Financial Vanguard

FEBRUARY 10, 2014

By OMOH GABRIEL, JUDE NJOKU and FRANKLIN ALI

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angote Group has distanced itself from the raging controversy that cement sold in Nigeria are of the 32.5 grade that can only be used for plastering, culvert and other low level construction grade. The company said it is within the realm of Standard Organisation of Nigeria, SON, to fish out those manufacturing and selling 32.5 grade and ensure that only the prescribed standard cement is sold in Nigeria. Dangote Group added that it is only the regulator that can spot the difference as there are no physical features to determine the grade except through laboratory test.

But other cement manufacturers differ, saying that there should be no limitation on cement products in the market place as the 32.5 grade has been part of building in Nigeria for 54 years. They said “We believe

Dangote, others disagree on grade of cement prescribed for sale ...Fresh tasks for SON fundamentally that consumers should have a choice of products to suit their needs and applications.

Current and future standards should continue to ensure that there is a good environment for choice, competition and quality.

“It is a fact that in the last few years, there has been more innovation and product choice, which has actually

generated price reductions for end users.

It has been suggested that cement products should be limited and some removed from the market. Products such as 32.5 have actually been part of building in Nigeria for the last 54 years and are used widely throughout the world. Limiting product choices will not be good for the consumer and will send

the industry backwards and away from current international trend,” the manufacturers stressed, while assuring that the cement manufacturing community will “continue to support all initiatives in conjunction with other stakeholders to eradicate building collapse.”

Messrs Dangote Cement Nigeria Plc pointedly dissociated itself from the companies producing 32.5grade cement in the country. The company explained that it produces only the 42.5 grade of cement in its three plants

Continues on page 18

135.65

-0.1

2,907.00

+21.00

15.69

-0.16

108.79 99.14

+1.60 +1.30

CURRENCY BUYING CENTRAL

WORKING VISIT - From left, Mallam Othman Abubakar, Airport Manager; Princess Stella Oduah, Minister of Aviation, and Mr. George Uriesi , FAAN MD, during inspection work assessment visit to the Sultan Siddiq Abubakar III Airport, Sokoto, on Wednesday.

DOLLAR POUNDS EURO FRANC YEN CFA WAUA RENMINBI RIYA KRONA SDR

154.7 252.3199 209.1292 171.0701 1.5254 0.3005 236.3267 25.5274 41.2612 28.0207 237.4181

155.2 253.1351 209.8049 171.6228 1.5303 0.3105 237.0903 25.6103 41.3945 28.1112 238.1854

SELLING 155.7 253.9504 210.4806 172.1755 1.5352 0.3205 237.8539 25.6933 41.5278 28.2018 238.9528

CBN Exchange rate as at 07/02/2014 C M Y K

18 — Vanguard, MONDAY, FEBRUARY 10, 2014

Cover Story

The Basic Guide to Starting Your Business Part 7 FORMS OF ENTREPRENEUR: here are different forms of entrepreneurship, and they will be treated one after the other.

Sole proprietorship: This is a situation whereby the function of an entrepreneur is performed by one person, who owns the business but has people who are led by him or her, working to achieve the desired success. It is important to note that running a business for the sake of just making profit for yourself is not entrepreneurship; you must be an employer of labour. If you look around the country today, we have lots of entrepreneurs who fall under this category, e.g. Eleganza Group of

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Dangote, others disagree on grade of cement prescribed for sale at Ibeshe, Gboko and Obajana.

Dangote Group’s Director of Sales and Marketing, Mr. Ekanem Etim, who made the clarifications at a news briefing in Lagos, called on SON to enforce the regulation that only cement that meets the 42.5 grade is manufactured or imported into the country.

He noted that before now when cement was largely imported, SON had insisted that only 42.5 grade of cement was allowed into Nigeria and wondered why upon domestication of production, the same regulation should not be applied.

Earlier last week, other cement manufacturers in Nigeria had distanced themselves from the recent claim that poor cement quality is responsible for the growing wave of building collapse in the country. The manufacturers, who debunked the claim, comprised Ashaka Cement Plc, Lafarge WAPCO Plc, Northern Cement Company of Nigeria, Sokoto and United Cement Company Plc, Calabar. But the Dangote group was not represented at that meeting.

In a statement, the other manufacturers said: ”The Nigerian cement industry is one of the most modern in Africa with significant new technology and capacity recently installed. Cement quality conforms with the highest international C M Y K

standards and the industry is constantly working with the regulatory authorities (Standards Organisation of Nigeria) to ensure up-to-date testing, certification of products and quality norms.”

It stated further that the cement industry in Nigeria is “committed to the sustainability of construction

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Continued from page 17

Before now when cement was largely imported, SON had insisted that only 42.5 grade of cement was allowed into Nigeria

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and we share public concern regarding the menace of building collapse.”

Commenting on the possible cause of building collapse, the manufacturers said, ”Experience throughout the world has shown very clearly that cement quality is not the source of building collapse.

Rather, the root cause is most frequently related to poor construction practices. The level of skill, education and awareness in the construction sector must be improved.”

According to them, some of the past and on-going efforts

of the cement manufacturers to address the issue include: developing several initiatives such the National Symposium on building collapse to bring stakeholders together to create awareness.

“There have also been several programmes in conjunction with Standards Organisation of Nigeria (SON) to educate and certify block makers and masons. We are committed to organising even more education and awareness in this area and have recently participated with the Ministry of Works to pursue this initiative.” The cement manufacturers remarked that the Nigerian cement industry is leading the way in Africa in high quality by providing innovative products and solutions, which are required by a growing construction sector.

However, Dangote Group’s Sales Director, Mr. Ekanem Etim, said, “Some years back, the preponderance of cement in this country was imported and the standard laid out by the Standards Organisation of Nigeria, SON, was that you cannot bring in any cement that was below 42.5. Upon domestication of the production, we believe that the standard should not be lowered. We at Dangote Cement, remain steadfast in meeting up to that particular standard. We are a key player in this industry and we believe that Nigerians deserve the best in quality and service delivery. That is

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UNVEILING: From left, His Royal Majesty, Oba ldowu Abiodun Oniru; Group Chief Executive Officer, Forte Oil, Akin Akinfemiwa; HRM, Oba Rilwan Babatunde Akiolu I, Oba of Lagos and Chief Financial Officer, Forte Oil, Julius Omodayo-Owotuga at the unveiling of Forte Oil Mega Station, Lekki, Lagos.

Running a business for the sake of just making profit for yourself is not entrepreneurship; you must be an employer of labour

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Companies - dealers in household and kitchen appliances, Zenon Oil, House of Tara (a leading make-up brand in Nigeria), Dangote. All these are examples of entrepreneurs that are sole proprietors but what distinguishes them from the ordinary businessman, are that they are employers of labour (they have employees working for them). They identified needs in the society and made an effort to fill them.

Partnership: This is a situation in which the business is founded and run by more than one person, who are also employers of labour. This type of entrepreneurship is found mostly in law firms, accounting firms, estate surveyors, but not limited to these practices e.g. we have DHL, May & Baker, Aluko & Oyebode, amongst others. Other types of entrepreneurship include private companies, public

companies, limited liabilities, corporations or statutory corporations.

At this juncture, I would like to state that there is a marked difference between a businessman and an entrepreneur. While a businessman is one who is involved in business just to make profit for himself and meet his needs, an entrepreneur is one who is an employer of labour and a wealth creator, and is also involved in business.

Interestingly, the steps I will be treating in this book and everything I have said so far, applies to both the businessman and the entrepreneur, and that is because most times, some businesses evolve from just business to entrepreneurship.

CHARACTERISTICS OF AN ENTREPRENEUR Successful entrepreneurs/ businessmen all around the world possess certain characters, traits or qualities, which have become the yardstick or benchmark for measuring their success. If you want to thrive then you must acquire these traits.?

Do what you enjoy.

Personal satisfaction is a very important ingredient that contributes to the growth of your business. When you do what you enjoy doing, this will be reflected in the success of your business or subsequent lack of success. In fact, if you don’t enjoy what you are doing, chances are that you won’t succeed. ?

Have an eye for opportunity: Many entrepreneurs are very quick to detect opportunities/ needs and do not hesitate to key into such openings and satisfying them. They are very smart, sharp and witty, opportunities do not need to present themselves twice to the eagle-eyed entrepreneur, just once and they seize it, making the most of it.?

Right mental attitude: Successful entrepreneurs have the right mental attitude and are warm, this endears him to many. They are very receptive and they nurture the relationships that are connected to their dreams.

There’s an old saying that; “your attitude determines your altitude”.

Vanguard, MONDAY, FEBRUARY 10, 2014 — 19

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ince the return to democracy, the PDP has been having its way because it has always had the majority members in the National Assembly. Previous experience has shown that the only perennial executive/legislative feud was over the benchmark price of crude oil that had produced no tangible results because the central challenge lay more on ensuring that projected mbpd is realised. Moreover, the sums saved in the Excess Crude Account are available for use either during the year or at a later date.But the Fiscal Responsibility Act provides for the prudent management of the nation’s resources, ensuring long-term macro-economic stability of the national economy, securing greater accountability and the needs of the people, the public funding. transparency in fiscal parties negotiate. It is in The greatest challenge to the operations in the country. budget matters that the nation today is not so much of The National Assembly in legislature of any country insecurity but that Nigeria considering the nation’s openly directs the affairs of public institutions are not annual budget in the past did government through functioning properly. This is not act according to the letters provisions for public so because most have become of the law. spending. willing tools for those who This majority that makes it Budgeting is about occupy the office of president boast of being the largest party resource allocation. Since or governor to suppress in Africa made the PDP-led resources are scarce, dissenting voices.

Federal Government whatever is available must The police, the armed complacent and most of the be judiciously expended. For forces, ICPC, EFCC, INEC, the time, refused to listen to the a very long time, Ministries, yearnings and aspiration of Department and Agencies of the people for whom budgets government have used the are made in order to deliver envelop type of budgeting to the dividends of democracy. under develop the country, But with the political drama leading to all manner of playing out with defection impunity by public office from PDP to APC, political holders. There have been gladiators are trying to find cases of double entry for the teeth with which to bite and same project with different hard too, if only to support sub heads. The legislature their position. has never been able to stop The decision of APC the practice by diligently legislators to test the wheel of scrutinising the budget. democracy by attempting to This time around, some are stall the budget should be asking the right questions. If seen as democracy in action the budget is riddled with though it is not based on any errors, such error of facts fundamental political and figures must be philosophy. corrected before the budget In the United States of is passed. It is time the America, Republicans and legislative arm of Democrats tear at each other government came out strong based on political philosophy. to put a stop to the current While the Republicans believe impunity going on in in lean government spending government quarters. Funds and a lower deficit, the should be allocated to Democrats believe in institutions based on judiciary and other increased spending on social performance. Any public democratic structures should welfare to assist the lower and institution that has become be freed from the whims and middle rungs of the society. In a burden to the nation caprices of the executive. The order to ensure that public should be denied access to National Assembly will be funds are properly aligned to

Budget feud, hallmark of democracy

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Budgeting is about resource allocation.

Since resources are scarce, whatever is available must be judiciously expended

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doing the nation a lot of service if these institutions are made to be independent and act at all times in the best interest of the country and not of the president or any governor.

If these institutions are made to function and act according to the provisions of the laws of Nigeria, most of the problems facing the nation would be solved. The police and other law enforcement agencies are not able to function because they have come to see themselves as institutions set up to protect the president or governor, not the ordinary Nigeria. That is why there are high profile killings that never get resolved. That is why the high and mighty can get away with anything; it is also why relations of the mighty never do any wrong.

That is why the president or governors’ wives are above the law.

That is why the wife of a sitting president can lock up a town without any body raising an eye brow. That is why they can order the Inspector General of Police around even without the permission of their husbands.

This is why the president’s wife who was not elected by Nigerians can look at a sitting governor of a state and order him to shut up in a public gathering. President or

governor’s wife just happens to be the wife of the president or governor. Their role should end in the sitting room or bedroom or at staying besides their husbands at ceremonies. It is not in their place who becomes what in a sane and decent country.

There is no constitutional position for the first lady either at the federal or state level, yet such persons do things as if they are above the law without the law enforcement agency calling them to order. The big question is do first ladies have immunity?

The National Assembly should go beyond saying they will not pass the police budget by actually initiating a bill to make all relevant agencies of government truly independent. Let it be that the president or governor can only appoint such persons but can not relieve them of the position just as they wish.

No matter what anybody says about Sanusi Lamido Sanusi, he is making a point that a Nigerian can sit in an office and call other arms of government to account to Nigerians for their stewardship. Yes, he may be wrong in some of his assertions, but the message is clear. Nigerian democratic institutions must be made to function independently. This is the only way Nigeria can move forward. By making public institutions work without interference from those in authority, Nigerians will be assured of fair play, justice and equity which the constitution has guaranteed all.

Cover Continued from page 18 why we take exception to the statement by the coalition of civil society groups that all cement manufacturers are not meeting up to the standard”.

“On one breadth, we want to align with the Civil Society that there is need for standards to be maintained. If the Standards Organisation of Nigeria had insisted that imported cement should come in 42.5grade, every manufacturer, be it local or international, should meet that standard. To that extent, we

Dangote, others disagree on grade of cement prescribed for sale should all comply so that Nigerians can get the very best from what we produce in this country. SON should step in, do what is required of them, so that we can give Nigerians the best and nip the incidents of collapsed buildings in the bud,” Mr. Etim said.

He explained that all

brands of Dangote Portland Cement have the 42.5 grade specification clearly written on the bags. On the education of cement users, he said the company has over the years, been conducting training and re-training programmes for block makers and cement users in all parts of the country. He assured that the exercise will

continue because it is a permanent feature in the company’s operations.

“We believe that we have to give back and educate users so that incidents of collapsed buildings due to poor use of the products can be stemmed.

Where the block makers or users of the cement are not educated to know the

difference between 32.5 and 42.5, they may use it for what it is not meant for. For example, 32.5 is meant for doing culverts, rendering (plastering) but when you use it for storey buildings, high storey buildings, bridges and all that, it cannot stand the

Continues on page 42 C M Y K

20 — Vanguard, MONDAY, FEBRUARY 10, 2014

Business & Economy

Africa can create 4.5 million jobs annually, says minister

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he Congolese Country Planning and Works Minister, Jean-Jacques Bouya, has said that Africa can create 4.5 million jobs annually with infrastructural development.

Speaking at the first international business and investment forum tagged “Build Africa” in Brazzaville, Bouya said in addition to impacting positively on growth, infrastructure can also help to create jobs.

Bouya said the African Development Bank (ADB) is offering more than 30 percent of its funding portfolio to infrastructure development through its Africa 50 programme.

OPENING: From left, Oba Isaac Olatunji Adesiyan, Olu of Ifonyintedo, Ipokia, Mr Akin Adesokan, Director Sales and Marketing, Dangote Cement Plc, Oba John Oladele Ojo, Oniko of Ikolade, Idiroko Ogun State, Alhaji Jimi Azeez, Managing Director, Jimmy Azeez Enterprises Limited, Mr Sola Taiwo, Area Sales Manager, Ogun State Dangote Cement Plc, during the opening of Dangote Cement Depot, Idiroko Road, Ogun State. PHOTO: Kehinde Gbadamosi

Traders pick holes in Budget 2014 …Decry over concentration on recurrent

By CALEB AYANSINA

FAO seeks $77m to avert food crisis in South Sudan

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ood and Agriculture Organisation (FAO) has appealed for 77 million dollars for critical food security and livelihood support for the 3.7 million crisis-affected population in South Sudan.

FAO also warned of a major food security and nutrition crisis in South Sudan, where millions of people are now facing acute or emergency levels of food insecurity.

Sue Lautze, FAO Head in South Sudan, said prices of staple crops had jumped just as basic commodities run out due to the collapse of the markets.

“Markets have collapsed, infrastructure is damaged, foreign traders have fled, commodity supply corridors have been disrupted by violence, and rural populations are unable to bring their crops, livestock and fish to market for sale.”

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IGERIAN Traders, weekend, lamented over the irregularities in the 2014 budget proposal submitted by the presidency to the National Assembly for passage, decrying that that the budget aside full of repetition, it was mainly prepared for civil servants not the entire Nigerians. They were of the view that, there were many things budgeted for in the appropriation bill, that were of no use nor have direct bearing on the well-being of the masses.

Taking a critical look at the bill, the Traders noted that Ministries, Departments and Agencies (MDAs) allocated billions of naira to many things that were not under their mandates. Among the things mentioned were budgeting money for fueling and maintenance of aircraft and boats, by agency that neither has nothing to do with aviation and water transport sector, nor possesses aircraft and boat as part of its utility equipment.

The National Association of the Nigerian Traders (NANTS) observed that the 76 per cent recurrent expenditure, and the 24 per cent capital components of the 2014 budget were rather lopsided; insisting, it was a clear violation of the Medium Term Expenditure Framework (MTEF).

Recently, the Minister of

Finance and Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala attributed the high recurrent expenditure in the 2014 budget to increasing wage bill of workers and political office holders.

Consequently, the National Association of the Nigerian Traders (NANTS) said that with

some of these imbalances in the 2014 appropriation bill, it deemed it fit to have a stakeholders’ consultation on Trade and Industrial Sector, in view of it relevance to the country’s economy, to address the matter.

Speaking at the forum in Abuja, the National President of NANTS, Ken Ukaoha

explained that the present administration had since inception introduced several programmes and policies towards improving the sector for people to reap the dividends of democracy, but its efforts seem yielding nothing or little, due to poor budget performance. ”The sector is no doubt receiving boosts and attention particularly within the grassroots and rural communities. But for the sector that hold the economy to continue to add further value, appropriate budgeting is key to serve as catalyst that reengineers productivity, create job and reduce poverty within the economy. ”NANTS has deemed the trade sector as a critical sector of the economy in view of its relevance to national development and in achieving the objectives of the transformation agenda. As we will all agree, almost every activity regarding exchanges in the economy revolves around trade. Indeed, apart from oil, the trade sector through import revenue is the largest revenue generator for the country.

“Similarly, to reposition Nigeria and arrive at becoming one of the twenty largest economies of the world by 2020 in accordance with our vision, trade is quite significant, especially given its role in manufacturing and investments. For this reason, the direction of the nation’s budget becomes significant as a compass to show development focus,” he said.

MAN, Gold Elsh partner to drive sustainable manufacturing in Nigeria

BY JONAH NWOKPOKU

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he Manufacturers Association of Nigeria, MAN, and Gold Elsh Unic Services, a consulting firm, have entered into partnership to train Nigerian manufacturers on re-engineering of internal processes in order to drive sustainability in the sector.

Announcing the partnership in Lagos at a media briefing on ‘MAN/Gold Eslh planned forum on re-engineering of internal process of manufacturing,’ slated for this week at MAN House in Ikeja, the Acting Director General, MAN, Rasheed Adegbenro said, “the programme is in furtherance of MAN’s role in promoting good operating environment and sustainability of members businesses.

“It is planned for re-engineering of manufacturing process in order to place them on strong competitive platform,” he said, adding that MAN’s collaboration with the consulting firm is to bring those

objectives to reality.

He further explained that the reengineering proposal has become imperative as “it is a well known fact that businesses in the small and medium categories have a high mortality rate in the developing world, as they rarely cross fifty years threshold.”

