Page 1



he Bank of Industry, BoI, has signaled that all is not well with the administration of the Federal Government’s N100 billion Cotton Textile and Garment (CTG) Industry loan to beneficiary companies. The bank is currently managing the fund at a loss under the current interest rate of six percent. This is even as majority of the Fund beneficiaries are not happy with the loan conditions and have called for a lower interest rate of three percent instead of the current six percent in order to reduce their production cost. An AIDE MEMOIRE prepared by the United Nations Industrial Development Organisation (UNIDO) and BoI made available to Financial Vanguard, showed that beneficiary firms include SunFlag, Adhama Textiles and Garment Industry Limited, Kano; Sam & Sarah; Nigeria Bag Manufacturing Company, BAGCO; Femi, a handbag and accessories manufacturing firm, among others. According to the document, BOI is finding it difficult to manage the Fund profitably. The bank has, therefore,

BOI managing N100bn CTG fund at high cost — Report •Seeks 3% coupon rate from DMO requested the Debt Management Office (DMO) to review downward its coupon rate for the fund being five percent to three percent as the bank is currently managing the Fund at a loss. It was learnt that the administrative and other ancillary costs are currently from outside the Fund and the expenses are being borne by BoI.

Findings on the administration of the Fund further revealed that although most of the beneficiary companies are satisfied with the bank’s loan application process and loan supervision, yet they are not satisfied with the disbursement plan and the conditions of the loan, claiming that the current amount disbursed is not enough to produce at full capacity.

Hence, reduction in the interest rate was considered the most desired change to the administration and conditions of the CTG Fund by beneficiary firms followed by extension of the loan duration. About 71 percent of the firms required a loan tenure beyond seven years to 20 years to enable the industry stabilise and grow. But the

Continues on page 18













154.75 232.9761 201.4845 163.428 1.6435 0.2885 232.7295 24.837 41.2623 27.0225 233.4713

155.25 233.7289 202.1355 163.9561 1.6488 0.2985 233.4814 24.9177 41.3956 27.1099 234.2257

SELLING 155.75 234.4816 202.7865 164.4841 1.6541 0.3085 234.2334 24.9984 41.5289 27.1972 234.98

CBN Exchange rate as at 08/03/2013

18 — Vanguard, MONDAY, MARCH 11, 2013

Cover Story

Entrepreneurial Education Revolution: An Imperative for Sustainable Development in Nigeria: Part 3

BOI managing N100bn CTG fund at high cost — Report Continued from page 17 BoI maintained that it can extend tenure of the loan to beneficiaries only if DMO extends the tenure of the Fund. In 2009, the Federal Government introduced a N100 billion intervention Fund to revitalise the CTG industry, which was domiciled with BoI.


pproval and disbursement of the Fund commenced effectively same year with a total of N7.195 billion disbursed to three firms. By June 2012, a total of N41.1 billion had been disbursed to 56 successful applicants by BoI. Recently, a validation workshop on the mid-term evaluation of Cotton, Textile and Garment (CTG) Industry was carried out by United Nations Industrial Development Organisation (UNIDO) and BoI in Abuja. The validation workshop was aimed at sharing preliminary results with stakeholders on the performance of the fund at mid-term; obtain views from stakeholders on the way forward for the CTG Fund, etc. The exercise drew stakeholders ranging from the beneficiary firms to the Central Bank of Nigeria, DMO, Bank of Agriculture, textile, ginnery, cotton operators including Nigeria Labour Congress. Mr. Olusegun Aganga, the Minister of Trade and Investment, who declared the workshop open, noted that the CTG sector was leading in the economy from the 1960s through to the 1970s and in the early 1980s when the industry had about 175 textile mills and employed over 600,000

workers, making it the second largest employer of labour next to government. “Unfortunately however, by 2008, the Textile factories still in operation had reduced to 24 textile mills and 10 ginneries employing less than 25,000 people and with exports less than US50million”, Aganga lamented. He identified some of the factors that led to the decline in the sector to include massive influx of textiles and apparels from Asia, particularly after the Multi Fibre Agreement (MFA) expired in 2005, inadequate and epileptic energy supply and heavy reliance on self-generation of power, leading to high and uncompetitive production costs. Others, he added, were global economic challenges, massive smuggling of cheaper textiles of lower quality, changing consumer tastes and habits and huge debt burden on producers in the value chain amongst others. The minister noted that the sector holds strong potential due to its natural cotton endowments, large market size and legacy sector knowledge, adding that Nigeria’s population of over 167 million people represents a natural market for basic textiles and apparel related goods. He stated further that the Potential to export to regional and select developed markets (such as the United States under the African growth and opportunity Act (AGOA) tariff regime) are also very attractive, just as the existing textile infrastructure and skill base provides the industry with a pool of knowledgeable

