage home ownership, the owner-occupier will always be our preferred buyer.

UK mortgage approvals jump in 2013

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he number of mortgages approved for house purchases rose by 20 percent in 2013 compared with the market doldrums of the previous year.

There were 734,969 home loans approved in during the year, with the numbers accelerating towards the end of the year, the Bank of England data shows. This was up from 612,654 the previous year, when many first-time buyers were locked out of the mortgage market.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said he expected demand to keep rising in 2014, but that mortgages would not get any cheaper. “We expect this to continue this year as Help to Buy [governmentbacked mortgage scheme] gets into its stride and lending appetite remains strong, with most lenders aiming to do more lending than they did last year,” he said.

The Bank of England figures show that total lending to individuals has been pushed to record highs in recent months by the revival in the housing market.

C M Y K

•Low cost housing development

Mass housing: Lagos adopts alternative building method Stories by YINKA KOLAWOLE, with agency report

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agos State government has adopted the use of dry construction technology for the building of the proposed 1008 units Ijora Badia housing project. The system is being used as a testrun in a bid to promote efficiency and cost effectiveness in the state’s quest for mass housing delivery.

The dry construction technology is based on minimal usage of water and sand, focusing on reinforced concrete, boards and metallic

structures that are assembled as prefabricated houses. The finished works include assembled partitions, suspended ceilings and raised floor systems.

Governor Babatunde Fashola said during a visit to the project site, at Ijora, that the new method of construction adopted for the project ensures that work was ongoing despite the absence of work equipment at the site.

Fashola noted that there are numerous benefits from the technologically driven approach. “Traditionally, it takes about one person a day or more to lay about 100 blocks. With this system, you can do a thousand blocks a

day, so, you would see that you are gaining 10 times more efficiency. Over time, we will now write a manual hopefully from them about a Nigerian developed system for efficient, cost effective saving mass housing delivery,” he said.

The governor also used the occasion to assure former occupants that over N200 million has been approved for their resettlement, calling on those involved to contact the office of the Attorney General of the State who is in charge of the disbursement of the funds.

Prof. Olumide Olusanya, one of the promoters of the technology, speaking on the

new building technology, noted: “Some 20 years ago, when roads were being built, they used to mix the cement, the concrete and the form work in the middle of the road. Today, the construction technology has changed. The drain is constructed off site, they bring the mechanical shovels, excavate, put the drains in and your road is almost half done. It is the same way we have approached this housing project.”

Fashola said Lagos State is keen on using locally developed technology to tackle the housing shortage in the state, adding that skilled professionals are involved in the project. “We have top intellectuals like professors, architects and others who have designed the system.

“Yes, there is not a lot of work going on on site here, but there is a lot of work going on off-site. The form work which the Professor was explaining to us that makes four blocks in one vibration sequence instead of one block, the form work that makes the block with the conduit already laid inside the blocks so that the electrical fittings and the conduit pipes can be installed at the time that the blocks is being laid are all being prepared off-site. It means a lot of time would be gained in addition to efficiency, leading to more cost effective houses as materials are being used optimally while the quality is not being compromised. So, in the next few months as they ’ve explained, the first buildings will be on this site but the work is being done mentally and technologically off-site so that when they deploy everything goes on smoothly,” Fashola stated stated.

Three firms partner on N1bn affordable housing scheme I

n a bid to compliment government’s effort to tackle the problem of housing deficit in Nigeria, three firms have signed a partnership agreement on the provision of N1 billion low-cost housing scheme in the country. The scheme tagged: ‘Igle Irorun’, is an initiative of Lafarge in response to the challenges of urbanisation and the housing gap estimated at about 17 million units.

The partners, LAPO Microfinance Bank, Lafarge Cement WAPCO Nigeria Plc and French Development Agency (AFD), were said to have signed the agreement for the project in October 2013 at the plant of Lafarge Cement WAPCO in Sagamu, Ogun State.

Speaking on the development, Project Manager, Affordable Housing, Lafarge Cement WAPCO, Mr. Boyer Aurelien, said the scheme is aimed at providing affordable housing to low

income earners in the country, with a projection of reaching out to 400 clients by the end of April this year. He said the intervention would commence in Sagamu and Abeokuta in the first phase. “We provide feasibility for people who ordinarily will not have access to these services that will improve the lives of the beneficiaries.

While LAPO has a history of assisting poor households by providing financial services and empowering the people,” he said.

Aurelien further stated: “The Lafarge Group is committed to achieving the objectives of building mega cities precisely for low income people by improving the conditions of living. At Lafarge, we have the ambition of improving housing conditions for two million people around the world.

Nigeria is one of our key priorities when it comes to affordable housing.

We have conducted an extensive

market survey on how we can best help low income people; we identified LAPO as the best partner in affordable housing based on its brilliant outreach and knowledge of low income people in this country.”

On his part, Managing Director, LAPO, Mr. Godwin Ehigiamusoe, said the company, as part of the agreement, was offering credit facilities to clients who desire to own houses in furtherance of its social and environmental mandate of improving the standard of living of the poor. He however added that the desire to really own a house must be evident.

“The reason why we want to get involved in the provision of housing is because of our mandate of improving the standard of living of the ordinary people. We also realise that housing is not just shelter for poor people; it is also a place for their business.

Vanguard, MONDAY, FEBRUARY 3, 2014 — 35

C M Y K

36 — Vanguard, MONDAY, FEBRUARY 3, 2014

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Vanguard, MONDAY, FEBRUARY 3, 2014 — 37

Insurance

Standard Alliance to leverage on ‘no premium, no cover’ in 2014

BY GODFREY ONORIODE

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Form left: Vice Chairman of Standard Alliance Insurance Plc, Olorogun O’tega Emerhor; Chairman, Alhaji Yahaya Sa’ad; Company Secretary Agnes Okiemute Umokoro; Managing Director, Mr. Imokhai Thomas; and Group Executive Director Mrs. Orerhime Emerhor-Iwuagwu at the company’s 17th Annual General Meeting in Lagos.

NCRIB solicits support for WAII’s advancement Stories by ROSEMARY ONUOHA

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he Nigerian Council of Registered Insurance Brokers, NCRIB, has advocated the support of all insurance constituent bodies for the West African Insurance Institute, WAII, to allow it meet the mandate of producing the required qualitative human resource for the industry in the West Africa sub region.

President of the NCRIB, Mr. Ayodapo Shoderu made the appeal during the visit of the new Director General of the Institute, Mr. Frederick

Bowen-John to the Council in Lagos.

Shoderu opined that the insurance industry in West Africa had not been able to live up to its expectations because of insufficient human resource or professionals who will render creative and dynamic insurance services to meet with changes in consumer’s expectations.