Factors responsible for the trend, he explained, include: “Weak internal process, microscopic and undiluted ownership structure, building businesses around personalities rather than institutions, uncompetitiveness of such type of businesses; limited access to markets, lack of innovation and near absence of corporate governance.”

Also speaking, Gold Elsh’s Marketing Executive, Yetunde Odedeji, noted that the re-engineering programme is aimed at advancing the Federal Government’s objective of meeting the vision 20-2020, and making manufacturing more efficient and productive.

She said, “What we are offering is change in systems to bring dynamism into the manufacturing sector and make for dramatic improvement and quality assurance.

Vanguard, MONDAY, FEBRUARY 10, 2014 — 21

Business & Economy

Abia State, Techno Oil partner to boost gas resources

By KUNLE KALEJAYE

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bia State government has indicated interest to partner with Techno Oil and Gas Company to develop the state’s oil and gas resources.

Governor of the state, Chief Theodore Orji, said that his government decided to invite the company because of its antecedents and glaring performance in the Oil and Gas sector in Nigeria.

Orji made the call when the management of Techno Oil paid him a courtesy visit at Government House, Umuahia.

The governor noted that Abia State has become a safe haven for investors because of the successes recorded by his administration in securing lives and property.

He expressed excitement that investors were now showing unprecedented interest in investing in Abia, following his clarion call on investors to take advantage of the huge investment opportunities in the state.

Allaying invrstors' fears, Orji said that government has created a conducive atmosphere for businesses to thrive in the state. He said that he was particularly delighted that citizens of the state were returning home to invest, describing the development as heartwarming.

“We decided to invite you to partner with us in the Oil and Gas sector because the Abia State Government does not have the skill and competence you have in the business. ‘’Abia State has oil but there is no oil company. So we will give your company government’s backing to actualise its dream in exploiting the oil and gas resources in Abia State for the benefit of our people,” he stated.

Recall that Techno oil ltd had recently handed over a multi million Naira project of a Block of Classrooms, an ICT centre with 30 work stations, Bore Hole, Transformers, and 22-KVA generator for Isingwu community in Umuahia.

The Managing Director of Techno Oil, Mr Tony Onyeama, lauded the governor for what he described as outstanding achievements, saying that

the future looked bright for the state.

He said that the management of Techno Oil has heeded the call by the state government for investors to explore opportunities in the state, saying that the company would remain a key ally in the effort to develop Abia.

The Executive ViceChairman of Techno Oil, Mrs

Nkechi, who led the company’s team, praised Orji for embarking on innovative projects aimed at taking the state to the next level.

She cited the plan by the government to develop a seaport, saying that the facility would boost business and commerce in the eastern states and open frontiers for economic development.

Obi also lauded the

governor for his initiative in the health, education and other key sectors, describing Orji as a man with a mission to take Abia State to the next level.

Techno Oil, which commenced business 16 years ago, has recorded tremendous accomplishments in service delivery, deploying key assets in the Oil and Gas sector.

SIGNING: From left, Mr Phillips Oduoza, Group Managing Director/CEO, United Bank for African Plc (UBA), Ambassador Joseph Keshi, chairman, and Soji Apampa, Executive Director, The Convention on Business Integrity at the signing ceremony of UBA becoming part of the Convention on Business Integrity, held at the bank's offices in Marina, Lagos.

PHOTO BY AKEEM SALAU.

Ernst & Young acquires Greenwich Consulting

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rnst &Young, a global leader in assurance, tax, transaction and advisory services, has announced the acquisition of Greenwich Consulting, a company specialising in strategy consulting with key strengths in the fields of marketing, distribution, client relationships, digital transformation, data analysis and growth strategies.

Speaking on the acquisition, Andrew Embury, EMEIA Advisory Leader says: “I am pleased to welcome our new Greenwich Consulting employees to EY. This acquisition is part of EY’s global growth strategy, and will help consolidate our service range, notably in growth strategy, marketing, digital and data-analysis.”

On her part, BunmiAkinde, Senior Advisory Partner, EY Nigeria, says: “We are particularly happy to be associated with Greenwich; together we are better equipped to meet our clients’ expectations especially in telecom, media, utilities and financial services.

We are already working together and

our Greenwich colleagues will be visiting

by March this year”.

For Woody Driggs, EY Global Advisory Customer Lead, “We are very excited to welcome the Greenwich team across our different member firm geographies worldwide.

This acquisition aligns with EY’s ambitious growth plan. These combined operations will expand our ability to meet our clients’ expectations. We are delighted that the highly talented Greenwich Team has decided to continue their careers at EY.” With more than 15 percent growth per annum in the Europe, Middle East, India and Africa (EMEIA) region, EY Advisory will use the acquisition to strengthen its position but across the world as a major partner in corporate and administrative performance and transformation.

Greenwich Consulting Group is a management consulting firm structured into sector-dedicated practices, namely; telecom, media, utilities and financial services.

World Bank disburses N25.788bn to 26 states

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he World Bank says it has disbursed 165.307 million dollars (N25.788 billion) out of 200 million dollars on Community and Social Development Project (CSDP) in 26 states between 2009 and 2013. This is contained in a World Bank’s report “Fostering Transformational Development in Nigeria”.

Some of the states include Abia, Akwa Ibom, Adamawa, Anambra, Bauchi, Bayelsa, Benue, Cross River, Ebonyi, Edo, Ekiti, Enugu, Gombe, Imo and Katsina.

Others include: Kebbi, Kogi, Kwara, Nasarawa, Niger, Ondo, Osun, Oyo, Plateau, Taraba, Yobe and Zamfara State.

The report stated that the communities involved have recorded progress in education, health, water and environment.

The document further stated that 3,312 new small scale businesses have been established with about 66.5 percent of the participants actively supporting their communities.

Jobless claims fall, weak exports push up trade deficit

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he number of Americans filing new claims for unemployment benefits fell more than expected last week, in a boost to the labour market outlook and the broader economy. Other data showed a weakening in exports in December, which if it extends to January could see trade being a drag on growth in the first quarter after it helped to buoy the economy in the last three months of 2013.

Initial claims for state unemployment benefits declined 20,000 to a seasonally adjusted 331,000, the Labour Department said.

That was a bit lower than economists’ expectations for a fall to 335,000 in the week ended February 1.

The data has no bearing on January’s employment report, which will be released on Friday, as it falls outside the survey period. Still, it bodes well for the jobs market.

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22 — Vanguard, MONDAY, FEBRUARY 10, 2014

Banking & Finance came third with 3,772 loans valued at N1.03 billion.

The ACGSF was established in 1977, and started operations in April, 1978. Its original share capital and paid-up capital were N100 million and N85.6 million, respectively.

Sterling Bank bags Nigeria Risk award

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terling Bank Plc has been honoured in the Banking and Investment Services category of the prestigious Nigeria Risk Award (NRA).

The award, according to a statement from the bank was organised by Conrads Clark Nigeria (CCN) Limited; a United Kingdom affiliated institution in conjunction with Institute of Risk Management, UK, to reward organisations with impressive Enterprise Risk Management practices in Nigeria.

In announcing Sterling Bank as one of the award recipients, the umpire affirmed that ‘Sterling Bank was being honoured with the award based on its upscale Risk Management practice leading to significant contribution to the entrenchment of a risk management culture within the bank, commitment to a sound, safe and stable financial institution through efficient management of risk.

Sterling Bank was issued the Payment Card Industry Data Security Standard (PCIDSS) certification on February 8th 2013.

Ecobank ranked top African banking brand

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cobank Transnational Incorporated has been declared the most valuable brand in Africa – outside South Africa, in the annual ranking of the global banking and financial magazine ‘The Banker’ in its special edition Brand Finance Banking 500 of February 2014.

Present in more African countries than any other bank in the world, Ecobank has successfully taken advantage of its unparalleled footprint to increase its brand value of 15% in one year. The ranking which was recently made public estimates the value of the brand to USD $ 243 million and boosts the Group to the 367th place in the top 500 most valuable brands in the global banking industry, a jump of 32 places from last year.

According to The Banker, Brand Finance Banking 500, if such performance is sustained, Ecobank could soon start to challenge the South African banks in the ranking of the top five brands with strong value on the African continent.

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CONFERENCE: From left; Emmanouil Revmates, Director, Handheld Products, Samsung Electronics West Africa Limited and Sunil Kumar, Director, CE, EBT & IT of West Africa during a press conference at the Samsung 2014 Forum in Malaga, Spain, last week. Photo by Emeka Aginam.

Banks’ lending to farmers continues downward trend

By BABAJIDE KOMOLAFE

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anks lending to farmers under the Agricultural Credit Guarantee Scheme Fund (ACGSF) continued its downward trend, as it declined to N9.42 billion in 2013.

The scheme was established to encourage banks to lend to farmers across the country.

This represented 2.9 percent decline when compared with N9.71 billion loans granted in 2012. In 2012 loans granted under the scheme declined by 13.5 percent from N10.19 billion in 2011.

Analysis of the banks’ loans to farmers under the scheme, which was introduced in 1977, showed that only five banks participated in the scheme in 2013, and granting 56,277 loans valued at N9.42 billion. Union Bank led the scheme with 14,752 loans valued at N4.17 billion. First Bank came third with 3,278 loans valued at N1.23 billion.

Others are Unity Bank with 957 loans valued at N150 million, and IBTC Stanbic with eight loans valued at N1.66 million.

Further analysis reveal that farmers in Edo State led the scheme in 2013 receiving

9,007 loans valued at N854 million, followed by farmers in Delta State, who received 4,016 loans valued at N757.9 million. Farmers in Katsina came third, receiving 4,433 loans valued at N738.7 million.

Analysis of the loans by purpose show that food crop farmers dominated with 41,551 loans valued at N5.83 billion, followed by livestock farmers who got 8,365 loans valued at N1.88 billion. Mixed crops farmers

he Federal Government holds 60% and the Central Bank of Nigeria, 40% of the shares. The capital base of the Scheme was increased to N3 billion in March, 2001. The Fund guarantees credit facilities extended to farmers by banks up to 75 percent of the amount in default net of any security realized. The Fund is managed by the Central Bank of Nigeria, which handles the day-to-day operations of the Scheme.

The Guidelines stipulate the eligible enterprises for which guarantees could be issued under the Scheme.

Between 1978 and 1989 when the government stipulated lending quotas for banks under the Scheme, there was consistent increase in the lending portfolios of banks to agriculture, but after the deregulation of the financial system, banks started shying away by reducing their loans to the sector due to the perceived risk. In order to reverse the declining trend several innovations and products were introduced under the Scheme such as the Interest Draw Back.

ICAN appoints Enterprise Bank as a collecting bank

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nterprise Bank has been appointed as a lead bank as well as collecting bank for various payment schemes of the Institute of Chartered Accountants of Nigeria (ICAN).

A letter from the institute to its stakeholders, which is titled, ‘Appointment of Enterprise Bank as collecting bank for the Institute of Chartered Accountants of Nigeria (ICAN),’ stated thus: “We are pleased to inform you that Enterprise Bank has been appointed as a Lead Bank as well as Collecting Bank for various ICAN payment schemes. The schemes include student registration fees, annual subscription, examinations fees, and practicing license fees.

The bank in a statement from its Corporate Communications Department while celebrating the appointment of Enterprise Bank to collect for a body as strategic as ICAN further said that the main platform to process all ICAN payment schemes in the bank is the Pay-Direct platform, adding that all branches of the bank have been enabled to seamlessly participate in the collection.

The latest appointment also indicates an expression of ICAN’s confidence in Enterprise Bank and has added to the

growing list of collections the bank undertakes on behalf of the federal and state governments, parastatals and other institutions.

Aside from ICAN, the bank also acts as a collecting bank for the Nigerian Ports Authority (NPA) charges, Power Holding Company of Nigeria (PHCN), Joint Admission and Matriculation Board (JAMB) and other educational institutions like the West African Examination Council (WAEC) as well as the National Examination Council (NECO). The rest include the Federal Inland Revenue (FIRS) taxes, state internally generated revenue (state taxes), export levies, Nigeria Export Supervision Scheme (NESS) fees, Custom and Excise duty and DSTV, among others.

While thanking ICAN for the confidence reposed in the bank, the statement added that Enterprise Bank will deliver on this assignment with all seriousness on its way to becoming a top collecting bank in the country. With this development, Enterprise Bank, the statement said, will continue to play a leading role in advancing the implementation of the cashless policy as part of the effort to be the bank of choice to all Nigerians.

Vanguard, MONDAY, FEBRUARY 10, 2014— 23

Banking & Finance

Interbank market liquidity defies CRR debit, closes at N612bn •Govt securities record 145% subscription •External reserves fall to $42.5bn

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he amount of idle cash in the interbank money market closed at N612 billion last week.

The liquidity surplus was despite debit of banks for cash reserve ratio (CRR) of N583 billion for the month of January. The CRR represents the portion of total assets banks are mandated to keep as cash in order to meet obligation to customers. Last month, the CBN increased the CRR for public sector deposit to 75 percent, while retaining that of private sector deposit at 12 percent. The CBN commenced implementation of the increase in CRR on public sector deposit last week. This increased the monthly CRR debit by 461 percent from N102 billion in December to N583 billion in January.

Though this occasioned a 40 per cent decline in interbank liquidity from N1.03 trillion at the beginning of last week to N612 billion on Friday, it however had momentary impact on interbank lending rates.

On Thursday when the CRR debit was implemented, interest rates on Open Buy Back (OBB) or collateralised loan and Overnight loan rose to 13.5 percent from 10.5 percent at the beginning of the week. The rates however receded to 10.5 percent at the close of business on Friday.

Investigation reveals that the impact of the CRR debit was ameliorated by fresh inflow of funds from maturing treasury bills of N181 billion and other sources, which lifted market liquidity from N397.74 billion on Thursday to N612 billion at the close of business on Friday.

Government Securities record 146% subscription Reflecting the huge amount of idle cash in the interbank market, subscription for government securities (treasury bills) recorded 146 percent subscription last week.

Results of trading in treasury bills (TBs) for week show that the investing public demanded for N407.95 billion worth of TBs while the CBN offered N279.28 worth of bills, and allotted (sold) N241.39 billion.

At the secondary market where existing TBs are sold,

the public demanded for N85 billion worth of bills while the CBN offered N90 billion and sold N52.11 billion. Interest rates demanded by investors ranged from 12 percent to 13.5 percent, while the CBN accommodated interest rates from 12.2 percent downward.

At the primary market where fresh TBs are issued, the public

demanded for N322.95 billion, while the CBN offered and sold N189.28 billion. Interest rates demanded by investors ranged from 10 percent to 13.6 percent, while the CBN accommodated interest rates from 12.34 downward.

rate and parallel market exchange rate remained stable at N155.75 and N168 per dollar respectively, the interbank market exchange rate however rose to N163.4 per dollar from N162.58 the previous week.

This represents 82 kobo depreciation of the naira in the interbank market.

Investigations reveal that the

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By BABAJIDE KOMOLAFE

The impact of the CRR debit was ameliorated by fresh inflow of funds from maturing treasury bills of N181 billion and other sources, which lifted market liquidity from N397.74 billion on Thursday to N612 billion at the close of business on Friday

External reserves fall $42.5bn Meanwhile the nation’s external reserves fell by $474 million last week. From $42.988 billion on January 31 st, the reserves fell to $42.514 billion on Thursday. Cumulatively, the external reserves had fallen by $1.096 billion from $43.61 billion at the beginning of the year. Analyses reveal that the external reserves persistently declined from January 1 st, except on January 20th when it rose marginally to $43.26 billion from $43.24 on January 17th.

Last year, it rose from $45.98 billion in January to a peak of $48.85 billion before falling steadily to $43.61 in December.

naira has depreciated in the interbank by N4.74 kobo or 2.9 per cent since the beginning of the year. It has remained relatively stable at the official market, while appreciating at the parallel market by N5 or 2.8 per cent.

Naira depreciates in interbank as CBN sells $779.9m Meanwhile the naira depreciated at the interbank foreign exchange market even as the CBN sold $779.94 million through the Retail Dutch Auction System (RDAS) sessions last week.

Though the official exchange

CBN assures investors of naira stability Notwithstanding the depreciation of the naira at the interbank market, the CBN Governor, Mallam Lamido Sanusi assured foreign investors of the commitment of the apex bank to the stability of the naira. Speaking at the Standard Bank’s West Africa

,

Investors Conference in Lagos on Tuesday, he said the apex bank will continue to defend the naira as long as stable crude oil prices.

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anusi said, “We have tried to build a stable environment and for us at the central bank we have been very lucky to have had a very good

partner in finance. If you look at government spending in 2013, it really wasn’t much higher than in 2012 and fiscal policy is not in itself loose on the basis of government spending. “The real challenge is that there are things that we can do to block some of the revenue shortfalls that are causing the problem – oil theft and bunkering because we’ve good oil price, we’ve got the output and if you fix that the issues reserves, around currency stability, around fiscal deficit would simply disappear.

But government spending itself has not been the problem. It is largely because of the fiscal discipline in the last few years that our tight monetary policy has been able to work. “ We have been able to bring down inflation to single digit and it has been below 10 per cent since January 2012. It would remain 10 per cent throughout 2014. I know there is speculation about how much money will come into the economy during elections, but how much money is there any way? It is $2.5 billion in the Excess Crude Account. So even if people want to spend money, the money won’t be available. So the risk from that end is not as high as people might think."

Accion MFB lauded for poverty eradication

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he leadership position of Accion Microfinance Bank as the bank that is vigorously driving the mission of financial inclusion for the masses has again been reiterated. This position was postulated when representatives of the Honourable Commissioner for Commerce and Industry, Lagos State, led by the Director of Commerce Mr. Hakeem Adeniji paid a courtesy visit to the head office of Accion Microfinance Bank at Anthony.

Speaking during the visit, Ms Bunmi Lawson; MD/CEO of Accion Microfinance Bank Limited attributed the bank’s success to using the small intervention at its disposal to help people build their businesses and promote their income. She said the interventions brought about through Accion International which has over 40 years of creating 63 microfinance banks in 32 countries worldwide, SME Managers; a venture capital firm and 3 leading commercial banks, Ecobank, Citibank and Zenith Bank.

The visit provided an opportunity for the AMfB and LASG’s team to deliberate on various issues and possibility of collaborating together to eradicate poverty.

UK trade deficit narrows The UK’s trade deficit narrowed in December to its smallest since July 2012, but manufacturing growth was weaker than expected, Office for National Statistics (ONS) figures show.

An increase in oil, chemical and aircraft exports helped the trade deficit in goods to fall by more than £2 billion to £7.72 billion, ONS said.

Fewer imports of aircraft and ships also boosted the figures, it said.

Manufacturing output rose by 0.3 percent in December, less than the 0.6 percent predicted.

The wider measure of industrial output rose by 0.4 percent in the month.

However, the ONS said the weaker-than-expected growth was not enough to change the estimate of GDP growth in the fourth quarter of 2013, which was 0.7 percent.

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24 — Vanguard, MONDAY, FEBRUARY 10, 2014

Corporate Finance

MoneyGram confident of further growth in Nigeria

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oneyGram, one of the world leaders in money transfer with over 20 000 points of sale in Africa, has reiterated its confidence in the Nigerian economy and affirmed its interest in supporting the financial inclusion agenda of Nigeria.

Mr. Carl Olav-Scheible, MoneyGram International’s Executive Vice President for Europe, Africa and Emerging Channels, gave the assurance upon arrival in Lagos for a week visit.

