Issuu on Google+

JUNE 3, 2013

Local, foreign investors create N912.4bn worth of new investments in Nigeria •Investments go to Manufacturing, Agriculture, Energy By FRANKLIN ALLI

S

ome pockets of new investments were recorded in the economy in the last few years, data tracked by Financial Vanguard has revealed. The new investments came from Nestle Nigeria Plc, Dangote Cement Plc, Lafarge WAPCO Cement Plc; Western Metal Products Company Limited (WEMPCO Group) and Teragro, the agro-business subsidiary of Transnational Corporation of Nigeria (Transcorp), Makurdi, Benue State. Also in the pack are Indorama Eleme Petrochemical Limited, Port Harcourt; SABMiller Plc’s brewery plant in

Onitsha, Anambra State as well as PZ Wilmar palm oil factory and plantation at Ikorodu, Lagos and Calabar, respectively. Analysis of the new investments showed that Nestlé invested N12 billion in Flowergate factories, dedicated to the production of Maggi products, at Sagam, Ogun State. It also made an investment of N5.4 billion to set up a Distribution Center in Agbara, Ogun State; Dangote Cement on its part invested a total of N140 billion in Ibese plant with a capacity of six million metric tons built by Sinoma, using state-ofthe-art Chinese and European technology. The plant is expected to increase its capacity to 12 million

tons per year by the end of 2014, providing ample supplies for the rapidly growing South-West region of Nigeria, as well as the ability to export cement and clinker through Dangote Cement terminals in Lagos. Lafarge WAPCO on the other hand invested N75 billion on a 2.5 million tons plant at Ewekoro II christened “Lakatabu. Lafarge also invested N23 billion on power plants at Ewekoro Ogun State to generate a total of 90 megawatts both to power Lafarge’s Lakatabu cement plant and to support Nigeria’s quest for power sufficiency. Still in Ogun State, Western Metal Products Company Limited (WEMPCO Group) invested N1 billion CBN intervention fund it got through

the Bank of Industry (BoI) on a 52 megawatts power plant to provide 24 hours electricity to all its factories. WEMPCO also recently made a combined investment of N344 billion on steel, ceramic tiles plant and nail production, at its 700,000 metric tons per annum Cold Rolled Steel Mill complex in Ibafon, Ogun State to complement its existing investments in the country. The Group Managing Director, Wempco Group, Mr. Lewis Tung, gave the breakdown as follows: $1.5 billion steel, ceramic tiles plant worth $500m and a nail production plant worth $200m. Benue State also got a slice of the new investments with an injection of Teragro N1billion fruit processing plant which was commissioned

Continues on page 18

126.95

1.1

2,191.00

-20.00

16.56

-0.09

101.20 -0.99 92.84

-0.77

CURRENCY BUYING CENTRAL

*From Left; Segun Balogun, Managing Director, Wapic Insurance Plc; Aigboje Aig-Imoukhuede, Chairman, Wapic Insurance Plc, and Mary Agha, Company Secretary, at the Completion Board Meeting of Wapic Insurance Plc in Lagos. C M Y K

DOLLAR POUNDS EURO FRANC YEN CFA WAUA RENMINBI RIYA KRONA SDR

154.74 233.9824 200.3883 160.5686 1.5221 0.2865 230.4177 25.2376 41.2596 26.8706 231.6148

155.24 234.7384 201.0358 161.0875 1.5271 0.2965 231.1623 25.3196 41.3929 26.9575 232.3632

SELLING 155.74 235.4945 201.6833 161.6063 1.532 0.3065 231.9068 25.4016 41.5262 27.0443 233.1116

CBN Exchange rate as at 31/05/2013


18 — Vanguard, MONDAY, JUNE 3, 2013

Cover Story

YOUTH RESTIVENESS AND UNEMPLOYMENT IN NIGERIA: THE WAY OUT PART 5

*From left: Mrs. Ebehijie Momoh, Cluster Head, SME Banking - West Africa; Mr. Tim Hinton, Global Head, SME Banking; Mrs. Carol Oyedeji, Cluster Head for Consumer Banking, West Africa and Mr. Vivek Uberoi, Regional Head of SME - Africa, all of Standard Chartered Bank, during a press conference, to launch the 'Straight 2Bank' product in Lagos.

Local, foreign investors create N912.4bn worth of new investments in Nigeria Continued from page 17 March last year by President GoodLuck Jonathan. Teragro, the agro-business subsidiary of Transnational Corporation of Nigeria (Transcorp) signed an agreement with the Benue State Government for Benfruit, the fruit juice concentrate company. The plant, which is located in the Makurdi Industrial Estate, is situated on one hectare of land. It has installed capacity to produce orange, mango and pineapple fruit concentrates at up to 26,500 metric tons per annum. Anambra State was not left out as South Africa’s brewery giant, SABMiller Brewery invested $100 million dollars (N15 billion) on its first beer plant at Onitsha for the product launch of Hero Lager. The project was awarded in March 2011 to Jagal Nigeria Limited and was completed within 18 months. The new plant which has an annual capacity of 500,000 hectoliters was also commissioned by President Goodluck Ebele Jonathan along with Governor Peter Obi and other government dignitaries. Also in attendance were senior officials from SABMiller Plc including Mr. Mark Bowman, Managing Director, SABMiller Africa. In addition to these, Indorama Corporation is also investing US$1.2 billion (about N188 billion) on single-stream gas-to-urea fertiliser project in Port Harcourt, through its Nigerian subsidiary, Indorama EPL. The Indorama fertiliser plant, which has capacity for C M Y K

1.4 million metric tons of Urea, Ammonia and NPK fertilisers per annum would be the world’s largest single-stream gas-to-urea plant, says the Technical Director of the project, Mr. Uptal K. Chatterjee. According to Chatterjee, the plant, expected to be completed in fourth quarter of 2015, is geared towards transforming Nigeria from a major importer to a key exporter of fertiliser. According to the Managing Director of Indorama, Eleme Petrochemicals Limited, Mr. Manish Mundra; “When completed, the project would deliver high quality fertilisers to Nigerian farmers, thereby helping Nigeria to boost agricultural output and enhance food security,” Mr. Mundra said. The project has already attracted huge financing from many international and local financial institutions, revealed Mr. Munish Jindal, Director of Finance of IEPL. Last February 18, 2013, Indorama and its financial partners sealed an US$1.2 billion financing arrangement in Dubai. A total of $800 million dollars is in loans, while $400 million dollars is in equity. According to Mr. Jindal, the financial partners involved in the $800 million loan syndication include the International Finance Corporation (IFC), Standard Chartered, African Development Bank (AFDB), Africa Export Import Bank (AFREXIM Bank), Bank of India, as well as KFW and DEG of Germany. Others are Commonwealth Development Corporation of the United Kingdom, FMO

E n t r e p r e n e u r i a l Development Bank of Netherlands and Emerging Africa Infrastructure Fund. The Nigerian banks are United Bank for Africa (UBA), Stanbic IBTC Bank, Guaranty Trust Bank (GTB), and Access Bank. Chairman of Indorama, Mr. S.P. Lohia, had in May 2011, broken the news of the fertiliser project to President Goodluck Jonathan, who promised to support the project because of the huge impact it would have on Nigeria’s agricultural sector and the creation of employment opportunities for Nigeria. Also tracked by Financial Vanguard in the new investment and job creation drive is PZ Wilmar, a new joint venture of PZ Cussons Nigeria Plc and Singapore’s Wilmar. They are investing N109 billion. N100 billion in oil palm plantations in Calabar and N9 billion refinery based in Lagos. Speaking on the new investment, the group’s Chief Executive, Mr Christos Giannopoulos said that palm oil plantation and refinery is the conglomerate’s new business line, adding that it has already acquired 30,000 hectares of palm oil plantation in Cross River State to boost its palm produce business in the country. Giannopoulos, who noted that Nigeria’s lost status as the biggest producer of palm oil in the world promised that his company would work assiduously towards helping the country regain its lost glory in the palm oil and associated produce in the global market.

he Minister of State for Education, Chief Nyesom Wike, has said the Federal Government will invest in technical and vocational education to create about one million jobs through collaboration with educational institutions in Taiwan, South Korea and United Kingdom to create access to functional vocational education for Nigerian youths. He says the focus is to use technical and vocational education to create jobs for Nigerian youths. The World Bank advocates a “three-lens approach” to youth empowerment involving •Working for youth as beneficiaries. •Engaging youth as partners . •Supporting youth as leaders. According to the World Bank, policymakers should frame correct social as well as economic policies based on these “youth lenses.” To bring this about requires the following broad initiatives: Changing the Policy Environment: The policymakers need to expand access to and enhance the quality of education and health services. The policymakers need to give young people a voice to articulate the kind of required assistance and the opportunity to participate in the delivery of assistance policies. Develop Youth Capabilities: To help the young people to choose the best from these opportunities, policymakers need to develop the youth’s capabilities. To do this, the policymakers first have to recognize the youth of their country as a strategic resource and vital decision-making agents. They also need to make sure that the youth are well-informed, sufficiently resourced and judicious while making their decisions. Provide Second Chances: The policymakers have to provide the young people with an effective system wherein they should grant the youth with second chances. For this, they have to implement target programs that would provide hope to the younger people as

well as provide them incentives to positively reshape their destinies. Increase Investment in Youth: If done properly, investment in youth especially during the five life transitions of youth will develop, safeguard and put in place proper human capital. As the youth undergo each transition from learning, work, health, family and citizenship, public policies and investments in youth can determine their directions and can prevent the youth from going off-track especially when there are economic crises and markets do not provide sufficient economic opportunities. Create a Productive Working Life: Once youth obtain the necessary skills, it

,

T

To help the young people to choose the best from these opportunities, policymakers need to develop the youth’s capabilities

,

is important to deploy those skills. This should be done by framing policies and implementing programs that would benefit the rich and poor so that there is fair and even competition. The states have to realise that freeing up their economy to foreign investment not necessarily restricts their role but in fact increases their role in the economic affairs. The policies that open up the economy will become youth- friendly only if the government is able to direct proper resources towards the youth and provide them access to jobs that are created due to liberalisation of the economy.


Vanguard, MONDAY, JUNE 3, 2013 — 19

N

igerian economy is on the stranglehold of debt. At the national, sub-national, corporate and individual levels, debts owed to banks have held the economy to a stranglehold, impeding real economic growth though policymakers are not admitting same. Since the financial crisis of 2008, corporate indebtedness has almost wiped out the assets of companies in the country. Many of the companies operating are mere paper companies living on borrowed times of AMCON. Of the existing ten largest depots in the country, eight are under the hold of AMCON. The airlines are not spared. The airlines flying in the country today are doing so by the grace of AMCON. The same is the case with the become very expensive. The manufacturing sector, where Federal Government is the largest of these firms owe attributing the rise in the the banks and their debts have nation’s debt profile to wage been taken over by AMCON. increase and the government’s If AMCON decides to intervention to curtail the liquidate companies owing it impact of the global economic and sell all their assets to and financial crisis of 2008. recover its money, Nigeria will This implies that the debt is have no company in existence. for consumption and not for Take for instance the airline productive activities. This where only about three are makes the matter worse for the flying now, if they are economy. liquidated because of debt, the Besides, the triple digit oil domestic airline industry will price which Nigeria has be dead in a day. If this depended upon has happens, all the workers encouraged development of employed by these companies U.S. shale oil, some of which at the moment will add to the now compete with OPEC’s ever growing unemployment crude. OPEC members had figure in the country. dismissed it as of little concern Nigeria as a country has a a year ago, but Nigeria's domestic debt profile of above Minister of Petroleum N6 trillion. Resources, Diezani AlisonThis debt is being serviced Madueke, has said it will have at very high interest rate. a major impact on Nigeria's Resources that should have finances. Nigeria, along with been spent on other services Algeria, has already felt the are being channeled to paying heat from the U.S. oil boom, interest on debts to banks. losing ground in its most The concern of economists lucrative export market and today is the cost of servicing diverting sales to Asia. this huge debt. Nigeria has Violence, unrest and one of the highest interest investment hurdles are rates in the developing world making Nigeria the weakest and if there are high levels of supply link, helping prop up debt, then debt servicing will oil prices to the benefit of the

Nigerian economy on a debt cliff group’s strongmen led by Saudi Arabia. Oil supply in Nigeria has been underperforming for some time and little if any growth is expected in the medium term. This development has pushed many Nigerians into ravaging poverty that has hit the nation. Recent official figures

in the country despite claims that the economy has been growing. The poverty data released by the National Bureau of Statistics suggested that 112 million Nigerians are poor going by the economic situation in the country in 2011. While 100 million are in absolute poverty, 12.6 million are moderately poor.

Poverty levels vary across the country, with the highest proportion of poor people in the northwest and the lowest in the southeast; yet, the economy is said to be growing

,

show that 112 million Nigerians live below poverty line on less than $1 or N160 a day. Nigerians have come to the hard reality that the various government policies since 1980, have contributed to the rising level of poverty

,

The Nigeria Poverty Profile 2010 Report indicates that poverty and income inequality in Nigeria increased in 2004. In addition, NBS estimates that this trend may have increased further in 2011 if the potential positive impacts of

several anti-poverty and employment generation intervention programmes are not taken into account, but this can only be ascertained at the conclusion of the 2011 survey. The rising trend of poverty in the country is a direct reflection of public policy failure in Nigeria. In 1980, an estimated 27 per cent of Nigerians lived in poverty. By 1990, 70 per cent of the population had income of less than $1 a day, more than two-thirds of the Nigerian people are poor despite living in a country with vast potential wealth and the figure has risen since then. Poverty levels vary across the country, with the highest proportion of poor people in the northwest and the lowest in the southeast. Yet, the economy is said to be growing. It said that the Gross Domestic Product (GDP) in Nigeria expanded 6.60 per cent in the first quarter of 2013 over the same quarter of the previous year. Historically, from 2005 until 2013, Nigeria's GDP growth rate averaged 6.81 per cent reaching an all time high of 8.60 per cent in December of 2010 and a record low of 4.50 per cent in March of 2009. With rising national and corporate debt that has pushed several otherwise viable companies into receivership with AMCON, decline in crude oil production and high cost of servicing domestic debt, the nation’s economy is hanging on a debt cliff. It can fall off the cliff if immediate steps are not taken.

Business & Economy

Nigeria’s debt-GDP ratio now stands at 20.77% — DMO T

he Debt Management Office (DMO) says the nation’s total debt to Gross Domestic Products (GDP) ratio now stands at 20.77 per cent against the 21.50 per cent in December 2011. Its Director-General, Dr Abraham Nwankwo, disclosed this in Enugu on Friday at an international media briefing and interaction on “Advances in, and Status of Public Management”. He also said that the debt to GDP ratio should not exceed 20-25 per cent threshold and there was government’s commitment to ensure that it did not rise beyond 30 per

cent. Nwankwo said that the threshold set for countries in the rank of Nigeria was 40 per cent. The DMO boss said that in spite of that the 40 per cent threshold, the nation had decided to remain conservative by ensuring that it would not exceed 25 per cent by 2015. He, however, said that there was the possibility that the country’s debt to GDP could reach 30 per cent in the future, adding that borrowing was part of modern economy. He said that the nation’s domestic and external debt stood at N6.49 trillion and 6.67 billion dollars,

respectively as at March. Nwankwo said that the government had not relented in its effort to introduce the inflation-linked bond whose coupon rate would increase as inflation increased. He said that part of the N577 trillion to be raised by government from the domestic bond market to finance the nation’s deficit for the year would be inflation-linked bond. He also said that plans to go to international capital market to raise one billion dollar euro bond was still on course, adding that the fund would be used specifically to transform the power sector.

The DMO boss assured Nigerians that “hot monies” from the portfolio investors should be considered safe, saying that the European economy might not regain from the recession in the next five years. He stressed that “hot monies” from foreign direct inflow into the country were safe. Nwankwo also disclosed that 20 Nigerian companies raised about N200 billion from the domestic bonds market between 2005 and 2012 to fund the real sector. He described the developments as part of the achievements of the transformation agenda of the

current administration. “This is important because it is in a process of managing Nigeria’s public debt that we develop the market to become useful for the private sector. “Less than seven years, at least 20 companies in Nigeria have gone to market to fund the real sector of the economy. This has nothing to do with the government. It has to do with what we have done to transform the market,” he said. Nwankwo said that the DMO had transformed the market to raise long-term funds of up to 20 years from the market.