“For the dire challenges of human resources to be met in the Nigerian insurance industry, like its peers in other West African countries, all training institutions of which WAII is inclusive, must be given required support and patronage by reputable

professionals and bodies in the sector” Shoderu stated.

The NCRIB President urged WAII to create more relevant courses for insurance brokers in its curriculum, considering their pivotal place as the main professionals in the insurance industry value chain.

Shoderu disclosed that part of his administration’s thrust of office was to effectively liaise with notable professional bodies in Nigeria and across the world in order to grow human capital development of the insurance broking sector and that the same gesture would be extended to WAII. Responding, Bowen-John

who came in company with the Deputy Director General of the Institute, Mr. Abdul Rasheed Akolade said the visitation was to galvanise greater interest of insurance brokers in the Institute, going by the existing records which revealed that most of the students that attended the institution were sponsored by underwriting companies.

He promised that the new management of the Institute had brought with them qualitative years of human resources, administrative and insurance professional experience, which they would bring to bear in turning the fortunes of the industry around, to the delight of the promoters.

Union Assurance records 12% growth in GPI

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nion Assurance Company Limited has posted Gross Premium Income, GPI, of N4.303 billion for the 2012 financial year.

The figure represents a 12 per cent increase from N3.842 billion realised in 2011.

Addressing shareholders at the company’s Annual General Meeting, AGM, in Lagos, Chairman of the company, Mr. Emeka Emuwa said that year 2012 in retrospect was challenging, yet the company delivered modest growth.

The Chairman said that net premium income rose from N2.874 billion in 2011 to N3.549 billion in 2012 while life and retail business portfolio increased by 61.7 per cent from N1.040 billion in 2012 to N1.681 billion in 2012.

He said “The company

recorded a substantial increase of 21.5 per cent in claims settlement within the period under review, recording N955 million in2012 from N786 million in 2011. This was largely due to the occurrence of a number of one off claims. The company’s total assets grew by 2.5 per cent from N9.026 billion in 2011 to N9.261 billion in 2012.

On the future outlook, the Chairman said “Without much doubt, 2013 promises to be an interesting and rewarding year for us all even as we grapple with stringent regulatory changes. Union Assurance management is committed to pursuing strategies that will bring about optimum utilization of resources and reducing cost.

All agencies will be re-tooled for expanded operations and business growth. We expect

them to triple premium revenue over the next few years and hope to consolidate our investment income to maximum result.”

He said “As part of NAICOM’s transition to riskbased supervision and strict observance of the provision of section 50 of the insurance act 2033, it announced the enforcement of the ‘’ No Premium No Cover” policy effective from 1st January 2013. This policy aims to stimulate liquidity within the industry eliminating the large provisions of outstanding premium income and a major risk faced by insurance companies. It has therefore become unlawful for insurance companies to grant cover to an individual or corporate body without first receiving premium. Though the ‘’No premium no cover” policy may currently present

some challenges, we expect to overcome these.

We will continue to overhaul our systems and processes to support the rapid growth in our life and retail businesses.

“We recognize the wide range of risks that our systems are subjected to in today’s business world and have made significant stride in our quest to run robust information communication technology (ICT) solutions to prevent potential breaches of our customer’s information.

We have deployed an effective document management system and both life and general businesses are already on a parallel run of the Core Business Application (CBA) that currently drives our businesses,” the Chairman said.

he Board of Directors of Standard Alliance Insurance plc has assured its shareholders that it would ride on the opportunities provided by the ‘no premium, no cover’ policy to grow its business.

Chairman of the company Aliyu Yahaya Sa’ad, stated this at its 17TH Annual General Meeting, AGM, in Lagos, adding that the company plans to continuously provide the best possible service to its existing clients and competitively capture the interest of new clients through employing aggressive marketing strategy.

According to the Chairman, the ‘no premium, no cover’ policy has come to stay and the company will work with the National Insurance Commission, NAICOM, to ensure the full implementation of the policy, adding that the policy will help to eliminate the problem of unpaid premium in the industry.

On future outlook, the Chairman said “We shall also strategically build on our reputation as one-stop general insurance service provider to remain competitive and generate a profitable after tax position as we look forward to a boisterous year ahead.

He added that investors will not be left out in the expectation of the company for a better performance as the prospect of a reduction in credit risk would make the company attractive to potential investors and repose more confidence in the management of the company.

On financial performance the Chairman said that the company was able to post an underwriting profit of N2.6 billion from an underwriting income of N4.99 billion at the end of December 2012 against N4.25 billion recorded in the previous year of 2011, representing a growth of 17.4 per cent. Gross premium grew by 19.5 per cent from N4.55 billion recorded in 2011 to N5.38 billion recorded at the end of December 2012, while investment income rose to N208 million in 2012 as against N176 million achieved in 2011.

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38 — Vanguard, MONDAY, FEBRUARY 3, 2014

People in Business

We w ant ttoo im pr want impr proove quality of journalism and broadcasting – MODIBBO KAWU

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r. Is’haq Modibbo Kawu is the Chairman/Chief Executive Officer of Abujabased Word, Sound and Vision (WSV) Multimedia Limited, a complete media outfit that cuts across print, radio and television.

Succinctly tagged 'The Complete Company', WSV apart from core media, is also into research, training and consultancy. In this chat with Financial Vanguard in Abuja, Kawu talks about what inspired him to start WSV, the challenges and his dreams for the company.

Excerpts: Background: Having graduated top of his class in mass communications at the undergraduate level, Modibbo Kawu was given the university's award for the best student. Thereafter, he obtained a master’s degree in political science and have worked in journalism and broadcasting for 37 years before establishing WSV. Said Kawu: “I have worked for Radio Nigeria, reported for Radio France International, Radio Netherlands and BBC World Service. I was a pioneer member of staff of Radio Kwara, pioneer General Manager of Kwara State Television Authority and editor of Daily Trust Newspaper. I was also Chairman of the Editorial Board.” It was, therefore, not surprising when in 2011, having traversed the entire length and breadth of the industry, he decided to build as it were, a one-stop shop for the media.

Inspiration: “I left in 2011 to start Word, Sound and Vision (Multimedia) Limited and the whole idea was to put together under one roof everything I have done in all the media, as well as add new things marketing communications, event marketing, internet journalism etc, as well as research and consultancy.

That is why we say that WSV is a multimedia company. We want to be able to add value in all the areas of media, provide platforms for service at various levels and then provide a strong training platform for media today.