workforce particularly in Northern Nigeria. These realities, the minister emphasized, make the sector too important for government to ignore. Hence, in 2010, he continued, the Federal Government introduced the N100billion Cotton Textile and Garment Revival Scheme, managed by BOI to reverse the ugly trend and ensure a rapid resuscitation and upgrading of the entire CTG value-chain. Aganga then disclosed happily: “Two years down the line, we are pleased to inform you that substantial portion of the Fund has been successfully disbursed to beneficiaries and the impact is very encouraging.


ecent figures from the Manufacturer ’s Association of Nigeria (MAN) reveal that the capacity utilisation in this sector has increased tremendously from 29.14 percent in 2010 to 49.70 percent as at 2011. In addition, a number of hitherto moribund textile mills have been reopened and about 8,070 jobs have been saved while over 5,000 new jobs have been created. He added: “The evaluation of the socio-economic impact of the Fund to the beneficiaries and the national economy at large could therefore, not have come at a better time. Although, it is evident that the CTG Revival Fund Scheme has provided the industry players with a unique source of incentivebased long Term Fund for the financing and refinancing of capital investments and revolving working capital, based on my interactions Continues on page 19

HE findings of a recent study showed that 66% of the undergraduates wanted to be self reliant after graduation. This means that undergraduates in Nigerian universities have high propensity for entrepreneurship skills. The results also showed that 32% of the factors that motivated the respondents to want to go into entrepreneurship were the needs to be self reliant while 68% of the factors were due to the fear of unemployment and poverty. It was also found that 62% of the respondents wanted to be a sole proprietor, while 38% wanted to go into partnership. In assessing the level at which undergraduates have been equipped with entrepreneurial skills and knowledge, 82% of the respondents indi-


R-L: Governor of Ekit State, Dr. Kayode Fayemi, former Presidential Aide to Chief Olusegun Obasanjo, Mr Akin Osuntokun and the Chairman of Vigeo Power, Mr Gbolade Osibodu, during a business dinner organised for the Governor by Igbimo Ure Ekiti in Lagos.


Many graduates have not come to terms with the reality of non-existent white collar jobs


cated that they had taken some courses in entrepreneurship in their respective institutions and that about 78% observed that the programme was adequate to equip them to manage a business after graduation. However, 18% of the respondents observed that the programme was adequate. It was inadequate because it was too theoretical, while there were inadequate facilities and no artisans for handling the practical. On eradication of poverty in Nigeria, 82% of the respondents indicated that entrepreneurship could eradicate poverty and unemployment in the country. There is no gainsaying the fact that entrepreneurship is the solution to unemployment and poverty among Nigerian

youths and graduates. The Federal Government of Nigeria has taken the bull by the horn in establishing the National Directorate of Employment (NDE), initiating the National Economic Empowerment and Development Strategy (NEEDS), and recently the Entrepreneurship Education in the Nigerian Universities. These are all targeted at reducing extreme hunger and poverty by 50 percent by the year 2015 FRN (2008). These are all steps in the right direction. The Nigerian government and all those concerned with implementation need to take closer look at all these programmes so that maximum benefit can be realised from the huge amount invested on them by the government. The Entrepreneurship Education in Nigerian Universities is a little over one year, and so would not give premature assessment but right from the onset of the programme, the Federal Government should have set aside adequate funds to make the programme realizable, centres for acquiring the skills and activities started in the course synopsis should be built and equipped. Artisans who are educated and capable of handling these skills should be employed. Undergraduates should not see the Course (GSE 301) on Graduate Self Employment as a mere theoretical course like other courses. They should be prepared to graduate from the universities with at least two skills as contained in the Course Synopsis. There is need to counsel undergraduates for possible attitudinal re-orientation towards self-employment and self-reliance. Many graduates have not come to terms with the reality of non-existence of white collar jobs. This counselling and reorientation should be incorporated along with the Entrepreneurship Education. Posters and Slogans about selfreliance should be pasted in conspicuous places in the universities. This will constantly remind the prospective graduates that time after graduation should not be wasted to endless seeking for jobs that are not available.