C M Y K


20 — Vanguard, MONDAY, JUNE 3, 2013

Business & Economy BRIEF OPEC shifts oil trade map after shale

O

PEC oil exporters on Thursday, set to leave output policy unchanged, were weighing the impact of rising supplies of U.S. shale oil that are redrawing the landscape of global oil trade. The Organisation of Petroleum Exporting Countries has little room to pump more oil due to the U.S. oil boom that has sparked competition for market share in Asia and set off a rivalry between its top two producers - Saudi Arabia and Iraq. At a meeting in Vienna on Friday, the 12-member group is expected to stick with its 30 million barrel a day (bpd) output target for the last six months of 2013. A year ago, OPEC gave shale oil short shrift, but now it is a hot topic. Gulf producers are of the view that OPEC will still be able to pump at least 30 million bpd, provided U.S. shale grows at a moderate pace. “Shale oil is not a threat, but it changes the dynamics of where the oil is going. There will be more competition in Asia,” said a Gulf OPEC source. Despite the growing supply, oil is comfortably above $100 a barrel, well below the $125 that rang alarms in major consumer countries last year. But triple digit oil has also unlocked vast amounts of U.S. shale oil in North Dakota and Texas - which competes with OPEC crude of similar, light quality from Nigeria and Algeria, rather than heavier Saudi output. Nigeria, along with Algeria, has already felt the heat from the U.S. oil boom, losing ground in its most lucrative export market and diverting sales to Asia. Fast-growing exporter Iraq is also fighting for more Asian market share, competing with regional C M Y K

Globalscan alerts on under-utilisation of scanners at Seme By GODWIN ORITSE

I

NDIGENOUS destination inspection service provider, Globalscan System Limited has raised alarm over the low usage of its equipment at the Seme border post despite its sophistication and efficiency. Speaking to journalists during a facility tour of the equipment at the Seme border, Globalscan Chief Executive, Mr. Fred Udechukwu said that the two sophisticated scanners cost a whopping sum of euro12.5 million, adding that the scanners are effective even as he stressed that underutilisation of the scanner has become a problem. Udechukwu said the equipment is also available for scanning anytime and that the scanners have the capacity to scan on a 24-hour basis. The Globalscan boss affirmed that the mobile scanner can assess 160 trucks per day,which according to him, can scan 20 trucks under an hour. Udechukwu reiterated that the mobile facility at the border post takes 3 minutes to assess a truck adding that in three shifts which the company operates, results to 480 trucks in a day. He noted that Globalscan has the capacity to scan 480 trucks but the trucks are not available for scanning,and that it is what the Nigerian Customs Service releases to them that they inspect. He disclosed that the mobile scanner cost 3.5 million euro while the fixed scanner cost the company a total of 9 million euros. He said that the company engaged 160 personnel adding that the staffers are all Nigerians even as he affirmed that the indirect staff are about 200. The scanning expert said that the company has its sites at Warri, Calabar, PTML, three sheds at Murtala Muhammed Airport and at the border post. Udechukwu reiterated that “for a truck to be scanned, it must meet three conditionsit must be released by the Customs for scanning, it must have the necessary documents which include the RAR and others before scanning can take place and the truck must have the specified measurement.” The scanning firm boss also

lamented that the size of trucks operating at the border post are a bit bigger compared to others that operates in the Lagos and Tin Can Island ports, He disclosed that as a result of some certain element in the Smiths Heimann scanning equipment ,it must be powered for it not develop technical hitches but the turn out of trucks are relatively low. On his part,General Manager Site Operations , Mr. Hassan Adeogun, noted that it is what the customs releases the company inspects. “We don’t have the power

to enforce trucks to come for scanning, it is whatever the customs have worked upon and their single goods delcaration (SGD)forms sent to us scanning , they send the document to us and since the beginning of this month we have never has any bad time and all the trucks that are meant for scanning are scanned”. He also noted that recently some trucks were released without undergoing scanning process noting that the scanners are not faulty for operation. “What we are scanning mainly here are Ecowas

Trade Liberalisation Scheme (ETLS) goods and those are the goods they send to us for scanning.” But when it can general goods they say no to that because of its heterogeneous nature” He added that expatriate are sent to the site on a quarterly basis for purpose of maintaining the equipment in addition to the regular servicing at weekends. According to him ,the scanners have not experience any fault since 2006 and that there is a contract agreement with Smiths Heimann on maintenance services even as the equipment have not experienced technical hitches.

*From left: Marketing Executive, Vowels A.A., Ms. Chioma Ikeh, Chief Regulatory Officer, NAFDAC; Dr. Nwabunike Ebele; CEO Vowels A.A; Dr. Omoniyi Akinleye and Senior Executive, Client Service, Absolute PR Ltd, at the launch of Idee's Stew Mix on Thursday in Lagos. Photo by Lamidi Bamidele

LCCI urges African countries to remove trade barriers D irector-General, Lagos Chamber of Commerce and Industry (LCCI) Mr Muda Yusuf, has urged African governments to ensure the removal of tariff and non-tariff barriers to trade within the continent. Yusuf said this in an interview with the News Agency of Nigeria (NAN) in Lagos. He said that both the private and public sectors of the economy had major roles to play to improve trade relations within the continent. According to him, the integration and coordination of the various regional economic blocs was essential to serve as building blocs for African integration. “The proper coordination of integration initiatives such as African Economic

Community, New Partnership for African Development (NEPAD) and other regional economic communities is a function of the public sector. Cross border investments as well as advocacy in promoting economic integration should be encouraged in the private sector,” Yusuf said. He also suggested that trade promotion in Africa should be carried beyond the sub-region, noting that initiatives to promote trade within the continent had been limited to subregional levels. The director general said that many firms would enjoy significant benefits of economies of scale if they were fully integrated into the African market.

“Africa has a robust market of about one billion people. Intra-African trade will enhance global competitiveness of African firms and lower their costs of production,” the director general said. Yusuf said that the treaties signed to promote trade in the continent had being slowly implemented owing to poor quality of political governance and civil unrest.. “The lack of political will to implement the treaties and drive the integration process has created impediment to successful intra-African trade. We have allowed colonial allegiance and loyalty to take precedence over regional protocols.


Vanguard, MONDAY, JUNE 3, 2013 — 21

Business & Economy BRIEF

BY LAJA THOMAS

N

IGERIAN banks and c o r p o r a t e organisations have been advised to increase the number of women in economic leadership by promoting qualified women to fill 30 per cent of bank board seats and 40 per cent of top bank management positions in accordance with Central Bank of Nigeria, CBN's policy by January 1, 2015. This was the consensus of speakers at the African Business Women’s advocacy forum organised by Women in Management, Business, and Public Service, WIMBIZ, in partnership with Vital Voices Global Partnership-led Supporting Public Advocacy for Regional Competitiveness, SPARC, held at the Sheraton Hotel, Oniru Estate, Victoria Island, Lagos on Thursday, May 23, 2013, with the theme Women’s Leadership: Why Africa is Rising. Speaking at the event, Alyse Nelson, CEO and President, Vital Voices said: “Vital Voices recognizes that women are powerful engines of economic growth and social change. Through SPARC, Vital Voices and partner businesswomen’s associations are working together to enable women to fully participate in their economies.” Adeola Azeez, Chairperson, WIMBIZ said: “The SPARC program

Association calls on states to establish microfinance banks

C

*From left:National President of Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Alhaji Muhammad Abubakar; Commercial Counsellor in the Embassy of Austria in Nigeria, Nella Hengstler; Commercial Attache', Andrea Kubista and NACCIMA 2nd Deputy National President, Chief Alaba Lawson during the visit of the Commercial Counsellor to NACCIMA on their planned Business Summit

African business women seek higher leadership role in banks through WIMBIZ is using advocacy tools to sensitize the general public and seek possible legislative change to deal with the issue of women representation on the socioeconomic decision-making processes in Nigeria. WIMBIZ will partner with other advocacy groups, media and consultants who would support the expansion of socio-political and economic space for women in Nigeria.” More than 100 African

business men and women were in attendance to examine the role that African women play in Africa’s economic growth and ways that the private and public sector can encourage and support women’s economic leadership. The forum featured a keynote address from Dr (Mrs)Obiageli Ezekwesili, and was followed by two panels focusing on the value of women’s leadership in Africa’s private sector and

BOA floats N2bn investment facility in Jigawa B

ank of Agriculture (BOA) has said it would initiate a N2 billion facility to encourage investment in commercial agriculture and enterprises in Jigawa. Mr Guyap Waziri, a Director of the Bank, made this known when he spoke at the second plenary of the maiden Jigawa Economic and Investment Summit in Dutse. Waziri said the facility would be provided under a joint collaboration between the bank and Jigawa Government. He explained that the bank would provide N1 billion while the State Government would contribute same amount to facilitate smooth running of the facility. Waziri said the fund would be made available to investors wishing to invest in agriculture in the state. “The facility is to encourage investment in commercial and agricultural enterprises at local levels. Agricultural financing is C M Y K

militating against commercial agriculture,” he said, The director said the bank had introduced new programmes in line with the policy of the Central Bank of Nigeria. According to him, the bank is providing low interest loans to small and large scale farmers to encourage agricultural activity in the country. He urged farmers to avail themselves the opportunity to benefit from its services, adding the bank had established zonal offices in Lagos, Enugu, Port Harcourt, Abuja, Kano and Bauchi to enhance its operations. Alhaji Rabiu Isa, the state’s Commissioner for Agriculture, said that the state had executed various agriculture development projects to encourage productivity. Isa said some of the projects included distribution of fertiliser and inputs, provision of loans, farmer education and support

services. He said that the state government had also established a seed processing centre in collaboration with the Federal Government. The commissioner added that the state government had contributed to the International Fund of Agricultural Development (IFAD) and Fadama III programmes to enhance sustainable development in the sector. Isa urged investors to complement the gesture and invest in agriculture. The forum was organised by the state to attract investment in agriculture, solid minerals, small and medium scale enterprises as well as information and communication technology (ICT). The conference was attended by farmers, investors, industrialists and elected political office holders.

the impact of government investment in women. The SPARC program, launched in 2012 by Vital Voices, brings together public and private sector leaders from Nigeria, Kenya, Uganda and South Africa to develop, strengthen and officially launch targeted advocacy campaigns designed to address relevant barriers, increase women’s economic engagement in the labour force and entrepreneurship and contribute to poverty alleviation over all. The public forum highlighted the critical work that businesswomen’s associations in Nigeria, Kenya, Uganda and South Africa are doing to remove key economic barriers for women. In Nigeria, The Businesswomen’s Association of South Africa (BWASA) is working to create a more enabling environment for South African women in business by recruiting Johannesburg Stock Exchange listed corporations as signatories to the Charter for Women’s Economic Empowerment, therefore preparing corporate South Africa for compliance with the forthcoming Economic and Gender Equality Bill. In Uganda, Uganda Women Entrepreneurs Limited (UWEAL) is working to increase women in agriculture’s access to Agricultural Technology and Agribusiness Advisory Services (ATAAS) resources. The Kenya Association of Women Business Owners (KAWBO) aims to increase the access of women entrepreneurs to government contracts by ensuring enforcement of 2011 Preference and Reservations Regulations.

hairman, South-West chapter of National Association of Microfinance Banks (NAMBs) Mr Olufemi Babajide has a d v i s e d s t a t e governments to implement the CBN’s new policy on microfinance banks. Babajide said in Lagos that the new policy permitted states and local governments to establish microfinance banks. He said that the gesture was to enable more people, especially the unbanked segment of the citizens to have access to banking services. Babajide said that development would also enable the apex bank to realise its financial inclusion policy. According to him, many rural dwellers do not have access to banking services and it is difficult for the private sector to effectively provide banking services at the grassroots. Babajide said the Kano State Government had implemented the policy and had been reaping the benefits. “Now CBN has made it simple, states and local governments can now set up microfinance banks and run them for sometime before handing over to the private sector. Before, the policy was that government should not set up microfinance banks. A state like Kano was having only three microfinance banks before the state government established about 50 microfinance banks in all the local government areas in one day,” he said. Babajide also urged the elites to form cooperatives and establish microfinance banks. Sanusi bags Africa Central Bank governor of the year award Governor of the CBN Sanusi Lamido Sanusi, has been conferred with the 2013 Central Bank Governor of the year award. This is contained in a statement issued in Abuja by Ugochukwu Okoroafor, Director of Communications, Central Bank of Nigeria (CBN).


22 — Vanguard, MONDAY, JUNE 3, 2013

Banking & Finance BRIEF Standard Chartered sponsors art auction to eradicate blindness

I

n aid of Seeing is Believing (SiB) in Nigeria, The Consumer Banking and Wholesale Banking departments of Standard Chartered Bank, Nigeria united with the Group’s Private Bank team to sponsor an auction of African artworks organised by Arthouse Contemporary . The first partnership between the Bank and Arthouse Contemporary took place in May last year, during which over USD 72,000 was raised towards the eradication of avoidable blindness in Nigeria. With the Bank matching contributions, over 3,000 cataract and glaucoma surgeries and 15,000 screenings took place in Nigeria in 2012. In addition, vital surgical equipment were donated and over 300 health workers trained in relevant eye-care areas. The sponsorship gave the Bank the opportunity to once again support the Nigerian art community, raise funds for Seeing is Believing and clearly demonstrate its One Bank approach to providing financial services to its esteemed clients. Speaking at the auction, Stephen Richards-Evans, Head Private Banking, West said, “The personal service delivered by our African Private Bankers is with our clients in mind. Our Private Bankers are experienced and passionate relationship managers with extensive knowledge and understanding to appreciate the clients’ needs and aspirations. With over 180 years of private banking experience, the African relationship team aims to deliver the ‘One bank initiative’ in which clients have access to other services, that meet their needs, within Standard Chartered through service excellence. This sponsorship demonstrates our commitment to community development and sustainability across our footprint in Africa through Seeing is Believing. With the growing worldwide interest in African art, we are pleased to showcase contemporary African art to increase awareness for our global initiative of tackling avoidable blindness.” C M Y K

Stories by BABAJIDE KOMOLAFE

C

hairman Heirs Holding, Mr Tony Elumelu has called for a new approach to the development of the African continent, stressing that charity and aid have failed Africa and its leading entrepreneurs are now driving the continent’s development agenda. He made this call last week at the African Development Bank’s (AfDB) Annual Board of Governors meeting held in Marrakech, Morocco. The speech was followed by a panel discussion moderated by the BBC presenter Zeinab Badawi with Ronald Lauder, founder of the Ronald S. Lauder Foundation. Elumelu challenged the audience to consider a new approach to Africa’s development – one that involved the private sector and was capable of kickstarting the economic ecosystem that underpins all sustainable development. He called this new approach Africapitalism, an economic philosophy which asserts that the private sector can solve Africa’s most pressing challenges through long term investments that create economic prosperity and social wealth. Speaking on the failure of traditional development interventions which have previously characterized development in Africa, Elumelu called for the

*From left; Dr. Ngozi Okonjo-Iweala, Coordinating Minister for the Economy and Minister of Finance; Mallam Sanusi Lamido Sanusi, Governor, Central Bank of Nigeria; Omar Ben Yedder Managing Director, IC Events; and Dr. (Mrs.) Sarah Alade, CBN Deputy Governor (Economic Policy) at the African Banker Awards 2013, in Morocco.

Elumelu calls for new approach to Africa’s development private sector to take on the responsibility of development using his personal experience at the United Bank for Africa (UBA). He made a compelling case for Africapitalism by telling the story of how a USD5 million investment in UBA 17 years ago spawned a multinational, pan-African financial institution that has created 25,000 jobs, generated wealth in

communities all across Africa, expanded finance for trade, created stronger financial infrastructure for investment and economic growth, paid taxes to national and local governments to support public services, and given millions of customers control over their financial lives. He compared that investment to the annual flow of charitable aid into Africa – many times the USD5 million

investment that started UBA – to show that private sector involvement was a far superior, more effective way of dealing with Africa’s development challenges. Elumelu’s investment company Heirs Holdings’ recent USD300 million investment in a power plant in Nigeria was another example of a long-term, profit driven investment that would bring development to Africa.

NDIC activities boost confidence in banking — ICAN T

he Nigeria Deposit Insurance Corporation (NDIC) has been commended for its outstanding contributions toward the safety, soundness and stability of the Nigeria’s financial system. This commendation was given by the Institute of Chartered Accountants of Nigeria (ICAN), Abuja District Society when it bestowed the district’s 2013 Merit Award on the Corporation’s Managing Director/ Chief Executive Officer, Alh. Umaru Ibrahim at a Gala Night held last weekend at the Transcorp

Hilton Hotel, Abuja. In his address at the occasion, the Chairman of the Abuja District of ICAN, Shehu Usman Aladire said the ICAN Merit Award was conferred on the NDIC CEO because of his managerial ability which had inspired depositors’ confidence in the nation’s banking system. The ICAN chairman cited the increase of deposit insurance coverage levels from N50,000 to N200, 000 per depositor of deposit money banks (DMBs) and the extension of insurance coverage to depositors of microfinance banks (MFBs) and primary mortgage banks

(PMBs) at N100,000 per depositor of the MFBs and PMBs and the second upward review to N500,000 and N200,000 per depositor of DMBs and MFBs/PMBs. This, he said, met the current economic realities and promoted public confidence in the financial system. Another landmark achievement of the Corporation under the able leadership of the MD/CEO, according to the ICAN, was the establishment of the bridge bank as a failure resolution option in the interest of depositors and other stakeholders. While

stressing that the NDIC’s initiative was internationally applauded, ICAN also noted with delight that the bridge bank approach adopted in 2010 prevented systemic crisis and outright liquidation of the affected banks that would have had dire consequences for depositors and other stakeholders in the nation’s banking system. The ICAN National VicePresident, Alh. Kabir Alkali Mohammed who presented the award to the NDIC CEO described the recipient as an embodiment of hard work, integrity and humility.