When you listen to radio, watch television or see articles written by people in the newspapers, a lot is very deficient so we feel there is a niche that our company can productively engage our C M Y K

community in and with, to be able to add value and improve the quality of journalism and broadcasting. We also want to do productions, documentaries, provide platforms to record music, videos and all that, and then do research, opinion polls, perception index analysis, statistical analysis, focus group discussions etc. So we want to be a one-stop shop for the multi-dimensional challenges associated with media work in the 21st Century for clients in

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By EBELE ORAKPO

life is very difficult so I knew that it was never going to be easy. The whole idea of this company has been in my head since 1987 but the company was not registered until a few years ago and we did not start functioning as a company as such until a year ago. It is a very challenging business environment. When I was starting, one of the people I respect a lot in this country said to me: ‘Modibbo, I have to praise your courage but Nigeria is very hostile to honest business.’ The

I come from a background where I have been told from day one that nothing comes easy and you know, the blow that does not break your back strengthens it so we are trying to show that we have some spine

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•Inside WSV's Language laboratory. different areas of social existence,” he said, adding: “We have installed a sound studio, probably one of the best anywhere; we have platforms to edit, a language laboratory, a creative hub where we bring in people from different media background so that together, they can provide solutions coming from the different backgrounds each one brings to the job. We have a platform of graphics and then online facilities. Our television studio is almost ready. We intend to also do something in newspaper as well as magazine. So it is a holistic venture.”

Challenges: Speaking on challenges faced by businesses in Nigeria, Kawu said: “Right from when I was eight years old, my father used to tell me that every true beginning in

business environment is very tough no doubt, but we have depended absolutely on the goodwill of a lot of people who have helped us through the teething phase. It is a very gradual process. It is not often in the media world that one has had the opportunity to have done radio, tv and newspaper. A lot of times, people have either done electronics and never touched print and vice-versa. I have been very lucky to have done everything, working for some of the best media organisations in the world. I think all of that provided the basis for what we have done.

“It is very tough trying to do business here but it is even tougher trying to do what has not been done before. People have either done radio or television or newspaper. Now you have somebody being as presumptuous or audacious

as we are, trying to do everything under one roof, it is not easy. Like I said, I come from a background where I have been told from day one that nothing comes easy and you know the blow that does not break your back strengthens it, so we are trying to show that we have some spine,” he stated.

A n o t h e r challenge is the low quality of labour force. “I have been aware of that for a very long time. I saw

•Is’haq Modibbo Kawu...It is a holistic thing that nobody has ever done

that practically as the editor of Daily Trust Newspaper.

The quality of graduates coming out of the school system leaves a lot to be desired but what organisations have to do is to invest a lot of money in training. We plan to do a lot of training. We started with an in-house seminar for the staff when we were taking off last year and we are hoping that as we begin to stabilise, we send our staff to different institutions in the country and hopefully, abroad. I was reading an interview with the founder of Phillips Consulting on their 20th anniversary and what struck me was what he said about training people who might just move away. He said the good thing is that when you train people properly, those that will leave would have taken away your work ethos and become your ambassadors wherever they go and I believe in that very strongly. I believe that if you train people, even if they move away, you have not lost anything because you have assisted the growth of your own country by helping to grow certain individuals who are really good quality staff."

Employees: Speaking on the number of employees, Kawu said: “We (my wife and I) run a school in Kaduna. We also have a school in Ilorin. So now, I am employing close to 50 people in the different endeavours.

In the multimedia area, we are about 20 and as I said, because we are trying to do so many things, we would eventually want to begin to make money and employ people at other levels. WVS eventually would stabilise at a point where we will have

between 35 and 50 members of staff doing different areas of media in the long-term but right now, we are providing this modest opening for people. And then we are going to have platforms of engagements with other consultants who come on short-term basis to work on projects with us so they are going to be part of the database of experts who work with us on periodic assignments.

Expectations: “We hope that in five years, we should have completely stabilised and be touching the lives of people all over Nigeria and beyond because we are thinking in terms of partnerships within and outside the country. We hope that we would also have our own radio and television channels, newspaper as well as magazine and continue to provide services and training. It is a holistic thing that nobody has ever done.

We are going to be on the lips of people all over the country where media is concerned and a lot of people who knew me when I went to work early in broadcasting will remember seeing aspects of my life from that level and later on, as a columnist and they will also see this side of me as a complete media person who has straddled every aspect of media and who is giving back to society that he loves very much. I think our country has tremendous capacity for change and development and I have always advocated change and development and I believe that WVS will be the harbinger of the progressive Nigeria that we believe will satisfy the intersts of all the people in this lovely country.”

Vanguard, MONDAY, FEBRUARY 3, 2014 — 39

Tax Matters

Fighting tax evasion in Nigeria F

Definition of Tax Evasion and Avoidance ax Evasion as defined by the Canadian Department of National Revenue is “the omission or commission of an act knowingly with intent to deceive so that the tax reported by the taxpayer is less

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• Kabir-Mohammed-Mashi , Ag DG, FIRS than the tax payable under the law, or a conspiracy to commit such an offence.

This may be accomplished by the deliberate omission of revenue, fraudulent claiming of expenses or allowances, and the deliberate misrepresentation, concealment or withholding of material facts.”

Tax practitioners have described tax avoidance as a situation where the taxpayer arranges his financial affairs in a way that would make him pay the least possible amount of tax without infringing the legal rules. It is a term used to denote those various devices which have been adopted with the aim of saving tax and thus sheltering the taxpayers’ income from greater liability which would have been otherwise incurred.

Tax evasion is the wilful and deliberate violation of the law in order to escape payment of tax which is imposed by law of the tax jurisdiction, while tax avoidance is the active means by which the taxpayer seeks to reduce or remove altogether his liability to tax without actually breaking the law.

While the law regards tax avoidance as a legitimate game, tax evasion is seen as immoral and illegal.

These ‘twin devils’ have created a great gulf between actual and potential revenue. The government has perennially complained of the widespread incidence of tax avoidance and evasion in the country as companies and other taxable persons employ various tax avoidance devices to escape or minimize their taxes or deliberately employ fraudulent ways and means of evading tax altogether, sometimes with the active connivance of tax officials.

Tax Evasion Schemes The problem of evasion is much more glaring under the direct assessment method under which the self-employed are taxed than with the indirect assessment method under which employees are taxed. It is generally

believed that the self-employed pay less than 10 percent of their personal income tax to the government yearly, while employees pay the remaining 90 percent.

Even civil servants and the other salaried workers are equally guilty of this nefarious practice in the manner in which they abuse the personal allowances and relief statutorily provided by the law. Thus, almost every potential Nigerian civil servant, in their claim for personal allowances and reliefs, would claim falsely that he is married with four children.