Vanguard, MONDAY, MARCH 11, 2013 — 19

Crude oil thieves will soon ask for amnesty N

igeria for all intents and purposes is a very funny country. It is a country typified by the famous Animal Farm drama. The pigs were the top rated animals that profess to be equal to all others, but were sleeping on beds while others were outside on ground in the cold. The truth is that whatever any one says, Nigerians are not all equal. We operate a constitution that says all Nigerians are equal, that the government will strive to achieve an egalitarian society. Right from independence, the equality of Nigerians has been in doubt. Every section of the country has at one time or the other felt marginalised by the powersthat-be. The thing is that among the ruling class, any time the various nationals that make up the country feel they are not getting enough, they cry foul, ‘we are being marginalised.’ Before now, it was the NigerDelta that felt marginalised and took up arms against the state. They got away with it and got their demands met. They were not only granted amnesty, but the President now who has the political power to dispense economic favour is one of their own. Restiveness in the area has abated. After June 12, 1993, the Yorubas were the ones who felt marginalised and they used the power of the media, concentrated in the South- West, to achieve their goals.

Obasanjo became the President. Though they had OPC, there was no amnesty, but those who went on selfexile and those who were accused of plotting to overthrow the government were pardoned and they returned to their homes. The question to ask is ‘who are those who control the economic power of the nation? Today, it is the North-East that is feeling marginalissed and devastated by poverty. The youth there have taken up arms against the nation. They have killed, maimed and destroyed properties worth billions of naira for no specific reason and now the call for amnesty is on. The case of the North-East is very pathetic in view of the fact that those who milk Nigeria’s economy dry are from this zone. Last week, the Chairman,, Senate Committee on Rules and Business, Sen. Ita Enang, at the floor of the Senate advocated equitable distribution of oil bloc licence in the country. Enang made the call during the debate on the Petroleum Industry Bill (PIB). He was reacting to the Northern Senators’ stand that the oil-producing areas receive too much money from the Federation Accounts. He said the oil blocs should be revoked and re-awarded to ensure that the federal character principle was applied in distribution of oil

blocs, marginal fields and prospecting licences.


nang, who spoke with Senate Correspondents after the plenary, alleged that most of the owners of the oil blocs were richer than their geo-political zone. “Some people who own oil blocs in the North-East are richer than their states. At least, one person is richer than the entire six or seven states of the NorthEast. Now, it is still said that the Niger-Delta is taking too much when one person is taking from the profit he makes from each of the oil blocs more than what even the derivation that the totality of the states are

taking. Most of these oil blocs were awarded long ago. Most of the owners are so rich that the country becomes the poorer for it. “These men are the ones who spearhead talks that poverty is the cause of Boko Haram insurgency in the North-East. What have they done with the money they make from oil bloc licences other than build mansions in these areas they can no longer live in. Besides, they are the ones that constitute themselves into a cabal that fund the stealing of crude oil in the country. Because they are highly connected and are men of means, every government that

comes into existence pleads helplessness in crude oil theft. How long can Nigeria continue down this road of some untouchables that make life difficult for the nation? Yet, each time, we come up with the argument of granting criminals amnesty. Very soon, we will be talking of granting amnesty to crude oil thieves whom government agencies know but have failed to do anything about them. Nigeria should as a matter of urgency revoke all the oil blocs allocated to individuals or companies that have no expertise in crude oil exploration. It is criminal for governments - past, present and in the future - to grant oil bloc licence to companies just because of their political leanings or connection to powers-that-be. Crude oil is the wealth of the nation. It is most of the wealthy operators in the oil sector that are responsible for the theft of oil and illegal bunkering in the Niger-Delta. I challenge the Federal Government to deny this. Crude oil is not stolen with teacup by the poor. It is stolen with ships and it is these rich persons who have these facilities that are capable of facilitating it, not the ordinary persons branded militants. The federal authority should muster courage and arrest these high profile thieves and put a stop to crude oil theft once and for all in the financial interest of the nation.

Cover Story BoI managing N100bn CTG fund at high cost — Report Continued from page 18 with some of you and my findings during my visits to your factories, I am not unaware of other challenges being faced by you”. Aganga assured the stakeholders: “We are working through the Standards Organisation of Nigeria to reduce the dumping of substandard goods into the country. Some of these goods include textiles and apparels. We are also exploring diplomatic channels through our Trade Ambassador at the World Trade Organisation. To ensure increase in power supply, we are working with the Ministry of Power to ensure that 10 industrial cities in the country have at least 18 hours of uninterrupted power supply by first quarter of this year

(2013)”. He stated further: “Our aspiration for the textile and apparel industry is to increase its domestic market share from its present position of 12 percent to 25 percent by 2020. We also expect this sector to create over 60,000 direct jobs within this period. To achieve this, the strategic thrust requires reviving the entire value chain. This includes strengthening the base by boosting cotton production for use in the domestic sector and potential exports, supporting existing players to expand their current operations and attracting strong brands to set up local manufacturing operation in the country. This explains why we have included the sector in the Industrial Revolution Plan which is being put together by my Ministry”.