Vanguard, MONDAY, JUNE 3, 2013 — 23


24 — Vanguard, MONDAY, JUNE 3, 2013

Corporate Finance BRIEF Vitafoam grows revenue by 15.3% in 2nd quarter

V

itafoam Plc has announced 15.3 percent growth in its revenue for the second quarter ended st 31 March, 2013. The company’s financial statement made public, Friday, indicated that the revenue rose to N8.79 billion in review period as against N7.62 billion in the corresponding period of 2012. The gross profit for the period grew by almost the margin to N2.633 billion, as against N2.277 billion in 2012, representing a 15.6 percent growth. Profit before tax at N585.334 million was 20.9 percent improvement over N484.065 million recorded in the same period of 2012. Further breakdown showed that profit retained for the year rose by 17 percent to N407.916 million in comparison to N348.652 million in 2012, while the basic earning per share went up to 50kobo from 43kobo, also representing 16.3 percent increase. However, both the cost of sales and administrative expenses still remained on the uprise with cost of sales increasing to N6.156 billion from N5.343 billion in the previous year. Administrative expenses on the other hand, rose to N1.483 billion from N1.325 billion. It would be recalled that the immediate past Chairman, Samuel Bolarinde, had disclosed at the last general meeting shareholders that it was partnering the International Finance Corporation (IFC) to construct a new factory in Sierra Leone. He noted that full-scale production in Sierra-Leone was expected to commence by the end of second quarter of 2013 to feed the local market and the adjacent countries. “The construction of a proposed foam factory in Sierra-Leone has commenced. The project is being financed by International Finance Corporation through a soft loan. Our activities in Ghana and Sierra-Leone will eventually spread the Vitafoam brand to all parts of the West African sub region,” Bolarinde said, without disclosing the amount involved.

C M Y K

*From left; Assistant Manager, La Casera Experiential Activation, Mr. Fisayo Aderibigbe; student, University of Benin, Miss Blessing Okanigbuan; Roadshow Manager, La Casera Experential Activation, Mr.Mohammed Elkash and Director of Welfare, SUG, Hon. Osariemen Okuonghae, during La Casera share your Apple Story, be a Star Activation, held at the institution's premises, Benin, Edo State.

Investors sustain interest in stocks, equities value up 1.14% STORIES BY NKIRUKA NNOROM

A

ctivities on the Nigerian Stock Exchange, NSE, maintained an upward movement last week with appreciable improvement in all the primary indicators, including the market capitalization, All Share index, ASI. The sustained interest in the market saw the NSE’s market capitalisation crossing the N12 trillion marks, while the ASI broke into 38,000 points, development analysts attributed to improved bargain appetite with significant decline in price volatility. Specifically, the market capitalisation of all listed equities rose by 1.14 percent to N12.075 trillion from N11.939 trillion the previous week, while the all share index rose by 1.19 percent to 37,794.75 points from 37,350.53 points. Also, the NSE 30 Index appreciated by 1.05 percent to close at 1,809.91. All except one of the NSE sectoral indices appreciated same as the preceding week: NSE Consumer Goods,

NSE Banking, NSE Insurance Index, NSE Oil/ Gas, NSE-Lotus II and NSE Industrial Goods Indices advanced by 0.66 percent, 0.19 percent, 1.17 percent, 0.58 percent, 0.62 percent, and 1.68 percent. However, NSE-ASeM Index depreciated by 0.95 percent. 40 equities appreciated in prices during the week led by

Nestle Nigeria plc with price increase of N13.21 to close at N1,001.10 from N987.80 per share, followed by Dangote Cement with price gain of N6.50 to close at N191.00 from N184.50 per share. Other top five gainers include Nigeria Breweries, which gained N5.77 to close at N177.90 per share.

Unilever added N3.54 to close at N68.00, while FlourMills Nigeria plc went up by N2.65 to close at N88.40 per share. On the other hand, 36 stocks depreciated in prices lower than 46 of the preceding week led by CAP with price loss of N17.51 to close at N45.00 per share from N62.51. UACN followed, dropping by N12.50 to close at N58.00 from N70.50. Others are Cadbury, which lost N9.04; Sim Capital Alliance Value Fund N7.59 and Total that went down by N5.90. A turnover of 1.503 billion shares worth of N14.109 billion in 24,007 deals were traded by investors in contrast to a total of 2.120 billion shares valued at N25.676 billion that exchanged hands last week in 31,806 deals. The Financial Services sector (measured by volume) led the activity chart with a turnover of 1.070 billion shares valued at N7.844 billion traded in 12,406 deals. The Financial Services sector represented 71.65 percent and 55.60 percent of the total traded volume and value respectively. The Banking sub-sector of the Financial Services sector boosted by activity in the shares of Unity Bank Plc and U B A Plc was the most active sub-sector on the week’s activity chart with sub-sector turnover of 811.929 million shares valued at N6.059 billion exchanged hands by investors in 8,834 deals. Also, the Banking sub-sector accounted for 54.02 percent and 42.95 percent of the total sub-sector traded volume and value respectively.

Chams pursues improved revenue base, expands to African countries

C

hams Plc has revealed plans to extend its operations beyond Nigerian shores to more West African countries in an effort to grow its revenue base. Addressing shareholders at the annual general meeting in Lagos, the Managing Director, Mr. Demola Aladekomo, said the move was borne out of the need to ensure that adequate returns to all stakeholders of the company in the coming year. He said as the company focuses on Nigeria as its primary target, significant efforts to localize all its technologies through outsourcing and industry partnership are being put in place, adding that Chams Plc will do what it can to take

advantage of the steady growth of the payment industry in the country. While hailing the company’s performance in the year under review, he said the 2013 financial year will see shareholders smile home with bumper harvest. According to him, “The identity management industry is also predicted to experience steady growth. Our concession agreement with the National Identity Management Commission (NIMC) is increasingly stronger by the day as we continue to deploy more resource to the project. Our solutions and technologies have been variously adopted by NIMC for deployment nationwide.”

He said the company was poised to leverage on its cutting-edge and innovative technologies to take full advantage of the Central Bank of Nigeria (CBN)’s cashless policy. He further disclosed that Chams has already started rolling out its mobile payment solution with remarkable success, while it has secured further milestones as a major stakeholder in the electronic and transactional payment industry. “The mobile payment solution characterised by our usual innovativeness, ease of use and cutting edge technology promises to change the face of payment in Nigeria.


Vanguard, MONDAY, JUNE 3, 2013 — 25

Banking & Finance By PETER EGWUATU

S

hareholders have commended the performance of FBN Holdings Plc for the financial year ended December 31, 2012 and approved the proposed dividend of N32 billion. The shareholders of FBN Holdings at the first Annual General Meeting, AGM, equally called on the Bank to overhaul its internal control system in tune with the modern technology. Mr. Timothy Adesiyan, the President, Nigeria Shareholders Solidarity Association (NSSA), said that the company’s information technology system needed to be improved upon for efficient service delivery. He said that although the company ’ had a good financial year ended Dec., 31, 2012, it needed to overhaul its internal control system. Mr Sunny Nwosu, the National Coordinator, Independent Shareholders Association of Nigeria (ISAN), said the company’s dividend was the best in the industry. Nwosu, however, urged the company to increase its

Shareholders commend FBN Holdings performance, approve N32bn dividend deposit mobilisation drive by spreading out to remote places to encourage saving culture among Nigerians. He told the management to increase its deposit mobilisation drive by spreading out to remote places to encourage saving culture among Nigerians. Meanwhile, the Bank posted a dividend of N32 billion as against N26 billion,

while gross earnings stood at N359.8 billion, up by 31.4 per cent year-on-year from N273.8 billion recorded in 2011 respectively. Other performance indicators for the review period show a net interest income of N287.3 billion, up by 27.8 per cent from N176.2 billion recorded in 2011. Non-interest income stood at N73.1 billion, up 20.1 per

cent year-on-year from N60.8 billion. Operating income was N298.3 billion, up 25.8 per cent from N237.0 billion in 2011. The bank recorded a Profit before tax of N92.7 billion, up by 158.5 per cent year from N35.8 billion in 2011. Profit after tax stood at N75.7 billion in 2012 as against N18.6 billion in 2011.

Commenting on the results, Bello Maccido, Chief Executive officer of FBN Holdings said: “We are pleased to present the maiden results of FBN Holdings following its restructuring as a nonoperational holding company with oversight of four major business groups, namely; Commercial Banking,

Unity Bank secures payment cards from fraud nity Bank Plc has taken U firm steps to secure its payment cards having

received the Payment Card Industry Data Security Standard Certification, the global information security standard to help prevent cardrelated frauds. Presenting the certificate to Unity Bank, Mrs. Adedoyin Odunfa, Managing Director of Digital Jewels which are

the consulting firm on the project, said Unity Bank which currently issues MasterCard and Interswitch Verve cards to its customers had demonstrated leadership in the industry, being the 5th bank to receive the certification in Nigeria. Mrs. Odunfa said, “After achieving the ISO270001 last year, Unity Bank has shown that is one of the banks at the

forefront of good security and compliance by now attaining the PCIDSS certification. You are the second bank in the country to have attained both of those certifications. That is quite a formidable feat given that there are several other banks who may claim to be more technological advanced than Unity Bank.” She however advised Unity Bank’s management not to

rest on its oars. “It is a feat that is evidenced by the fact that it is a global certification and not a local one and so I will like to say that having attained this, yes, we congratulate ourselves, but we must look forward and ensure that we are able to sustain this certification. That is extremely important,” she said.

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 Non-Building/Heavy Construction Julius Berger Nig Plc Roads Nigeria Plc Real Estate Development UACN Property Development Real Estate Investment Trusts Skye Shelter Funds CONSUMER GOODS Automobile/Auto Parts DN Tyres & Rubber Plc

Opening Price (N) 0.50

Daily Stock Market Report Closing Price (N) 0.50

Quantity Traded 239,000

Year High 0.50

Year Low 0.50

E.P.S.

P.E. Ratio

0.09

0.50 46.00 30.00

2,000 938,966 335,124

0.50 24.58 8.30

0.50 14.53 6.40

0.10 7.33 2.75

50.00 2.77 4.37

3.66

3.99

1,606,884

0.66

0.48

0.11

15.00

ICT Computer Based Systems108 Courteville Investment Plc

1.80 5.43 1.60 5.42 1.32 58.00

1.75 5.43 1.60 5.42 1.25 58.00

407852 1,000 3,166 100 22,572,848 2,001,792

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

Computers and Peripherals Omatek Ventures Plc

56.25 10.07

56.25 10.07

235,120 1,000

62.26 8.28

32.96 3.01

4.11 4.73

10.11 2.26

15.33

15.00

336,482

20.15

11.59

1.69

7.33

100.00

8.51

100.00

13,400

100.00

97.00

11.75

0.50

7,970

0.50

0.50

0.00

0.00

4.40 275.61 26.28 278.00 0.77

4.84 276.00 26.28 177.90 0.75

170,740 276,626 210690 1033,940 20,000

4.63

2.23

0.00

0.00

Beverages-Non-Alcoholic 7-UP Bottling Company Plc

52.50

52.50

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

9.41 10.33 87.50 3.15 12.35 0.72

9.20 9.50 88.40 3.16 11.12 0.72

Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc

54.56 1,088.00

55.49 1,001.01

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

32.27 3.30 2.11

Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc

51.00 66.50

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 Sim Capital Alliance Plc Stanbic IBTC Bank Plc UBA Capital Plc

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

0.50 47.25 30.00

0.50

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

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

11.37 6.97 15.00 3.10 5.00 29.99 4.90 2.79 8.52 10.30 0.62 1.20 22.80 0.50 0.91 1.23 0.50 0.50 1.65 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 2.47 0.50 0.80 0.50 0.50 0.62 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.89 6.00 1.12 1.50 0.50 0.50

1.73 0.50 2.02 18.29 552.20 0.54 103.50 16.01 1.28

255.00 7.10 100.00 1.01

186.00 5.23 72.50 0.93

8,689

51.49

2449,512 5,646,595 1,624,413 2,075,015 4,661,964 13,000

19.90 16.20 95.00 6.60 6.70 0.88

2,112,089 214,671

37.27 840.10

8.33 400.00

32.27 3.48 2.11

60 552,722 1,631,009

36.19 5.54 2.88

33.96 2.91 2.88

13.89 0.61 0.00

2.44 7.07 0.00

51.00 68.00

320,026 1,145,920

41.02 47.39

21.02 27.60

0.82 1.44

4.39 32.91

11.20 6.90 15.28 3.08 5.00 28.50 4.75 2.78 8.51 11.33 0.64 1.19 22.20 0.50 0.91 1.20 0.50 0.50 1.67 0.50 0.54 0.50 0.50 0.50 0.50 0.50 0.50 0.50 2.40 0.50 0.78 0.50 0.50 0.63 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.89 6.00 1.12

24,422,775 6,508,673 4,841,626 6,980,170 4,626215 9,485,808 10,971,073 3,374,171 16,677,295 4,064,362 82,235,347 2,335,362 12,562,287 1,200 2,757,142 631,000 196776 10,000 565,426 1,765 62,500 9,000,000 50,000 7,000 1,670,890 400,000 18,046,150 3,478 784543 163,407 2,822,191 90,250 3,410 71,705 3,500 100,100 100 11,000 744 100 3,818 72,682 3,000 548,905

1.50 0.50 0.50 0.50

400 9,803 100,000

1.74 0.50 2.02 18.10 552.20 0.55 103.50 16.01 1.29

11,311,214 22,000 100 33,822,246 297,946 82,814 3,028,282

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 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 6.00 1.18

IT Services NCR (Nig) Plc Tripple Gee and Company Plc ICT Telecommunications Starcomms Plc INDUSTRIAL GOODS Building Materials Ashaka Cement Plc Berger Paints Plc CAP Plc Cement Co. of Northern Nig. Plc Dangote Cement Plc First Aluminium Nigeria Plc DN Meyer Plc Lafarge WAPCO Plc Portland Paints & Products Nig Plc Paints & Coatings Manufacturers Premier Paints Plc

Closing Price N

Quantity Traded

as at Friday, May 31, 2013

Year High

Year Low

2.23

785

10.54

9.52

0.00

0.00

0.50

0.50

400,000

0.50

0.50

0.00

0.00

4.08 3.10 1.75 58.00 2.01 0.93 8.17 2.07

4.80 3.10 1.80 58.00 2.21 1.00 8.17 2.07

400 10,040,174 1,147,099 139,628 1,886,671 341,275 1,894 25,000

5.31 1.45 3.20 23.11 5.61 1.96 12.91 200

5.31 0.70 0.83 2.58 3.61 0.95 0.95 4.28

0.19 0.44 2.62 0.20 0.09 0.00 0.00

0.75

0.70

2,796,450

0.52

0.50

400

0.50

0.50

0.00

12.50

80,198 2,000

9.31 3.59

3.25 3.25

0.00 0.01

1.43 0.00

0.50

0.50

2,307,692

1.47

0.50

0.00

0.00

27.85 8.25 45.00 10.98 187.50 0.50 1.86 97.98 5.90 1.40 10.93

27.00 8.25 45.00 10.75 191.00 0.50 1.86 98.04 5.90 1.40 10.93

872,267 84,605 221,143 302,128 538,265 2,000 21,400 597,712 5,000 10,000 40

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

1.99 2.70

2,000 2,717,101

6.91 3.60

13.92

Tools and Machinery Nigerian Ropes Plc

7.85

7.85

40

8.69

8.26

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

4,000

9.20

6.80

0.50 0.50 0.58 0.50 0.50 1.08 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 1.06 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.00 0.92

0.00 0.50 0.14 0.02 0.50 0.28 0.01 0.00 0.03 0.01 0.00 0.02 0.00 0.00 0.03 0.16 0.00 0.37 0.02 0.03 0.06 0.04 0.09 0.00 0.00 0.00 0.02 0.00 0.07 0.04 0.92

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 0.00 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 15.43 150.00 10.56