Tax evasion has continued to remain an endemic problem in this country.

Tax evasion” ... has become so widespread that there now exists a cash economy of widespread proportion which the tax man has no control”.

Tax evasion may be perpetrated in several ways, some of which comprise the following: False claims in respect of children, wife, capital allowances, dependent relatives, life assurance premiums etc; Understating or false declaration of income receipt from trade, business, professional, vocation or employment; Omission to state gross amount of dividends, rents etc. received in Nigeria from outside sources.

False claims of contribution to a pension scheme.

Reduction of tax liabilities through fraudulent tax returns.

Giving incorrect information in relation to any matter or thing suffering the liability to tax of any taxable person.

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Introduction or the development and growth of any society, the provision of basic infrastructure is necessary.

This explains why government shows great concern on how funds can be made available to achieve their set goals for the society. Government needs funds to be able to execute its social obligations to the public. These social obligations include but are not limited to the provision of infrastructure and social services. Meeting the needs of the society calls for huge funds which an individual or community could not contribute alone. One of the main methods through which funds are acquired for the government is through taxation. Citizens are expected to discharge their civic responsibility by paying their taxes to contribute to the development and administration of the society at large.

Tax evasion and avoidance remains the greatest problems plaguing tax administration in Nigeria. Apart from salaried employees, most citizens in Nigeria pay inadequate taxes or no taxes at all and this has led to a substantial loss of government revenue.

The reasons for such behaviour could be attributed to several factors; the insufficiencies and complexities of tax legislation coupled with taxpayers taking advantage of loopholes in the tax law, high rates of taxation and a lack of sense of civic responsibility amongst the taxpayers.

Tax evasion and avoidance have been a menace which seem to have defied solution had bedevilled the Nigerian tax system right from colonial times.

While some have blamed the situation on the tax authorities for not living up to expectation with regards to tax administration, others attribute it to the unpatriotic attitude of the taxpayers.

This disturbing aversion to taxation has some historical antecedents.

Traditionally, there has always been a hostile response to the payment of tax by the people who viewed tax collectors as a nuisance to the society. And the few that paid tax, did so with the greatest reluctance. Even in the Bible, instances abound where the Jews treated the tax collectors with disdain and contempt.

This negative attitude continues in modern times and with taxpayers perfecting various methods of frustrating the tax authorities. To say the least, this negative attitude to taxation is unpatriotic in view of the well recognised role which taxation plays in the economy. In fact, it is undeniable today that every government depends to a large extent on taxation not only for its socio-economic development but also as a means of ameliorating the existing inequalities of wealth in the society.

Tax evasion and avoidance have been a menace which seem to have defied solution had bedevilled the Nigerian tax system right from colonial times.

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Types Of Tax Evasion Customs Duties: typical area of tax evasion in Nigeria is the attempt to evade customs duties.

Typically importers try to evade customs duties by either under–invoicing or changing the product description to attract lower rates of duty. A lot of goods are brought into the country through

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unauthorised routes. This is intended to evade the payment of customs duties.

Personal Income Tax: nscrupulous employers may try to evade paying employment taxes. Most often this is done by intentionally failing to remit to the tax authorities the employment taxes it collected from its employees. After a certain amount of time, the employer will then dissolve the company or claim bankruptcy, leaving the employment taxes unpaid.

Other methods are paying the employees in cash; filing false payroll tax returns, or failing to file payroll tax returns.

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VAT Evasion: ne of the simplest ways to evade VAT in Nigeria is to inflate the claims to deduct VAT paid at earlier stages or outright fabrication of fake invoices for purchases never made.

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Curbing Tax Evasion he federal and various states governments have commendably deployed several measures aimed at curtailing or minimising tax evasion in Nigeria.

Most of these measures are contained in various legislation empowering the government department, ministries, agencies or any commercial bank with whom any company has any dealing with respect to any kind of transaction or business to demand from such a person a tax clearance certificate of three years immediately preceding the current year of assessment. In a similar manner, the government introduction of provisional tax within 30 days by corporate entities or the declaration of interim dividends constitute a commendable anti-evasion endeavour.

In some states, similar anti-evasion measures have been adopted.

In other instances, tax evasion measures take the form of legislation which compels performing musicians to pay tax to the government before being allowed to play. Stiff penalties were imposed for failure to comply with such directives.

Our tax laws are replete with punitive momentary measures as well as criminal sanctions aimed at solving this problem.

One of such many provisions is section 66 of the Companies Income Tax Act which conferred on the Federal Inland Revenue Service (FIRS) the power to seize and sell defaulting taxpayers’ goods, chattels as well as their premises in extreme cases in order to recover the amount of tax owned by such taxpayers.

Others are found in the FIRS ACT of 2007 which stipulates the following offences and penalties as follows: Section 40 – FAILURE TO DEDUCT OR REMIT TAX The penalty on conviction is pay tax withheld or not remitted. In addition to a penalty of 10% of the tax withheld or not remitted per annum plus interest at the prevailing CBN rate and imprisonment for a period not exceeding three years.

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C M Y K

40 — Vanguard, MONDAY, FEBRUARY 3, 2014

C M Y K

Vanguard, MONDAY, FEBRUARY 3, 2014 — 41

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is wealth was as legendary and mysterious as that of Da Rocha in Lagos.

Incidentally, there was an overlap in the respective grips on financial power allied with political power of Dantata and Sir Ojukwu in the three regions – East, North and West – under colonial rule. One can now even say, with the benefit of hind sight, that the British went out of their way to financially promote certain individuals, in each region, in order to use them as listening posts so as to prolong colonial rule.

While the Governor Generals of Nigeria, resident in Lagos, sat on small chairs, when Sir Ojukwu and Da Rocha sat on couches to receive them, the Alhaji Dantata of their generation would only allow the Governor of the then Northern Region to seat on a mat covered with Persian rug, when he came to visit in his private home which was situated on land larger than that of the Ado Bayero, the Emir of Kano.

He was a great produce merchant whose diversified business included some of the groundnut pyramids which

The Inheritors: Why Nigeria’s One Man Business Never Last – 3 Alhaji Dantata simply locked up his made Kano famous before the oil boom demolished them. He was reputed to be the nation’s largest exporter of groundnuts at a time when that commodity accounted for a substantial percentage of the export earned by Nigeria and when true federalism was the prevailing constitution governing the macroeconomy.

Legends have it that Alhaji Dantata was not only into groundnuts but he also dealt in hides and skins, onions and all the agricultural products which the North had to offer to a nation undergoing political and economic growth pains. He had such a strangle hold on commercial activities involving farm produce, as the biggest agent in the entire north and the country that several wagons of the Nigerian Railways would have gone up and down the country empty if the great merchant refused to send produce for just two days.