He was accompanied by a high-powered delegation of MoneyGram senior executives including Herve Chomel, Vice President for Africa ; Ana Ansell, Vice President for Marketing ; Neil Edwards, Vice President for Finance and Francois Peyret, Regional Director for North and West Africa. The visit by MoneyGram International’s top management is also to mark key achievements by MoneyGram Nigeria in its 17 years of existence.

In further remarks, Carl Scheible noted, “The African remittance industry in particular is enjoying vibrant growth, and MoneyGram is well positioned to provide remittance services to a growing community of customers.

MTN cash smash promo winner emerges

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winner in the on-going MTN Cash Smash Promo, Silas Daniel has emerged, revealing that winning a whooping sum of thirteen million Naira is a great opportunity for him to put his family back on the prosperity track after the loss of his father who was the bread winner.

Speaking at the second prize presentation in the ongoing nationwide promo, at Bolingo Hotel, Abuja, last week, the twenty-five-year-old Silas who is an HND student at Bauchi State Polytechnic was very emotional.

“In fact, I am short of words, initially I couldn’t believe this, I lost my father barely two months ago, and things had been very difficult at home, we had been struggling with our finances. God has come in His miraculous way to use MTN to put us back on track. It is so unbelievable.” He said.

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Japaul Oil working on N50bn fresh funds injection— Jegede … To declare dividend to shareholders Stories by PETER EGWUATU

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apaul Oil & Maritime Services Plc is planning to raise about N50 billion fresh fund to boost its business, just as it has expressed intention to declare dividend to shareholders in the financial year ended December 31, 2013.

The Group Managing Director, Japaul Oil & Maritime Services Plc, Mr. Biodun Paul Jegede, who disclosed this in Lagos to Vanguard said “ We are going to pay dividend to our shareholders this year but it is not going to be fantastic because we are still investing for the future. By the time we finish paying our debt to the banks and inject

fresh money not by bank loans, then we would be declaring higher dividend to our shareholders.”

He advised shareholders to be patient with the company, stressing that the company’s future is bright and promising.

While commenting on the proposed fresh fund, he said “ We would be raising additional money in excess

MEDIA CHAT: From left, former First Lady of Cross River State, Mrs. Onari Duke, Mrs Yinka Ayo-Yusuf, Trustee, Pastor Ituah Ighodalo, Chairman of the Board, Lady Kehinde Kamson, Founder and CEO of Sweet Sensation Confectionery Limited, and Mr. Paul Achem Project Co-ordinator, all of Food Bank Nigeria during a media chat held in Lagos, recently.

We lower our forecasts on Guinness — Rencap

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enaissance Capital, Rencap has said that it has downgraded its forecasts on Guinness Nigeria Plc following Diageo’s forecast on the company’s result for the first half, 2014, which is expected to be released on February 17.

Diageo is one of the leading premium drinks business with an outstanding collection of beverage alcohol brands across spirits, beer and wine. These brands include Johnnie Walker, Crown Royal, J&B, Windsor, Buchanan’s and Bushmills whiskies, Smirnoff, Ciroc and Ketel One vodkas, Baileys, Captain Morgan, Tanqueray and Guinness Second quarter, 2014 remained challenging, according to Diageo’s update on Guinness. “Demand in Nigeria remained soft, consumers continued to trade down to value brands, and the beer market declined at a mid-single-digit rate. We conclude that Guinness’s volume decline was compounded by market-share losses, due to an ill-timed price increase at the beginning of second quarter, 2014, and Guinness’s value brand Dubic was not rolled-out quickly enough to fully capture the volumes lost to down-trading” Renaissance Capital noted.

According to Diageo’s comments, its beer

volumes in Nigeria declined 17 per cent over first half of 2014. “Using Diageo’s results and comments, we have revised our forecasts, and we think Guinness’s revenue for first half of 2014 could show a decline of 15 per cent. This would imply deteriorating performance during second quarter of 2014, given that revenue slowed 5.4 per cent over first quarter 2014. We highlight that in the comparable period first quarter of 2013 was significantly better than first quarter of 2013.

Therefore, our second quarter of 2014 estimates are being compared with a higher base, and the Year on Year, YoY decline is amplified” Renaissance Capital emphasized.

In terms of profitability, Renaissance said “We expect negative mix, together with increased marketing spend (following the relaunch of Guinness), to result in weaker margins YoY. We forecast Earnings Before Interest and Tax, EBIT could show a decline of c. 22 per cent YoY for the first half of 2014. However, we think a lower effective tax rate will more than compensate for any margin decline. We forecast a 12 per cent decline in earnings and EPS of N3.76. We note that Guinness benefits from a tax credit on its Malta Guinness Low Sugar brand.

of N50 billion. We want to coin out a company where foreign partner will invest and after five years will exit. If this happens the company will be sitting on N80 billion assets.

It is after this exercise that the company can start paying higher dividend to shareholders.”

He urged shareholders to be patient with the company as plans are in place to make them reap the fruit of their investment. It will be recalled that the company was unable to pay dividend to shareholders in the 2012 financial year. The company’s management had explained that its performance was affected by the adjustments made for depreciation and newly-introduced policies for preparations of statutory financial reports which was responsible for the drastic decline in the profit of the company in 2012.

Also, narrating the challenges Japaul had gone through since its Initial Public Offering (IPO) in 2007, Jegede said “ We have learnt in a very bad way. We have made our mistake in the past by buying old vessels because of insufficient fund.

The money we raised in 2007 IPO was insufficient to give us the number of vessels we wanted, so we ended up buying old vessels that did not withstand the test of time. All we could have done then was to use the little money to buy fewer vessels. But all these things are now lesson to us.

Further, he said “ The initial challenge we had was that at the point we finished raising the money, you know the capital market was booming, the oil sector was at the peak everything was fine. Just in 2009 , at that time, that was when we bought some of the vessels we promised our investors that we are going to buy, but that money giving the capital requirement, the capital intensive nature of our business, we could not buy new vessels but eventually bought some old vessels.

So we were using it and making money and it is part of the input of year 2009. So when the 2009 crash came, everything crash, the price of everything crash, including stock exchange was in bad shape and it happened all over the world . It was really a melt down situation.”

Vanguard, MONDAY, FEBRUARY 10, 2014 — 25

Corporate Finance

VISIT: From left, Deputy Group Chief Executive, Oando Plc, Mr. Mofe Boyo; Group Chief Executive Officer, Mr. Wale Tinubu, and Chief Executive Officer, Nigerian Stock Exchange, NSE, Mr. Oscar Onyema, during Oando’s courtesy visit to the floor of the NSE in Lagos.

Lasaco Assurance records N180m loss over result adjustments

By WILLIAM JIMOH

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asaco Assurance Plc said it has recorded 180 million loss before tax in 2012 financial year.

Engineer Ashim Oyekan, Acting Chairman of the company, who disclosed this while addressing

shareholders at the 33rd Annual General Meeting, AGM, in Lagos, said the loss was due to adjustments done in line with the International Financial Reporting Standard, IFRS, as a result of first time adoptions.

Oyekan stated that this was in response to international best practices to fully effect

the provisions of the IFRS, a transitional period which turned out to be very long drawn, necessitating the involvement of external parties, who were not previously involved in the preparation of the accounts and reports.

His words, “We have had to make some adjustments to

Ecobank calls EGM on reform after criticism by SEC E

cobank has called an extraordinary general meeting for March 3 to adopt an action plan and reconstitute its board of directors in response to criticism of its governance by Nigeria’s securities regulator. The meeting of one the biggest financial institutions in subSaharan Africa will also adopt a resolution on capital raising and amend the company’s articles of association, according to a press release.

The bank is under pressure to reform after Nigeria’s Securities and Exchange Commission (SEC) criticised weaknesses in the board’s ability to manage its own activities, monitor management, evaluate performance and oversee ethical behaviour.

The SEC report in January said there was an absence of clear vision and strategy at the bank, inadequate transparency in recruitment procedures and conflicts of interest.

“The EGM is to adopt a plan of action to implement the recommendations of the SEC in governance improvement of the company,” Ecobank

spokesman Mwambu Wanendeya told Reuters.

The meeting, to be closely watched by investors, will be held in Lome where Ecobank Transnational Incorporated, as the bank is officially known, has

its headquarters.

The SEC called for the EGM to be held in February. Initially, Ecobank said it was waiting for two governance reports it had commissioned but would try to comply with the timetable.

fully comply with the IFRS. Most of these adjustments were provisions which do not affect the movement of cash immediately. Over the years, some of these provisions will be released into our operations and we hope that in our 2013 accounts, the outlook will be much better.

“In line with the dictates of good corporate governance, a few lapses have been pointed out by our supervisory authority and the Board has taken relevant steps to correct them. As a first step, existing shareholders’ representatives on the Audit Committee would not be offering themselves for re- election at this AGM having served out the term prescribed by regulations.”

“Furthermore, the Board has already notified the External Auditors that their services would no longer be required beyond year end 2013. This is to enable the company have a smooth and full transition to IFRS,” he added.

Meanwhile, the company during the year under review recorded 11 percent growth in gross premium income over the previous year, with a net premium of N3.3 billion as against N3.2 billion in 2011.

It settled N1.3 billion gross claims benefits for insurance contracts in 2012, representing an increase of N448 million over the amount settled in 2011.

The company’s investment income grew by 34 percent, reflecting its strategic direction to leverage investment income as a key revenue source. “The growth from N249 million in 2011 to N334 million in 2012 is the immediate positive reflection of the efforts to restructure the company ’s growing investment portfolio despite the difficult investment,” said Oyekan.

Flour Mills grows revenue by 28% in 9 months

By NKIRUKA NNOROM

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lour Mills of Nigeria Plc (FMN) has posted an impressive result for the nine months ended 31st December, 2013. The company’s revenue rose from N139.2 billion to N178.9 billion, a growth of 28 percent.

Earning for the period after tax was N8.6 billion compared with N6.9 billion recorded during the equivalent period of 2012/13 financial year, a growth of 22 percent. the company said in a statement that increased production capacity and enhanced efficiency following completion of the ‘West Mills’ the company’s latest milling facility coupled with a small decline in overheads contributed to the improved performance.

Additionally, the company derived some benefits of synergy arising from internal restructuring and completion of merger with two former subsidiary companies -

Niger Mills Company Limited and Nigerian Bag Manufacturing Company Plc. The statement added that the company’s outlook for the last quarter of the financial year remained positive, saying that ‘management will focus attention on its innovative routes to the market and distribution network to sustain the growth momentum and deliver good value to stakeholders.’

However, Group’s earnings before tax for the nine months under review declined from N8.2 billion to N5.9 billion. This was attributable to operational ramping up and strong competition faced by Golden Sugar Company Limited, FMN’s subsidiary, which launched its products during the first quarter of the financial year.

Management expects contributions to the Group’s bottom line from a variety of investments that will come on stream, it added.

Minister lauds Stanbic IBTC’s support for real sector

By NKIRUKA NNOROM

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tanbic IBTC Holding Plc, a member of Standard Bank Group, has been commended for the various initiatives it has undertaken to support the real sector and increase investment inflow into the country.

Minister of Industry, Trade and Investment, Dr. Olusegun Aganga, gave the commendation in his presentation at the 2014 Standard Bank West Africa Investors’ Conference in Lagos.

Presenting a paper titled, ‘Nigeria: Time to Deliver ’, Aganga said, “over 150 years, Standard Bank has positioned itself as a bank for Africans, and by Africans. They have gone to markets that others only dare, and are moving the very frontiers of financial innovation on the continent.

“Only two days ago, I have the privilege to hold Stanbic IBTC and GE signing ground breaking financial package arrangement of over $350 million to finance micro power generation in the country. I know that they are very active in the other sectors of the economy providing financial solutions to businesses across the nation.

SAC trader guilty of insider dealing

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former manager at SAC Capital, a major US hedge fund founded by billionaire Steven Cohen, has been found guilty of insider trading.

Mathew Martoma was found guilty of conspiracy and securities fraud for his part in a scheme that made SAC $275m (£169m) in profits and avoided losses.

Prosecutors in New York called it the most lucrative insider trading scheme in history. SAC paid out a total of $1.8bn last year to settle related charges.

Mr Cohen, who founded SAC in 1992, has not himself been charged with any wrongdoing. But he faces civil action from US regulators who say he failed to supervise Martoma and a fellow trader properly.

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26 —Vanguard, MONDAY, FEBRUARY 10, 2014

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Vanguard, MONDAY, FEBRUARY 10, 2014 — 27

Commodity index Jan 31- Feb 6, 2014

Micro-Finance Lafarge seeks cashless retailers, commissions customer value centre Stories by PROVIDENCE OBUH

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afarge WAPCO Plc has urged t s distributors to think along cashless sales as it commissioned “Customer Value Centre,” to further enhance its relationship with customers and improve business value.

The Value Centre is a platform where customer’s complaint, information and issues bothering payment are addressed with personnel on standby to respond to questions from customers on any issue.

Managing Director/Chief Executive Officer, Lafarge, Mr. Joe Hudson gave the charge at the commissioning of the Value Center in Lagos, saying, “One thing is important; let’s start working with more technology, life is changing, may be we should start thinking in the long term how to sell to our retailers with the POS in the future. We want to do so much with the customer value centre and I hope we can partner with you to share idea and deliver it.”

Hudson said that the value centre will eradicate the traffic between customers and the company, stating, “When I came in newly, I asked if there was a customer service centre to cater for the needs of customers or customer service in Lafarge, but there was none. Now I am happy to say that this is a great transformation. We still have a long way to go, we need your help in becoming better and indeed you need to be better to serve your customers.

The only way we can make a difference i

is by satisfying our customers.

“When we thought of moving our office temporarily to the Island, we said it is not wise to drag all the customers down there, and so we said lets have a convenient place for them. When you pay money, it should turn in fast and it shouldn’t take days or weeks before you get your feedback, no more of such. We want to work with you,” he said.

Also, General Manager, Sales and customer service, Mr. Sam Ndioyema added, “In the last one year, we have rolled out additional five thousand customers, who we do not know where they live. We do not know where they are coming from, we don’t know their offices, we don’t have their details, we have block makers, artisans, who have contributed in making our business grow last year and in the current year.

“The value centre is to help us add proper value to our customers, ensure issues are attended to regularly, complaints and enquiries handled properly, importantly, that we add value to businesses and value to our business too”.

Addressing the Artisans, Blockmakers and stakeholders who were present at the occasion, he said, “In the past, you complained that you don’t know who to complain to; you had issues and there was nobody to attend to it. Now, we have customer centre, we can share information with you and you with us. When you pay in money into our account, it will tell you how much you have paid and what value and tones it will bring.”

Actis acquires 36% stake in tyre business benefit East African consumers and

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he emerging market investor, Actis, has announced a 36 percent equity investment in tyre seller, AutoXpress, East Africa’s leading tyre distributor.

In a statement made available by Actis, it said the investment is significant in the East African market.

Speaking on the investment, Head of Private Equity, Actis, Mr. Peter Schmid, said: “AutoXpress is a compelling entrepreneurial business that meets a core consumer need: access to quality tyres, automotive parts and services in convenient locations. In partnership with the management team, we intend to accelerate AutoXpress’s expansion across East Africa to become the leading Pan-regional tyre and autoparts business.’’

In the same vein, Actis Head of East Africa, Michael Turner, added: “I am delighted to see Actis building on its long track record of backing high quality management teams in leading African businesses. AutoXpress’s products and services are particularly relevant to the Kenyan market, which is dominated by second hand cars. By backing the leading provider of aftermarket tyres, auto parts and services, we hope this investment will directly

businesses.”

Managing Director of AutoXpress, Sandeep Shah, said: “Actis’s proven track record, industry experience and regional insights make them the right investor to support AutoXpress in its next stage of growth in East Africa, with additional stores planned for Kenya and our imminent entry into the Tanzanian market. We look forward to working with Actis’s in-house Value Creation Group to assist in implementing our market strategy of expanding the products and services that our customers need.”

Operating through 20 companyowned stores in Kenya and Rwanda, AutoXpress is the key distributor and retailer of leading tyre, battery and suspension brands, including Pirelli, Dunlop, Marshal, BKT, KYB and Energizer, Servicing both corporate customers and the fast growing Kenyan retail market, AutoXpress is a third generation family business.

However, Actis invests exclusively in the emerging markets with a growing portfolio of investments in Asia, Africa and Latin America. It currently has US$6 billion funds under management with $1.5 billion invested in 18 countries in Africa. To date, Actis has invested $2.6bn in 64 investments across the continent.

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28 — Vanguard, MONDAY, FEBRUARY 10, 2014

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Vanguard, MONDAY, FEBRUARY 10, 2014 — 29

Homes & Housing Finance

CBN lists guidelines for mortgage refinance firms Stories By YINKA KOLAWOLE

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entral Bank of Nigeria (CBN) has paved the way for full take off of mortgage refinancing in the country with the release of regulatory and supervisory guidelines for the operations of a Mortgage Refinance company.

The apex bank noted that the framework is designed to ensure that the MRC operates in a safe and sound manner, on internationally accepted principles, standards and best practice in mortgage liquidity facilities.

It prescribes the basic regulatory requirements for the MRC's principal line of business of re-financing credits to borrowers on the security of residential mortgage assets and other qualified collaterals. It also sets the capital adequacy requirements for the MRC, including its minimum paidup capital, maximum leverage limit, and the minimum riskweighted capital requirement.

The apex bank pegged the minimum capital base of an MRC at N5 billion, noting that the MRC shall commence operations with, and maintain at all times, a minimum paidup capital of N5 billion. It also stated that a MRC should maintain, at all times, a minimum ratio of core capital to total assets (leverage ratio) of not less than five per cent.

The framework also stipulated that the core or tier 1 capital of the company should

consist of paid-up capital and reserves plus retained earnings, statutory reserves, other reserves and published current earnings, less goodwill and other intangible assets and identified losses, or as otherwise defined by the CBN for licenced financial institutions. In addition, CBN stated that the MRC shall maintain at all times a minimum ratio of qualifying capital to the value of its riskweighted assets of not less than 10 per cent. Asset risk weights to be used for this computation shall be those prescribed by the Bank for licensed banks.

The guidelines listed permissible and nonpermissible activities that an

MRC can be involved in. For instance, the framework bars MRC from granting consumer or commercial loans; originating primary mortgage loans; and accepting demand, savings and time deposits, or any type of deposits. It also prohibits MRC from undertaking estate agency or facility management; providing project management services for real estate development; management of pension funds/schemes; and all other businesses not expressly permitted by CBN. According to the apex bank, the establishment of an MRC is primarily aimed at increasing the liquidity

within the mortgage subsector and ensuring the availability of mortgage credit, reducing mortgage and related costs, and making residential housing more affordable. •gThe objectives of the MRC are to support mortgage originators such as primary mortgage banks, commercial banks to increase mortgage lending by refinancing their mortgage loan portfolios, and to act as an intermediary between originators of mortgage loans and capital market investors typically looking for longdated high quality securities,•h it stated.

Permissible activities listed for MRC include: refinancing of fully secured mortgage loans and investment in debt obligations issued or guaranteed by the Federal Government or any of its agencies, which should not be less than 50 per cent of the MRC•fs total investments; Issuing guarantee for mortgage loans as part of its off-balance sheet

he National Housing Fund (NHF) scheme was established by Act 3 of 1992 to enable Nigerians in all sectors of the economy, particularly those within the low and medium income levels who cannot afford commercial housing loans e.g. civil servants, traders, artisans, and commercial drivers etc., to own houses.