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

0.75 0.50 2.02 20.00 552.20 0.78 103.50 15.69 1.41

0.00 0.50 2.02 8.57 552.20 0.50 103.50 10.64 0.03

0.19 0.00 0.00 2.03 12.68 0.13 10.56 0.87 0.21

9.16 0.00 0.00 9.85 43.55 6.00 9.71 18.03 6.71

10.00

0.50

2.69

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

0.10

18.70 2.29

4.31 4.02 57.00 2.31 3.80 0.50

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

9.05 14.13 0.00 0.00

0.50

,39.00

27.61 32.84

88.50 0.00 3.07

18.70 2.29

19.98 16.29 22.22 0.00

1.35 25.43

P.E Ratio

2.23

9.95 0.41 5.08 0.00

Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company

E.P.S

1.99 2.74

5.94 1.47

0.5 0.25 0.00

0.00

7.47

7.47

Metals Aluminium Extrusion Ind Plc

10.55

10.55

100

12.39

10.70

0.13

85.77

Non-Metalic Mineral Mining Multiverse Plc

0.50

0.50

300,000

0.50

0.50

0.01

0.00

Paper/Forest Products Thomas Wyatt Nig. Plc

1.32

1.32

97

1.38

1.38

0.00

0.00

Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc

2.00 0.50

2.00 0.50

35,300 1,318,179

2.50 2.58

1.62 2.58

0.11 0.00

13.15 0.00

1.44 0.50

1.44 0.50

2,000 1,000

1.51 0.99

1.33 0.50

0.03 0.00

28.80 0.00

3.98 10.00 12.68 4.30 1.05 2.92 0.66

3.98 10.00 12.68 4.30 1.05 2.78 0.66

6,888 28,770 1,530 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

11,299,965

0.97

0.87

0.19

6.06

Intergrated Oil and Gas Services Oando Plc

15.60

15.65

3,743,466

78.97

27.99

1.73

4.17

20.50 0.50 24.00 3.22 14.00 118.00 16.20 165.00

20.50 0.50 24.00 3.11 14.00 118.00 16.20 164.00

82,191 82,640 247,713 913,615 45,163 17,581 140,246 203,537

37.10 0.70 32.60 5.59

0.50 0.50 5.71 3.89

4.93 0.00 4.25 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

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

0.50

0.50

1,000

200

0.50

0.50

11,000

0.72

1.88

1.75

254,984

4.40

4.50 2.78

0.50 6.27 0.79

0.78

39.60 9.16

7.37

0.01

0.51

0.00

3.65

1.30

0.21

8.19

1,432,637 2.78

3.67 3,125

2.65 0.25

0.60 11.12

4.91

0.50

2,269,597

1.64

6.27 0.86

10,000 678,713

400 2.07

0.90 3.00 1.33

0.04 0.34 0.92

12.75

11.25 34.09 2.12

Media/Entertainment Daar Communications Plc

0.50

0.50

68,500

0.50

0.48

0.00

0.00

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

1.62 2.00 2.52 5.49

1.61 1.80 2.52 5.70

104606 278,525 500 850,500

3.68

0.25

12.19

0.00 6.82

3.17 0.30 0.00 3.60

0.54

27.69

Road Transportation Associated Bus Company Plc

0.92

0.92

584,117

0.80

0.50

0.00

0.00

Speciality Interlinked Technologies Plc

4.90

4.90

1,050

5.15

4.90

0.00

0.00

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

4.70 7.55

4.70 7.70

10,757 1,368,017

2.78 11.75

1.57 6.50

0.60 12.53

4.22 8.75

26 —Vanguard, MONDAY, JUNE 3, 2013

Capital Market


Vanguard, MONDAY, JUNE 3, 2013 — 27

Micro-Finance

Lafarge to partner MFIs to tap into N21.3trn housing finance Stories by PROVIDENCE OBUH

L

afarge Cement WAPCO Nigeria Plc is set to partner with Microfinance Institutions (MFIs) with a view to tap into the N21.3 trillion financing needed to bridge the housing deficit in Nigeria. This is contained in its annual report for the financial year ended December 2012, which revealed that the company is bringing into the country, a Lafarge Group business initiative aimed at developing affordable housing solutions for low to middle income Individual Home-Builders (IHB) through access to microcredit and technical assistance. According to the report, “The Project, which has been successfully launched and implemented in Indonesia and Honduras is considered relevant to Nigeria, where about 14 million households are in need of housing microfinance to renovate, extend or build their house from scratch, representing a total market size of N21.3 Trillion (source: Alitheia Capital, 2011). To tap into this huge market, Lafarge WAPCO will partner with Microfinance institutions with proven integrity and willingness to key into the objectives of the project.” Meanwhile, Preliminary work on the project began in the second quarter of 2012 and Lafarge WAPCO is currently working to facilitate investment in the identified microfinance institutions to launch a pilot in 2013. In the penultimate year, the company further re-stated its commitment to its customers with the development and introduction of an additional product into the cement market to complement the existing Elephant Classic and Supaset brands: Powermax Cement. However, “Powermax Cement is the

first SON certified 42.5 cement product in Nigeria meant to cater for the needs of specialized users who require high strength concrete. Since its introduction into the market in mid2012, the product has been well received by major construction companies in Nigeria.”

Easy starter fiesta hits Asaba

E

tisalat Nigeria has brought its third edition of the Easy Starter fiesta funfair to subscribers in Asaba, Delta State. Easy Starter is the family prepaid package from Etisalat that offers a bounty of uniquely designed services with competitive tariffs, and admirable flexibility. Customers on Easy Starter can enjoy five free megabytes, Home Zone, U & Me; and Receiver Pays in addition to affordable call rates. Speaking at the event, Manager, Mass Market Segment, Etisalat Nigeria, Nnamdi Ezeani, described the fiesta as a brand building initiative designed to bond with the host communities, brand’s customers and drive affinity. “This fiesta is a monthly initiative across Nigeria and hosted by Easy Starter, the most family focused offering in the Nigerian telecommunications market. Director of Sports, Delta State Ministry of Sports, Mrs Mercy Awolor, said: “We are a sports loving state. You can tell this from the antecedents of the State. So when Etisalat mooted the idea of a 5-Aside competition, we had to grab it with two hands because it is a good initiative from which we can discover new talents to build on our success story in sports.”

NUPENG promises social dialogue approach to issues …re-elects Korodo Lagos zonal chairman

N

igeria Union of Petroleum & Natural Gas Workers (NUPENG) has promised to embrace social dialogue as a key to addressing issues that affects it activities. Lagos Zonal Chairman, Alhaji Tokunbo Korodo made the promise during the third NUPENG quadrennial conference/election, even as he was reelected as Chairman, along-side other officials. Korodo said, “T he only thing I can assure is that I will work with my team and ensure that we have a crisis free tenure for my second tenure, a situation whereby there is an issue, instead of subject Nigerians to hardship, we will embrace social dialogue on all issues and if there is need for us to justify or go ahead on industrial strike action we will try to justify it before we go. “When we have issues and the relevant body that is supposed to tackle it refuses or fail to embrace dialogue with us, then we have no other option than speak the language they

understand. But we will try to take an extra step to create a very cordial relationship.” He added that the union is now maintaining peace with the Lagos State Government, unlike where it has faced confrontations from various agencies, “in the past we have been confronting ourselves, but this time we have created a peaceful approach to our issues, we meet, we socialize and also dialogue on all issues that is why we have less confrontation with Lagos state and also in Ogun State and all the government arms, we are going to ensure we have lesser strike action within the next tenure. Speaking on the state’s government plan to relocate some tank farms, he said, “The deed has been done, there are some physical arrangements they suppose to have done. When such has failed, there is no way we can relocate the tank farms over night unless it will affect the distribution of petroleum product.” C M Y K


28 — Vanguard, MONDAY, JUNE 3, 2013

Vanguard, MONDAY, JUNE 3, 2013 — 29

Interview

Interview

*Mustafa Chike-Obi...If there is any problem we have today in my opinion, it is unemployment of young people.

*Mustafa Chike-Obi...Government only gave us N10 billion- N5 b *Mustafa Chike-Obi from CBN, N5 b from the Ministry of Finance. can’t get job. where the three banks would be losing up AMCON management conscious of N10 billion a month and what did we do? employment generation We stopped it, now they are all profitable. We must be conscious of anything that will We lost about 50 per cent of these banks. We create employment opportunities for young were looking at a rate where we would have people, to promote businesses that have lost 100 percent of these banks if we had not chances of survival. If it will take longer, then intervened. A lot of these things that have we will do that. The old ways of liquidating been done were done with caution in mind. banks that NDIC used to do, as far as I have I am sure you are aware of the refinancing experienced, the banks that were liquidated plan. 15 years ago, their depositors are still waiting

We’ll be guided by law in loan recovering and restructuring effort AMCON has spent N10 billion of the Federal Government’s money. The rest of the money is not government money and will never be government money. The rest of the money is going to be from recovery, restructuring and from the banks

could take more than 10 years, but we are very sure that by 10 years, it will be all over. We like dialogue when people ask us why we are doing things this way. What about the bridged Banks? The three banks that were bridged and owned by AMCON were losing money somewhere between N2 to N3 billion a month. If you extended that, we would have gotten to a situation

Mustafa Chike-Obi

,

We have had seven scenarios of how to refinance and we have finally settled on the one that was announced, the one we are using. Am sure you are all aware of it. The summary of that is that we are going to keep N2 trillion of the debt and refinance N3.6 trillion, so we are reducing our size already by 75 per cent. And we think that is a responsible thing to do. I just want to reassure you that if there is anything AMCON has got to do and we are doing, we have thought about the consequences, not just on one group of people, but on the economy as a whole. So, if there is any problem we have today in my opinion, it is unemployment of young people. You have a situation where young people go to the university and they have no expectation of getting jobs when they leave the university. The impact of that is that they do not study in school; they hang around in school for three or four years, get the degree and get out. They are not proud of doing Youth Service because they know they

to collect their money today. With what we have done this time, no depositor lost a kobo. Nowhere in the world has there been a banking crisis involving more than 10 per cent of total banking assets where depositors will not lose money. Nigeria is the first case in the history of this world where the banking crisis involved 10 percent of banking assets and nobody lost any money as a depositor. I think we should be proud of that. No bank failed today; we should be proud of that. The banking employment as a whole decreased by about 10 per cent; I think we should be proud of that. If you look at what is happening in Spain, Cyprus, what is happening Slovenia, what happened in USA, Northern Island, Britain, Greece, even France where there was no banking crisis, they have lost more than 10 per cent of banking employment. So, again, we are trying our best and we will do better. The Act that set up AMCON permitted it to buy non-performing loans, but along the line, AMCON bought performing loans and there are complaints about that… (Cuts in) AMCON bought three performing loans. First of all, the Act said eligible banks assets, and is defined as any

,

we will depress the market by probably 30 or 40 percent if we put that kind of volume in the market. So, we have to balance how we can dispose off those assets in an orderly fashion so that the market is not negatively impacted. The same thing goes to Real Estate assets. We have a lot of real estate assets and it will be unwise to dump them in the market at once. I was telling the Business Editor, that in the airline industry, of the four largest airlines, AMCON is involved in four of them. If you take Arik for instance, Arik owes AMCON about N70 billion, but the aircrafts they have are worth about N75 billion. We could take the aircrafts tomorrow; sell them in order to get our money back. We will have no problem, but what will that do to Nigeria. It does about 65 per cent of the domestic air travel. It has credit from NEXIM Bank; so it will affect Nigeria’s credit rating abroad. We will lose some where between10, 000 and 20,000 direct and indirect jobs and it will cripple the airline business in Nigeria. So, we have to balance that against recovering our money over 10 years and immediate disruption of airline business. But that’s how it is. We are also very involved in Aero Contractors and IRS Airline. So, when you look at the airline industry, you ask yourself, what is the most responsible way of getting your money back and still keep the industry and employments alive? That is what takes time. That is the airline industry. In manufacturing sector, of the 15 biggest manufacturing companies, AMCON is involved in 10 of them. In the downstream petroleum industry, of the 10 biggest depots, we are involved in eight of them. Cuts in, you hold the economy That is the point. That is why when people say ‘wind AMCON down’, I say they do not know what they are talking about because you will immediately kill the economy, you will lose half a million jobs and you will cripple everything. And the role of government is to sometimes allow an orderly transition. In our planning, orderly transition will take about 10 years. That is what we envisage; it

,

Introductory remarks I want to start by saying that we are never upset by a critical examination of what we are doing. AMCON is big; it is a very big institution, and we have currently liability of close to N6 trillion, which is bigger than almost any state in the country. We are not elected at AMCON, so we need to be watched and observed and everything we do is on the basis that we are accountable. We do not object to tough articles, but we object to articles that are uninformed. We are very open to dialogue; we are very open to any question you can ask us and we will answer the question as frankly as possible. I have no prepared remarks, but I will answer your questions as they come, because we believe in transparency and there is no attempt to hide anything from anybody. We are saying please that people should ask questions and after you ask us the question, you can write whatever you want because that is what you do. We have seen a number of articles from very many Newspapers that we feel did not adequately understand what we are doing. I will start from the very obvious. Your editor-in-chief started by saying that AMCON is spending your money. Who pays AMCON bills and what is its life span? To date, AMCON has spent N10billion of the Federal Government’s money. The rest of the money is not government money and will never be government money. The rest of the money is going to be from recovery, restructuring and from the banks. The banks will pay the rest of the money. The reason why AMCON is operate for 12 years, instead of five years or seven years as IMF recommended, which it called ambitious, or even why we are taking of 12 years is very simple. We have to balance four things. The first thing we want to balance is that we cannot afford to over-burden the banks in terms of what they are paying. Currently, banks are paying approximately 20 per cent of their profit before tax to AMCON every year. And if AMCON want to go faster than promised, by year10, that 20 percent may go as high as 40 per cent of their profit they will pay to AMCON. And we need to be very conscious that we do not have to overburden the banks. If we make the banks pay more quickly in order to make AMCON’s life span shorter, it will lead to a situation where banks will pay all their profits to AMCON and that will be unadvisable. So, we have to balance the burden on the banks, which are the major payers of AMCON’s debt. The second thing is that because of the size of AMCON, we have currently about 300 billion worth of listed securities in our portfolio. The stock exchange trades about four billion a day on average. If we are to start selling those securities, it will probably take up to a year before we will finish selling them and

asset that the Central Bank determines may be critical to the banking system. So, the law does not say nonperforming loans at all. There is nowhere in the law you will see the word n o n performing loans, what you will see is EBA, eligible banks assets, as defined by the central bank. There are three of these so-called performing loans, not four, not five, three. The first one was Zenon’s loan, Femi Otedola’s loan. Femi Otedola owed 10 banks a total of a N191 billion. If those loans ever went bad, assuming we ignored those loans and they went bad, everything we had done would have been wasted because we would have had another banking crisis. The banks could not absolve the N191 billion losses from

Femi Otedola. So, it was determined by the central bank that it will be taken out of the banking system. Surprisingly, he had collaterals to cover those loans. So, AMCON took those loans and the collaterals and in the end we have taken the collateral from him and we will get the money back. But those loans were taken out of the banking system, because it is systemic risk to the banking system. I will tell you about the origin of taking off of these loans from the banking system; I went for a Standard Bank conference in New York and I asked all the investors, ‘why are you buying our banks shares below book value, because banks shares should not be sold below book value, half of their book value across the board and I said why are you people doing this to us? And they said, ‘we don’t believe the book value of you banks assets. We think that the book value your banks are churning out are not true because you have Zenon loan and Zenon is marked as performing and we don’t think it is performing, and because of that, we are marking down all your banks.’ So, I went back to the CBN and told the management that this is why investors are pricing our banks so low and it hurts us. When banks sell so low, it actually hurts you because they can not raise capital and when they can not raise capital, they cannot lend. Now, you see all the banks are now going outside to

We have to balance the burden on the banks, which are the major payers of AMCON’s debt. The second thing is that because of the size of AMCON, we have currently about 300 billion worth of listed securities in our portfolio

,

raise capital all over the place because their share prices are high enough to start raising capital because no bank can raise capital half the price of its book value. So, we looked at the loans and there were three loans we believe that were causing this problem. First was Zenon and I just talked about Zenon. The second was Seawolf. Seawolf is a company that has three oil rigs operated by Conoil and I think Shell and one other oil company. It had a loan facility of $760 million in one bank –First Bank, and if that loan failed, there goes First Bank. So, we decided to take over that loan. The third was for the same reason – Goemetric Power and Geometric Power is a huge success story because they are about to start producing power in Abia State. I think they are going to start in June and by December, they would have paid up their loan. That was a success story, but they had debt with one bank – Diamond Bank. So, those three loans were identified as systemically dangerous loans and they were taken out of the banking system by AMCON. Those were the only performing loans that AMCON bought. It was a very special situation and AMCON has not bought any other performing loans since then. (Cuts in) What is the situation report on Arik airline? Arik’s loan facility is a nonperforming loan. All the other loans that we bought were non-performing loans. And to tell you the truth, those loans were non-performing. Femi Otedola could not pay interest on the loans any more. Even though the banks said they were performing, they said so because they couldn’t afford to take the loss. So, it was technically performing, but in real sense, it was not performing. So, it was a good thing we took them out, but we are not buying any more loans. No more loans are going to be bought by AMCON, good or bad. So, the issue of moral hazard, no moral hazards has stopped. We will not buy any more loans from any bank for the life of AMCON. I have been wondering since the day AMCON was formed where it got all the money it is using to buy all these loans. Debts, Debts, We got N10 billion from the Federal Government and the rest is debt. Debt that we have to pay back and the N2 trillion we have