And, he traded both ways – from North and from the South. He was also the largest

buyer of kola nuts from the South in addition to locally grown rice, fruits, peppers and tomatoes. He was also one of the biggest distributors of imported food items, textiles and perfumes. His warehouses were bulging with tomato puree, Titus and Gesha sardines as well as other provisions. Needless to say, his activities dominated the Northern Nigeria Marketing Board which was established to organize the movement of produce and to guarantee quality, especially for exports.

Later control of the Marketing Board became the springboard to enormous wealth by young and educated Northerners for several decades. They served as intermediaries between the illiterate farmers and the customers in Europe needing Nigerian groundnuts, palm oil, coal, tin, hides and skins – among other products.

In fact he was in control to the extent that it was said that millions of Nigerians would have starved if Dantata

warehouses for one week. He never stepped into a bank.

Like most great merchants who started small, his houses and shops were his banks and they were stuffed with large amounts of money; so much so that he eventually did not know how much he was worth.

As the stores multiplied and he had to delegate more authority to his storekeepers, he eventually lost control of his accounts and increasingly of the businesses he started.

He was also known to sponsor those agitating for Nigeria’s independence from colonial rule. People like the late Malam Aminu Kano – young, educated Northerners – who had joined Southerners like Herbert Macaulay, Azikiwe and Awolowo pressing for independence from British domination received support from him.

Perhaps, it was on account of his support for the agitation for independence and perhaps because, too much avarice took over or because he was seriously defrauded by his storekeepers, but, suddenly, Dantata found

himself in deep financial trouble. Increasingly, he was finding it difficult to pay his suppliers and his business empire was in danger of collapsing.

Then, one day in 1956, or so, the entire country was stunned as the newspapers reported that Alhaji Dantata, had been arrested and charged with printing and circulating counterfeit currency. For some of those who knew the Kano business magnate, it was a trumped up charge, partly on account of his support for independence and partly because he was also suspected to be nursing the ambition to use his enormous wealth to become the next Emir of Kano. For others, perhaps out of envy or because they could not figure out how one person could come about with so much money; they had a clue at last.With bewildering speed, he was prosecuted, found guilty and sentenced to several years in prison. Till today, there is a great deal of controversy regarding the evidence on which Dantata was convicted. But, about one thing, there can be no dispute, the consequences were devastating – the sentence wrecked Dantata’s business empire.

42 — Vanguard, MONDAY, FEBRUARY 3, 2014

E-Commerce

Amazon shares fall 9% after loss warning

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mazon.com Inc shares fell more than 9 per cent in early trading on Friday, after the online retailer warned of a possible loss in the current quarter and its quarterly results missed expectations in the holiday shopping season.

At least seven brokerages cut their price targets on the stock, by as much as $30 to a low of $415. Another seven raised their price targets by as much as $100 to a high of $500.

Amazon shares were down at $372.81 in early trading.

The stock had gained by about a third in the last six months.

The world’s biggest online retailer said it expects operating results for the current quarter to range from a $200 million loss to a $200 million profit, compared with a profit of $181 million a year earlier.

The outlook was somewhat conservative, reflecting Amazon’s focus on investing aggressively in growth opportunities and new initiatives, analysts said.

Twitter buys patents, seals licensing pact with IBM

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witter Inc has bought 900 patents and signed a cross-licensing agreement with IBM, making peace with Big Blue and bulking up on its intellectual property portfolio as it takes on larger rivals Google and Facebook.

The agreement announced on Friday comes after International Business Machines Corp accused Twitter in November - on the eve of its high-profile initial public offering - of infringing three of its patents. At the time, it underscored how few patents the six-year-old social media company possessed in relation to more established rivals.

A cross-licensing agreement will help safeguard Twitter against similar claims in the future.

Twitter ’s legal director, Ben Lee, said in a joint statement with IBM on Friday.that, “This acquisition of patents from IBM and licensing agreement provide us with greater intellectual property protection.

How entrepreneurs can leverage online market place Stories by JONAH NWOKPOKU

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nline market is a type of e-commerce site that provides opportunities for online businesses to transact businesses relying primarily on sites other than theirs. It refers to a type of e-commerce site where product and inventory information is provided by multiple third parties, whereas transactions are processed by the market place operator. In an online market place, consumer transactions are processed by the market place operator and then delivered and fulfilled by the participating retailers or wholesalers.

Compared to vendorspecific online retail stores, selection is usually wider, availability is higher, and prices are more competitive.

Examples of online market places include eBay or our own Kaymu.com.ng or Online Exchange, OLX in Nigeria.

Entrepreneurs who do not have the resources to build, host and maintain websites for their businesses can leverage on this type of platform to not only create a web presence for their business, but to also grow profits as they would make their products and services available to a wider range of customers.

Speaking on how entrepreneurs can take advantage of this type of platform to grow businesses, the Managing Director of Kaymu.com.ng, Massimiliano Spalazzi, noted that online market place fosters entrepreneurship by strategically positioning small to medium scale businesses before a large homogeneous audience to generate sales.

He explained that business savvy entrepreneurs have embraced the online market

place as a mechanism for transforming their business operations, adding that added value of the online market place include opportunities to increase revenue, ability to open 24 hours a day, seven days a week and the capacity to use the internet’s interactive nature to enhance customer service.

According to him, “How an entrepreneur exploits the opportunities the online market place presents to transform relationships with

customers is crucial to his or her success as the online market place is changing the face of entrepreneurship.”

Spalazzi further explained that in Nigeria, Kaymu.com.ng has created a meaningful presence for entrepreneurs by committing to an integrated marketing plan focused on creating maximum exposure to small and medium scale sellers on the platform.

He said, “Owning a shop on the online market place is

Mr Vitus Ezinwa, General Manager, Human Resources (right) and Mr Kachi Onubogu, Commercial Director, both of Promasidor Nigeria, makers of Cowbell Milk having a discussion during the company's 2014 Sales / Marketing Conference held at the Transcorp Hotels, Calabar, Cross Rivers State.

Facebook team visits Konga.com

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twelve man team from the social network giant, Facebook, has paid a courtesy visit to Nigeria’s online retailer, Konga.com.

Nichola Mendelsohn, Head of Facebook, Europe, Middle East and Africa, who led the team said while addressing Konga’s leadership and marketing team, that what motivated the visit was that

Konga’s success story with a reputation that has gone beyond local shores is quickly gaining traction around Africa despite having only been in existence for less than two years.