The aims and objectives of the fund include: Facilitating mobilisation of fund for the provision of houses for Nigerians at affordable prices; Ensuring constant supply of loans to Nigerians for the purpose of building, purchasing and improving of residential houses; Providing

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PMorgan Chase & Co. will pay $614 million and improve mortgage lending practices under a deal to settle claims it approved thousands of unqualified home mortgage loans for government insurance and refinancing since 2002, costing the government millions of dollars when the loans defaulted.

U.S. District Judge J. Paul Oetken in Manhattan approved the deal, which calls for JPMorgan to pay the money within a month and install an improved quality control program to review loans it underwrites using a federally maintained software application that determines if a loan qualifies for government insurance.

JPMorgan said in a statement that its deal with federal prosecutors, the Federal Housing Administration, the U.S. Department of Housing and Urban Development and the U.S. Department of Veterans Affairs “represents another significant step in the firm’s efforts to put historical mortgage-related issues behind it.”

UK house price inflation dips

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One of the housing estates built under the Lagos State Home Ownership Mortgage Scheme (Lagos HOMS)

Housing finance: Steps to obtaining NHF loan

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JPMorgan to pay $614m over mortgage lending

incentive for the capital market to invest in property development; Encouraging development of specific programs that would ensure effective financing of housing development, in particular low cost housing for low income workers and; Providing long term loan to mortgage institutions for onlending to contributions to the fund.

To be eligible for the NHF loan, an intending beneficiary must be a registered contributor and up to date with his/her contributions 2.5 percent of monthly basic salary contribution, for a minimum of six months, to qualify for the loan. A

contributor interested in obtaining NHF loan must apply through a registered and duly accredited mortgage loan originator, e.g. a Primary Mortgage Bank (PMB), who packages and forwards the application to FMBN. Applicants are required to provide satisfactory evidence of regular income. Deducted monthly contributions must be remitted to FMBN promptly, and at least 6 months contributions should be made.

The NHF loan cannot be obtained to purchase a piece of land to build house. A prospective applicant who wishes to obtain a loan to build a house is expected to have his/her land as well as an

acceptance title to the land prior to the application for NHF loan.

The only collateral required to obtain the NHF loan is the property in question – being built or bought. No any other collateral is needed to secure the NHF loan. A contributor is eligible to access a maximum loan amount of N15million repayable over a maximum period of 30 years at an affordable interest rate of 6 percent. The loan is repaid on monthly installation from the monthly income of the beneficiary. This mode of repayment has the advantage of been both affordable and convenient.

he rate of house price inflation in UK has fallen for the second month running, according to the UK’s largest mortgage lender, the Halifax.

It said prices in the year to January rose by 7.3 percent, compared with a rate of 7.5 percent in December and 7.7 percent in November. But its figures also show that average prices have risen above the •’175,000 mark for the first time in five years.

In January, it said the average price of a home in the UK rose to •’175,546, the highest since July 2008. On a quarterly basis, the Halifax said prices were up by 1.9 percent in the three months to January.

The Halifax figures are in contrast to those provided by rival Nationwide, which has reported that house price inflation is continuing to accelerate. It recorded an annual increase of 8.8 percent in January, and said average house prices had reached •’176,491.

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30 — Vanguard, MONDAY, FEBRUARY 10, 2014

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Vanguard, MONDAY, FEBRUARY 10, 2014 — 31

Homes & Housing Finance

Sustainability is key to affordable housing provision

REDAN urges CBN to disclose re-capitalised PMBs

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eing part of the speech by Lagos State Governor, Mr. Babatunde Fashola, at the launching of the Lagos State Home Ownership Mortgage Scheme on February 3, 2014

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or many years, our people have had to acquire houses; often times being required to pay cash once and for all, as if they were buying a shirt or a pair of shoes in a shop.

This approach in part explains the reason why a large number of ordinary middle class and working people cannot afford to acquire homes on the basis of the their legitimate income derived from hard work that rewards the dignity of their labour.

In Lagos State, we have taken the view that a home is not something you buy in one day but over time, in a way that your ability to acquire it is tied to your income and continued prosperity.

Babatunde Fashola, Lagos State Governor Our view of a home is that it is something you pay for gradually and it is a place of safety, well built, safe solution. Part of the pride I have about this project is that we have not had to borrow money to fund any of these housing units. Our progress so far is the result of rigorous planning and financial discipline, savings and commitment. These projects have been fully funded from the taxes that our people have paid as monthly internally generated revenue (IGR).

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bout 3 years ago, when we took the view that the Lagos State Ministry of Housing on its own cannot deliver all the houses that Lagosians require without the active support and participation of private sector developers, this Scheme was born in my mind.

The next hurdle was how to deliver it. We started saving N200million monthly, whether the internally generated revenue increased or decreased; and today, we are now saving N500million monthly, and it is possible to increase this as more people pay their taxes.

The role of the Ministry of Housing will increasingly be that of a regulatory one, facilitating private sector housing development and enforcing housing regulations, leading research into systems building and cost saving initiatives that increase the affordability of homes and the speed of construction. Our ultimate plan is to be the guaranteed purchasers to developers who will acquire their own land, build to our specification and to our

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and sound, to protect you and your family from the hazards of nature such as rain and heat; a place that will not flood or suddenly collapse. An asset that outlives you.

Lagos HOMS is the acronym we have created from the Lagos Home Ownership Mortgage Scheme. It is a process by which Lagosians will be given a fair and transparent opportunity to pay for their homes over a period of not less than 10 years under a mortgage scheme.

Today as we flag off this Scheme there are 1,104 completed homes while another 3,156 units are various stages of construction, and we intend to start more.

We are starting 132 units in Iponri, 720 units in Ibeshe Ikorodu, 420 units in Ajara Badagry, 648 units in Sangotedo Phase II, 216 units in Obele, 36 units in Akerele Phase II, 48 units in Oyingbo, 1254 units in Ilubirin and 1080 units in Ijora Badia.

The easiest thing to do would have been to simply sell all the houses today, collect the cash and wait for the next batch and do the same; but this is not our way. That is the simplistic way that does not solve the problem of housing. For us, sustainability is the key and I have personally benefitted from previous initiatives by my esteemed predecessors in this regard.

I am happy that we took the decision to confront this problem and I hope that the solution we offer today will be the long term

Tenancy Law represents our moral intervention to protect citizens who earn monthly income from landlords… Lagos HOMS represents our leadership intervention to increase the stock of affordable housing

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agreed prices. This way, many more houses can come on stream because of private sector participation, and Government will use the IGR from tax payers’ money to buy from the developers and sell to the citizens on a 10 year mortgage payment.

When I signed the Landlord and Tenant Bill into law, I explained that it was the beginning of a housing plan for Lagos. Many commentators who either did not listen to me or did not understand me reasoned that I should have provided houses first. The truth is that there are empty houses. People simply cannot afford them.

While the Tenancy Law represents our moral intervention to protect citizens who earn monthly income from landlords who demand multiple year advance payments, the Lagos

HOMS represents our leadership intervention to increase the stock of affordable housing on convenient payment terms.

After experimenting with a few designs of bungalows, room and parlour and block of flats, we have settled on two designs. A block of four floors, containing 12 flats of 1, 2, and 3 bedroom on each floor and a block of 12 flats of two units of 2 bedroom flats; and 1 unit of a 3 bedroom flat.

In each case, each block will have 12 flats and in this way we can optimize the use of our limited land space. We are still working on a design of a block of 18 flats with lifts while we are looking for ways to power the lifts without increasing the cost unreasonably. We have also taken pains to design the flats such that they have more space than most of what is available in the open market.

For example, our one bedroom flat is 60.22 square meters while the 2 bedroom is 75.79 square meters and the 3 bedroom is 123.88 square meters. They all contain more living area than many of the standard 1, 2, and 3 bedrooms in the market, which are ordinarily available to middle and low income bracket people who are out target under this project.

In terms of pricing, our policy is about affordability and accessibility. This is so because we have not yet found cheap or low cost cement, neither have we found low cost iron rod or low cost labour.

eal Estate Developers Association of Nigeria (REDAN) has called on the Central Bank of Nigeria (CBN) to publicize the primary mortgage banks (PMBs) that met the required capital base following the December 31, 2013 deadline.

The developers said the non-disclosure of the names of those that met the requirement has continued to pose a threat to the business of real estate development.

Members of REDAN spoke in Lagos during the Real Estate Trends 2014 recently organised by REDAN, South West zone.

They said CBN’s delay in making public the names of the PMBs that met the deadline would affect their businesses negatively, saying they are becoming wary on the mortgage banks to transact business with.

Recall that CBN set December 31, 2013 deadline for PMBs to recapitalize to N5 billion and N2.5 billion for State and National PMBs, respectively.

Flint’s new £3.3m housing scheme starts

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ork is starting on a £3.3m project to build a new block of 33 apartments for people over 55 years of age in the centre of Flint.

Builders Anwyl Construction will work on the site of the former Delyn council offices in the town.

The project is due to be completed by February 2015.

The four-storey building is for social housing provider Wales and West Housing in partnership with Flintshire council.

Anwyl Construction recently completed an £8.5m 61-home care complex in Mold. It is also working on another £15m project to provide 147 homes on two sites in Wrexham.

Helen Brown, Flintshire council’s cabinet member for housing, said the council was committed to providing affordable housing throughout the area.

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32 — Vanguard, MONDAY, FEBRUARY 10, 2014

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Vanguard, MONDAY, FEBRUARY 10, 2014— 33

Insurance

Possibility of not getting compensation overrides fear of loss ---Soladoye T

Yemi Soladoye trying to come out and it will definitely come out in big form.

On the part of the public, even if your husband or father sells a product and you cannot see the benefit you are going to derive from the product, you are not going to embrace it. I tell people that insurance is a fear product and that fear emanates from this. If the fear of getting compensation from the insurance company is higher than the fear of the risk materializing, then insurance has failed in that direction, and so people will not

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he lack of confidence on insurance mechanism by the general public was brought about by the fraudulent attitude of insurance practitioners’ decades ago. However, it is still the job of insurers to set the records straight and regain the trust and confidence of the general public. Mr. Yemi Soladoye, in this interview with ROSEMARY ONUOHA, elaborates on the issue and others.

Public’s lack of confidence on insurance In fact, the insurance sector is where it is because the public does not have confidence and trust on insurance mechanism in Nigeria. This is historically based on how insurance was presented to them since the promulgation of the Workmen’s Compensation Ordinance of 1942. The first compulsory financial product in the country was from insurance and the second is the motor vehicle third party ordinance of 1945. When all these came and the local underwriters embraced insurance, it was seen as more or less a side business by motor dealers.

There was serious abuse and that was why the Insurance Act of 1941 came into effect. When the foreign companies came in the 50s and 60s, the agents that started marketing, especially life insurance products, were selling all-purpose products.

If you have headache, they will tell you that you are going to get money. They will tell you that if your car is stolen, under a life cover, you are going to get money.

Theirs was just to sell their products. So between 1964 and 1974, the image of insurance seriously nosedived and that was when we had the first pragmatic insurance crash in 1976. So many insurance companies were operating then without being licensed or registered.

Because the insurance sector performed woefully, the general public being typical Nigerians, decided to leave insurance to God. Instead of appreciating the fact that the message was good and what was probably wrong was the messenger and to come together to say ‘No, we must resist this.’ Nobody did that until very recently, when we have the Insurance Consumers Association of Nigeria put in place. It is still

pass.’

So if that is the feeling, then we have failed in a strategic aspect of our job. And unless we can improve, we are not going to get anywhere.

However, the public should have come together long ago to say ‘this is what we want.

You cannot be talking of small prints if we the public don’t want small prints. You cannot be giving us what you feel you want to give us. We should be able to say, this is what we deserve as insurance consumers.’

In some countries, when you insure

If they do not, they cannot use it against the public. So all these things are developing. Imagine that kind of contract that you think is normal only for you to rush to court and the court says ‘no,’ it will never make sense to you.

embrace it which is what we have been experiencing.

People go through such fears like ‘anything can happen to my car, anything can happen to my house’ but the fear of getting compensation from the insurance company if they insure is higher than the fear of the risk itself. Therefore what the insurance companies should have done all these years is to embark on massive insurance education to enlighten the public. Do you know that 60 per cent of educated people still believe that third party motor insurance is ‘police let me

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your house and it gets burnt, they give you alternative accommodation until the house is repaired. When you have a car, comprehensively insured and the car is stolen or has an accident, they give you a replacement car until the accidented one is repaired.

Complaints bureau The lack of complaints bureau then contributed towards the apathy for insurance, but still we ourselves as a people generally are a bit docile when looking at issues. We accept a lot of rubbish. The

law that governs insurance is different from the law that governs sale of goods.

Insurance law is that of utmost good faith, the law for sale of goods is ‘let the buyer beware.’ So when you are buying insurance, unless you have been educated by the insurance people themselves or met a segment of the public that takes it upon itself to say, yes this thing must succeed, you are likely to fail and before the 2003 Act where Section 54-63, put together all the principles guiding insurance like the principle of utmost good faith, insurable interest, indemnity, and the utmost good faith is specifically about fullest disclosures of all material fact.

Before, if you breach any condition in insurance, e.g. it is warranted in the insurance policy that your car will be parked in a locked up garage, if the same car was stolen on Lagos-Ibadan express road by 2pm and in the course of investigation it was realized that you have not been parking that car in a locked up garage at night, insurance has the power to repudiate your claim.

Whereas the theft that happened has no bearing with parking your car at the garage. So with the 2000 Insurance Act, the law says that cannot be, if it is not relevant, it is not relevant.

And if insurance people think that a fact is material, then they should ask for it expressly in their proposal form. If they do not, they cannot use it against the public. So all these things are developing. Imagine that kind of contract that you think is normal only for you to rush to court and the court says ‘no,’ it will never make sense to you.

It was such judgments that made people call insurance legalized robbery. So even by the nature of the contract itself, you may not be able to win. Even with the presence of the complaint bureau, we are still not there. NIA cannot be the accused and the judge in its own case. So when NIA established the complaint bureau, first to me, that is more or less an admission of the fact that, your product is not good.

If I am sure of my product, how can I say ‘’when you have complaint against me, come and talk to me”? We should rather be doing something that will build trust and confidence in insurance mechanism.

Expert warns that major tremor in Israel could bankrupt insurers

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serious earthquake in Israel will cause some 7,000 deaths, 8,600 serious injuries and displace 170,000 people, Pini Shahar, the Finance Ministry’s senior deputy commissioner of Insurance, Capital Markets and Savings told a conference on Tuesday, detailing how the government assessed the impact of such a disaster.

The estimates, which also predict 28,000 buildings sustaining light to medium damage and 37,000 people suffering light injuries, were lower than a previous estimate made a decade ago, he noted.

“This is the new basic scenario the government is preparing for,” Shahar said, speaking on a panel at Netanya Academic College on the risks to insurance companies from major catastrophes.

Life market growth to top 5%: report

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he Australian life insurance market is expected to grow by 5.1 per cent a year over the next 15 years, according to Rice Warner.

And life insurance sold through personal super will grow at 6.7 per cent a year in real terms, the actuary says in a report. This is faster than anticipated in previous research and reflects the growth of bankdeveloped “low-cost” super products that compete directly with non-profit funds, Rice Warner Principal Richard Weatherhead says.

“As a result, industry fund, public sector fund and employer master trust insurance will grow more slowly than other segments.

“The relatively strong anticipated growth of retail super life insurance reflects the growth of products sold in conjunction with new, low-cost personal super products.”

Mr Weatherhead says last year’s prediction of pricing convergence in different segments was correct, especially between industry and other employer-based super funds.

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34 — Vanguard, MONDAY, FEBRUARY 10, 2014

Economy

Why Delta state is setting up a Green Economy Agency — Odili P

AUL Odili, anchors the Delta Green Economy initiative, Governor Emmanuel Uduaghan has setup to drive the state sustainable development action plan. Recently, the state Green Economy team had a workshop that featured local and international experts to develop a blueprint for the state. Paul Odili, who chaired the session, spoke to Vanguard on why the state is planning to institutionalize this vision.

What is Green Economy?

Green Economy is an emerging concept, which in simple terms and as defined

by UNEP is generally low carbon, resource efficient and socially inclusive model of development. This concept is a mouthful and I think another way of explaining what I have just defined is to say that Green Economy focuses on the business as usual way of doing things but in this

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case in a more efficient and environmentally sustainable manner. You know climate change gave rise to this concept because what is obvious is the fact that overtime due to the way we have gone about industrializing and organizing our production activities and the manner we have also gone about consuming natural resources without any thought about replacements, have greatly affected the environment and our ecosystem.

Man’s activities have led to massive pollution, spillages, poor land use systems and poor waste and sanitary management. The result is global warming and climate change, and some of these things have affected in some instance, the health of the people, it has affected the productivity of the people and it has led to increase in poverty, look there is a strong fear that at the rate in which the human race is consuming the resources of

source scarce hypothesis that argues that you can consume all the resources and none will be left.

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nother school says no, subject to availability of technology, you can continue to extract resources from the earth provided it is competitive. In other words, so long as relevant technology is available to exploit those resources and there is no close substitute and the demand is there, it will continue. So for example, crude oil production in Nigeria may or may not finish depending on your school of thought.

•Paul Odili the world, apart from environmental damage, it will leave the future generation with nothing. Although in saying this, I am aware of the two schools of thought on this subject: One school is the re-

What are the resources the Green Economy is promoting?

Green Economy is seeking another way of pursuing our developmental objectives in a more efficient manner and environmentally supportive manner. I also agree that con-

sidering the level of infrastructure development in many advanced economies and even including to an extent our own to introduce a new approach that does not follow the traditional pattern of development is a bit difficult to adopt. The result is ongoing debate around the world—among the big powers, like US, Western Europe, China etc. Do you industrialise following traditional pattern and clean up later or do you adopt a green approach, which it is feared are not easily replicable and sometimes disruptive.

But despite this debate, I feel that in many respects there are some things that can be done at in a resource efficient and environmentally friendly manner. How we produce and consume energy, how we produce and consume water, how we produce and consume agricultural products, how we manage our waste, how we transport ourselves, how we design and build our houses etc, can be done in an environmentally friendly manner that does not deplete the resources and does not affect the environment.

Vanguard, MONDAY, FEBRUARY 10, 2014 — 35

World Economic Forum – A waste of time and resources Banking sector is shedding jobs faster than they can be created elsewhere and keen observers of the sector should be able to see it.

First, the ATM reduced the need for tellers nationwide. At least 130,000 jobs were lost on this account alone and more are on the way.

Allied to the ATM is the widespread of e-payment and the cashless economy. Again, more jobs are being erased everyday. It is estimated that a typical bank will need no more than twenty per cent of its current workforce to operate in less than ten years from mow.

Post offices worldwide and in Nigeria are also becoming major victims of technology among which are the e-mail,

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“There is nothing more wasteful than doing diligently what should not be done at all.”

President Jonathan took a plane load, or more, of people to Davos, Switzerland for what was billed as the World Economic Forum, WEF. The entourage included several Ministers, some Governors, captains of industry and others too numerous to mention.