,

L

ast week, Vanguard Editors played host to the Managing Director/CEO, Asset Management Corporation of Nigeria, Mustafa Chike-Obi. He took the opportunity of his visit to clear the air on some of the controversies surrounding the Corporation. For instance, he explained why AMCON is contemplating 10-year period for winding up instead of seven as suggested by IMF. He also dismissed the allegations of political manipulations among others. THE EXCERPT:

Nigeria is the first case in the history of this world where the banking crisis involved 10 per cent of banking assets and nobody lost any money as a depositor. I think we should be proud of that. No bank failed today; we should be proud of that

,

to repay now is from recovery we have made and from contributions from banks. We will keep paying it from recoveries and banks’ contributions till we finish paying it. Yes, we owe money; nobody gave us money. The good thing about the debt is that it is government guaranteed, so it counts for equity, it could count as liquidity because it will allow them to go back and do their business. But that money has to be repaid. We are repaying N2 trillion in the next two years because we have collected enough money from everything we have done to be able to repay N2 trillion. Over the next 10 years, there is N3.6 trillion we are going to pay back. Government only gave us N10 billion, N5billion from the CBN, N5 billion from the Ministry of Finance. That’s the only money we got from government. There is insinuation that AMCON is being subjected to political manipulations. Chief Great Ogboru alleged that his loans were performing and he had collaterals backing them up, but there are some political intrigues Let me say a few things. One is who is Great Ogboru that AMCON would go after him? If political enemies are going after somebody, it is definitely not Great Ogboru. The issue for Great Ogboru is that he borrowed money. I asked him, ‘Did you borrow money’ and he said ‘yes’. Have you paid, he said No. If you borrow N500 million and somebody is saying it is N1billion and you are disputing it, ‘bring the N500 million and put it somewhere and let’s dispute the other one you said you did not owe. You haven’t paid interest on the money you borrowed from a bank in three years. He agreed that he borrowed the money; he agreed he has not paid interest, but he is disputing the amount, so he won’t pay. I said bring the one you agreed you owe to the table first, and then we can fight over the one you said you didn’t owe. Is that not the way to do things? So, Great Ogboru owed money and AMCON has bought the loans and he will pay that money one way or the other. He can run around and talk about political enemies. I do not belong to any political party; I do not care about politics. I only want to collect my money back. I said, ‘give me my money back, and you can’t complain about us.’ And just so you know, his own outstanding debt amounts to about N3 billion. We paid over N617 million, because we agreed that some of those charges could be suspicious, and we are asking him to pay the N617 million and he is saying he wont pay it. Look, we have 13,000 loans. People like Great Ogboru are not used to people saying to them ‘pay the money you owe.’ So, he will say this and I said to him, ‘go to court. When you go to court, we will meet you in court and then we will see what the court says.’ But I can assure you that I am not interested in anybody’s politics. AMCON can never be used against political enemies imagined or real. Ifeanyi Ubah for instance owes us much more than that, and we told him to go and run for governorship, but if you run for governor, you cannot run your company because we do not want to be seen as sponsoring a governorship candidate. So he agreed. He is gone to run for

Continues on page 30


30 — Vanguard, MONDAY, JUNE 3, 2013

Interview

We’ll be guided by law in loan recovering and restructuring effort governorship. We have taken over the management of his company. We are going to appoint all the executive directors in his company and when he finishes running, he can come back and discuss coming back to the company, but he can’t do it for less than two years. So, we are not partisan. Why will we be fighting for N617 million. It is the smallest loan we have, but we have to collect it? So, let me just answer your question directly. We are not subject to any political interference. The president of Nigeria, who technically is my boss, because he appointed me, has never asked me to do anything for anybody. Not for once. I talk to him frequently and if he doesn’t ask me to do it, nobody will because I always ask him, ‘This thing they are asking me to do, is it you with your permission? So, they now know that I will ask him. So, nobody, not the Minister of Finance, not the CBN governor, nobody has ever asked me to do anything improper. People complain and they will come and say ‘This person has complained, look into it.’ I know people bash Jonathan depending on their political will, but he has never asked me to do anything improper as the MD of AMCON. Not once What is the term of agreement you had with Ifeanyi Ubah concerning his governorship aspiration? We gave him two choices. We said to him, ‘We can’t tell you not to run, but you owe us a lot of money. So if you want to run, you will give the management of the place or we prefer that you don’t run, but go and manage your company so that we get our money back.’ But we can not as Nigerians tell him not run because that will be improper, but we said, ‘You cannot use the company’s money or asset to run for the governorship election because you owe. So, here is your choice – complete breakaway from the company for two years while you run or you agree not to leave for two years. He chose to run. So, we will appoint MD, CFO and another ED to run the coy. He still owns it, but he can not write any cheque or sign any money out of that company for two years. (Chips in, you won’t pay him while he is away?) How can we pay him when he is not working? When he finishes paying us, he can take anything he wants. Cuts in gain, He has not paid salary for months now) We will pay salary when we take over. You have not taken over yet? C M Y K

We will sign the agreement sometime this week. When we take over, we will run the company as it should be run. From the picture you have painted, AMCON looks too powerful. Is there no tendency of subsequent MDs misusing the absolute power this Corporation has in event you are not reappointed after five years? Jokingly, I will beg them to re-appoint me. Laughter, Seriously, my tenure is five years renewable. So after 10 years, nothing will be left. Let me answer you. AMCON is powerful in a very narrow way. We are powerful if you owe us money. We are not that powerful if you don’t owe us money. We are not as powerful as the IG of police, who has interest in all of our lives. 12,000 loans, 12,000 people, a lot of them have paid part of their indebtedness. So, 10,000 loans are not that many. So, we are not really the power that you should be afraid of. However, we recognize that in those areas where you owe us money, we have tremendous power and the power is geared towards recovery, and it is essential. We have established a number of processes to ensure that the power

,

Continued from page 29

Mustafa Chike-Obi

AMCON is powerful in a very narrow way. We are powerful if you owe us money. We are not that powerful if you don’t owe us money. We are not as powerful as the IG of police, who has interest in all of our lives

AMCON executives have is limited. We have a process for recovering loans, we have a process for restructuring loans and we have a process for selling our assets. We have all kinds of policies that create an institution. So, nobody can actually go to AMCON and take too much away from the policies. That is one. The second is that we are regulated by the CBN. We are a regulated entity. CBN examiners come to AMCON once a year for what they call routine examination and they have what they call special examination and they are very intrusive. If there is

,

anything annoying I have seen in AMCON, it is CBN examination. They ask all sorts of questions; it is very intrusive. So, we can not do too much without the CBN knowing. That’s two. The National Assembly is very interested in what AMCON is doing. I am going on Tuesday to make some explanation to the House Committee on Steel. They want to ask about Delta Steel, one of the debts we are actually trying to realise, but I have to go and explain it to the National Assembly. So, we have National Assembly oversight, which is quite intrusive as well. Finally, we have a

Board of Directors. You know the composition. These are Director General Finance Ministry, NDIC MD, SEC DG, and DG, Financial System & Control of CBN. These are the four institutions we have on the board of AMCON and they ask all sorts of questions. So, the degree of freedom the AMCON executives have is not as much as you think, your concern is important. We hope that the appointing authorities are conscious of the damage a corrupt, inefficient and lazy executive can do in AMCON and that they appoint only the right people. But we can only hope. It appears that you are confident that that whenever you go to court, you must have an upper hand. I said this because I was at the last training you organised for judges and I kept wondering why a government institution should be training judges First of all, it is extremely normal for institutions to sensitise judges on laws pertaining to them. NDIC does it every year. The CBN does it more than once a year and when there is a new law, it will be foolish of you not to sensitise the judges of the new law and what you are trying to do, who you are and all that stuff. It is completely acceptable and we applied to

the Federal High Court Chief Judge and it is done all the time. So, this is not anything unusual no matter how people are presenting it to you. Olisa Agbako presented something called the AMCON rules for the Federal High Court. It was organised and presented by Olisa Agbakoba and company. We supported it, we were there to seek the judges, we were sensitised and it is completely appropriate. Now, after that so-called seminar, (we have had two now), Justice Tafaratu ruled against us in what we call, ‘a very surprising fashion on Capital Oil.’ So, I do not think that you are right in saying that we are very sure. What we are sure about is this, if you borrow money, you signed a loan document and you take the money and if you do not pay it, we are actually sure that the court will determine that you owe the money. We do not just go to court; we go to court with documents. What is this controversy about the IMF and winding AMCON down? The clarification is in the IMF report. I have found myself defending something that the IMF did not say, which is a very difficult position. IMF did not say AMCON should wind down now. The report is clear. It commended the Nigerian authorities for AMCON, then goes on to say, ‘Having succeeded in its task, we recommend that AMCON starts the process of winding down,’ and it used the word, ‘with an ambitious time target of say 2017. They call 2017 ambitious in their report. So, if IMF says 2017 is ambitious, we agree with them. We think 2017 is ambitious and in fact, it is a little bit irresponsible. We think the right time is 10 years from now because we do not want to break our banks and break our economy, that’s all. They say 2017 is ambitious, we agree with them. We think it is 2023. That’s what I found really hard about this. It is a very complimentary report. It complemented Nigeria authorities and AMCON for having done the job and that the banks are now healthier. That’s what the report said. How Nigerians took that and flogged it as a bad thing, I do not understand. And the same IMF report said you should remove fuel subsidy now and the people, who are jumping up and down saying wind down AMCON are not saying remove fuel subsidy. If people like IMF so much, go and recommend that.


Vanguard, MONDAY, JUNE 3, 2013 — 31

Homes & Housing Finance BRIEF

Stories by YINKA KOLAWOLE

US mortgage rates hit year high

T

he Federal Housing Authority (FHA) has recovered N500 million from illegal acquisition of houses by some of its employees, following a verification exercise and subsequent recovery of the houses. Managing Director, FHA, Mr. Terver Gemade, disclosed this during the inauguration of the Interim Management Team of the FHA by of Lands, Housing and Urban Development, Ms. Ama Pepple, in Abuja. He confirmed the allegation that some unscrupulous employees of the agency converted FHA houses into their private property. “We have done some verification and recovered a number of houses. We recovered about 44 houses some months ago, and we were able to realise N500 million within a month,” he said, adding that the new interim management will carry out further verification exercise with a view to determining who owns what. Gemade refuted the insinuations that the ongoing commercialisation process of the agency would eventually lead to job loss. He said the action is rather in line with the present administration transformation agenda geared towards enhanced service delivery “We are doing our best to make sure that the welfare of members of our union is protected. When there is change, there is always going to be fear in the system, but we have allayed their fears. We are not intending to sack anybody. The reform the minister has put together is transiting from agency of civil service to a commercialised agency of government. “As a result of the transformation of the FHA from an ordinary Agency of the federal government to a commercialised organ for housing provision, some staff became jittery, thinking that the work force will be reduced, but we have addressed the problem. The interim management team is already working to strengthen the tie between the management and FHA Workers Union toward creating a more conducive working relationship that will improve housing delivery for Nigerians. Expectations are high in terms of the need to provide houses, especially as a result of the huge housing deficit. As a result, the minister set up a technical board for the FHA, and then an IMT to work for a period of twelve months,” Gemade said. C M Y K

A

•Middle-income housing development

FHA recoups N500m from illegal housing acquisition It would be recalled that the Federal Government set up a seven-member Interim Management Team to commence the process of commercialising and repositioning the FHA for efficient service delivery. Meanwhile, the housing minister said the move by government to overhaul the

operations of the agency is justified, noting that it has not fully met the objectives of setting it up. “The FHA was conceived as a model agency that would satisfy the yearnings of Nigerians in the delivery of adequate and affordable housing. However, today, as we reflect on its 40 years of operations,

the agency’s achievements have remained low and the dreams of its founding fathers have not been attained. It is noteworthy that in all these years, FHA has succeeded in delivering about 37,000 housing units in 80 estates. “The Authority does not generate enough income to meet its wage bills; pay retirement benefits to its 816 pensioners and fulfill all aspects of its operations.

FMBN, Chinese firms negotiate N948bn housing finance deal encourage private sector

F

ederal Mortgage Bank of Nigeria (FMBN) has opened discussions with two Chinese investment groups, China Export and Credit Insurance Corporation (SINOSURE) and International Commercial Bank of China (ICBC), to secure a $6 billion (about N948 billion) housing finance loan facility. Managing Director, FMBN, Mr. Gimba Ya’u Kumo, who disclosed this said in Abuja, said the loan would be obtained at single digit with 15 – 20 year tenure. He said the arrangement is such that the loan would be given directly to Chinese construction companies operating in Nigeria for disbursement in tranches of $1.5 billion to build houses under the supervision of FMBN. Ya’u Kumo said the development was a result of efforts by the apex mortgage bank to attract foreign investors into the capital intensive housing sector. He said the responsibilities of FMBN under the

arrangement will include creating mortgages, collecting mortgage repayments and using the proceeds of the repayment to pay back the loan over the tenure facility. “A team of the Chinese SINOSURE/ICBC is visiting the country following the series of discussions we had with them in the past and in furtherance of our business expansion drives to

involvement in the development of the sector. Apart from these Chinese companies, we are also discussing partnership with Globus Financial Services LLC of the United States to access a $1 billion 10-year facility to finance affordable houses and infrastructure. The pilot scheme will involve the FMBN to fund off-takers considered for some federal and state government institutions,” he stated.

Ogun, firm plan housing, industrial estates in Agbara

O

gun State government is set to unveil two schemes aimed at boosting residential accommodation and industrial development in the state. The State’s Ministry of Housing has commenced preliminary works to develop a housing scheme on a 50 hectare land to boost residential accommodation, while it has also signed a memorandum of understanding (MoU) with a private investor, ROTH Incorporation, to embark on a 650 hectare industrial estate, both in Agbara. Commissioner for Housing, Mr. Daniel Adejobi, disclosed this in a briefing on activities of the ministry in the last two years. According to him, design work has started on the proposed 50-hectare residential development, adding that preparatory work had equally commenced on the construction of a 549 housing unit estate at Idi-Aba in Abeokuta.

verage US rates on fixed mortgages jumped last week to their highest levels in a year, signaling slightly higher costs for homebuyers. But rates remain low by historical standards. Mortgage buyer Freddie Mac says the average rate for the 30-year loan rose to 3.81 percent, up from 3.59 percent in the previous week. That’s still not far from the 3.31 percent rate reached in November, the lowest on records dating to 1971. The average on the 15-year loan rose to 2.98 percent, up from 2.77 percent. The record low of 2.56 percent was reached in early May. Mortgage rates are rising because they tend to follow the yield on the 10-year Treasury note. The yield rose to 2.17 percent Tuesday, its highest level in 13 months. It has since fallen slightly to 2.11 percent in early trading Thursday. Still, that’s up from 1.63 percent at the start of the month. Yields on the benchmark note are rising because investors are selling government bonds. That’s largely because minutes of the Federal Reserve’s last meeting showed several policymakers favored slowing the Fed’s bond purchases, perhaps as early as this summer. The Fed’s $85-billion-amonth in Treasur y and mortgage bond purchases have pushed down longterm interest rates. When it slows the bond purchases, interest rates are likely to tick up. That would decrease the value of bonds with lower yields. Cheaper mortgages have helped boost home sales this year and strengthen the housing recovery. Sales of previously occupied homes and newly built homes both rose in April. And a report Thursday showed the number of Americans who signed contracts to buy homes in April reached a three-year high, suggesting completed sales will increase again in the coming months. There is generally a one- to twomonth lag between a signed contract and a completed sale.


32 — Vanguard, MONDAY, JUNE 3, 2013

Insurance BRIEF

BY FAVOUR NNABUGWU Just back from Cairo, Egypt

Insurance key to economic growth in Mid-East, North Africa

A

C M Y K

I

*From right; Alhaji Bala Zakariya’u, Chairman of Niger Insurance Plc, Mr. Fola Daniel, Commissioner for Insurance and Mr. Olusola Ladipo-Ajayi, GCEO of Lasaco Assurance Plc at the 40th African Insurance Organisation conference in Cairo, Egypt.