“We were really impressed with how Konga has been able to stamp its footprint in Nigeria in such a short time with plenty of positive

CNN’s Africa Start-up hosts Easy Taxi

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essential to maximising exposure to a mass customer base. Entrepreneurs can take advantage of the marketing channels, huge customer base and resources implemented by online marketplaces to build their businesses.

Through the online marketplace, small to medium scale businesses can market their products and services globally and reduce the expense of marketing, advertising and staffing.”

he Founder/ CEO of Nigeria’s taxi hailing company, Easy Taxi Bankole Cardoso, has been featured on CNN’s Africa Start-Up, a new programming strand that shines the spotlight on African Startups and entrepreneurs.

Explaining the idea behind the taxi application during the programme, Cardoso said, “It’s as easy as the name. I wanted it to be simple for customers, very easy for users to download the app and request a taxi at a click.”

He noted that, in the long run, he sees Easy Taxi changing the taxi culture in Nigeria with hopes to standardize the pricing of taxis in the country.

He said that the taxi hailing app which was launched in Nigeria six months ago has received impressive response from Nigerians.

“Demand is catching on. I’m bringing a completely new model, a completely new idea to Nigeria, it’s not where we want it to be yet but it’s getting on,” he said.

feedback coming from users on Facebook,” she said.

She also expressed satisfaction with the successful execution of Konga’s Black Friday/Cyber Friday-Fall Yakata and Konga’s Christmas Campaigns and disclosed that Facebook will further strengthen its relationship with the Konga brand with mutually beneficial partnerships that would help the brand and the over 12 million active people using Facebook in Nigeria.

In response, the Chief Operating Officer of Konga.com, Alex Kamara, on behalf of Konga team, thanked the Facebook team for taking out time to visit. He noted that, “Konga always goes where its users love to go,” and used the opportunities to highlight some of the initiatives that Konga has planned for its users in the coming year.

Vanguard, MONDAY, FEBRUARY 3, 2014 — 43

Advertising, Media & Marketing ANTISEPTIC SOAP MARKET:

Dettol deploys market matrix device to stay afloot Beyond “Happy New Year!” (Part Three)

STORIES BY PRINCEWILL EKWUJURU

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uthors of marketing books and market intelligence experts have at different times identified increase in population, changing lifestyle, search for better ways to satisfy man’s growing hierarchy of needs and competition as factors that cannot be ignored in today’s market place.

Discerning producers of consumer goods and services who appreciate consumer loyalty are everyday evolving strategies to entrench their brands in consumer’s heart.

As the saying goes, it is hard to win a loyal customer but takes a second to lose a dissatisfied customer.

These words are premised on the array of antiseptic soaps on the shelves which has rekindled the marketing activities of Rickett Benkiser, which earlier had reinvigorated the antiseptic market, thus bringing brands like SafeGuard from Procter And Gamble, a strong contender for the top spot in the market. Tonnex antiseptic medicated soap, by Tennyson Industries Limited, BBB antiseptic soap marketed by Gavannah Trading Company Nigeria, Black soap by J.V. Nessa Nigeria Limited and Democare Medicated Soap by Victory Broad Investment and h2h Moringa soap by Vidsa Multiventure Limited Nigeria all combined to give Dettol a run for its market share.

The only attractive portion these contending brands have been able to play up is ‘pricing.’ A tool Dettol also plays on. For example, a tablet of Dettol soap sells for N100, while others sell at the same amount, but the brand activation embarked upon by Dettol has given it an edge.

In effect, the move by Reckitt Benckiser, manufacturers of Dettol Re-energize, a brand extension of the Dettol brand to align its corporate philosophy with the consumer-centric marketing matrix to attain market leadership was its engagement with various sectors where the brand plays.

The brand has succeeded in building the biggest consumer direct contact programme in Nigeria through various innovative engagement platforms, which is lacking in other competing brands. For example, through the ‘Dettol New Mum initiative,’ the brand reached 5.8 million mothers in 44 cities in Nigeria, that is about six million mothers in five years. It sampled these mothers, taught them good hygiene

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From Left: General Manager, Mass Market, Airtel Nigeria, Wole Abu; Head of Marketing, Seven-Up Bottling Company, Mr. Norden Thurston; Senior Marketing Manager, PepsiCo , Mr. Shakeel Akram, and General Manager, Value Added Services, Airtel Nigeria Mr. Victor BannermanChedid at a Press Conference to unveil Pepsi/Airtel consumer promo in Lagos recently. practices and educated them on what good hygiene does for them, their babies and their families.

Furthermore, the Dettol brand has also reached 3.5 million school children in three years by visiting 7,000 schools across Nigeria courtesy of its school hand hygiene programme, ‘Good Health is in Our Hands.’

Another strong success factor is Reckitt Benckiser’s ability to bring innovative solutions to meet the needs of its various consumers per time.

Just recently, the firm reiterated its commitment to this avowed characteristic with the launch of its newest soap variant, Dettol Reenergize.

The Marketing Manager (Personal Care), Reckitt Benckiser, Mr. Ahmed Shah, said innovation, consumer engagement and continuous research were three critical success factors that could not

be compromised in today’s competitive market. He said Dettol Re-energize, which was unveiled at a trade launch a few months ago was another product of innovation and extensive research into consumers’ want and preference.

“Our research has shown that consumers want a soap that has pleasant fragrance and ability to refresh them.

This is why we have introduced a Dettol Soap variant with a pleasant long lasting orange fragrance that refreshes and also gives them protection against germs”, he stated.

Corroborating, the Managing Director, Reckitt Benckiser Nigeria Limited, Mr. Rahul Murgai, said that being innovative has helped the company to build the Dettol franchise across markets including Nigeria. Speaking at the trade launch of Dettol Re-energize in Lagos, he described the extension of the soap category as another “great innovation”.

Murgai noted that as a product of extensive research, the new soap variant was unique for its reviving citrus fragrance and the trusted Dettol germ protection that offer consumers long lasting freshness and protection.

TwinPine, MTN sign agreement on mobile adver tising advertising

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winPine Limited, an indigenous mobile advertising network and MTN Nigeria provider of mobile telecommunications services have signed agreement to jointly provide advertisers the opportunity to serve their advertising content on MTN’s mobile portal ‘MTN Play’.

The agreement which is exclusive to TwinPine will take advantage of the tremendous traffic which ‘MTN Play ’ currently controls to give advertisers and brand owners the opportunity to reach their target market via the platform.

Speaking on the partnership, the Managing Director of TwinPine, Mr. Elo Umeh said,

“We are pleased to be partnering with MTN on this innovative platform.

Being an indigenous mobile advertising network, we have the advantage in that we understand the local market and can better help brands reach their target audiences.