Although, it is billed as global forum for tackling worldwide economic problems, it is nevertheless noteworthy that not all the Presidents or Prime Ministers were in attendance. The reason is not difficult to discover. The WEF had in recent years become a forum for the wellemployed, well-paid and well-fed to gather and take care of their own interests – while pretending that they care about the jobless, the poor and those without hope. Yet, the number of unemployed people globally had been increasing every year for over ten years and the distribution of wealth had become increasingly skewed in favour of the wealthy and against the middle class and the poor.

Some of the reasons are clear. Virtually all the major multi-nationals in Davos were in search of nations where they would receive all sorts of heavy incentives before deciding to establish factories which are capital intensive and employ few people – even though job creation was usually the reason for granting the concessions they were granted in the first instance.

Allied with that is the fact that increasingly the jobs being created are service jobs and information technology oriented. They generate very few jobs while yielding huge revenue to the shareholders.

Meanwhile, technology is rapidly wiping out lots of jobs in every economy – from emerging economies to the most advanced and there is nothing the whole world can do about it. Two examples will illustrate the point.

seriatim all the sectors of the global and Nigerian economy which had been devastated by technology. There is probably no sector which had not been visited by the scourge of technology.

More worrisome is the fact that, rather than abating, the rate of job destruction, on account of technology will most probably accelerate in years to come chewing up more jobs and leaving millions of people worldwide with life-time unemployment.

Already, close to a generation of youths globally have been caught in the vice grip of life-time of joblessness – including Nigerian youths. I have a drawer full of C.Vs from young Nigerian graduates seeking employment;

Instead, the President’s entourage consisted of people like Jim Ovia, Tony Elumelu, Dangote etc; in short those whose banks and businesses are already capital intensive and ICT-based and who have little interest in agriculture or the smallscale, medium scale and microenterprises which are still labourintensive and can create more jobs rapidly, it was a bloody jamboree

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Facebook, twitter and other means of personal communications which get the message there faster and cheaper. The Nigerian Post Office can provide the official figures; but, whatever they are, they will most probably reveal the sharp drop in letters posted or registered, stamps purchased and vehicles needed to transport them. Ten years ago, the NIPOST dreaded the Yuletide avalanche of greeting cards and other pieces of mail. Now, it wishes those halcyon days are back. Now greetings are sent on the handset and few people even remember where the Post Office in their locality is located. Since greeting cards account for a vast majority of the mail carried in the past

by NIPOST, the decline in the use of cards had dealt a mortal blow to card manufacturers and most have quietly closed down.

There is no need to list

some have been with me for more than three years and all my efforts to get them placed have proved mostly abortive. Once in a while, the kid gets lucky and I help find a job. But, it occurs so infrequently that it might all be regarded as absolute failure. Many of the friends and associates I call on account of job seekers had since stopped picking the phone. I don’t blame them.

So, when the President took a plane load of people to the WEF, I was under the impression that the number one item on their agenda would be hustling for multinationals to come and establish businesses here which are more labourintensive and can employ lots of people.

Better still, I thought the representatives of the countries in developing countries would get the global community committed to developing plans to increase jobs.

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36 — Vanguard, MONDAY, FEBRUARY 10, 2014

Business & Economy

CBN tightens rules for currency dealers to support Naira

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he Central Bank of Nigeria (CBN) w e e k e n d announced new rules requiring currency dealers to put Naira in their accounts at the bank two days before bidding in its forex auctions, in a move dealers said was unlikely to stop the local currency from weakening.

Nigeria has been selling dollars directly to banks to prop up the local currency, which has lost 2.9 per cent this year as the US Federal Reserve begins reducing its stimulus, which has led offshore investors to pull money out of local bonds.

The Naira was trading at N163.38 to the US dollar, weaker than the

five-month low of N163.35 it touched last Wednesday. “I don’t think this will stop the naira from weakening.

People who have naira and have need for dollars will still buy it,” one dealer said, referring to importers in the West African country.

Nigeria depends on imports for almost 80

percent of goods sold in the country.

Its currency has hovered around N162.50 N163.60 in the past two weeks with a surge in dollar demand from offshore investors exiting local bonds and bureau de change agents buying hard currency on behalf of their customers.

The new measure,

which comes into effect from February 10, is expected to prevent forex speculation at its naira auctions. The regulator sells on average $800 million at its twice-weekly forex auctions on Monday and Wednesday.

Dealers said the measure means customers bidding for dollars at the central

bank would have to put the funds into their account their two days before submitting their bids. Until now they could bid and fund their accounts on the same day.

“I doubt if this move will have any impact on the interbank ... apart from the opportunity cost for banks for leaving cash with the central bank for two days,” another dealer said, noting that the move was aimed at soaking up liquidity. On Wednesday, the central bank withdrew N750 billion ($5 billion) from the banking system to enforce a new higher cash reserve requirement for lenders to hold government deposits, which accounts for around 10 percent of total banking deposits. CBN data last week showed that Nigeria’s foreign reserves fell to $42.69 billion as of Feb. 4 compared with $46.09 billion a year earlier.

Reserves fell 1.40 percent in the month to that date, the data showed.

World Bank to disburse $159.5m for growth, employment

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he World Bank would disburse $159.5 million (about N25.679bn) on growth and employment project in Nigeria before the end of 2017. Notice of the disbursement is contained in a World Bank report titled “Fostering Tr a n s f o r m a t i o n a l Development. The bank said the project was aimed at addressing the gap that prevented key growth centres from expanding and supporting small and medium enterprises to develop new business models.“It is also aimed at creating an enabling business environment,’’ the report said.

It stated that over 500 enterprises and artisans have benefited from interventions in the meat, leather and construction sectors funded by the Department For International Development (DFID).

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Vanguard, MONDAY, FEBRUARY 10, 2014 — 37

Tax Matters

Tax implication of adoption of

international financial reporting standards (IFRS)- Part 1 INTRODUCTION n 28 July 2010, the Federal Executive Council accepted the recommendation of the Committee on the Roadmap to the Adoption of International Financial Reporting Standards (IFRS) in Nigeria, that it will be in the interest of the Nigerian economy for reporting entities in Nigeria to adopt globally accepted, high-quality accounting standards by fully adopting the IFRS in a phased transition. The Council further directed the Nigerian Accounting Standards Board (NASB), under the supervision of the Federal Ministry of Commerce and Industry, to take the necessary action to give effect to the Council’s approval.

Section 55 (1) of the Companies Income Tax Act, Cap C21, LFN 2004 requires a company filing a return to submit its audited account to the Federal Inland Revenue Service (FIRS) while Sections 8, 52 and 53 of the Financial Reporting Council of Nigeria Act, 2011 gave effect to the adoption of IFRS. This implies that the audited accounts to be submitted to the FIRS after the adoption of IFRS shall be prepared in compliance with its standards. It is in line with the above that FIRS published guidelines on tax treatments to be given to each of the standards especially where there are deviations from Generally Accepted Accounting Practice (GAAP) after the adoption.

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taxpayer shall prepare and present an opening IFRS statement of financial position at the date of transition to IFRS. This is the starting point for its accounting in accordance with IFRS. A first time adopter of IFRS is required by the standard: to recognise all assets and liabilities whose recognition is required by IFRS; not to recognise items as assets or liabilities if IFRS do not permit such recognition; to reclassify items that it recognised in accordance with

previous GAAP as one type of asset, liability or component of equity, but are a different type of asset, liability or component of equity in accordance with IFRS; and to apply IFRS in measuring all recognised assets and liabilities. The new net asset based on the accounting balance shall not be adopted for minimum tax computation in the year of transition.

If the retained earnings of a taxpayer that had previously paid tax based on dividend for a particular tax year increases as a result of the adoption of IFRS, and additional dividends are paid after the transition period from the portion of the retained earnings that relates to the tax year, the taxpayer shall be subjected to additional tax based on dividend in line with Section 19 of CITA. Where however, the taxpayer was previously assessed to tax for the tax year in line with Section 40 of CITA, the taxpayer will only pay tax on its dividends based on Section 19, where the cumulative amount of dividends declared from the profits/retained earnings relating to the tax year, exceeds the taxable profits previously reported in the tax computations. Details of recognitions, de-recognitions and reconciliation must be forwarded to FIRS by the taxpayer including all adjustments to opening retained earnings. All conversion cost (capital and revenue) shall be subject to verification by the FIRS before it can be allowed as qualified capital expenditure or revenue expenditure.

EXTENSION OF TIME TO FILE RETURNS -

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irst time adopters of IFRS would on application in accordance with Section 26 (5) of FIRSEA (and provisions of Self-Assessment Regulations 2012) be granted three (3) months extension for filing of their first set of IFRS financial statements and related returns to allow sufficient time to overcome initial conversion problems. IFRS compliant financial statement shall be included in tax returns in line with Financial Reporting Council of Nigeria (FRC) Act. Tax returns under IFRS shall be in line with Section 55 of CITA and should include: In respect of first time adopters; Statement of Financial Position as at the beginning of the earliest comparative period when a taxpayer applies an accounting policy retrospectively or makes a retro-

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IFRS1 - FIRST TIME ADOPTION

LECTURE: From left, Professor Pat Utomi, Founder/CEO,CVLWith Oluwasoromidayo George,Executive Director British American Tobacco Nigeria Foundation (BATNF) And Abimbola Okoya, MD, BATNF at the 11th CVL Annual Lecture held in Lagos. PHOTO BY AKEEM SALAU

Whereas IFRS provides for retrospective application of change in accounting policy, retrospective adjustment shall not be effected for first time adopters for tax purposes

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spective restatement of items in its financial statement. Statement comparing the tax effect of IFRS adoption with GAAP. Statement of reconciliations from GAAP to IFRS. Deferred tax computation.

In respect of post-first time adoption: Deferred tax computation.

A statement showing the adjustments made on income statement or total comprehensive income to arrive at assessable profit and total profit for tax purposes as the taxpayer may wish to adopt shall be included.

IAS 2 – INVENTORIES:

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here allowable input VAT is included in the

cost of inventories, it shall be disallowed for income tax purposes and treated separately as deductible from the output VAT as contained in the VAT Act. When Inventories are Purchased with Deferred Settlement Terms: Cost of inventories shall be based on the cost indicated on the invoice inclusive of any imputed interest. Where such interest has been charged in the income statement it shall be disallowed for tax purpose. If however, the interest has been separately shown on the face of the invoice, such interest shall not form part of the inventory. Any inventory (e.g. returnable packaging materials) reclassified in line with IFRS as non-current asset shall continue to be treated as inventory in line with the existing tax practice. Estimates or provisions shall not be allowable for tax purposes, and any write-down on stock based on estimated cost of completion shall be disallowed.

IAS 8 - CHANGE IN ACCOUNTING POLICIES, CHANGES IN ACCOUNTING ESTIMATES AND CORRECTION OF ERRORS

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hereas IFRS provides for retrospective application of change in accounting policy, retrospective adjustment shall not be effected for first time adopters for tax purposes. Taxpayers should submit a re-computation of income tax and deferred tax. Taxpayers should disclose: All changes in estimates; The basis of computation; The statement to which it has been charged.

Obsolete stock/inventories FIRS may allow claims on obsolete stock where it is satisfied that such stock is indeed obsolete. Any verification/certification of destruction of obsolete stock/inventories carried out without the FIRS witnessing such shall not be accepted for tax purposes. FIRS shall assess each correction of error on its merit and in line with the existing laws. Taxpayers shall provide detailed disclosure of the sources of the errors and the future tax effect of the errors.

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38 — Vanguard, MONDAY, FEBRUARY 10, 2014

Business & Economy

Sao Tome shortlists four companies in oil block licensing round

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he government of Sao Tome and Principe has short-listed four companies, including Portugal’s Galp Energia, to bid on two oil blocks in its exclusive economic zone, according to a statement released by the state oil company, ANP. The tiny Central African island nation announced its plans to open a new licensing round for its blocks 1 and 6 last month.

The statement said Petrogal, the former name of Galp, and London AIM-listed New World Oil and Gas will compete for both blocks.

Blue Skies World Group is bidding on block 1, while London Global Energy is seeking to acquire block 6.

Sao Tome began awarding offshore blocks after signing an agreement with Nigeria in 2001 to jointly develop acreage in waters between the two countries.

Heineken unveils new TVC

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eineken lager beer has changed the way it delivers its Television Commercial (TVC) content as it unveils its latest global ad campaign, ‘The Odyssey ’.

The new TVC celebrates the premise that every man is legendary at something. The premium beer brand has cast non-actors in its TVC to play the central protagonists.

The advert, created by Heineken with Wieden and Kennedy Amsterdam, follows its recent ‘Legends’ platform, which saw a series of ‘Men of the World’ who are pushed to discover their limits and overcome them. However, this is the first time that non-actors have been used in the campaign and given a stage, proving that every man has the ability to become legendary.

Premiering in Lagos, Nigeria from 3rd February 2014, the ad follows the main character’s adventures aboard a cruise ship as he uses his wit, charm and skills to impress his fellow passengers.

Covering everything from a limbo contest, to diving perfectly into a swimming pool, to dancing the perfect conga, the advert gives real men a stage on which they can perform their skills.

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ALUMNI SESSION: From left: Dr. Enase Okonedo, Dean Lagos Business School (LBS); Susan Peters, Senior Vice- President, General Electric (GE) and Austin Okere, Group CEO, Computer Warehouse Group (CWG) at the LBS Alumni Association Session of 2014 held in Lagos recently.

Global economy loses $6b to counterfeit mobile phones annually

By EMEKA AGINAM in Malaga, Spain

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hile the global econ omy loses about $6 billion annually to the menace of counterfeit phones coming through the grey market, according to latest Mobile Manufacturers Forum, (MMF), report, Samsung Electronics has said that it would deepen partnership with the relevant authorities and vendors in Nigeria to tackle influx of fake phones.

The new report by MMF showed that in 2013, no fewer than 148 million counterfeit mobile devices were sold through visible retail sites, with many more expected to be sold in unofficial retail outlets, online auction websites and in local black markets worldwide respectively.

A grey market is the trade of a commodity through distribution channels which, while legal, are unofficial, unauthorized, or unintended by the original manufacturer.

The most common type of grey market is the sale of imported goods brought by small import companies or individuals not authorized by the manufacturer which would otherwise be more e The MMF is an international nonprofit organisation founded in 1998 by a number of leading manufacturers of mobile radio equipment, including leading ones like Nokia, Samsung, Apple, as well as network suppliers like Ericsson, Nokia Siemens Networks

and Alcatel-Lucent, among others.xpensive in the country they are being imported to.

It would be recalled that the Compliance Monitoring and Enforcement Department of the Nigerian Com-

munications Commission (NCC), had earlier played host recently to the Director, Europe, Middle East and Africa, of Mobile Manufacturers Forum (MMF), Mr. Thomas Barmuller, for bilateral discussions with the regula-

tor on reassuring the Nigerian telecom consumer of their safety from electromagnetic field (EMF).

The MMF report informed that lab tests on more than 50 counterfeit devices found that most failed basic compliance tests against industry standards for network connectivity, which translated into a very high percentage of call dropouts for users.

According to the report, network coverage was significantly reduced as more substandard devices connected to the network, which created coverage blackspots that could only be fixed by installing 80 per cent more base stations. The report, according to MMF Secretary General, Micheal Milligan in Brussels, Belgium, “with the average knock-off phone selling for around $45, our conservative estimate of $6 billion in illegal sales represents a massive financial loss for governments and the mobile phone industry.

“Governments can combat the growing counterfeit phone problem with new technology which can identify substandard devices on the mobile network and permanently block users who don’t change to a genuine product.”

Nigerian consumers positive on stability of economy, polls

BY CHRIS OCHAYI

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n independent, dynamic and innovative public opinion and research organisation in Nigeria, NOI Polls Limited has put consumers' confidence index for the month of January at 83 per cent, saying consumers in the country were positive about the stability of the economy.

The polls which revealed that consumers are highly optimistic about the future, which put the expectation index at 96.9 per cent, also said that Nigerians feel good about their present personal and economic situation.

The Managing Director/ Chief Executive Officer of NOI Polls Ltd, Miss Oge Funlola Modie explained that a total of randomly selected 4,000 adults are polled monthly.

According to her, “NOIPolls started monthly polling for the consumer confidence index in January 2014 and the score was 83.9 per cent. The score obtained in January indicates that consumers are positive about their personal and stability of the economy.

She added that, “in general, this optimism is expected to result in the purchase of more goods and services and ultimately stimulate economic growth.

On the aspect of the Eagle 30 Business Confidence Index, Miss Modie said: ‘’NOI Polls has also concluded the Eagle 30 business confidence survey biannually for a five-year period of 2009, 2010, 2011, 2012 and 2013. The eagle 30 business confidence survey captures the opinions of C-level executives from 30 leading companies in Nigeria and provides information about the existing business environment and short-term business outlook.’’

She also explained that in the aspect of personal well-being Index, her organisation started monthly polls for its January 2013 index where seven indicators were used to measure the PWB. “These were standard of living, health, achievement in life, personal security, social interaction, religion and economic situation.,’ she stated.

In his contribution, the Director of Research of NOI Polls Ltd Dr. Boll Ihua said the quarter-

ly analysis of the Power and energy sectors for 2013, shows that power supply was best over the first quarter with an average of 41per cent and worst over the 2nd and 4th quarters with an average of 33 per cent. ’’In the telecoms, 40 per cent of Nigerians use dual lines [down from 45.5 in 2012 telecoms survey], 37 per cent use single lines up from 26 per cent in 2012 Telecoms survey], 16 per cent use 3 lines down from 19 per cent in 2012 Telecoms survey], 7per cent more than 3 lines.’’ For the Oil and Gas sector, Dr. Ihua explained that in 2013, an average of 62 percent of Nigerians purchased petrol at the official pump price of N97 while an average of 38per cent purchased above the official pump price.

Speaking on what the organisation stood for, Dr. Boll Ihua stated that NOI Polls is the No.1 for country-specific polling services in the West African region. ‘’We partner with Gallup USA to develop opinion, research in Nigeria. We deliver forwardthinking research and relevant data on public opinion and consumer market on a range of topics.’’

Vanguard, MONDAY, FEBRUARY 10, 2014 — 39 vicahiyoung@yahoo.com 08033348923

Appointments & Promotions Promasidor group names Thiry Managing Director, Nigeria

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non- Executive Chairman of Promasidor Nigeria Limited, Mr. Olivier Thiry has been named the new Managing Director of the company effective May. He will be succeeding Chief Keith Richards a few months ago clocked sixty years.

In a statement by the company, the current Chairman, Mr. Mark Rose said, “Keith Richards has done an outstanding job as Managing Director since he started in November 2007.

His tenure will be recognized, not just for our results but also for the development of our brand portfolio and our organization. Under his leadership PNG has become respected throughout Nigeria for our brands, our people, our innovative spirit and our corporate responsibility.

“Keith had always signalled he would like to move on once he turned 60 but I am delighted that he has agreed to stay on as Chairman. In this part-time role we will be able to take advantage of his understanding of the Nigerian regulatory, social and political environment.

He will be remaining in

Award is proof of Uduaghan's performance — Agbomah

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x e c u t i v e Chairman, Delta State Rural Development Agency, RDA, Mrs. Ifeoma Agbomah, has described the award given Governor Emmanuel Uduaghan by the Metro Eiream Newspaper, Republic of Ireland, Dublin as an international acknowledgement of the governor ’s outstanding performance.