African insurers reinforce to increase market share from strength to strength with the continent outpacing the global average GDP growth. Kotb who is also the chairman of the Insurance Federation of Egypt said that the main challenge was to ensure that the growth reflects on the average citizen and that the riches of Africa countries have direct effect of alleviating more Africans out of poverty and

,

s advanced economies are struggling to shrug off the anaemic growth rates following the global financial crisis of 2008/2009, African insurance industry and its practitioners have set up an apparatus to increase sector ’s competition and market share while they give uninsured people more choices than they now have. This development was revealed at the just concluded 40th African Insurance Organisation, AIO Conference and General Assembly in Egypt. This year’s AIO conference theme, ‘The Role of the African Insurance Industry to support the Economic Development of African Countries’ held in Cairo, Egypt, witnessed the highest participants in the history of the AIO so far with over 800 participants. Egypt’s Prime Minister, Dr. Hishan Qandeel, identified poor infrastructure as the major problem confronting Africa countries from achieving the needed growth. Qandeel said Africa generated a premium income in excess of $66 billion in 2011 while he explained that the non-life business accounted for $21.7 billion representing 7.1 per cent, while the life aspect of the business contributed $44.6 billion, representing 1.2 per cent of world premium income during the year under consideration. He said for Africa to achieve better economic growth, there is need for it to solve the problem of infrastructure in the continent. He explained that infrastructure built before independence by the colonial masters were built majorly as a means of covering raw goods from the point of production to foreign countries, adding that better infrastructure needed to be put in place by African countries. On the way forward, he hinted that Egypt was planning to build economic corridors that will link Egypt and the rest of Africa, adding that the corridors will link Egypt to Khartoum, Addis Ababa and South Africa. He explained that Egypt had positioned to join other African countries to fight poverty and corruption as it affected the growth of development in Africa. In his welcome remark, the Chairman of the Organising Committee, Mr. Abudel Raouf Kotb, said that African economic boom was set to go

play to ensure that these risks were properly identified and managed in order to ensure the sustainable development of our countries. Africa is becoming the continent of the future and the world is carefully following and actively participating in the development of Africa and many have identified our continent as the main source

For Africa to achieve better economic growth, there is need for it to solve the problem of infrastructure in the continent

tracking inequality which he hoped that the conference would find solutions to the challenges facing insurance sector in Africa. According to him: “We have reason to be optimistic but let’s not underestimate the challenges we face, our continent continues to depend on external demands making us susceptible to global economic slowdowns, particularly in China and Eurozone.” He explained that Africa faced many domestic risks such as youth unemployment, political upheavals low insurance penetration and severe weather etc. He further said that the insurance and reinsurance markets had a pivotal role to

,

of future growth, opportunities and profitability. “The African economic boom is set to go from strength to strength with the continent outpacing the global average Gross Domestic Growth (GDP). The main challenge is to ensure that this growth reflects on the average citizens and that the riches of our countries have the direct effect of alleviating, more Africans out of poverty and tackling inequality,” Kotb said. According to him, the continent had reasons to be optimistic but warned, “let us not under estimate the challenges before us. Our continent continues to depend on external demand making us susceptible to

global economic slowdowns, particularly in China and the Eurozone.” “Furthermore, Africa faces may domestic risks such as youth unemployment, political upheavals, low insurance penetration and severe weather just to mention a few. The insurance and reinsurance industry has a pivotal role to play to ensure that these risks are properly identified and managed in order to ensure the sustainable development of our countries,” he added. Dr Yehia Hamad, Egyptian Minister of Investment, said the insurance system achieved big development during the last period in comparison with the other economic sectors in the neighbouring countries. He said the minister said the economic growth across the world declined by 4% during 2012; referring that this decline included many countries, whether European or other ones; consequently the Egyptian economy faced more pressure. He added that Egypt has huge economic capabilities that the government aims to work on them. Hamad stated that the Egyptian economic program was hailed by the International Monetary Fund (IMF), so it may facilitate the negotiations about the IMF loan. He added that the ministry targets achieving growth rates from 3% to 6% during the coming period in an attempt to boost the national income.

nsurance can promote economic development, create jobs and boost trade across the Middle East and North Africa (MENA) region, according to “The Role of Insurance in MENA” - a new report from Zurich Insurance Group (Zurich) launched at the World Economic Forum, MENA summit, held in Jordan from May 24-26. Though the MENA region has made considerable progress over the last decade, with some of the lowest insurance penetration rates in the world, there is still large growth potential in the insurance sector. However, insurance can help to transform the MENA economies to address many of the economic and social challenges facing the region, including helping nations to diversify and modernize their economies to create sufficient employment opportunities for the young. Insurance allows individuals and their families to protect their hard-earned assets, which provides economic stability for all classes of society. By providing risk transfer possibilities and facilitating capital formation, insurers also promote economic development. Insurance provides essential coverage to businesses that promotes trade and economic activity. Furthermore, by insuring trade and foreign direct investments, insurance contributes to sustainable growth across all market sectors. Saad Mered, CEO General Insurance Middle East & Africa, Zurich Insurance Group commented: “The role of insurance in emerging economies is often not well understood and underestimated. For these fast growing countries, insurance supports the pace of economic development and protects quality of life. It safeguards and rebuilds the foundations of economic activity after unexpected loss, like in the wake of natural catastrophes. Insurance can also play an important part in funding retirement solutions. It not only provides long-term savings vehicles, but also addresses risks that might affect the ability to save (i.e. disability) or living longer than expected (i.e. longevity risk) on one’s savings.


Vanguard, MONDAY, JUNE 3, 2013 — 33

Insurance

Over 50 insurers yet to submit 2012 financial result STORIES BY FAVOUR NNABUGWU

O

ver 50 Nigerian insurance companies are yet to submit their 2012 International Financial Reporting Standards, IFRS, compliant financial results, to the National Insurance Commission, NAICOM. This is despite the March 31 deadline for submission of the preceding year ’s results. Commissioner for Insurance, Mr. Fola Daniel, hinted this at the just concluded 40th African Insurance Organisation, AIO’s Conference & National Assembly held at Marriott Hotel, in Cairo, Egypt.

According to Daniel, only five insurance companies have submitted their accounts for the 2012 financial year. As at the end of March 2013, he affirmed that no insurance company had submitted full IFRS compliant audited financial accounts for year ended 31st December 2012. He, however, said that the commission is sympathetic with the insurance companies over the strain of IFRS compliant audited accounts, which are quite different from what insurers were used to, saying that the commission could understand the challenges faced by companies that were still to submit. He urged the

African insurance brokers seek to break into oil & gas business

D

etermined to break the jinx of playing the second fiddle after the reinsurance brokers in the continent, African insurance brokers are prepared to make an in road into oil and gas business. The continent insurance brokers under the aegis of African Insurance Brokers Association (AIBA), do not wish to be left behind in the oil and gas business in Africa. Prince Feyisayo Soyewo, a strong member of AIBA said the association will come forth as a strong and formidable force to be reckoned with in the continent. Soyewo, who is also the executive chairman of Prestige Insurance Brokers Limited, has been a strong advocate for the recognition of insurance broking as independent and selfregulating professional body, consistently pushing for integrity in the practice of insurance broking. In an interview with vanguard in Cairo, Egypt, prince Soyewo admitted that the association has slept for too long but acknowledged the new

wave of aspirations coming to the insurance brokers in Africa and the Nigeria. “AIBA has been in existence for 20 years yet we have nothing to show for it but as soon as we are able to organise ourselves as a formidable body, we will take our rightful position. “One of the first organs that AIO established is the AIBA but we have not been able to achieve much which is quite unfortunate,” Soyewo said. “Reinsurance brokers had over the years taken the shine off the insurance brokers on the premise that the insurance brokers lack the capacity but insurance brokers are uniting our forces now realising that if we cannot individually combat, collectively we can be a strong force to have a fair share of the market.” African Insurance organisation, AIO constitution compels any broker to be a registered member of the body before being admitted as a member of AIBA, a subsidiary of AIO but some brokers jumped the gun by registering with AIBA without the AIO.

companies to revert their challenges with their accounts to the Commission on time, adding that early submission was necessary to enable the commission to appraise and approve as appropriate before the expiration of grace obliged by Securities & Exchange Commission, SEC and the Nigerian Stock Exchange, NSE. He added that the commission has stepped up its approval process by ensuring that any account submitted to it, is treated, approved or reverted to companies within four days. In April 2013, NAICOM issued a circular to the 31 underwriters listed on the Nigerian Stock Exchange warning them against delay in submission of their 2012 accounts to avoid sanctions from the regulatory bodies. The circular signed by Nicholas Opara, Director, (Supervision) on behalf of NAICOM boss reads in part “We are concerned about non-submission of your IFRS complaint audited financial statements for year ended 31st December 2012 as at today (11th April, 2013). As your primary regulator, our review and subsequent approval precedes submission to both the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE), which hitherto was on or before the close of business on 31st March following the year end of the financial statements.” NAICOM stated that it was aware of the 30 days extension to the statutory deadline granted to listed companies including the insurance firms. Nevertheless, it added that the commission requires that the firms conclude and submit their audited 2012 financial statements without further delay to enable it to review and approve as appropriate with the extension granted by the secondary regulators.


34 — Vanguard, MONDAY, JUNE 3, 2013

Agric BRIEF Jigawa tackles farmers, pastoralists crises

T

he Jigawa Government says it is developing developing 50 grazing reserves to curb farmers/pastoralists clashes in the state. The state Commissioner for Agriculture, Alhaji Rabiu Isa, who spoke with journalists in Duste, said that the government was also providing incentives to keep off pastoralists from farm lands. Isa said that the strategy included the provision of pasture, water points, veterinary drugs and cattle routes to encourage agriculture and boost livestock production as well as check the skirmishes. He added the measure had addressed shortages of pasture and enhanced access to safe drinking water for animals and humans. The commissioner said that more than 1.5 million cattle, sheep and goats had been vaccinated against various animal diseases and that new veterinary clinics had also been established to enhance animal health care services. “We are able to promote peaceful co-existent between farmers and herdsmen. It is the greatest achievement of democratic governance in the last six years. “In 2007, there are several cases of clashes between pastoralists and farmers, but since the inception of this administration, a lot of measures have been taken to prevent the conflict. “We have in place farmers/ pastoralists Conflict Resolution Committees in the state as well as local government areas;“When there is any case, they will try as much as possible to amicably settle the dispute.” Apart from peace building, the commissioner said that the state government had adopted various measures to enhance agricultural activity and food security. Isa explained that more than 150, 000 farmers were registered under the Federal G o v e r n m e n t ’ s Growth Enhancement Support (GES) scheme, adding that about 14,800 tonnes of fertiliser would be distributed to registered farmers.

Oil palm importation: Stakeholders stage protest …call for cancellation of waiver …insist on 35% import duty BY CHRIS OCHAYI & CALEB AYANSINA

A

BUJA – STAKEHOLDERS in the Palm Oil Industr y, weekend, staged peaceful protest, to draw the attention of the Federal Government to some factors that militate against the development of the industry. Among the issues raised, according to the Vanguard’s finding are: Waiver for importers, Tariff on importation, Development fund for palm oil industry, Infrastructure as well as Company Tax issues. The Leader of the Coalition of Oil Palm Stakeholders Association, Mr. Moye Ladoja at a Protest Visit to the Ministry of Agriculture and Rural Development in Abuja, said that importation of over 24,000 metric tons of Palm Oil, annually, to the country just by eight companies calls for concern. He maintained that massive importation of oil palm into the country under the ECOWAS Trade Liberation Scheme (ETLS) is a major threat to the huge investment of stakeholders, canvassing for strict application of 35% import duty to be carried out on palm oil importation to resuscitate the industry. Ladoja called on the government to as a matter of urgency to withdraw waiver granted to some importers of palm oil, and exclude producers from paying company tax to scale up investment into the industry. The groups also unanimously canvassed for the establishment of N100b development fund as bailout for the industry, while stressing the need to improve on infrastructure across the country. His words, “As we speak, the oil palm industry is in distress, because the Nigeria government has not responded to the policy onslaughts of Malaysia and Indonesia. The policies are geared towards Nigeria patronizing them, for the country to attain self sufficiency in palm oil production. “Since the first quarter of

the year, we have witnessed increased important of crude palm oil and refined products into Nigeria, which had crashed the domestic trade. Our product system is well accustomed to the seasonality of production. “The Peak and off seasons of production has only been marked by price differential. Never has it happened that local producers of palm oil system is well accustomed to the season Never has it happened that local producers of palm oil will not receive patronage in the Nigeria palm oil market.

“Today, local producers are holding on to unprecedented stocks, because prices have crashed and they are being forced to sell at ridiculously, low and unsustainable price levels. This is occasioned by the influx of cheap, subsidized palm oil from Asia. “We need to put it on record that it is not illegitimate to import CPO into the country provided the appropriate duty is paid. However, we must recall that when the ban on the importation of CPO was lifted, the objective was to make the product more available as raw material for industrial processing and manufacture of downstream products. “It is amazing to discover

that the same companies that purportedly import CPO as raw material also engage in direct trade in the product. More disturbing is the rising importation of refined products, which is under ban in the guise of ‘crude palm olein’. “The critical issues that we like to bring forth on this visit are two debilitating issues of waiver and CPO and olein imports through ETLS. These have become the two routes to killing our oil palm industry. “We are disturbed that in spite of the assurances of Mr. President in his budget speech, certain individuals and companies are being given waiver to import CPO and olein.

Armed sea robbery threatens Nigeria’s fishing industry — Adesina

T

he Minister of Agriculture and Rural Development, Dr. Akinwumni Adesina, has decried the wave of armed sea robbery in Nigeria’s coastal waters which he said was threatening the fisheries subsector, the fourth largest nonoil foreign exchange earner for the country. Adesina spoke at the National Marine Fisheries Stakeholders Conference on Armed Sea Robbery organised by the Federal Ministry of Agriculture and Rural Development in Lagos recently. In his keynote address delivered by the Permanent Secretary, Federal Ministry of Agriculture and Rural Development, Adesina said that apart from foreign exchange earnings, the fisheries sector contributes a lot to the economy, including food and nutrition security, income and

employment generation, and poverty alleviation. He lamented that apart from killing and inflicting serious injuries on crew members, valuable items such as fish and shrimp products, communication and navigation equipment worth several millions of Naira had been carted away by the sea pirates. Furthermore, he said that over 400 fishing and shrimp vessels had been attacked since 2002 while 120 shrimp vessels were attacked by sea pirates and robbers from January 2012 to date. He stressed that the socioeconomic cost of armed sea robbery and other vices scared new investors due to increased risk factor in investing in the country, adding that it led to decrease in fish production and retrenchment of workers, just as

foreign exchange earnings from the sector had dropped with reduction in the number of fishing vehicles from 250 in 2009 to 122 in 2013. Adesina then charged the participants to work out effective ways of tackling armed sea robbery challenges facing the fishing industry. He assured that his ministry was making efforts at addressing the issue. For instance, he said two Vessel Monitoring System (VMS) stations were being established in Lagos and Calabar, six patrol vessels had been procured, sensitisation campaign against sea piracy intensified and was collaborating with regional and international bodies to checkmate the activities of sea pirates.


Vanguard, MONDAY, JUNE 3, 2013 — 35

Aviation

Mid-term scorecard: Remodeling, Aerotropolis aviation major landmarks By LAWANI MIKAIRU

T

he Minister of Aviation, Princess Stella Oduah has recorded many achievements in the last two years .However, her major glaring landmarks are in the remodeling of the nation’s airports, and the aerotropolis concept which is aimed at building airport cities. Part of the minister ’s achievement is the signing of the Passenger Statement of Rights. It ensures that in all circumstances, airlines remain alive to their obligations to customers and there are sanctions for default. As part of the steps taken to protect consumers, the Ministry has engaged with some foreign airlines on unfair regional disparity in ticket pricing. The Ministry has also advanced the process for the floating of a new national carrier that will be fully owned by the public. This will enable Nigeria respond to her reciprocal obligations under Bilateral Air Service Agreement, BASA. There has also been Independent Power Projects ,IPP, for designated Airports As part of the National Aviation Masterplan , the minister has embarked on the remodeling of the nation’s airport. This remodeling project is the biggest terminal construction project undertaken by any aviation minister in recent times . Lagos, Abuja, Port Harcourt, Kano and Enugu airports have benefited from this remodelling projects. . Work has already begun to provide these facilities to meet international standards and best practice, thereby giving Nigerians and visitors modern and luxurious airports. The successful first phase of the plan has seen eleven airports being remodeled and reconstructed. Both terminals at Lagos along with the terminals at Abuja, Port Harcourt, Enugu, Kano, Calabar, Benin, Jos, Yola, Kaduna and Owerri have received and are receiving a complete overhaul to improve services and passenger experience. Work is also commencing to remodel a further nine airports. These are Maiduguri, Katsina, Sokoto, Akure, Ibadan, Bauchi, Ilorin and Jalingo. In addition, runway resurfacing

BRIEF ARIK Air partners Cranfield University for manpower development By LAWANI MIKAIRU & DANIEL ETEGHE

A

*From left: Youth Segment, Etisalat Nigeria, Michael Nwoseh; winner of Samsung Laptop, Tolulope Oladele and Specialist, Youth Segment, Etisalat Nigeria, Ifeoluwa Oyeyipo, at the Etisalat Cliqfest Seminar (Day 1), held at Obafemi Awolowo University, Ife on Thursday, 30th May, 2013. has been approved at Calabar, Maiduguri, Sokoto and Ibadan airports, which will improve take-off and landing capabilities. Abuja has been earmarked for a second runway, which will increase traffic and passenger numbers. At the end of this second phase, all 22 airports under the management of

FAAN will be completely overhauled and transformed, The new passenger terminals will incorporate modern facilities such as wide concourses, plentiful check-in desks, baggage drop services, state-of-the-art scanning and baggage handling, international retail concessions, restaurants and

washrooms. They will provide the domestic and international traveler with stress-free journeys in a relaxing and truly modern environment. Six cargo terminals are also to be built across the countr y, enabling perishable goods to be moved more easily.