We also have the technological capacity to meet the needs of advertisers however large”.

According to Umeh, the agreement not only covers mobile advertising, but also extends to mobile content purchased on the ‘MTN Play ’ platform via the Mobile Advertising Service. With this deal, Twinpine enables mobile content providers’ bill MTN users for digital content driven by mobile advertising via SMS channels.

oday, we shall conclude our customer experience agenda by considering customer dialogue and connection.

Customer Dialogue Do you hear the voice of your customers? Do you listen? If you don’t, something is wrong. You need to constantly engage your customers in a dialogue. You need to obtain ongoing feedback on your products/services, your performance versus competition, the performance of your frontline employees or even the customer’s perception of their last service experience.

Customers are a treasure trove of information and they’re usually willing to offer you insight that could help you resolve some of your knottiest problems – if only you’ll listen.

This year, you may want to reorganize your customer feedback mechanism, both online and offline. Some customers may not want to be associated with a “complaint box” but they’d be willing to offer feedback online. Make it easy for customers to get their views across to you. You may want to get a professional to analyze and report such feedback to you at regular intervals.

On your part, commit to acting on the feedback obtained. In addition, conduct studies to obtain customer perception. Customer satisfaction studies are useful, but they don’t tell the entire story. Instant feedback on most recent service experiences may be more helpful in pin-pointing areas that need improvement.

You may also want to find ways of getting your customer care line to live up to the name. If after going though the menu maze associated with automated customer care lines all they get is “you are caller number 91 waiting to speak to our consultants; you’ll need to wait for 40 minutes…,” customers will lose hope. Who wants to wait that long on the phone to reach you?

Customer Connection Begin to find ways of connecting with your customers, beyond the normal transaction-based interactions. I don’t want to use that highfalutin, but threadbare expression – relationship marketing – which today has little or no relationship in it. Get to know your customers as individuals and treat them as such. Most times, organizations treat customers as mere statistics!

That attitude won’t help you see customers for who they really are.

It’s difficult to connect with customers when all you know about them is just enough information to conduct a transaction. You’re also not going to connect with customers if the only time you call is when you want to ask for an order. You need to do things that will make the customer begin to value your relationship over and above the core product or service they buy from you.

Last line Over the last three weeks, we have been considering things that can help us improve customer experience in 2014. Some of these things are: customer focus, customer appreciation, people development, customer dialogue and customer connection.

You may recall that at the beginning of the year, many companies sent “Happy New Year” messages to their customers. The messages, by card, email or SMS, were as evocative as they were intriguing. The best for me was: You are the reason why we are here. (I can hear someone say, “So they know!”) That message bears great sentiments. But, beyond the sentiments, our message is that the best way to ensure your customers have a “happy and prosperous new year” is to serve them well. Reduce their waiting time. Listen to their complaints. Resolve their complaints promptly. Better still, give them fewer reasons to complain.

Concluded

44 — Vanguard, MONDAY, FEBRUARY 3, 2014

Agric

USAID, AGRA provide support to improve access to markets for smallholder farmers A multi-partner initiative – Strengthening Agricultural Input and Output Markets in Africa (SAIOMA) – aimed at improving smallholder farmers’ access to markets, has been launched by the United State Agency for International Development (USAID) and the Alliance for a Green Revolution in Africa (AGRA).

The initiative, which is a three-year Global Development Alliance between USAID, Bill & Melinda Gates Foundation, Rockefeller Foundation and the Swedish Ministry of Foreign Affairs, is also meant to increase farmers’ earnings and improve their well-beings and the livelihoods of their families.

The SAIOMA initiative that will also be implemented in Kenya and Malawi along side six districts in East and Central provinces in Zambia will benefit 35,000 smallholder farmers, 468 agro- dealers, and 30 Small/ Medium Enterprises.

AFAN calls for early disbursement of N14bn dry season farming grants

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he Chairman, All Farmers Association of Nigerian (AFAN) in Ogun State, Mr. Olusegun Dasaolu, has called on concerned agencies to ensure judicious and early disbursement of the N14 billion grants in support of dry season farming.

Mr. Olusegun Dasaolu made the call in Abeokuta while hailing the Federal Government Speaking in Abeokuta, for the grants to farmers.

He said that farmers in the state were happy to note that President Goodluck Jonathan had their interest at heart. ”The early disbursement will help farmers to prepare their lands, pay for labour, buy seeds and fertiliser in preparation for the season’s planting,” Dasaolu said.

Mr. Bayo Adewusi, a lecturer at the Department of Horticulture, Federal University of Agriculture Abeokuta, described the gesture as a welcome development.

•Ajibola Olawale

from the federal government, we are only lucky to have some feed millers who have come to our assistance through free training for majority of fish farmers in the country, including Kwara State.

You mean the method of fish farming in the country is still at a crude stage?

You see our method is still going below average; we still need perfection in some areas, like in terms of input support and manpower, which has to do with training to assist our local farmers.

Do catfish farmers have access to loan facilities to develop and grow their business?

It is quite unfortunate, as a supplier I have not received loan from any commercial bank. So far I have carried out projects under United Nation that is Food and Agricultural Organisation, FAO, Nigeria, where I made some supply to states that were affected by the 2012 flood.

Likewise on this GES, where I paid money into First Bank of Nigeria, FBN, where I bank, and nothing has come out as assistance from them since I wrote to them.

Finance, bane of fish farming — Kwara CAFAN boss M

r. Ajibola Olawale, the Chairman Catfish Farmers Association of Nigeria, CAFAN, Kwara State Chapter in this interview with Gabriel Ewepu bares his mind on fish farming, the All Farmers Association of Nigeria, AFAN, and how farmers could cooperate to move the agriculture sector forward.

Excerpts: How long have you been in fish farming business?

I have been a fish farmer for over 25 years, and it was after I completed and obtained my National Diploma certificate.

Which category of fish farming are you engaged with?

I practice all kinds of fish farming, which includes tilapia, catfish, and others.

Since you started this catfish farming, have you made any meaningful progress?

The only sustainable means I am living today is through catfish farming. The peak I have attained today was through fish farming.

This is because the business is highly lucrative, and had made serious impact in my live, that is why I have remained in the business for the past 25 years. For now I am self-employed and I have my own farm.

How many fish farmers do you have?

I have just one fish farm in Kwara State. I have made huge amount of money from the business for all these years. I have a minimum of 10 employees working with me in the farm.

Since you started this business have you received any form of assistance from any of the three tiers of government?