Governor Uduaghan was at recently in Dublin given an outstanding leadership award by Metro Eireann, the first Nigerian to have bagged the award by the multicultural newspaper for outstanding performance.

Speaking in Asaba, Agbomah said for such an award, coming barely few weeks after four leading newspapers in Nigeria had honored him showed that the governor ’s excellent performance in all sector of the economy had received international recognition and endorsement.

Nigeria and available to advise and support the board as well as be a mentor to the incoming Managing Director.

The incoming Managing Director began his career with the Promasidor group in 2002 in Algeria.

Originally head of the supply chain function, he assumed the office of Deputy Managing director in 2004, and became the substantive Managing Director in 2005.

Under his leadership, Promasidor became the market leader in the

powdered dairy and beverage industries in Algeria.

He left Algeria in 2009 and assumed the position of Managing Director for Ghana in January 2010 where he has been hugely successful for four years.

Prior to the Promasidor group, Thiry worked for Belgolaise Bank (Fortis Group) in Belgium in a number of roles.

In 1999, he joined the company “Delta Informatique “leader ’s in banking information.

He began as head of projects

and became responsible for the branch based in Ivory Coast in charge of West Africa. He worked here for two years prior to joining Promasidor Algeria In 2002.

The new Managing Director Olivier graduated in 1995 with distinct Honours from the University of Brussels.

Thiry, Rose further stated would be joining Keith in Nigeria in the next few weeks for a substantial familiarization and would begin to take operational responsibility during the second quarter with a formal handover in May 2014.

AWARD: Mrs. Maryam M. Sanusi (middle), Asst. Director/Head (Communications and Public Relations Unit), Federal Roads Maintenance Agency, exchanging pleasantries with Sen. Ayogu Eze, while the Head of Civil Service of the Federation, Alhaji Bukar Goni Aji looks on, after receiving FERMA Excellence award recently.

Mar 6 other s, get FERMA aw ar d Maryyam Sanusi, 116 others, awar ard

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HE Federal Road Maintenance Agency, FERMA, has honoured Mrs. Maryam Sanusi, Assistant Director/ Head (Communications and Public Relations Unit) and 16 other staff for their dedication and contribution to the growth and development of the agency.

Others who receive the agency’s award are Iniobong Usoro, Chijioke Ukpabi, Omonu Shaibi,, Nanpan Joroh, Eugene Uleh, Olatunde Adepoju, Adamu Gulma, VictorImarhiagbe, Samuel Maduekwe, Alao Dauda, Stephen Akaeze, Agnes Ademelchi, Francis Ishabiyi, Kanu Ikoh and

Lagos SURE-P trains 117 CSWYE supervisors

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onscious of the value of the Community Service Women and Youth Employment (CSWYE) project in bringing the dividends of SURE-P to the citizens at the grassroot, the State Coordination and Implementation Committee Lagos State, has commenced a training programme in Monitoring and Evaluation for the one hundred and seventeen (117) Supervisors in Lagos State.

The Supervisors were drawn from all the Wards within the twenty (20) LGAs in the state.

In the one week on-going training programme, all the 117 Supervisors are being trained in the monitoring of projects in the various Wards and the filling of evaluation forms towards a better report delivery of the CSWYE project.

The training was organized by the SURE-P Head Office at the Office of the Honourable Minister of Labour and Productivity, Abuja and it is replicated in all the 36 states of the Federation and the Federal Capital Territory (F.C.T.) Abuja respectively.

Kaboshiyo Avongs.

Speaking, FERMA’s Managing Director, Mr. Gabriel Amuchi, said the award was initiated to appreciate the workforce.

Amuchi said FERMA had in the past two years, reduced road failures, explaining that the agency ’s rapid road maintenance scheme was hinged on surveillance, monitoring and rapid response to prevention of road failure.

Amuchi said 17 staff were recognised and rewarded for excellence and outstanding legacies in the agency.

Also, Chairman, Senate Committee on Works, Sen. Ayogu Eze, said the civil service held the key to good governance and national development.

According to Eze, a positive and vibrant service that exhibited integrity, honesty and objectivity, would reflect in a government that was high performing and able to deliver on its core mandate.

Starwood Hotels and Resorts announces Tyem Area PR Manager for Nigeria

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tarwood Hotels and Resorts has announced the appointment of Ms Nanji Tyem as Starwood’s Area Public Relations Manager Nigeria.

The appointment took effect from 1stof January 2014.

She will oversee the Communication Affairs of The Five Starwood Hotels in Nigeria namely Sheraton Abuja Hotel, Sheraton Lagos Hotel, Four Points by Sheraton Lekki, Lagos, Le Meridien Ogeyi Place Port Harcourt and Le Meridien Ibom Hotel & Golf Resort.

Tyem who also doubles as the Public Relations Manager for Sheraton Abuja Hotel is Stepping into her new position with over 15 years’ experience in Public Relations in the Hospitality Industry She began her childhood education in Liverpool England and Islamabad Pakistan and later got her Tertiary Education in University of Jos Plateau State and University of Abuja.

She has over the years worked as a key member of the International PR team, managing and facilitating the implementation of the PR Strategy for Starwood’s properties, products & corporate initiatives.

Establishing and managing PR communication processes, ensuring in conjunction with the International PR Director, that Divisional/Corporate image and messages are appropriately projected, distributed and communication objectives are met.

Nanji has undergone Several Professional Trainings, International Courses as well as received several Awards and Recognitions.

She is currently the UNICEF Ambassador for Sheraton Abuja Hotel a Position she has held since 2002 The General Manager of Sheraton Abuja Hotel Mr Boris Bornman, described the appointment as a welcome development, adding that Nanji Tyem would bring her creativity, dedication and passion for hard-work in the discharge of her duties in her new role.

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40 — Vanguard, MONDAY, FEBRUARY 10, 2014

Aviation Stories By LAWANI MIKAIRU

Peacock Travels plans airline

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eacock Travels and Tours, a foremost Nigerian tour company is set to float an airline. This is coming just as its UK manager, Keith Lyold confirmed that it is set to acquire an existing agency in South London.

He said, “We’d like to think that Peacock will expand and we will be all over the UK at some point, but it won’t be happening overnight .We are looking to get our own airline this year as well, which at the moment we are finding difficult but we’ll get there.”

He further said the travel agency is poised to expand “on to the high street with ambitious plans to grow the business all over the United Kingdom.”

According to Lyold, ” We’ve been looking to buy either a start-up travel agency or an existing agency. We’ve come across this one and we are going ahead and buying it .We need to be on the street, we have got to have shop front.”

Emirates to commence flight operations to Abuja, Kano airports

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mirate Airline is to start scheduled daily passenger flights to the Nnamdi Azikiwe International Airport, Abuja and the Mallam Aminu Kano International Airport, Kano.

This is sequel to the approval granted the airline by the Federal Ministr y of Aviation, to extend its operation to the airports .

According to Joe Obi ,Special Assistant, Media, to the Aviation Minister, in a letter to the Aviation Minister, Princess Stella Adaeze Oduah dated February 03, 2014 and signed by Salem Obaidalla, Senior Vice President, Aeropolitical and Industry Affairs, Emirates Airlines, the Carrier expressed gratitude to the federal government for the continued support and assistance extended to it throughout the period it has been operating in Nigeria.

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he Nigerian College of Aviation Technology, NCAT, Zaria, is to commence helicopter training and degree programmes this year. The college is also to open its Lagos campus.

Speaking in an interview on the transformation of the college in the past three years, Rector of the college, Captain Chinyere Kalu, said training of helicopter pilots will commence as soon as the college takes delivery of its acquired Bell 206 helicopters presently in Lagos.

According to her, it became necessary to introduce helicopter training as 80 percent of helicopter pilots were foreigners being used for off shore oil rigs in the Niger Delta.”It’s a very sensitive area and key in our economy and should be well secured. Having such operations done by foreigners, you will agree with me that its not in the best interest of our nation”. ”If Nigerians are in the forefront in taking over fix wings, I don’t see the reason why rotary wings should be left in the hands of foreigners especially the sensitive nature of it. We are very hopeful that it will commence this year, we are at the final stage and we will need a smaller helicopters to start” With over 500 students in the college, Capt Kalu

BRIEFING: Chief Operating Officer, Dana Air, Mr. Yvan Drewinsky speaking with Aviation journalists on the re-commencement flight operations of Dana Air LagosAbujay at the MMA-2, Lagos. He is flanked by Media Communications Manager, Mr. Sam Ogbogoro (left) and Head, Commercial, Mr. Obi Mbanuzo.

NCAT to commence helicopter training, degree programmes explained that the college will commence its HND programmes which will increase the students number to about a thousand including those on short courses, three, six and 12 months.

The Rector explained that the college was pursuing and processing accreditation for its degree course with the Aviation Accreditation Board International in the USA. According to Capt Kalu, the

NAMA begins calibration of navigational equipment

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igerian Airspace Management Agency, NAMA , has commenced calibration of navigational equipment at some airports across the country to enhance air safety. The one week exercise is being handled by ASECNA , a Dakar based Calibration firm.

The Managing Director of the Agency Engineer Mazi Nnamdi Udoh said in Lagos on Wednesday that the calibration of the navigational aids would assist in putting all the navigational aids in proper shape at these airports.

According to NAMA General Manager, Public Affairs, Mr Supo Atobatele, “The routine calibration exercise commenced at the State owned Birni Kebbi airport where newly installed Doppler Very High Omni -directional Radio Range (DVOR), Distance Measuring Equipment (DME) and Instrument Landing System (ILS) were commissioned.”

Atobatele further said, “Routine checks on VOR/DME equipment at Sokoto, Jos and Abuja are to be carried out by the technical team including the Precision Approach Path Indicator (PAPI) of the Abuja and Kaduna airports. The glide slope of Kaduna will be re-checked as well.”

“Similarly, the newly installed Conventional VOR / DME at Enugu airportwill be commissioned while the VOR/DME at Owerri and ILS/DME at Ilorinare for routine check.”

NAMA spends about N200milion annually to calibrate navigational aidsat 26 airports across the country.

college intends to offer courses on aerospace engineering.”We want to offer Degree course along with flying, dispatchers course,

aviation management and so on. So there are a lot of courses we would want to offer beyond what we are offering now and also in line with aviation training”

Dana Air adds Boeing 737-500 to fleet

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ana Air has added a Boeing 737-500 series aircraft, to boost its fleet and entire operations. With the additional aircraft coming into service, Dana Air now operates an aircraft fleet comprising of the Boeing MD 83 series and Boeing 737 brand of aircraft.

The Boeing 737-500 aircraft which is the first of the Boeing 737 aircraft expected to join the fleet, arrived the Murtala Mohammed International Airport, Lagos on Wednesday, after necessary inspection and certification by the Nigeria Civil Aviation Authority’s (NCAA) auditors.

Addressing aviation reporters on the introduction of the B-737 aircraft in Dana Air fleet, the Chief Operating Officer and Accountable Manager of Dana Airlines, Mr. Yvan Drewinsky said the plan to introduce the Boeing 737 fleet of aircraft has always been an integral part of the long term business model of the airline. “Our plan was to have two B-737 aircraft join our fleet in the last quarter of 2013 but we had to reschedule the delivery date as we were undergoing an operational audit involving the Nigeria Civil Aviation Authority

(NCAA) Flight Standard Group (FSG) in conjunction with their foreign partners”, he said .

He also noted that the aircraft has undergone significant internal enhancements to ensure that Dana Airlines guests continue to enjoy the unique and outstanding on-board experience they have come to expect from the airline. Furthermore, Drewinsky said Dana Airline’s plan to re-fleet is a gradual process and the outcome of the operational audit carried out by the NCAA is therefore a welcome development as it has further reinforced that the airline adheres strictly to prescribed standards, having demonstrated satisfactory competence in the operations of the Boeing McDonnell Douglas (MD-83) aircraft fleet.

Dana Airlines is the first Nigerian airline to successfully undergo the Nigerian Civil Aviation Authority (NCAA) prescribed operational audit.

Vanguard, MONDAY, FEBRUARY 10, 2014 — 41

Agric

Fish farms to produce two thirds of global food fish supply by 2030— UN

By JIMOH BABATUNDE with agency reports

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quaculture — or fish farming — will provide close to two thirds of global food fish consumption by 2030 as catches from wild capture fisheries level off and demand from an emerging global middle class, especially in China, substantially increases.

These are among the key findings of “Fish to 2030: Prospects for Fisheries and Aquaculture,” a collaboration between the World Bank, Food and Agriculture Organization of the United Nations (FAO) and the International Food Policy Research Institute (IFPRI), released weekend . The report highlights the extent of global trade in seafood which tends to flow heavily from developing to developed countries.

According to FAO, at present 38 percent of all fish produced in the world is exported and in value terms, over two thirds of fishery exports by developing countries are directed to developed countries. The “Fish to 2030” report finds that a major and growing market for fish is coming from China which is projected to account for 38 percent of global consumption of food fish by 2030. China and many other nations are increasing their investments in aquaculture to help meet this growing demand. Asia — including South Asia, South-East Asia, China and Japan — is projected to make up 70 percent of global fish consumption by 2030. SubSaharan Africa, on the other hand, is expected to see a per capita fish consumption decline of 1 percent per year from 2010 to 2030 but, due to rapid population growth of 2.3 percent in the same period, the region’s total fish consumption will grow by 30 percent overall.

The report predicts that 62 percent of food fish will come from aquaculture by 2030 with the fastest supply growth likely to come from tilapia, carp, and catfish.

Global tilapia production is expected to almost double from 4.3 million tons to 7.3 million tons a year between 2010 and 2030.”The fast-

Lack of irrigation facilities, bane of dry season farming

Fish pond moving nature of aquaculture is what made this a particularly challenging sector to model - and at the same time, embodies the most exciting aspect of it in terms of future prospects for transformation and technological change,” said one of the report’s authors Siwa Msangi of IFPRI. “Comparing this study to a similar study we did in 2003, we can see that growth in aquaculture production has been

stronger than what we thought.”The World Bank’s Director of Agriculture and Environmental Services, Juergen Voegele, said the report provides valuable information for developing countries interested in growing their economies through sustainable fish production, though he warns that carefully thought out policies are needed to ensure the resource is sustainably managed. “Supplying fish sustainably — producing it without depleting productive

natural resources and without damaging the precious aquatic environment — is a huge challenge,” he said. “We continue to see excessive and irresponsible harvesting in capture fisheries and in aquaculture, disease outbreaks among other things, have heavily impacted production. If countries can get their resource management right, they will be well placed to benefit from the changing trade environment.”

Livestock sector needs the private sector to grow — Ijewere

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r. Emmanuel Ijewere, the CEO, Best Foods, has said that for the livestock sector to grow in the country that the private sector needs to invest in value addition.

He decried the situation where cattle are still being transported from the north to the other parts of the country in trucks.

“Let us stop moving cattle and start moving beef. I do not see any sense in this country why you will drive cattle all the way from Borno to Lagos. By the time they get here they would have emaciated and become bonny and all that.”

Ijewere added explained that there is no big city in the world where you have an abattoir in the centre or heart land of the city. “These are done where the cattle’s are grown. They move the meat either by train, air or refrigerated trucks on the cold value chain. That is

*Ijewere what happen and that is the way we must go.

While throwing his weight behind the aspect of the Agriculture transformation agenda that says move beef and not cattle, he disclosed that Nigeria has the lowest cattle per head in Africa, if not one of the lowest in the world,

“because our population is huge, our cattle population is small and therefore rely on neighbouring countries to bring in cattle to Nigeria.

“What is worse is that the breeds have not been improved over the years, now the government has not paid enough attention. One of the spines off of that is that 98% of the milk we consume in Nigeria is imported.”

Ijewere , who is the coordinator of Committee of Agricultural Stakeholders of Nigeria (CASON), said he sees big opportunities for the private sector in the sector , “I do not see what is bad in this, let us see the opportunities by getting educated and intelligent people with financial power , either locally or internationally to come and start producing milk in Nigeria , the more we are able to do that the better .”

n Agriculturist, Dr David Ogunlusi, has identified inadequate irrigation facilities as the bane of dry season farming in the South-West.

Ogunlusi said this in an interview with the News Agency of Nigeria (NAN) at Ido in Ido/Osi Local Government Area of Ekiti.

He noted that most farmers in the area could not practice dry season farming due to the non-availability of irrigation facilities unlike their counterparts in the northern part of the country.

According to him, the problem is aggravated due inadequate dams in the area coupled with the nonusage of River Niger for irrigation purposes as expected.

“We should realise that dry season farming is not popular in the southern part of the country unlike in the northern part, where it has been in practice for decades.

“It is the origin of Fadama projects that was later domesticated across the country; so farmers in the South still- need to be sensitised because majority of them believe that dry season is meant for resting.

Obama signs farm bill

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resident Obama on Friday signed into law an agriculture spending bill that will spread benefits to farmers in every region of the country, while trimming the food stamp program that inspired a two-year battle over the legislation.

As he penned his name on the five year measure at Michigan State University, Obama said the wide-ranging bill “multitasks” by helping boost jobs, innovation, research and conservation.

“It’s like a Swiss Army knife,” he joked. But not everyone is happy with the legislation and Obama acknowledged its passage was “a very challenging piece of business.”

The bill expands federal crop insurance and ends direct government payments that go to farmers whether they produce anything or not. But the bulk of its nearly $100 billion per year cost is for the food stamp program that aids 1 in 7 Americans.

The bill was finally passed with support from Democrat and Republican lawmakers from farming states.

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42 — Vanguard, MONDAY, FEBRUARY 10, 2014

Business & Economy

FCT minister tasks PENCOM on investments

By HENRY UMORU

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INISTER of the Federal Capital Territory Administration, FCTA, Senator Bala Mohammed yesterday charged the DirectorGeneral, National Pension Commission, Mrs. Chinelo AnohuAmazu to invest the huge amount of funds available to it in infrastructural development rather than leave such funds idle, just as he disclosed that the administration in 2013 remitted a total sum of N3.2 billion to the Commission being the contributory funds of staff of the Administration and the six Area Councils of the Federal Capital Territory.

According to the Minister, the Commission can check the law establishing it that would enable it go into partnership with genuine investors to use such funds available, adding that such partnership could be guaranteed by a reputable bank in the country to take off the risk aspect of the investment from the Commission.

Speaking when he received the DirectorGeneral, National Pension Commission, Mrs. Chinelo AnohuAmazu in his office, Senator Bala

Mohammed who noted that the payment was done after due reconciliations between the officials of the FCT Administration and the National Pension Commission, however revealed that in addition, about N92 million was now being worked out to pay the Commission being the outstanding of the FCT Contributory Pension fund.

According to him, some of these infrastructural developments like roads, housing and transportation are bankable and that monies stockpiled at the National Pension Commission can be used to turn around infrastructure in the country with profitable interest to all parties, adding, “The banks can be used to float bonds for such purposes which could be beneficial to all

parties involved”.

He said for instance, the Abuja Master Plan has about 79 districts with 9 sector centres in the Federal Capital City and with only 11 Districts as well as 2 Sector Centres so far developed while about 80 percent of such districts have not been attended to due to the paucity of funds.

The Minister promised to make available a plot of land for PENCOM to build its Headquarters after the Commission must have met with all administrative processes.

Speaking earlier, the Director-General of the National Pension Commission, Mrs. Chinelo Anohu-Amazu remarked that she has gone round the country including the FCTA to explain the merit of PENCOM scheme to the end users.