The minister was optimistic that the outcome of the workshop would significantly enhance the implementation of the scheme and provide a guide on areas requiring urgent attention by the Federal Government to incorporate in the Industrial Revolution Plan.


oI’s Managing Director, Ms. Evelyn Oputu, who also spoke at the workshop, reiterated the bank’s commitment to the rehabilitation of ailing and moribund industrial firms, including textile, automotive and others, which have significant capacity for employment generation and export. She disclosed that more approval and disbursement of the fund would be done to successful applicants in 2013,

adding that the fund could even be fully disbursed then. Justifying the workshop, the BoI boss explained that, having implemented the funding scheme for two years, the need for an independent mid-term evaluation on the performance of the bank and beneficiaries cannot be overemphasized. This, she added, would enable stakeholders to ascertain whether the funding scheme achieved intended objectives, so as to recommend to BOI and other stakeholders how to improve its efficiency and effectiveness. “Our desire is to save and create jobs in the CTG industry, protect the US$2 billion investment in the industry, increase the profitability of beneficiaries of the fund and strengthen the synergy between CTG sub-

sectors,” said Oputu. Also, the Vice President, Nigeria Labour Congress (NLC), Mr .Issa Aremu, said that BoI is doing a very good job. He advocated for increased funding of BOI, specifically asking that the CTG intervention fund should be increased to N1 trillion from the N100 billion. According to him, if banks that are rendering services and who altogether are less than 30 could benefit to the tune of trillions from the central bank of Nigeria, why won’t over 120 textile, cotton and garment firms who can employ tens of thousands of Nigerians not also enjoy funding in trillions. He also argued that the interest rate is still high at six per cent, canvassing zero per cent.

20 — Vanguard, MONDAY, MARCH 11, 2013

Business & Economy BRIEF Smugglers kill Customs officer at Seme border BY GODWIN ORITSE


ARE devil smugglers last week killed a Customs officer whose identity is yet to be ascertained at the Seme border Command of the Nigeria Custom Service. Vanguard gathered that trouble started when the smugglers protested the high extortion fee being demanded by the Customs officers for the passage of their goods.. It was further gathered that the Smugglers also accused the officers of arresting their colleagues after exhorting money from them. It was said that a similar scenario played out earlier at the Seme Command which led to a face-off between the smugglers and the officer which resulted in the death of the officer. Confirming the development, Public Relations officer of the Command, Mr Ernest Olotta, told Vanguard that there was a protest by some youths in the Gbagi area of Seme over the death of one their colleagues suspected to be a smuggler. Olotta told Vanguard that the deceased suspect was coming from across the border carrying poultry products. On sighting a team of anti-smuggling officers around Gbagi, he drove into the bush, which necessitated a chase by the officers. The Command spokes man explained that it was in the course of the chase, that the suspected smuggler ran into some objects that led to his death. He stated that both the products and the vehicle have been taken to the Seme border for further investigation. An eye witness present at the scene of the event told Vanguard that in the course of the pursuit by Customs, the smuggler’s vehicle somersaulted and killed two of the smugglers on the spot. The death of the smugglers, however, led to an attack on the officers by youths of the area.

2013 Budget: Collectible revenue projected at N11trn — Okonjo-Iweala T

he Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala, said that the gross federally collectible revenue in 2013 budget was projected at N11.34 trillion. Okonjo-Iweala made this known while giving a breakdown of the 2013 Budget, in Abuja. She said, “The gross federally collectible revenue is projected at N11.34 trillion, of which the total revenue available for the Federal Government’s Budget is forecast at N4.1 trillion.” This, she said, represented an increase of 15 percent over the estimate for 2012. According to the minister, the projection is based on oil production of 2.53 million barrels per day compared to 2.48 million barrels per day in 2012. “Benchmark oil price of 79 dollars per barrel, up from 72 dollars per barrel in 2012, Projected real GDP growth rate of 6.5 percent and average exchange rate of N160 per dollar,” she said. The minister said that the non-oil sector was expected to sustain the 2013 budget. She commended the Federal Inland Revenue Services for attaining 20 percent growth in non-oil tax revenue between 2007 and 2012. On the expenditure provision, she said that budget made provision for an aggregate expenditure of N4.987 trillion. This she said represented a modest increase of 6.2 per cent over the N4.697 trillion appropriated in 2012. “This is made up of N387.97 billion for statutory transfers; N591.76 billion for debt service; N2.38 trillion for recurrent (non-debt) expenditure. Of which N1.717 trillion is the provision for personnel cost, while overhead cost is projected at N208.9 billion. And a total of N1.62 trillion has been provisioned for capital expenditure,” she said. The minister added that an additional N273.5 billion had been provisioned for the subsidy reinvestment (SURE-P) programme. Okonjo-Iweala said that with the development, the fiscal deficit was projected to improve to about 1.85 per cent of GDP in the 2013 Budget when compared with the 2.85 per cent in 2012. She said that N497 billion was marked out for critical infrastructure such as power,