None, except this present administration under the Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina. He has made life meaningful for us fish farmers in Kwara State. Under the Growth Enhancement Scheme, GES, the aquaculture sector was one of the beneficiaries under agriculture. The 500 juveniles given to individual farmers and 5 bags of feeds subsidised at 50 per cent rate for the farmers, it has changed the lives of Kwara farmers.

How many Kwara State farmers have benefited from this policy Growth Enhancement Scheme?

We are 850 fish farmers and 795fish farmers so far have benefitted from the scheme, including those in the ministry and all the fish farmers from the local government areas of Kwara State.

How have you been able to carry along catfish farmers in Kwara State?

I thank God so far, and we have been able to form the Fadama Group under our canopy, as well as aqua culturists and Fish Farmers Association of Nigeria working together to see to the success of the GES in Kwara State.

We have over 300 members under Kwara State CAFAN, and looks forward to the registration of more members with the association, who will also benefit from the GES. With the increasing number of your members in CAFAN, can you say they have the capacity and ability to locally produce, meet the demands of Nigerians and also export catfish to other parts of Africa and the world?

Just to cover an avenue for now, and despite the GES we recorded the highest sales by individual farmers, and also the rate of fresh catfish consumption had also increased, and with what we have been given under the GES, we are still pleading if the number is not increased we might not be able to take care of the demand of fish products locally for now. This is because the awareness is there now that eating fresh fish is the best compared to imported frozen fish.

What is CAFAN’s position in the proposed banning of imported of fish by the federal government?

We are not praying for the banning of imported fish, because considering productive capacity by fish farmers in the country, we cannot meet up to 40 per cent of the local demand and consumption. So we still need frozen fish to support our local consumption of fish. Gradually, may be if this programme would be extended and increased above the initial 500 units per farmer, I think we will be able to cover the demand to 50 and 70 per cent in 2014.

Has your members received technical training from the government to boost productivity?

Actually, we have not received any training

The federal government has to intervene in this issue of accessing loans and if fish farming is to survive. We need financial assistance, because we cannot go it alone. Banks should be nurtured to see fish farmers as their friends and not as enemies.

Whenever they want to give loans it should not be given to political fish farmers, rather they should identify the practicing fish farmers, and not to give us practicing fish farmers a tie-rope, where they will be asking for collateral in form of building and other landed properties, but should ask the fish farmers to use their farms as collaterals, especially when it is not on a leased land.

Most fish farmers have been able to develop their fish ponds but feeding the fishes is the big problem but without the assistance of the banks there is no way individual fish farmers can survive it.

Are you saying CAFAN is helpless financially?

We are very helpless, because feeding occupies 75 per cent in the cost of production in fish farming.

For an individual fish farmer, it will be difficult for you to feed even 1000 fishes to a suitable size without any assistance in form of soft loans or grants.

Relationship between CAFAN and All Farmers Association of Nigeria, AFAN To some of us, All Farmers Association of Nigeria, AFAN, should be an umbrella body for farmers, including fish farmers, but this is not the case now. AFAN is for cassava and maize growers, forgetting Poultr y Association of Nigeria, PAN, cattle rearers, and other kinds of farmers.

I feel the leadership of AFAN should be rotated among the various sub sector of the industry.

Vanguard, MONDAY, FEBRUARY 3, 2014 — 45

46 — Vanguard, MONDAY, FEBRUARY 3, 2014

Aviation

We are first to successfully undergo operational audit — Dana Air Stories by LAWANI MIKAIRU

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ana Air's Chief Operating Officer and Accountable Manager, Mr. Yvan Drewinsky, said Dana is the first airline to have successfully undergone the yearly scheduled operational audit

exercise prescribed by the Nigeria Civil Aviation Authority, NCAA. Drewinsky said this during the recommencement of full commercial flight operation after the lifting of suspension placed on the airline by NCAA to enable the agency carry

out the operational audit.

The airline resumed operation with more than one hundred passengers on its MD 83 plane from Lagos to Abuja. Among the passengers on board the flight were aviation reporters.

It will be recalled that the Nigerian Civil Aviation Authority in

exercising its statutory safety oversight functions on all the operating airlines, had prescribed a yearly scheduled audit programme to ensure safety in the sky and to also avoid hitches in flight operations. Dana Air is the first airline to have successfully

undergone the operational audit exercise.

Drewinsky said the operational “ open items” NCAA requested the airline to close before resuming operation “ were items relating to standard operational procedures and had nothing to do with safety .So we closed all the items which is the reason we resumed flight operation.” He also disclosed that the airline

flight crew have been sent for refresher courses to enable them keep abreast of current practice after more than three months off duty.

He also disclosed that the airline has signed a contract with a company to deliver two new Boeing 737 with the first one arriving this week, and the other coming in February.”We are actually increasing our fleet with Boeing aircraft.” On routes, he said the airline is resuming flight operation with LagosAbuja route and will subsequently return to other routes like Calabar-Uyo-Lagos routes. at 6:35 PM.

Concessionaires must now deliver projects within 24 months — FAAN

T

he Managing Director of Federal Airport Authority of Nigeria, FAAN, Mr George Uriesi, has said the agency has remodelled the way it does its business. Concessionaires who are willing to do business with FAAN are now required to show proof of financial solvency and ability to deliver any project given to them within 24 months.

George made this disclosure during the Investment Forum organised by the Ministry of Aviation to showcase the investment opportunities in the aviation sector in Lagos. He said the numerous cases involving concessionaires against FAAN currently pending in various courts are results of due diligence not properly followed.

According to him, “ the rules have changed. The money must be there to execute the project after all the necessary papers have been signed. The era of collecting projects and not starting is gone. You must start the execution of the projects within six months and the project must be completed within 24 months.”

NCAA deploys more CPD officers to airports

O

ver 52 Consumer Protection Officers have been deployed by the Nigerian Civil Aviation Authority, NCAA, across major airports in Nigeria. These officers have been posted to more than 10 airports. This is coming just as NCAA is commended by air travelers for the Consumer Protection Directorate initiative and the way it has been mediating on complaints from air travelers. The officers were posted to these airports after successfully completing their onthe-job training called (OJT).They were deployed to join other officers already on ground at the airports. Capt. Fola Akinkuotu, DG, NCAA, said, “ the directive for thorough training and mass posting of these officers is to provide support to the transformation agenda of the Federal Government of Nigeria.”

The Director General said that with the remodeling of the airports, there should be a corresponding increase in the number of CPD officers at the airports to attend to passenger complaints.

All the airports that are involved in the exercise are Murtala Muhammed International Airport (MMIA), Murtala Muhammed Airport 1 (Domestic), Murtala Mohammed Airport 2 (MMA 2) in Lagos.

Vanguard, MONDAY, FEBRUARY 3, 2014 — 47