Rivers State aircraft: Stakeholders fault House report By LAWANI MIKAIRU

T

he House of Representatives report on the Rivers state owned Bombardier Global Vision Aircraft, BD700-1A11, N565RS, which indicted the Federal Government and the regulatory body, the Nigeria Civil Aviation Authority (NCAA), has been faulted by aviation stakeholders. An executive member of the Aviation Round Table (ART) Sheri Kyari said the House of Representatives should not have hurriedly make public the report without objectively looking at the technical details of the issues involved. “ The question is were aviation laws breached? By that action, the House is now functioning as the regulator which should not be so. I don’t expect them to come up with a report without further explanations from NCAA, Caverton Helicopters and the Ministry of Aviation.” Kyari said. He said the Minister of Aviation who has the

responsibility of protecting the industry had to step in to stop the embarrassment to government, noting that the Minister has the right to take the actions she had taken in the matter. “I want to believe that the National Assembly should only intervene when the matter is getting out of hand, but the matter is still under control. By that report the House is acting like the executive instead of legislators. I don’t know the experts that are feeding the House with information. They should have allowed the Minister and NCAA to carry out their duties before they stepped in,” Kyari said. A pilot with one of the domestic airlines Uche Ojadi said the Nigeria Airspace Management Agency (NAMA) was over generous to have allowed the aircraft to fly from Port-Harcourt to Akure. He also said NCAA has the right to step in during situations like the matter between the Rivers state government and the regulatory body.

“NCAA as regulator has o v e r s i g h t responsibilities. It issues clearance to aircraft to fly and NAMA enforces that regulation so if NAMA does not act appropriately NCAA should step in. NAMA should not have allowed the aircraft to even take off when its clearance certificate had expired.” Ojadi further said that even with expired clearance certificate the Rivers state governor was still operating the aircraft because “The Governor used his influence to be flying the aircraft even when the document had expired, but NCAA has to bear the responsibility for the default.” However, an aviation security expert Group Captain John Ojikutu (retd) said that he was in support of the findings of the House because NCAA should not have allowed the said aircraft to even leave Port Harcourt and fly to Akure.

rik Airline has entered into partnership with Cranfield University to help in training and developing the airline’s manpower especially, the middle and lower level management staff. This partnership is aimed at human capital development in the Nigerian carrier. The partnership will also include exchange programmes between Arik Air and Cranfield University. According to the Managing Director of Arik Air, Mr Chris Ndulue “As a first step in the partnership, Dr. John Frankie O’ Connell, an expert in airline management at the Air Transport Department of Crannfield University will be conducting a three-day ‘kick-off’ seminar for Arik Air management staff from Monday, May 27 to Wednesday, May 29, 2013. The three-day seminar will cover airline industrial trends, commercial and airline strategy, among others.‘’ He further said that Dr. O’ Connell is expected to dwell on general trends of the aviation industry, aero politics and new regulatory trends facing the airline industry, airline traffic, demand, forecasts and aircraft orders as well as traffic measurements for full service airlines among others topics. Speaking about the partnership, Dr. O’ Connell said the future of aviation lies in Africa as more than 2.7billion people travelled by air. And half of this figure will come from Africa in the nearest future as the aviation market is now in Africa. ‘’So Africa airlines should start developing manpower that will be able to cope with this new challenges that will confront the airlines” he said. According to the Arik Air Executive Vice President, ”The airline industry is a dynamic one and at Arik Air we believe we have to be in tune with current trends in the sector. This is the essence of this partnership which will set Arik apart from other airlines.


36 — Vanguard, MONDAY, JUNE 3, 2013

MID-TERM REPORTS ON KEY MINISTRIES: MTI – 1

vicahiyoung@yahoo.com 08033348923

Appointments & Promotions Korodo reelected Lagos Chairman as NUPENG holds zonal elections

N

Governor Emmanuel Uduaghan of Delta State, Minister of Labour and Productivity, Chief Emeka Wogu, his Ministry of Information counterpart Mr. Labaran Maku, and the Special Adviser to President Goodluck Jonathan on Political Affairs Alhaji Ahmed Gullak, at the sensitization and appraisal tour of the Community Services, Women and Youth Employment (CSWYE) Project of SURE-P in Asaba, Delta State, South-South Geo-political Zone.

Premium Pensions appoints Ideva, Mele MD, ED

P

remium Pensions Limited, has announced the appointment of Mr. Wilson Ideva and Adamu Mele as its Managing Director and Executive Director, ED, (Business Development and Investment) respectively. Mr. Ideva had served as the Managing Director/CEO of First Guarantee Pensions Limited and Penman Pensions Limited before joining Premium Pension Limited. Ideva is a chartered accountant and double merit award winner with considerable expertise in finance and general administrative duties in diverse sectors. An accountancy graduate of Auchi Polytechnic, he has working experiences as an accountant, treasury manager, credit controller, financial/management consultant, and finance manager. The new Premium Pensions Managing Director is Fellow of the Institute of Chartered Accountants of Nigeria, ICAN, and a member of the Nigerian Institute of Management. Upwardly mobile and imbued with exemplary commitment to professional excellence, Ideva is a multidisciplinary and immensely talented technocrat and turnaround manager with a track record of good contributions to growth and organizational changes in most places where

he has worked. On his part, the new Executive Director, Mr. Mele has functional expertise in economic and investment research, financial advisory services, asset management, capital market regulation and administration. A law graduate of the University of Maiduguri with an MBA from the University of Ado Ekiti, he had held several positions in financial management and administration in various organisations, including Head, Northern Region, of IBN Securities Limited (a subsidiary of First Inland Bank Limited) and CEO Tiddo

Universal Securities Limited (Member Nigerian Stock Exchange), before joining Premium Pension Limited. His many professional certifications include Fellow Certified Pension Institute of Nigeria. He is also an Associate Chartered Stock Broker (ACS.) and also, an alumnus of New York Institute of Finance and Wharton Business School, University of Pennsylvania. The new ED has brought to bear on the leadership of Premium Pension Limited a strong pedigree in the financial sector and profound knowledge of the workings of the pension industry.

igeria Union of Petroleum and Natural Gas workers, NUPENG, has concluded its zonal elections, electing officers to its four zones across the country. A statement by the Acting General Secretary of NUPENG, Isaac Aberare, said the union’s zonal elections took place simultaneously in Warri, Port Harcourt, Kaduna and Lagos on May 24, 2013. According to him, the zonal elections was a prelude to the NUPENG National Delegates Conference that will come up in December this year, which will usher in a new National Executive Council, NEC. According to the statement, “the new Zonal Chairmen elected are Comrade T.N.A. Korodo, Lagos Zone, Comrade Idris M. Gana, Kaduna Zone, Comrade Godwin Eruba, Port Harcourt Zone and Comrade Cogent Ojobor, Warri Zone.” The zonal chairmen during their acceptance speeches pledged loyalty to the administration of Comrade Igwe Achese and his developmental efforts and programs. The President of the Union, Comrade Igwe Achese, praised members for the maturity exhibited during the campaigns and elections and wished them the best during their tenures. NUPENG had before the zonal elections also held its special delegates’ conference on April 26, 2013 to review the constitution, preparatory for the delegates’ conference and was attended by delegates from all the branches nation-wide. The delegates agreed in unison to the various amendments in the constitution as recommended by the Constitution Review

Constitution. The Union is geared towards re-positioning the Union to meet the new challenges in industrial relations hence the need to put these structures in a right footing before the delegates’ conference proper in December, this year.

Korodo

Uraih Heads NIMN’s Fellows

A

s part of efforts of the new leadership of the National Institute of Marketing of Nigeria, NIMN, to reposition the institute and enhance marketing practice in the country, NIMN has inaugurated an advisory body to the institute. The body known as body of Fellows is headed by Dr. Ify Uraih. Giving reasons for its inauguration, Acting President of the Institute and Chairman of Council, Mr. Ganiyu Koledoye, explained that the setting up of the body, whose responsibility will be purely advisory, had become imperative to enable the institute draw from the fountain of knowledge of these respected individuals in the institute.

CBS appoints Okere as entrepreneur in residence F

OUNDER and Chief Executive Officer, CEO, Computer Warehouse Group, CWG, Austin Okere, has been appointed by Columbia Business School, CBS, as an Entrepreneur in Residence, EIR, in their Entrepreneurship Development Programme EDP. He just came back as guest lecturer from Columbia Business School’s Eugene Lang Entrepreneurship Center and Massachusetts Institute of Technology’s Legatum Centre for Development and Entrepreneurship Following this, Okere is to

serve as an Entrepreneur in Residence at CBS, where he is expected to use his expertise to promote Entrepreneurship in an Emerging Economy. Okere is credited to have built the Computer Warehouse Group into a Pan African Systems Integration Company with revenues in excess of $120million per annum. The company has 650 staff in Nigeria, Ghana, Uganda and Cameroon. In 2012, Okere was named ICT Man of the Decade by ICT Watch Africa Digital Network, while CWG was named

Conglomerate of the Year. CWG was also named ICT Company of the Year by Technology Africa Group. The organizers cited CWG’s contributions toward the growth and development of ICT, youth empowerment through ICT education, and nation building. With his new position, Okere will be required to visit the United States of America, USA, twice a year for two weeks and also spend a minimum of eight hours per month in online interactions with Faculty and Students.

Dr. Ify Uraih


Vanguard, MONDAY, JUNE 3, 2013 — 37

People in Business

I love working with children — Otobong Ebe

BRIEF

By EBELE ORAKPO

M

r. Otobong Ebe is the Administrator of Kaduna-based Anchor Schools. In this chat with Vanguard, the graduate of Accountancy from the University of Abuja, speaks on how he got into education business, the challenges and his vision for the school. Excerpts:

Tekramspace plans to reduce unemployment

T

Upon graduation from the University of Abuja, Mr. Otobong Ebe who was born in Kano, raised in Kaduna and has lived all his life in the north, worked for a nongovernmental organisation (NGO) for a few years before going to the UK for a master’s degree in Marketing and Advertising.

Going into education business:

Despite having a degree in accountancy, Oto, as he is fondly called by friends and family, decided to go into education business because according to him, he loves working and spending time with children. Moreover, he found accounting boring. “I did not know how boring accounting was until I got into it. I realised the boredom in my first year post-graduation. It is monotonous. I actually have three major passions tourism, education and sports," but he chose education above others because “on coming back to Nigeria, I had not intended to go into education immediately but there was a need. The school was already in existence but the management was not so good and there were many opportunities that needed to be explored which needed my expertise. So I just jumped into it,” said Oto.

The school:

He said; “I came back and went fully into the school business without bothering to look for another job because one, I love working and spending time with children and it was just something I knew I needed to do, get it right and that is what we are working on. Over the last

*Oto Ebe...Certain government legislations do not encourage one to put in his or her best into running a school. couple of years, it has really grown and we are starting the secondary section in September. We are also trying to move over from the regular Nigerian curriculum to infuse a bit of the British curriculum as well because right now, we do not have any British secondary school in Kaduna. I noticed that parents of most of our graduating pupils want to send them off to boarding schools in Abuja and Lagos so that they can have that British education so I am trying to start it in Kaduna," he said. "My mother has been a career teacher so myself and my sister persuaded her to quit working for someone else and start hers after we all left the house. She started a daycare in the house, then pre-school, and it grew and grew to the point where it is now. She is still the proprietress though she has taken a back seat now. So I run everything administration and oversee academics as well but she comes in from time to time to touch on things academic." The school which will be 10 years old in September, has as its vision 'to nurture a complete child in the transition to adulthood in

,

I don’t know if I should call them mushroom, there are lots of schools with no standards springing up everywhere and you see the half-baked teachers and pupils that graduate and it is really sad

,

readiness for 21st Century challenges and instilling the core values of diligence and excellence.'

Challenges:

On the challenges faced in the business, Oto said they are numerous. "For one, certain government legislations that do not encourage one to put in his or her best into running a school. For example, in Kaduna State, we are all required to belong to certain categories. Schools are categorised and then the higher they rank your school, the more money you have to pay. Schools have to pay as much as N250,000 a year to government, besides your regular pay as you earn tax and the income tax paid by the owner of the school. That has been a problem. But it is a work in progress because we are engaging the government to try and see our point of view and bring this down.

"They want all the schools to step up standards but where I fault them is that they are not carrying out oversight functions to enforce certain standards amongst schools so you have all these schools, I don’t know if I should call them mushroom, there are lots of schools with no standards springing up everywhere and you see the half-baked teachers and pupils that graduate and it is really sad. So I think paying this money is not such a problem if they will exercise their oversight function and enforce the standards across board."

In the next five years:

“Anchor in the next five years should have a standard secondary school, and in seven years, I intend to start an A-level programme as well and God willing, in 10 years, we should look at establishing a university or even a monotechnic,” he enthused.

ekramspace, an online business portal has concluded plans to put on stream a website where businesses and freelancers can work together while unlocking all the accruing benefits. Speaking with reporters on how the portal will operate, Managing Director and Chief Executive Officer, Tekramspace Nigeria Limited, Mr. Abiodun Owotomo, said businesses are under increasing pressure to achieve bottom line growth and deliver constant innovation in an overcrowded market in a changing global economy. Owotomo said businesses that hope to survive in such environment must explore new and innovative ways to generate sales, display a tight control on costs and constantly update organization skills. “More and more companies are turning to temporary employees to address these very challenges and gain the benefit of employing a component of flexible workforce either through contract employees or projects,” he said. He listed the benefits of working with Tekramspace to include cost saving to the business from more efficient delivery and timely completion of projects. Savings will also be made on pension contributions, health benefits, administrative and other associated costs which can be substantial in the long run. Other benefits include harnessing of new skills and increased the quality of projects. “Working with Tekramspace is as easy as opening an email account and you could be up and running in a matter of minutes. See what contract employees can do for your business! Visit us on w w w. t e k r a m s p a c e . c o m today.” The objective of this initiative is for Tekramspace to contribute its quota to government’s effort at reducing unemployment in the country, Owotomo said, adding that “Tekramspace is a Nigerian business that is keen to see significant improvement in the lives of fellow Nigerians.”


38 — Vanguard, MONDAY, JUNE 3, 2013

T

he Honourable Minister for Trade and Investments is one public official who, at the beginning, appeared to be cast in a superfluous role in an over-bloated cabinet of over forty Ministers and countless “Advisers” – mostly free-loaders. But, he has since demonstrated two qualities indispensable for public officials anywhere in the world, especially Nigeria. He works hard at his assignment and he is a good listener, who does not become impetuous when criticized. Instead of the silly rejoinders beloved by the “Special Assistants” of other Ministers, the Minister reaches out to his critics and explains his position. Inevitably, a fair-minded critic soon discovers that the Minister has two points in his favour. First, he works within a system which waters down his own best efforts. Second, as a low budget Ministry, MTI does not have the funds to promote itself; no advertisements to place in the media and few workshops to organize. That means that most of its best efforts are under-reported and their impacts on our future development are seldom appreciated. Yet, in the absence of a Ministry of Economy Development, MTI

Mid-Term reports on key ministries: MTI – 1 has been given the mandate to determine the future of the Nigerian economy at a time when we are certainly transiting from a world in which America imports oil to one in which the USA will increasingly export oil in various forms. For Nigeria this is the most significant news of the year and how this country deals with that monumental change will determine our future as a people. The person charged with the responsibilities of charting our navigation from over-dependence on crude oil exports to a more diversified economy must be exceptional in more ways than one. Every other Ministry can be headed by at least five hundred Nigerians without anyone noticing the difference. The number of Nigerians who can handle MTI can be counted on the fingers of the two palms of our hands and we still will not count all the fingers. One of them is on seat right now. A little bit of digression is required to illustrate the power of the MTI. JAPANESE MODEL

MITI

AS

In the I950s and I960s, there was a fierce debate among economists about the superiority or otherwise of strictly planned economies (mostly socialist and communist countries like the

,

“On earth there is nothing great but man; in man there is nothing great but mind”, Sir William Hamilton, 17881856.

economy. The dream was understandable because at the time the USSR was growing at about ten per cent annually while the USA was averaging three to four per cent.