works, transport, and aviation. The minister further ssaid that another N705 billion was set aside for human capital development under education, water, agriculture and health sector “We also allocated over N950 billion for national security purposes, comprised of N320 billion for the police, and N364 billion for the Armed Forces, N115 billion for the Office of the NSA, and N154 billion for the Ministry of the Interior. For 2013, the SURE-P programme has a projected allocation of N180 billion, augmented by

the 2012 unspent balances of N93.5 billion. “This amount will be used to make further progress in the provision of social safety net schemes, maternal and child healthcare, youth development and vocational training for Nigerians,” she said. Okonjo-Iweala said that budget had key priorities, which included the reduction in cost of governance, and debt management. Others are infrastructure investments, job creation and the development of the manufacturing sector.

She said that the recurrent spending in total expenditure had reduced from 74.4 per cent in 2011 to 67.5 per cent in 2013 while capital spending increased from 25.6 per cent in 2011 to 32.5 per cent in 2013. The minister said that N100 billion was saved for 2013 budget from the implementation of IPPIS. On debt management, she said that N75 billion of maturing debt obligation payment was made last week and N25 billion had been set aside in a sinking fund to be used for retirement of maturing debt obligations in

L-R: Commissioner for Commerce and Cooperative, Niger State, Mallam Yahaya Dan-Sallau; Minister of Trade and Investment, Mr. Olusegun Aganga; and Commissioner for Commerce and Industry, Ogun State, Otunba Bimbo Ashiru, during a stakeholders’ meeting on the National Enterprise Development Programme, in Abuja.

Tax dispute: FIRS agree N3.5m out of court settlement with firm


he Federal Inland Revenue Service (FIRS) and Orchid Nigeria Ltd, Abuja, have agreed to settle the N3.5 million tax disputes between them out of court. Orchid had taken the Nigerian Customs Service (NCS) and the FIRS to the Tax Appeal Tribunal in Abuja over non-refund of N3.5million Value Added Tax (VAT). The appellant’s counsel, Mr Obi Nwankwo, had alleged that the first and the second respondents erroneously charged VAT on the Advance Simulator Systems imported for the training of students at the Maritime Academy of

Nigeria, Oron, Akwa Ibom. Orchid averred that under the first schedule of the VAT Law No. 102 of 2007 (as amended), books and educational materials were exempted from VAT. The appellant stated that upon clearing the items, it was erroneously charged VAT to the tune of N3.5 million contrary to the provision of the tax law. Mr Bright Igbinosa, Counsel to second respondent, told the tribunal that the Nigerian Customs Service and the FIRS had met with a view to settling the matter out of court with the appellant. Igbinosa,

therefore, prayed the court for an adjournment. The appellant’s counsel said, “The case is for hearing and we have witness in court, the two respondents did not file any response to our appeal.” Nwankwo said that the counsel to the second respondent had informed him that the FIRS management was working hard to see that the “matter is settled out of the tribunal and the money paid back”. The acting Chairman of the Tribunal, Mr Nnamdi Ibegbu (SAN), adjourned the case to April 9 to enable the parties to file their out of court settlement report.

Vanguard, MONDAY, MARCH 11, 2013 — 21

Business & Economy

L – R the picture shows Chief Executive Officer, The Nigerian Stock Exchange (NSE), Mr. Oscar Onyema; President of Council, NSE, Alhaji Aliko Dangote; Chairman, Board of the Securities and Exchange Commission (SEC), Dr. Suleyman Abdu Ndanusa; Council Member, NSE, Alhaji Kasimu Garba Kurfi, and Director General / Chief Executive Officer, SEC, Ms. Arunma Oteh at the Trade Opening of the NSE.