IBM starts rolling out Watson supercomputer in Africa

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BM began rolling out its Watson supercomputer system across Africa last week, saying it would help to address continental development obstacles as diverse as medical diagnoses, economic data collection and ecommerce research.

The world’s biggest technology service provider said “Project Lucy ” would take 10

years and cost $100 million. The undertaking was named after the earliest known human ancestor fossil, which was found in east Africa.

The Watson system uses artificial intelligence that can quickly analyze huge amounts of data and understand human language well enough to hold sophisticated conversations.

Dangote, others disagree on grade of cement prescribed for sale Continued from page 19 test,” he said.

On the escalating price of cement, he claimed that despite the spiraling inflation, devaluation of the Naira and hike in energy costs, Dangote Cement has not increased the price of its brands in the last five years. He said the company achieved this because it invested heavily on logistics C M Y K

(transportation).

It would be recalled that the coalition of civil society groups and Built E n v i r o n m e n t Professionals, had last week, threatened to take its campaign to the National Assembly with a plea that the lawmakers probe manufacturers and importers of cement for compromising standards in the building and construction sub-sector.

They promised to enlist the Consumer Protection Council, CPC, to prompt SON to be alive to its responsibilities by ensuring the sale and manufacture of high grade cement for the Nigerian market by punishing offenders.

The coalition also canvassed the enforcement of the National Building Code to address the lax control by regulatory authorities.

Vanguard, MONDAY, FEBRUARY 10, 2014 — 43

Interview

By NKIRUKA NNOROM & BASHIR ADEFAKA

But here in Nigeria, we have it. We have aluminum extrusion plant in Owerri, Abumed in Abuja, Kaduna aluminum in Kaduna. So, we have industry which can meet Nigerian demands but there is none in ECOWAS because they don’t want to protect.

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February last year, you addressed a press conference lamenting the challenges facing the aluminum sector especially Tower Aluminum company that is the only surviving aluminum manufacturing company in the country. One year down the lane, has there been any policy change to ameliorate the problem?

Let me tell you, there is no policy change since we met. No policy change. We met February last year.

Isn’t it? There has not been any policy change since then, although we are expecting because the extrusion tariff and customs duty from the government which were to become effective since 2013 was deferred to 1st January 2014.

This is 2014 and the 1st January has passed and they have pushed it again to 1st January 2015.

So, the Manufacturing Association of Nigeria, MAN, has taken up the matter with the government that we can only continue to suffer if the tariff is deferred for another one year; that is 2015, unless the government should do something. MAN has given the recommendations to the government on various sectors including the aluminum. I understand that government has looked into those recommendations and we are expecting something to happen concerning the tariff, which may come anytime, but that has not come to public domain so far.

So, if you ask me, I would say as at today, the situation is still the same and as we are getting the materials from China, we are exporting to China the jobs that should keep Nigerians in gainful employment. By importing those aluminum extrusions, colours and the rest, we are exporting jobs.

And the value is the game in business. I can only put my money in areas of business that will earn me more profit. If importing from China is more profitable area, why not? But

Nigeria can outpace China, if... – DUGAD if we continue to do that, what value is being added to the trading that people are encouraged to do in term of number of jobs created? By importing, the only thing you succeed in doing is trading to make money and so we are exporting jobs, which should by extension, help grow our economy to China.

I told you last time that the Aluminum Rolling Mills in Port Harcourt was not working; ours is the only rolling mills working now in Nigeria. We are not aware of any other functional rolling mill at the moment. We are working at full blast except that the only challenge we have is that we are operating at huge losses because it is impossible to

locally which then developed the economy. They developed their economy, developed their infrastructure and now when they became ready to compete with the world, you can see what China has become in the eyes of the world. Nothing says that Nigeria cannot do more than China if the manufacturing sector can be protected by the government with all the incentives that are required.

So, if you really want development, to meet up with its requirements, you have to create the enabling environment and sometime you make provision for long-term and not only short-term policy. Go to India, every car they use there today are made there. They developed their technology and they

Part of the complaints in the manufacturing sector is that huge portion of their production cost goes into power generation. Now that the power sector has been privatised, what is the impact on your cost?

You are in Lagos; have you seen any improvement in your house or your area? Although the power sector has been privatised, it has not reflected in a way that you can say there is a change or improvement. Nothing has changed. Let me tell you, I feel it is so because these companies are still settling down. Even the power plants do not get supply because they cannot produce electricity. But talking about privatisation of power sector, I can tell you that there is no impact yet because we still run on generators.

But because we are an industry, we have put up our own power plants.

The cost of generating power to run our production is too high and so we have to put up a plant in Abeokuta and another in Ota. Could you estimate the percentage of your cost that goes into power generation?

Percentage of cost on power varies from one industry to another. But, like ours, where the large volume of power is required, 40 percent of our cost goes into power generation.

At Ota, you said despite the challenges, you were neither willing to relocate to Ghana nor retrench your workforce. One year after, nothing has changed, what is the latest talking about your state of mind?

Let me tell you, in spite of everything, we are still investing. We are doing our best to improve our activities, China first and foremost improve our protected its manufacturers production locally which then developed and all that. the economy; nothing says We are not changing our that Nigeria cannot do more minds about than China if the Nigeria but manufacturing sector of we are Nigerian economy can be bleeding.

This bleeding protected by the government should not be with all the incentives that allowed to are required continue. It has to be stopped so that death does not occur.

That is the reason we have been crying to the government that they have opened up the Indian economy should come to our aid in stopping now so that everybody is going to India. this bleeding not only for our sake but for the sake of the good number of Where do we go from here? people in our employ and economic Generally speaking, we have to start development of Nigeria. We read in preparing for how we can protect the news that government is mopping Nigerian industries because if you are up money from circulation. So, it is not industrialised, how will you very important that government develop? In the whole of West Africa, should provide different lending rates there is no single extrusion plant for different sectors. because they don’t want to protect it.

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ower Aluminum remains the only functional local aluminum manufacturer in Nigeria and it continues to retain its workforce despite challenges, which the company especially, its extrusion segment faces in the wake of uncompetitive environment created by the government policy that made it possible for finished aluminum products to be imported from China without incentives for locally produced ones. Group Managing Director of the Tower, Chief (Dr.) Jinesh Chandra Dugad, said the implication of is that, “When you import finished products especially aluminum, you are exporting the jobs that should have helped ameliorate the unemployment situation that Nigeria has lived with over the years.” In this interview with Financial Vanguard, Dr. Dugad, who had February 2013 cried out to the government over the challenges that was dragging the nation’s aluminum giant to comatose, however maintained that despite the harshness of Nigerian environment for manufacturing businesses, he was not willing to contribute to growing unemployment in Nigeria through retrenchment of staff. Excerpts:

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compete with China. And so, government has to protect us.

Government has to protect not only aluminum, but all the sectors involved in manufacturing in this country because today, we are able to go to China and import the products from there because China had protected its own local manufacturers. That country first and foremost protected its manufacturers

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44 — Vanguard, MONDAY, FEBRUARY 10, 2014

E-Commerce

REGISTRATION: Senator Ganiyu Olanrewaju Solomon, representing Lagos West Senatorial District, receiving his card from Oladosu Rasheed Adebayo during his party's (APC) registration exercise at Ward A Olowonla Zone, Mushin Lagos. PHOTO BY AKEEM SALAU.

E-commerce experts list conditions for optimizing conversion Stories by JONAH NWOKPOKU

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perators in the ecommerce space in Nigeria have listed visual appeal, customer reviews on product listing, email opt-in, consumer education and simple check out process as necessary conditions for optimising conversion rates.

In e-commerce, getting people to the store is one thing but getting them to make a purchase is another.

Speaking to Financial Vanguard on optimising conversion, Chinma Nwaozuzu, who is the Chief Executive Officer of Girlyessentals.com.ng, a beauty online store, listed conditions for getting online store visitors into effective customers, said, “An ecommerce website firstly must be visually appealing. The essence of an e-commerce store is to create a showcase for a company’s products, so it goes without saying that the product listing pages should be user friendly and the pictures used should be of the highest quality.

Customers should be able to view the products and feel like they are literally within their grasp. Once this is achieved, a customer is more likely to go ahead and make a purchase.”

Such site, she said, should also be very easy to navigate.

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According to her, "Online customers are getting more and more impatient so the layout of the site needs to be less cluttered for better effect.

She further explained that, “Having Customer Reviews on product listing pages is also an effective way of

ensuring conversion.

Customers want to know that a product has been tried and tested by ‘real people’ before they are willing to part with their cash. This is especially true if it is a product that they will be purchasing for the first time. Having an e-mail opt-

in page is also crucial, as in this way, you can collect valuable e-mail addresses from your target customers and build a list of people who are interested in the products you have to offer. The chances of these potential customers returning in the future to make a purchase will be vastly increased”.

On his part, Femi Fatokun who is the Manager, Shopandmall.com.ng, noted that to improve conversion, “Educating the public about online shopping and ecommerce are prerequisites, as site owners need to educate their potential market about the benefits of shopping online. Also, e-commerce sites can run promotions and sales, give freebies from time to time, while making effort to maintain excellent customer service, from taking calls to timely response to e-mails.

They can also improve conversion by giving proper description of the items on display.”

For Peter Akporume, CEO of Mobile Enterprise Technology, “To improve conversion rates, e-commerce operators should use a simple checkout process with few clicks. The easier it is for people to check out, the more likely that they will buy. Another thing that they can do is improve their perception among users. If people trust a business or brand they will certainly do business with that company or buy from that brand.”

Kaymu identifies PR strategies for online market place sellers

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igeria’s online marketplace, kaymu.com.ng has identified public relations strategies that could be exploited by sellers at online market place.

Kaymu identified the strategies during the maiden edition of its seller workshop series entitled: 'KaymuVarsity' recently. The strategies identified at the interactive session included how sellers can integrate branding, participation, ratings and testimonials, customer service and interpersonal relations and leveraging of social media tools to boost sales to their online market place stores.

Top on the list of the strategies include, branding, which the online market place identified as the perception of a target market towards a business.

Speaking at the forum, Kaymu’s Public Relations Manager, Tomiwa Oladele said, “Branding is not about getting your target market to choose you over the competition, but it is about getting your prospects to see you as the only one that provides a solution to their problem. A brand is the idea or image of a specific product or service that consumers connect with. Branding is when that idea or image is marketed so that it is recognizable by more and more people, and identified with a certain service or product when there are many other companies offering the same service or product. A good online marketplace seller must

brand his/her online store by making sure all the elements of branding are aligned in such a way that customers choose to purchase from them rather than any other seller of the same product.”

Explaining further, she said, “Online marketplaces like Kaymu.com.ng have put in place measures to ensure sellers on the platform are engaged in activities that will drive sales to their online stores. Activities range from workshops, seller reports, competitions, onsite advertising and social media campaigns. Sellers who seek to give their sales a boost and increase their visibility on the online market place must ensure they participate in these activities as this puts their brands/stores out there.”

She noted that online sellers can also leverage the social media, as recent studies have shown that there are over 100 million active Nigerians on the social network, facebook. It is therefore imperative to ensure online businesses have an active social media interaction and engagement to drive customers to their virtual stores.

A business savvy online market place seller must have a business page that is linked to the online market place store to drive his/her facebook users and the entire facebook community to their online market place store.”

Apple pulls Bitcoin app from store

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pple Inc has removed Blockchain, an application for iPhones used to send and receive Bitcoins, from its App Store, the developer of the programme has said. Chief Executive Officer of Blockchain.info, the developer of the software, Nicolas Cary, said the company received an e-mail from Apple saying that the app was withdrawn “due to an unresolved issue.”

As a virtual currency, Bitcoins exist only as software and transactions are completed via computing devices. With merchants from car dealers and Web stores accepting the digital money, mobile apps have become a popular commerce tool. At the same time, some governments including China and India have questioned Bitcoin’s legal status. Since Apple requires apps to be legal in all territories that they’re offered, many Bitcoinrelated programs for Apple’s iOS mobile software don’t offer the ability to send money.

“We’ve been there two years,” Cary said in an interview. “What did they just discover that is now unresolved?”

Twitter’s loss exceeds estimates as user growth slows

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witter Inc posted slowing user growth and a net loss that was wider than analysts’ estimates in its first earnings report as a public company, sending shares down as much as 19 percent in extended trading.

There were 241 million monthly active users in the fourth quarter, Twitter said in a statement today, up 30 percent from 185 million a year earlier and slower than 39 percent seen in the prior period.

Usage also declined, with 148 billion views of Twitter timelines compared with 159 billion views in the third quarter. Net loss was $511.5 million compared with $8.7 million a year earlier, and was more than double analysts’ projections of $253.5 million.

Vanguard, MONDAY, FEBRUARY 10, 2014 — 45

International Business News

Brent oil stays above $107, set for weekly gain

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rent crude rose above 107 dollars a barrel on Friday, heading for a second weekly gain.

“The market is playing a bit of wait and see game. But in general, there is quite a bit of optimism we’ll get good numbers and that is supporting oil,” said Ben Le Brun, a market analyst at OptionsXpress in Sydney.

Large price swings are not expected ahead of U.S. non-

farm payrolls data. A Media poll points to recovery in U.S. jobs growth to 185,000 in January from 74,000 in December.

Brent crude was up 17 cents at 107.36 dollars, after rising almost a per cent in the previous session - its biggest daily gain since Jan. 22. The bullish performance on Thursday stemmed partly from a report that showed the number of Americans filing

new unemployment benefit claims fell slightly more than expected last week. U.S. crude was down 16 cents at 97.68 dollars, hurt by expectations of lower demand during peak maintenance season.

Brent’s premium to the U.S. benchmark was at 9.68 dollars a barrel. The spread narrowed to 7.94 dollars a barrel on Wednesday, the tightest since Oct. 10.

If the non-farm payrolls data

*From left: Deputy President, LCCI, Mrs Nike Akande, Oba Rilwan Akiolu of Lagos, President, LCCI, Alhaji Remi Bello and Vice-President, LCCI, Dr Michael Olawale-Cole during a courtesy visit to the Oba by officers of the Lagos Chamber of Commerce and Industry.

delivers further signs of U.S. economic growth, it could prompt the Federal Reserve to curb a monetary stimulus programme that has helped support risky assets such as commodities. But traders reckoned it would take a significant deviation from expectations for the data to shake the oil market.

Tighter supply of North Sea crude in March could support the Brent benchmark.

Loading of the four crude streams Brent, Forties, Oseberg and Ekofisk (BFOE) will average 890,000 barrels per day (bpd) in March. This figure is down from an expected 1.03 million bpd in February, according to loading programmes. Oil prices are expected to rise aided by peak refinery maintenance season as refiners in the U.S and Asia will shut down units in the second quarter.

“That is going to limit demand for crude, but product prices could go up due to limited supply,” said Le Brun.

Investors will watch Saturday’s talks with Iran as the U.N. nuclear watchdog hopes to persuade the Islamic state to finally start addressing long-held suspicions of its designing a nuclear bomb.

Tough international sanctions over the past two years have cut Iran’s oil exports in half.

Stocks rally after US jobs report, dollar slips G

lobal equity markets rallied on Friday as investors pegged a poor U.S. jobs report on bad weather, but bond yields and the dollar fell as the data showed employers hired far fewer workers than expected in January, suggesting economic softness. Nonfarm payrolls rose by 113,000, well below the consensus of 185,000, although the unemployment rate hit a five-year low of 6.6 percent, the U.S. Labor Department said.

The dollar fell broadly while safehaven gold and U.S. government debt prices rose on the unemployment report.

But the equity market also rose, with investors writing off the weakest two months of U.S. job growth in three years on inclement weather.

“Markets are increasingly behaving as though the recent series of soft economic data is truly attributable to bad weather, and not some broader downturn in demand,” said David Joy, chief market strategist at Ameriprise Financial in Boston.

“It’s unlikely that the economic momentum from late last year simply stalled in December and January,” Joy

said. MSCI’s all-country stock index .MIWD00000PUS rose 0.56 percent, and its gauge of emerging markets .MSCIEF rose 0.69 percent. The pan-European FTSEurofirst 300 index .FTEU3 of leading shares rose 0.55 percent, helped by steelmaker Arcelor (ISPA.AS), as investors bet equities would continue to benefit from the region’s gradual economic rebound.

On Wall Street, the Dow Jones industrial average .DJI rose 8.45 points, or 0.05 percent, to 15,636.98. The S&P 500 .SPX gained 4.86 points, or 0.27 percent, to 1,778.29 and the Nasdaq Composite .IXIC added 15.465 points, or 0.38 percent, to 4,072.587.

“Expectations for the report were too high, and investors are giving the report the benefit of the doubt because of the weather,” said Donald Selkin, chief market strategist at National Securities in New York.

After the sell-off earlier in the week, the fact equities are rising after Thursday’s gains shows there’s still momentum to the bull market, Selkin said. “Stocks initially got killed after the report came out, but now we’re pretty

sharply higher. That’s a strong sign that we’ve bottomed out,” he said.

Though the labor market report called into question the strength of the economy, the preponderance of most economic data still shows some pretty good growth, said Anthony Valeri, investment strategist at LPL Financial in San Diego.

“We’re seeing earnings on track to grow about 9 percent year-over-year, and as long as that’s the case, the pullback in stocks is likely to be limited,” Valeri said.

“The data hasn’t been weak enough to suggest that the current earnings trajectory will deviate,” he said.

The dollar index .DXY fell 0.19 percent to 80.754, as the euro gained 0.16 percent to 1.3610 against the greenback. The dollar rose 0.12 percent to 102.20 against the yen.

The benchmark 10-year U.S. Treasury note rose 9/32 in price, pushing its yield down to 2.6656 percent. Brent crude rose toward $108 a barrel after a fall in the U.S. jobless rate to a five-year low of 6.6 percent fueled hopes for stronger demand in the world’s top oil consumer.

Ghana’s Terkper says rates meant to shield economy as Cedi falls

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hana’s finance minister said raising the key interest rate was meant to shield the economy from capital outflows prompted by Federal Reserve tapering that battered emerging markets as the cedi fell to a record low.

The central bank, led by Governor Kofi Wampah, raised the policy interest rate by 200 basis points to 18 per cent, the highest in more than four years and the biggest jump since at least January 2003.

The move came a day after it announced curbs on foreigncurrency trading to halt a slide in the cedi, Africa’s worst performer this year against the dollar.

“The decision is not an exaggeration of events,” Minister Seth Terkper told reporters in Accra, the capital.

“As a result of Fed tapering, there have been capital flows away from emerging markets.

There are fallouts that have been observed in countries like Turkey, Argentina, Indonesia, India, Malaysia, South Africa.”

Central banks in developing countries unexpectedly raised rates last week to stem a slide in their currencies prompted by the Federal Reserve’s start of asset-purchase tapering. The cedi has lost 5.4 per cent against the dollar this year, the worst performer among 24 currencies in Africa tracked by Bloomberg. It depreciated 4.1 percent to 2.5113 per dollar by 10:57 a.m. in Accra, the lowest since at least May 1994.

11 vessels arrive in Lagos ports with petroleum products

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he Nigerian Ports Authority (NPA) says 11 vessels have arrived in the ports in Lagos with petroleum products. This was contained in the ‘Shipping Position;’ a daily publication of the NPA on Friday.