The person charged with the responsibilities of charting our navigation from overdependence on crude oil exports to a more diversified economy must be exceptional in more ways than one

USSR, East Germany, China, Yugoslavia etc) and free economies (mostly capitalist countries like the USA, UK and Western Germany etc). The two competing models of development were the most prominent and for about twenty years the planned, socialist economies delivered higher GDP growth rates such that at one point the leader of the USSR, Nikita Kruschev, boasted that the country would soon overtake the United States as the leading

,

For a while, the world was divided into planned and free economies until the Japanese, still under US administration, came up with a third option – a semi-planned economy. This approach to economic management imposed elements of a planned economy on the basic free market; as will be explained shortly. Before long, this approach to economic development had propelled Japan from the ruins of the Second World War to the third

largest economy. The engine room of the Japanese Miracle was the Ministry of International Trade and Investments, MITI. So powerful was MITI that the Ministers, in those days, was regarded as the Deputy Prime Minister as the brief description down-loaded and summarized will demonstrate. “Japan’s Ministry of International Trade and Industry, MITI, was formed in 1949 from the union of the Trade Agency and the Ministry of Commerce and Industry in an effort to curb post-war inflation and provide government leadership and assistance for the restoration of industrial productivity and employment. MITI held primary responsibility for formulating and implementing international trade policy, although it did so by seeking a consensus among interested parties, including the Ministries of Foreign Affairs and the Ministry of Finance. MITI also coordinated trade policy on issues affecting their interests, with the Economic Planning Agency, the Bank of Japan, and the ministries of agriculture, construction, forestry and fisheries, health and welfare, post and telecommunications, and transportation”. It might be added that MITI also had control over foreign exchange allocations.

Interview Frank Umeh a lawyer and Managing Director, Tradewinds Duty Free Market, Tinapa Free Trade zone, Calabar, in this interview offers insights into how the Tinapa free trade will be successful. He said he believes that Tinapa is a viable project and everyone should be thinking of how to make it do better than it is doing presently. Excerpt. BY INNOCENT ANABA

H

ow would you describe doing business in

Tinapa? Tinapa is a relatively new chapter in business in this clime. It is like a breath of fresh air. Tinapa is the only free trade zone in Nigeria today that is engaged in trade in finished goods. The trade in Tinapa involved importing goods from outside the country for onward distribution to either the local market or outside Nigeria. If you have customers from other countries outside Nigeria coming into Tinapa to buy, it C M Y K

becomes a form that Dubai takes. You have Nigerians going to Dubai to import goods into Nigeria. In Tinapa, we have customers from different countries like Cameroun and even from the Equatorial Guinea coming in to do shopping. Then for the local economy, Nigerians come to Tinapa to make their purchases. Anytime you visit Tinapa, it is assumed that you have left the country. Trade in Tinapa has been good; it has been wonderful but it could be better. What is your take on the operation of free trade zones in this country? I have been a keen observer of the development in Tinapa

Tinapa is gold mine in waiting – Umeh free trade zone since it was commissioned. And my training as a lawyer is a leverage in the essence that one understands the legal framework involved. I have read several gazettes of other free trade zones within and outside this clime. I have travelled to Dubai and I have also heard much about the operations of the Dubai free trade zone. When the Tinapa law was signed by the late President Umar Yar’Adua in 2009, I took time to read through the law and I saw the enormous potential and opportunity that Tinapa has for any serious trader that really wants to excel beyond the identified hiccups and difficulties in logistics in the importation of

goods into the zone then. I have read the law of Tinapa back to back and, therefore, conversant with the procedure. So, it’s been more of learning and practice. I believe that one needs to constantly update his knowledge in any field of endeavour he is into because when you stop reading, you start dying. What informed your uncommon optimism that Tinapa free trade zone would be viabe? I have studied the Tinapa project and I have come to the conclusion that it is a sound concept. The Free Zone was actually created to meet a need that had been identified. Government didn’t just set

up this zone for the sake of setting up a zone. But like every new concept, there are bound to be challenges especially in a unique environment like ours. For me, failure is not an option in this matter. Instead of asking if Tinapa will succeed or not, we should be thinking of how to make it successful even beyond the expectation of those behind it. The targeted issue should be on how Tinapa can meet the needs for which it was established. And when you talk about those needs, you talk about the quality of goods, the manufacturers’ interest to look into the Nigerian trade, the image of the country, the collateral interests of the investors, the businessmen and the customers.


Vanguard, MONDAY, JUNE 3, 2013 — 39

Advertising, Media & Marketing

Re-inventing promo as tactical positioning strategy Stories by PRINCEWILL EKWUJURU

...As 9 Legend winners shop in Dubai

R

ecent development in the stout market show that there is a new and interesting dimension to the competition among the various brands jostling for patronage, until Nigerian Breweries Plc, owners of the Legend Extra Stout brand decided to revitalize the industry few years ago. The market which was believed to be dominated by Guinness Extra Stout before Legend’s Real Deal campaign changed the growing intensity in consumer promotion deployment, brand activation, thematic and tactical creative campaigns and share of voice in the media. Accordingly the marketing antics of both leading stout brands in the market would take a while to abate. But the interesting part of the whole episode is that consumers are the focal point for this battle. Having spent a better part of its early life trailing Guinness Stout, Legend Stout through its Real Deal campaign in 2012 recorded a milestone when it was announced the best stout in taste and quality at 51st Monde Award ceremony in Athens. Aside its newest achievement, the brand last year launched the first consumer promotion in its history and rewarded consumers with instant gifts prizes such as TV sets, generating sets, BlackBerry handsets and many more. In 2012, the brand also created an engagement platform tagged; Legend Real Deal Night, where consumers were invited to engage with the brand through music and comedy while instant gifts items were given out. To continue its stride in consumer reward system, Legend extra Stout unveiled a revamped and repackaged Legend Real Deal promo Season 2 to further reward loyal consumers. The promotion will reward consumers with 350 pieces of 32" television sets, 720pieces of 130 litres of refrigerators, 720 pieces of BlackBerry Bold 6, 200,000 pieces of N500 airtime, 200,000 pieces of N200 airtime, 2.5 million free Legend extra stout and 25 individuals to shop with N1 million in Dubai. Observing a boring and C M Y K

Nine out of the 25 expected winners in the on-going Legend Real Deal promo session 2 at a shop in Dubai the United Arab Emirate, UAE, recently.

uninspiring stout market in the country, NB Plc in 1992, launched Legend to inject excitement into the category. The launch was meant to catch the younger generation in a more contemporary manner, associate the brand with already existing stout values hence the first copy line for the stout “Light up your lifePut a spark in your life.” Twelve years later, the promoter ’s quest to turn Legend into a brand beater in

the dark beer category, Legend was reformulated and enriched with Vitamins to reduce the bitterness and alcohol content of the brand. The process also removed the observed ‘burnt taste’ that gave the brand the initial unpleasant flavour which was perceived not to be the quality of the ideal stout brand. Hence a new advertising copy was created “Legend makes you feel real good’. Unlike previous activities

around the brand, three years later, a new packaging, which involved change of bottle and labels were introduced to bring excitement to the brand and tickled consumers. The brand throughout this period never seems to get it right in terms of positioning, packaging and quality but in 2009, Legend was repositioned and repackaged to elevate the brand from savings to mainstream category.

Bailey’s bottle takes new look B

aileys, the Irish cream drink from the stables of Diageo Brands Nigeria is now in a new bottle. The drink formerly in a short bottle now comes in new bottle with ‘high shoulder ’ leaving admirers desirous of the spirit drink. In a chat with members of the media to announce the reinvention, General Manager Diageo Brands Nigeria, Mr. Felix Enwemadu, said the introduction of the new Bailey ’s bottle into the Nigerian market is in line with the global drive to further position the brand uniquely in the minds of its consumers. “We have created a beautiful new bottle which is both modern and stylish and has a greater sense of femininity. Baileys is a brand that appeals uniquely to women and the new bottle was created to embrace and celebrate the stylish and contemporary woman. The

new Baileys bottle evokes the brand’s modern, feminine sense of style” Enwemadu said. Enwemadu further explained that “the striking new design is the next step in the brand’s quest for renewed femininity as it restates the provenance and heritage of Baileys in a more elegant way. The new bottle has been heightened and the shoulders lifted, to give a more elegant profile and pose a more alluring and impactful prospect on shelves and in shops worldwide”. Also commenting on the new bottle, Managing Director/Chief Executive, Guinness Nigeria Plc, Mr. Seni Adetu, said the introduction of the new bottle shows the desire of the company to continually satisfy its consumers. “Baileys is on the path of exciting our consumers with

this new bottle. Despite the re-design, the iconic drink still maintains it distinct creamy taste that stood it out since 1974. While they enjoy the smooth, creamy taste of Baileys, we encourage our consumers to drink responsibly at all times.” Adetu said. The Baileys bottle redesign follows the announcement made in October 2012 of the brand’s most ambitious global marketing campaign to date; ‘Cream With Spirit’ campaign which was launched across TV and print on around the world, with the aim of beaming light on women and celebrating the spirit of modern womanhood. The bottle has been launched globally since January 2013.

BRIEFS Lagos NIPR holds AGM

C

ome July 2013, the Lagos State Chapter of the Nigerian Institute of Public Relations , NIPR, has unveiled plans to mark its th 24 Annuai General Meeting (AGM)/Public Relations Week. The theme of this year ’s lecture titled: Public Relations and Good Governance: What Synergy? Is expected to be delivered by the Governor of Lagos State, His Excellency, Babatunde Raji Fashola (SAN), on July 4 in Lagos, as His Royal Majesty, Oba of Lagos, Rilwan Akiolu, is the expected Royal Father of the day. Barr OlajideOlogun, Chairman, Lagos , NIPR at the Pre-AGM briefing, said, “This year’s theme will mirror on the concerns for good governance of Nigeria towards achievable national development.” “It is also meant to x-ray how professional and public relations strategies and methodology could be deployed to enhance participation and cooperation of all, for effective political leadership.” Continuing he said that since Nigerians yearns for a wholesome transformation of the country that would guarantee sustainable and efficient infrastructure, good governance, peace and security, the lecture would provide answers to the roles public relations professionals can play to achieve them.

Sweet Sensation celebrates children

S

weet Sensation Confectionery has in all its branches to commemorate with children in the celebration of the just ended Children’s day celebration In showing immense appreciation to her Customers for their loyalty and support towards the brand, the restaurant, winner of the 2012 WATH Awards Platinum Category treated the children to fun, games, and gifts rewards. According to the Marketing Manager, Oluyemi Yusuf, the Children were given freebies, entertainment and lots of fun for all that walked into any Sweet Sensation Outlet. You should have seen the excitement and satisfaction on their angelic faces. He further stated the gifts, games and fun provided were all given out free to the kids.


40 — Vanguard, MONDAY, JUNE 3, 2013

Email:lesleba@lesleba.com, lesleba@gmail.com Blog page:www.lesleba.com/blog2 Website: www.lesleba.com Tel:0805 220 1997

Protecting the dollar against the naira with CBN reserves

,

I

n the light of popular perception regarding the virtue of large reserves, it may seem incredible for anyone to suggest that the process of accumulating reserves by the Central Bank of Nigeria is in reality, actually the primary reason for a low value naira. Let us begin to expound this observation with the recognition that out of total current national reserves of about $50bn, the excess crude account apparently holds about $9bn, while about $1bn is domiciled in the sovereign wealth account; the balance of about $40bn comprise what CBN proudly claims as its own reserves, which do not technically belong to the federation account, and cannot therefore be appropriated. Undoubtedly, such unfettered largesse would pose the grave danger of moral hazards; nonetheless, the $40bn cache represents the answer for those Nigerians who wonder how CBN funded a host of social welfare interventions in the recent past; the cash allocations to victims of Kano and Madalla bombings as well as hundreds of millions of cash donations to selected educational institutions, provide ample testimonies of CBN’s unfettered discretion to disburse funds from its bountiful reserves. We also recall that after Prof. Soludo’s consolidation exercise, the CBN equally allocated about $500m each, without collaterals, to 14 Nigerian banks, to fund international operations. In essence, however, the larger the CBN’s component of reserves, the deeper also would be poverty nationwide, with the collateral of average annual double-digit rates of

An inquisitive observer may even wonder what business CBN does to garner such bountiful dollar revenue. The answer to this question is actually quite obvious; the CBN earns its dollar revenue by selling back public sector dollars to the true owners of the dollar revenue

,

inflation and cost of funds to the real sector equally disenabling. An inquisitive observer may even wonder what business CBN does to garner such bountiful dollar revenue. The answer to this question is actually quite obvious; the CBN earns its dollar revenue by selling back public sector dollars to the true owners of the dollar revenue; i.e. the three tiers of government. Question then is, how does the CBN achieve this sleight of hand? Our annual fiscal plans indicate that over 80 per cent of budgeted revenue comes from crude oil export, while the balance is derived from internally generated tax revenue. Curiously, however, all monthly allocations to the three tiers of government are fully denominated in naira; the implication, therefore, is that the dollar component of the distributable revenue has obviously been captured and substituted with freshly minted naira allocations, at a

rate of exchange that is unilaterally determined by the CBN, with a cursory glance, at prevailing rates in the black market for guidance! Thus, CBN can literally keep printing more naira to buy up increases in dollar revenue! Evidently, within such a framework the size of naira allocations would definitely increase as dollar revenue also rises; thus, for example, distributable monthly dollar revenue of N1bn would translate to CBN’s cash injection of about N160bn, while $5bn dollar revenue would result in a bloated injection of N800bn fresh funds into the money market. Consequently,, the larger the naira cash injections, the greater will be the problem of surplus cash or excess liquidity, which is defined as that amount of cash over and above what a bank is legally required to hold for its day to day operations. Instructively, the greater the extent of excess liquidity, the more urgent will be the need to reduce the cash surfeit, so

as to combat the threat of inflation. The process of excess liquidity reduction forces CBN to return to the money market to borrow some of the burdensome systemic cash surplus. To this end, the CBN would gallantly stride into the money market and offer to pay the commercial banks mouthwatering double digit interest rates to induce them to part with some of the surplus cash in their till. In this manner, the CBN competes with genuine manufacturers and industrialists for market funds, and ultimately outbids the real sector, which cannot normally survive if it borrows at a higher cost than the oppressive rates aggressively offered by government. Thus, apart from increased cost of funds to the real sector, the related collateral to this odious market scenario includes a shrinking industrial landscape, an annual inflationary average of about 10 per cent, increasing rate of unemployment, as well as increasing national debt and related service charges. Curiously, the impact of CBN’s naira substitution for dollar revenue is probably less obvious with regard to naira/dollar exchange rate, even though it is easy to recognize that pitching increasing naira against relatively rationed dollars in the market should predictably lead to a weaker naira rate of exchange, while conversely, pitching more

dollars against more stable naira in the market will similarly lead to a stronger naira rate of exchange. As earlier discussed, rising distributable dollar revenue leads to fresh injection of hundreds of billions of naira on which banks can leverage to create the burdensome spectre of excess cash, which may then become ultimately pitched against the rationed dollar sums, sold in bi-weekly auctions by the CBN. It is not surprising, therefore, that in consonance with open market supply and demand mechanism, humongous naira sums chasing relatively rationed sums of dollar will lead to a weaker exchange rate for the naira. In such market place, therefore, CBN’s self-styled share of dollar reserves will certainly increase whenever CBN auctions less dollars in the forex market, notwithstanding the reality that the less dollars offered for auction, the greater will be the demand for dollars, and ultimately the weaker also will be the naira rate of exchange!! Consequently, Nigerians have to be wary about celebrating optical increases in CBN’s share of dollar reserves, as quite clearly, the current arrangement forebodes doom for the naira rate of exchange, and ultimately also for the domestic purchasing power of our naira with oppressive social and economic consequences. Nonetheless, our seeming economic dilemma will be favourably resolved by the adoption of dollar certificates for the payment of allocations of dollar-derived revenue. SAVE THE NAIRA, SAVE NIGERIANS!!

Business & Economy Fixed cargo scanner at Seme border ready for operation

T

he fixed scanner at Seme border built at the cost of N3.54 billion has been installed and tested by the Nigerian Nuclear Regulatory Authority (NNRA) for full scale operation. Mr Fred Udechukwu , the Chief Executive Officer of Global Scansystems Ltd., owners of the scanner, said this on Friday at Seme, near Badagr y, during the Technical Sight Acceptance Test of the facility. Udechukwu said that the contract with the company, C M Y K

which is the only indigenous service provider, was to supply scanners at various locations across the country. He said that according to the terms of the contract, the firm was expected to install a fixed scanner at Seme border. “In the interim, as a responsible company, we installed a mobile scanner which is the same thing doing what the stationary scanner will do”, he said. He said that while the mobile scanner emitted 3.8 million volts x-ray, the fixed scanner emitted nine million volts.

Udechukwu said that the essence of the test was for NNRA to accept the stationary scanner and issue the company a certificate after which it would commence full operations. He said that the fixed scanner, like the mobile one, was capable of scanning 20 trucks in one hour and 480 trucks in 24 hours. Global Scansytems is operating Lot 3 of the Destination Inspection contract covering Seme, Murtala Muhammed airport, PTML Tin-Can Island, all the free trade zones in Lagos, Calabar and Warri ports.

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

-

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

CONTRIBUTORS Princewill Ekwujuru Naomi Uzor Providence Obuh LAYOUT

-

Media/Marketing Industry Micro Finance Graphics Department


Financial 03062013