'RMRDC cluster project to provide 500 job opportunities in Bayelsa' T he Raw Materials Research and Development Council (RMRDC) says its cluster project on plantain flour, oil palm, fish drying will provide some 500 jobs for Bayelsa indigenes. The Director-General of the council, Prof. Peter Onwualu, said in Abuja that all was set for the take-off of the project. He recalled that the council had completed a baseline study on raw materials available in each ward in the country in 2012. According to him, the council was able to complete the baseline study on the potential and existing clusters in about 9,000 wards across the country. “In Bayelsa, we are working on plantain flour, oil palm, fish drying; and contract for the machines needed to have been awarded since last year and are now being fabricated. We believe that this will create over 500 jobs, and the number of small and medium enterprises (SMEs) in the state are up to 30,” he said, adding that results from research institutes would also be used by the SMEs. Onwualu said that the council has commissioned a cluster project on cassava production in Umuahia, Abia, and a number of projects on oil palm cluster in Anambra. “We were able to cover four locations in Anambra. We deployed small-scale machines for processing

palm fruit to palm oil and palm kernel; this is part of the cluster formation we are doing to build capacity,” he said. He added that the council would organise a training programme on clusters for each state in the country. “Our target is to have at least one training in each state in Nigeria depending on the available raw materials in that state. We were able to

cover 28 states for the training; each of them focused on different raw materials,” he said. The Director-General listed some of the focused raw materials to include carline, cassava, granite, tomatoes processing, and stone cutting. Onwualu said out that the council has trained more than 1,000 women on improved methods of processing tomatoes and fruits in Taraba.

N384bn severance allowance: PHCN workers allege harrassment from criminals Workers of Power Holding Company of Nigeria (PHCN) in Nnewi, Anambra, have alleged that criminals are harassing them following the Federal Government’s announcement of N384 billion for their disengagement. The workers embarked on a peaceful demonstration under the auspices of Anambra State Council of National Union of Electricity Employees (ASCNUEE) and the Senior Staff Association of Electricity and Allied Company in Nnewi. The State Chairman of ASCNUEE, Mr. Steve Ezenwa, urged government to take steps to secure the immediate release of the kidnapped members of the union. According to him, members of the union have become targets and victims of hoodlums following the announcement by the government. He said, “PHCN workers are already apprehensive of the situation on ground after two female staff of PHCN, Nnewi were recently kidnapped and are still held in captivity. “It was unfortunate that the technical committee and financial consultants contracted to evaluate the exit package of PHCN workers have not completed the assignment before the announcement was made.” He said the government should retract its statement on the matter and inform the public better on the state of affairs in the power sector.

FG to establish 18 cassava processing industries


he Federal Government is to collaborate with the private sector to establish 18 cassava processing industries with machines that can process 240 tonnes of cassava per day. Mr Olusegun Adewunmi, President, Nigeria Cassava Growers Association (NCGA), dropped the hint in Abuja. Adewunmi said this was in line with the Agricultural Transformation Agenda of President Goodluck Jonathan’s Administration, pointing out that the processing industries would create market for cassava. The objective of the agenda was to generate employment and transform the country into a leading player in global food markets to grow wealth for millions of farmers. The agenda was designed to make the agricultural sector a

business project to promote private investment in agriculture. It will also execute integrated projects through value chain processes, generate employment, and transform Nigeria into a net exporter of agricultural commodities. Adewunmi said that the cassava growers would have to work really hard to be able to meet the requirement of the processing industries, especially as the country has started exporting cassava grits and chips to China. He commended the Federal Government for designing the agricultural transformation agenda. He explained that the agenda had made farmers to partners with banks and not ‘’a masterservant relationship like it used to be in the past’’. “For the first time, a farmer

can sit down and make a programme of his own and it is acceptable to the bank and to the government. In the past, it was the ministry that will make the programme, but we are glad it is no longer like that. The agenda is working; it is giving us freedom,” he said. Adewunmi, who observed that the membership of the association had increased to more than one million farmers, said that the membership would be more than 10 million in the next six months. He said that the issue of cassava glut was also being addressed by the Federal G o v e r n m e n t ’ s agricultural programme. According to him, glut is an act of flooding the market with excess goods so that supply exceeds demand.