It said the 11 vessels would discharge their products at the Atlas Cove Jetty, New Oil Jetty, Petroleum Wharf and Bulk Oil Plant. NPA said that apart from the 11 vessels, 103 others are expected to arrive at the ports from Feb. 7 to Feb.28. It said that 42 out of the 103 vessels would sail in with containers, while 23 would bring in various food items.

NPA said that 12 vessels would sail in with vehicles, while nine others would arrive with petroleum products.

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46 — Vanguard, MONDAY, FEBRUARY 10, 2014

Advertising, Media & Marketing has been Nigeria.

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ICM commences Valentine promo

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keja City Mall, ICM has commenced a shopping promo for the valentine season tagged: “THE ICM 2014 VALENTINE’S PROMO”.

The ICM Valentine’s 2014 promo is in partnership with Hemingway’s Safari Africa Limited, its an in-mall activation aimed at rewarding ICM’s premium shoppers for their loyalty, which ends February 28th, 2014.

There promotion is slated to have two draws. The first draw will pick 10 winners for the ICM Candle lit dinner which will hold in the mall on 14th February. The select couples will have a night of fun and excitement. They will be feted with exquisite cuisines, exotic wine and of lots of love songs and games that will show how well they know their spouses.

While three winners will be picked in the second draw with the following prizes: –3rd prize $600 worth of shopping voucher.

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across

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P&G’s Oral-B campaign alligns with WOHD celebration

s the World Oral Health Day approaches, Oral-B, a Procter & Gamble’s toothpaste brand has commenced its ‘Sharing Smiles’ campaign which it said is targeted to reach disadvantaged communities that cannot afford dental care products and consultations with dentists.

As part of the ways to celebrate the World Oral Health Day, WOHD, on March 20, 2014 and in commitment to total oral health, the campaign which is targeted at providing free dental services through Oral B’s Mobile Dental Clinic (MDC) to people who ordinarily cannot afford the service, kicked off on the 30th of January 2014.

Ajewole Ayotomiwa, Brand Communications and Consumer Relations Manager, Procter and Gamble, said the campaign is the brand’s way of sharing smiles to indigent communities around Nigeria, adding that Oral B places a high premium on dental health and hygiene.

According to Ayotomiwa, “the campaign which will be culminated on the W OHD on the theme ‘Celebrating Healthy Smiles’ will be celebrated worldwide on March 20th 2014, which will enable Oral B promote the objective of the day, which is promoting the general dental hygiene of the world population.”

done

FORUM: Managing Director/CEO, Unilever Nigeria Limited. Mr. Yaw Nsarkoh (m) flanked

by Chief. Ben Igwe (Key Distributor, Unilever Nigeria, and Mr. Ikechukwu I. Igwediebube (Key Distributor) at the Company’s Customers Forum event held in Lagos.

We are here to contribute to Nigeria’s growth — Unilever MD Stories by PRINCEWILL EKWUJURU

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hen sales are good in a particular year, companies celebrate their trade partners, likewise when sales are bad.

The Customer Forum, a celebration instituted to keep tab on their trade partners performances, as well as giving them a sense of belonging, brings an emotional bonding between both parties.

In this scenario, companies give trade incentives to their partners to enable them continue in their businesses, at times, it is in cash, trucks, cars, refrigerators, generating sets, TV sets , Phones etc. But today, the Customer Forum has become a tool in the hand of companies to dig deep into the understanding of its partners, which in another way helps to position the company in their minds and the market.

Other need for the Customer Forum is also to chart a new course for the development and growth of the company through the string line of the trade partners, which is an avenue to push sales for the company. Even though targets are given at times.

For this reason, the 2013 Unilever Nigeria Plc Customer Forum was not an exception, for the fact that the gathering of the trade partners saw the company reward them with various gift

items at the instance of the new Managing Director/CEO, Yaw Nsarkoh, who took over from Thabo Mabe.

Like Nsarkoh said: “Customers are the essential part of any business model that is serious about serving its consumers. They are our trade partners, we work with

them in one ecosystem to create value for the consumer, so that we can build the brand preference we are looking for. We are into partnership, one of the things that lubricates it is recognition, it is an opportunity for us to appreciate all the work, that

n order to express our brand appropriately even in the remote part of Nigeria so that our brands can be appreciated and also to build the future growth of the business by extending the relation with our partners further that is what it's all about.

On his expectations: “First of all the foundation that has been built by my predecessor is solid. What I tend to do is to erect an even more strong strategy on it. Nigeria is great in the global environment.

What we want to do is to ensure that our brand is strengthened into the future so that we can participate in, and contribute to the growth of Nigeria within the global construct, and in that effort build the African business to become the business of our dream.” On his message to the consumers, he said that the consumers are the reason the company exist. “We will continue to listen to the consumer. We will continue to try and anticipate their needs from the basis of the signals that we get and amplify them in other to build strong brands that provides solutions that improves their life, The main reason why we exist is to serve consumers. That is what Unilever has been about since its existence in Nigeria since the 1920s, I believe, as I told you, consumers life will improve.”

Innovation built Dettol soap franchise across markets — Reckitt Benckiser MD

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he Managing Director of Reckitt Benckiser Nigeria, Mr. Rahul Murgai, manufacturers of Dettol soap has said that innovation has helped the company to build the Dettol franchise across markets, including Nigeria.

Speaking at the trade launch of Dettol Re-energize in Lagos, he described the extension of the soap category as another, ‘‘great innovation’’.

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

Speaking further, he said that the move by the company to align its corporate philosophy with the consumer-centric marketing matrix to attain market leadership was its engagement with various sectors where the brand plays.

According to him, “The brand has succeeded in building the biggest consumer direct contact programme in Nigeria through various innovative engagement platforms, which is lacking in other competing brands. For example, through the ‘Dettol New Mum initiative,’ the brand reached 5.8 million mothers in

44 cities in Nigeria, that is about six million mothers in five years. It sampled these mothers, taught them good hygiene practices and educated them on what good hygiene does for them, their babies and their families.”

Furthermore, he stated that the Dettol brand has also reached 3.5 million school children in three years by visiting 7,000 schools across Nigeria courtesy of its school hand hygiene programme, ‘Good Health is in Our Hands.’ Another strong success factor is Reckitt Benckiser’s ability to bring innovative solutions to meet the needs of its various consumers per time.

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

Corroborating, the Marketing Manager (Personal Care), Reckitt Benckiser, Mr. Ahmed Shah, said innovation, consumer engagement and continuous research were three critical success factors that could not be compromised in today’s competitive market. He said Dettol Re-energize, which was unveiled at a trade launch a few months ago was another product of innovation and extensive research into consumers’ want and preference.

Vanguard, MONDAY, FEBRUARY 10, 2014 — 47

Advertising, Media & Marketing

Quill Awards: Promasidor partners Thomson Chief Keith Richards, the in- dedicated news reportage on Foundation coming Chairman of industry, education, and Stories by PRINCEWILL EKWUJURU

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romasidor Nigeria Limited, makers of Cowbell Milk said it is partnering Thomson Foundation to take the Promasidor Quill Awards to a new level.

With the partnership, the best overall entry for the 2014 Promasidor Quill awards will have the opportunity of participating in a five -week course in the UK.

Promasidor Nigeria, addressing journalists at a press conference to announce the partnership at the company ’s corporate headquarters said the essence of the partnership is to have a champion of champions among the winners of the seven categories created by the company to go for a training programme in the United Kingdom (UK).

The award was instituted as a way of rewarding excellence in journalism in Nigeria for

PRESENTATION: From Left: Group Country Manager –Africa (Mayora Group) Mr. Ryan Kaloh presenting a bus Key to CEO of Mayolaa Strides Limited, Mrs. Nwannka Agbo, one of the winners and Country Manager of Inbisco Nigeria Limited, Mr. Emeka Ajoiyi during the presentation ceremony held in Lagos recently.

corporate social responsibility & nutrition issues all year round. Richards noted that the media is an important organ in the life of the society and it plays a very important role in checking the pulse of different issues in society but most times, the practitioners are undermined.

“Since we sold the first sachet of milk and grew our product brands across our dairy, beverage and food enhancement categories over the years, we have continued to enjoy and benefit from the support of the media and committed journalists who have noticed our commitment and hard work,” he said.

Richards explained that the awards tagged ‘Promasidor Quill Awards’ initially covered five categories among which are the Brand Advocate of the year, Best Corporate Social Responsibility (CSR) Report of the year, Most Educative Report of the year, Best Report on Nutrition and the Best Photo Story of the year.

He said that winners from the maiden edition had received state-of-the-art tools of trade as well as a 6 - week certificate-awarding course at the School of Media and Communications of the Pan Atlantic University, Lagos in order to further equip them with new knowledge and skills set to do more.

Why we refreshed our brand identity—First Bank

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irst Bank of Nigeria, FBN Plc has explained that the removal of the elephant’s body in its corporate logo was meant to change the perception that the bank is sluggish as the elephant.

The Head of Marketing and Corporate Communication, Mrs. Folake Ani-Mumuney, who gave insight into the logo, said the body of the elephant has evolved as the bank’s name signifies that customers of the bank drive the brand. This new trend has positioned the bank as a consumer-centric bank with service excellence built on a new campaign direction; ‘You First.’

Analysing the new brand icon of the bank, AniMumuney said, with the elephant’s head raised, forward raised-leg and eyes raised, signifies a focused and forward looking bank.

Ani-Mumuney however said that the refreshed identity is the bank’s new commitment to serve customers better and

also to expand its service to other countries as a global brand that has operated in the banking sector for 120 years.Continuing, she said: “We have re-ignited this iconic symbol with a number of enhancements that communicates a robust evolution relevant to today’s banking business. The raised head of the elephant in our refreshed identity is

our promise to all customers that with the bank by them every financial challenge they face, they can face with their head held high. The deep blue colour according her represents momentum, innovation and evolution. The raised foot of the elephant according to her is a promise that the bank will always put its foot forward for each and every one of its customers.

Inbisco rewards distributors for outs outstt anding per perff ormance

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nbisco’s Nigeria Limited, a subsidiary of PT Mayora Group, has rewarded the outstanding marketing performance of some of its trade partners. The 2013 Distributors Forum tagged: “Second Inbisco Distributors Forum”, saw some of the trade partners going home with five new buses to enhance the distribution of the company’s products in various parts of the country.

The Country Manager of Inbisco, Mr. Emeka Ajoiyi, said the gesture was part of the company’s culture of rewarding excellence and also to encourage its distributors in their business operations.

According to him, “It is highly fulfilling to see some of our distributors smile home with brand new buses, which is in line with our culture of rewarding excellence and adding value to the business of our trade partners.”

Atmosphere for Service “Charity begins at home” is a thread-bare expression. In the world of service excellence, however, this cliché still has its place. The best place to begin the quest for excellent customer service is right inside the organisation. The bane of most service improvement initiatives is that they are too externally oriented. In such situations, employees begin to think mainly in terms of the external customer. Nothing is really wrong with this kind of thinking, so long as employees equally appreciate the link between internal service and external service.

In the best customer-focused organisations, people within the organisation see one another as customers. The production people see the marketing people as their customers. The marketing people see the field sales people as their customers. The purchasing people see the production people as their customers. People in the human resources department see everybody else as their customers and try to create a work environment that encourages optimum performance. Everybody in the organisation knows just how the performance of their job function facilitates or hinders that of someone else in service delivery. Everybody knows precisely how they contribute to customer satisfaction.

This is perhaps just one side of the coin. The other side has to do with the value the organisation places on its employees. In those organisations that truly regard people as their “greatest asset,” it is not unusual to see employees go beyond the call of duty to serve customers.

The reverse is equally true. Organisations that treat their employees like filth end up having their customers treated the same way.

The point is that if you treat your employees, there is no guarantee that they’ll treat your customers well – but you have a good chance of getting them to mirror you. But if you treat them badly, you can bet they will take it out on your customers!

It is up to you to create the kind of work environment that encourages excellent service.

How do your team members relate to one another?

Do they see one another as partners working toward the same goals? Or are there (suspicions of) hidden agenda? Do people talk to one another with respect or are they always hollering to have their way? The way people relate to their colleagues won’t be much different from the way they relate to their customers.

Beyond the relational aspects of service, there is the need to look at the internal systems, processes and structure. Is the organisation flat or bureaucratic? Is it easy to get things done – or are employees bogged down by layers upon layers of signatures and approvals? Are people empowered to use their initiative, make mistakes and learn? Or is the sword always dangling over those who err?

Do employees have the necessary tools for their work? Are employees adequately rewarded? What does the company do to retain its best employees?

Just as it is important to retain your current customers, it is necessary to retain your good hands.

Getting competent employees that fit your organisational culture is not generally easy. Even when you get good employees, it takes a lot of time to train them to meet the standards of excellence you’ll like to see. This whole idea of treating employees (internal customers) well, making them buy into the corporate vision and motivating them to render exceptional service has been aptly tagged “internal marketing” by services marketing scholars.

Indeed, the best place to start marketing is in-house.

C M Y K

48 — Vanguard, MONDAY, FEBRUARY 10, 2014

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

Are workers better off in Zimbabwe than in Nigeria? particularly power, inflation rate, cost of funds, exchange rate stability, etc, etc, would all be important factors.

However, for the purpose of our current exercise, we may just beam on inflation and the prevailing minimum wage levels. Incidentally, our monetary authorities were quick to celebrate, when inflation rate receded below 8%, after remaining in double digits for several years.

Interestingly, however, the

,

N

igerians could be forgiven, if their impulsive reaction to the above comparison is a derisive sneer because of the general perception that the Zimbabwean economy was dysfunctional. Indeed, about five years ago, Zimbabwe was the ultimate butt of universal jokes because of the abiding inflationary spiral that had gone haywire at 231,000,000%!

Consequently, the Zimbabwean dollar was exchanging at about two billion Zimbabwean dollars to US$1; in other words, the value of the currency was less than the paper on which it was printed!

Inevitably, Zimbabweans forsook the national currency and resorted to simple trade by barter; for example, parents paid the school fees of their wards with farm produce, such as eggs, chickens and other such consumables.

Zimbabwean supermarkets, which were once fully well stocked soon became characterized by unending rows of empty shelves.

Inevitably, also, the rate of unemployment climbed well beyond 50% of the working population!

Thus, it may seem inappropriate to compare such a “horrid primitive” economic environment with that of the self-acclaimed “giant of Africa,” where, in spite of a steady decline in the purchasing power of the naira, the strength of the economy still compared more favourably with the apparent economic crisis in Zimbabwe!

However, the preceding dismal picture of Zimbabwe was certainly true in 2008; today, the situation is much different! I agree that in making a comprehensive comparison between economies, several indices, such as Gross Domestic Product, Per Capita Income, level of infrastructure,

become rejected for transactions.

In those countries where primary coins have remained a vital component of their currency profile, inflation rates have invariably remained low between one and four percent; the inflation rates in the United States and UK, for example, where primary coins have continued to be used, is currently below 2%, while it would be regarded as crisis dimension, if inflation

It will be instructive to compare Zimbabwe’s existing minimum wage level to our own N18,000 (about $110) per month. Evidently, the lowest paid government worker in Zimbabwe currently earns about three times the minimum wage in Nigeria

implication of Nigeria’s current 8% inflation rate is that people with static incomes, such as pensioners, would lose over 96% of the purchasing value of their incomes every 12 years!

It is this recognition that untamed inflation is a poisonous plague, that predicates the prime mandate of all central/reserve banks on price stability.

In addition to inducing poverty, our current rate of inflation, also ultimately makes it impossible to enjoy the advantages of the use of primary currency such as kobo coins. Indeed, such primary coins have become irrelevant, cumbersome, and relatively valueless, and have therefore,

,

approaches 5%!

Incidentally, on the 31st of December 2013, Ghana’s leading newspaper, the Daily Graphic, published the inflation rates in about 15 African countries; surprisingly, as at August 2013, Zimbabwe posted the lowest inflation rate of 1.28% ahead of Ivory Coast in second place with 2.2%!

However, the “Trading Economics” website reported in early February 2014 that Zimbabwe’s inflation had further reduced to 0.33%!

Certainly, Lamido Sanusi, our Central Bank Governor, has often insisted that it would require the skills of a magician to bring down inflation to such

benign level as in present day Zimbabwe, and at the same time bring down cost of funds to single digit, with a stronger naira exchange rate in tow.

Maybe there are lessons that we could learn from the experience of Zimbabwe!

The ultimate question, however, is how the Reserve Bank of Zimbabwe turned around the economic fortunes of that country! Indeed, in line with my consistent position in this column, inflation rates will rise in sympathy with increasing and unrestrained printing/creation of fresh money by a country’s monetary authorities; in such event, too much money will chase fewer goods, and smaller stock of foreign reserves, and ultimately, inevitably weaken the exchange rate of the national currency.

Our own monetary authorities have regrettably loyally trodden this path of ‘perdition’, when it unceasingly inundates the system with hundreds of billions of naira, which it substitutes for dollar-derived revenue in monthly government allocations. Five years ago, Zimbabwe’s authorities realized the folly and anti-social impact of such monetary strategy and decided to throw their own currency, the Zimbabwean dollar, which exchanged at two billion Zimbabwean dollar to US$1, into the dustbin, and adopt wholesale and retail use of the US dollar, as their official domestic currency; today, Zimbabwe has succeeded in performing the elusive magic and their economy is once again on a steady rebound!

I n s t ructively, Nigeria’s adoption of dollar certificates for the payment of allocations of dollar revenue will also do the same magic for our economy, on a healthy inclusive platform, with increasing job opportunities.

I

n a related development, a recent Reuters report stated as follows “Zimbabwe’s government employees have rejected pay increases of 27% as too small…. The Unions want a monthly minimum wage of US$543, equivalent to the poverty line for Zimbabwe’s 235,000 state employees, the bulk of who are teachers….

Meanwhile, the government has proposed that the lowest paid worker would earn $375 a month, a 27% increase from the current $296".

It will be instructive to compare Zimbabwe’s existing minimum wage level to our own N18,000 (about $110) per month. Evidently, the lowest paid government worker in Zimbabwe currently earns about three times the minimum wage in Nigeria! Incidentally, also, the jobless rate in Zimbabwe is a relatively credible 10.7%, as against almost 24% for Nigeria.

Furthermore, Zimbabwean businesses obtain loans at below 14%, whereas in Nigeria, cost of funds to the real sector remains well above 20%.

Undoubtedly, other parameters such as peace, political stability, and security would be required in addition to above indices to paint a more accurate picture and make a fair comparative evaluation of economic and social welfare between workers in Zimbabwe and Nigeria.

Business & Economy

Operator appeals to LASG to enhance ferry transportation

C

hairman, Ferry T r a n s p o r t Association (FTA), Bayeku, in Ikorodu, the Lagos State Mr Lukman Ganiyu, on Friday urged the state government to enhance ferry transportation.

Ganiyu said in Lagos that government’s assistance would further reduce operational costs and decongest traffic on the C M Y K

road.

“We’ve not received any form of support from government. It has been our personal efforts. If the government partners with us in the area of loan we know how to repay.

Even the usual traffic congestion on our roads would reduce.

In western countries, they take water transportation seriously

because it is faster. For instance, it takes only 20 minutes to move from Bayeku to Victoria Island in comparison to the three or four hours being spent if you go by road. So, there is a huge difference. ‘’ Ganiyu stressed that the high cost of running the business was further compounded by the high interest many commercial banks in country charged on their loans.

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