BRIEF NACCIMA to raise N250m for victims of disasters


igerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) is set to raise an initial N250 million for what it calls NACCIMA Emergency Relief Programme (NACERP). Accordingly, the fund raising programme is coming up next week in Lagos and Abuja, respectively. In a statement, the Association said that while the Lagos Launch will hold on March 14 at External Ballroom Federal Palace Hotel, Victoria Island, the Abuja launch will hold April 16, at Abuja Sheraton. Mr. Goodie Ibru, the Chairman of NACCIMA Emergency Relief Programme said the relief initiative will intervene in three critical areas like Post Disaster Medical Services, Psychological Healing Service and Business Advisory and Soft Loan for Victims of Disasters. “NACCIMA decided to intervene in these three critical areas “because most victims of disasters have psychological trauma of their disasters as there is little or no immediate and long term psychological healing in term of counselling,” he said “To effectively provide the three services, NACCIMA will establish a vocational centre with recreation facilities in each of the six geo-political zones of the country. “Every willing victim of disaster will be trained in one vocation or the other professional areas for a period spanning from six12months depending on the nature of the vocation a victim decides to learn. The National President of the Association, Dr. H. A. B. Ajayi, called on all multinational and indigenous corporations to support the initiative and help poor and weak Nigerians through their social responsibility funds. He also appeals to Nigerians philanthropist to contribute a portion of their wealth in support of the victims.

22 — Vanguard, MONDAY, MARCH 11, 2013

Banking & Finance BRIEF Zenith Bank expects London listing this month


igeria’s Zenith Bank expects the British authorities to approve later this month to list up to $850 million of its shares on the London Stock Exchange as global depository receipts, a banker close to the deal said. The London Stock Exchange said last week it expected an increase in new listings from African companies this year as businesses in the continent’s fastgrowing economies seek to attract foreign investors. Zenith had said in October that the secondary listing was aimed at improving liquidity in its stock rather than raising capital. Zenith has all necessary approvals from Nigerian authorities to go ahead with the listing, the banker said, adding that the deal will enable foreigners who prefer to hold dollar assets to invest in the bank. “Investors can only switch a maximum of $850 million worth of local shares into the GDR programme,” the banker said, adding that the GDR price will be based on the naira exchange rate and the local share price of Zenith Bank. “Hopefully, it will be listed within two weeks,” the banker said. Zenith has a primary listing in Nigeria with a market capitalisation of 674.7 billion naira ($4.3 bn), based on Tuesday’s close of 21.49 naira per share. One GDR will represent 50 ordinary shares, the bank said. JP Morgan is acting as the depository bank, while Citi will act as the custodian. The LSE is already home to 96 companies whose main operations are in Sub Saharan-Africa, including 23 which have shares listed on its main market. Zenith Bank joins



s part of its commitment to the development of the Nigerian maritime industry, Skye Bank Plc has granted credit facilities amounting to $500 million to operators in the industry in recent times. The amount represents money provided to indigenous ship owners and other stakeholders for the acquisition of ships and other critical work tools to enable them play very active roles in the industry. Explaining this development, the Skye Bank’s General Manager in charge of the Corporate Banking 11 Group responsible for the Maritime and Aviation sector, Mr. Segun Opeke, recently at a forum of maritime stakeholders, stated that the bank was prepared to expand its credit lines to the operators to further develop the industry. According to him, the bank was responsible for the provision of credit facilities to indigenous ship owners for the acquisition of an estimated 50 percent of the entire indigenous fleet in the country. Many operators attest to the bank’s influence on the development of the industry, particularly in the participation of indigenous shipping companies in general cargo

L-R: Directors of Programmes and Event AIPN, Mr Gbenga Falabi , Chairman of the Ocassion Mr Bunmi Olaopa,National Chairman Association of Industrail Pharmacists of Nigeria Dr Lolu Ojo and Chairman Board of Fellows, Pharmaceutical Society of Nigeria Mr Ade Popoola at the AIPN Bi-Monthly Meeting in Lagos.

Skye Bank lends $500m to maritime operators business and oil movement in the coastal areas. Skye Bank has been widely acknowledged by maritime operators for its pioneering role in maritime financing and has won many awards in this regard.

Recently, the bank won the “The most progressive maritime bank” award in recognition of its pioneering role in maritime banking as well as for its contributions to the growth and development of the maritime industry in Nigeria.

The bank was given the award by the Nigerian Chamber of Shipping (NCS) at its 10th anniversary at a special event to recognize and appreciate individuals and corporate bodies that have facilitated the growth of the domestic shipping industry.

Unity Bank emerges overall winner at Kaduna Fair U

nity Bank Plc has emerged the overall winner among hundreds of exhibitors that participated in th the just concluded 34 Kaduna International Trade Fair. The Bank was also adjudged the most functional among the banks that participated in the 10-day International Trade Fair and was also voted as the second most courteous bank. The President, Kaduna Chamber of Commerce, Industry, Mines and Agriculture (KADCCIMA), Abdul-Alimi Bello, disclosed before the award presentation that Unity Bank was voted overall winner because of its product quality, creativity, innovation, crowd pulling, consistency, reception, planning and promotion. Alimi said the bank provided excellent services to participants during the Fair especially in account opening and cash withdrawals. “We at the Chamber urge the bank to sustain the momentum at all times”, he added Earlier at the bank’s Special Day which preceded the clos-

ing ceremony, the Managing Director, Ado Y. Wanka, told participants that the bank is rolling out products that are designed specially to make banking transaction safer, easier and accessible from the comfort of customers’ home and offices. Wanka who was represented by the Executive Director, North West, Isma’il Abdullahi Galadanchi explained that

with the world going cashless, the bank shall continue to leverage on the latest technology to roll out products suited for the customers ‘needs. He further explained that the products, such as Unity Mobile and Unity Pocketmoni, will allow customers to complete their banking transactions on their mobile devices using any of the major telecoms networks (MTN, Glo, Etisalat and Airtel).

According to him, the Unity Pocketmoni has the unique feature that allows individuals to perform transactions without a bank account. In addition to the above mentioned products, the Managing Director reaffirmed that the Bank’s MasterCards have been made easier for customers to make payments on purchases in and outside the country.

WAUTI commiserates with CITN


he West African Union of Tax Institutes (WAUTI) has sympathised with the Chartered Institute of Taxation of Nigeria (CITN) on the death of its Registrar Emmanuel Abayomi Jayeoba. In a letter to CITN President, John Jegede, WAUTI President, Prince Rasaq’Kunle Quadri said the institute received with shock the passing on of the Jayeoba and therefore sympathise with council, entire members of the Institute and his family on this sad news.

He described Mr. Jayeoba as a gentleman who made invaluable contributions to the growth of CITN while he was alive. “The same enthusiasm and support was extended to the Union by his active involvement in activities leading to the establishment and eventual inauguration of WAUTI. He will no doubt be missed by his colleagues, friends and family members,” Quadri said. He said the member-bodies of WAUTI is consoled however by the legacies left behind

which will keep him alive in the minds of those who loved him and have had the opportunity of working closely with him. “On behalf of the Governing Council and member-bodies of the West African Union of Tax Institutes, please accept our heartfelt condolence. Our prayer is that God shall grant the departed eternal life and his family, management and staff of CITN and others the fortitude to bear the irreparable loss,” he said.

Vanguard, MONDAY, MARCH 11, 2013 — 23

Banking & Finance

Diamond Bank commits N70bn on MSME loans By EMMA UNA, Calabar


IAMOND Bank of Nigeria Plc has so far given N70billion as loans to Micro, Small and Medium Enterprises (MSMEs) since the inception of the programme in 2009. The Bank’s Head of MSME Proposition, Mr. Chima Nnadozie, said this last week in Calabar at the Diamond Business Xpress Enterprise Series During the interactions after the lectures, participants make contributions on and asked questions to maximise the benefits of the business lecture series in growing their businesses, Nnadozie said the Bank was willing to give out loan to MSMEs if they meet the banks basic condition of having operated for at least one year, function from a fixed address , and have invested money in the enterprise since it started. He said, “The bank has since 2009 given out over 70 billion naira to small businesses to boost their financial capacity. This figure is since we started in 2009 but since then some have been paying back and the figure now should stand at N30 billion”. Meanwhile, the three resource persons at the monthly enterprise series were drawn from the private sector: John Ekpihke a business planning consultant who spoke on business planning and development , John Etim Bassey a business resource consultant who spoke on the principles of minimal start up, while Chima Nadozie the head of MSMEs at Diamond Bank spoke extensively on the factors through which businesses can best attain its highest aggregate performance. John Ekpikhe told the participants that business plans are in practice, not mere instruments for attracting and obtaining loans from banks but actually practical tools that help in the day-to-day running and operations of businesses. “Though most people stumble into business and as such do not have a formal business plan to provide the focus and direction which the business should follow, the business plan is an important instrument which aligns the entrepreneur with exactly what he is doing and what he

seeks to achieve by taking control of the business and also understand it fully”. He said the business plan helps the business owner to know the needs of the business, its turnover, how to access loans and finances to the level he wants through constant analysis which cannot be easily achieved without a business plan. Every business, he said, ought to have bench marks and time frames to meet the primary purpose for which it was setup like creating independence for its owner, higher income prospects,

better lifestyle, personal satisfaction and building a future for the entrepreneur. “Every business owner, whether small, medium or large scale, has a personal reason for delving into it but often at the end of the day, many cannot meet these goals principally because at one point the owner may lose track of where he is taking the business to and as its often said, if you do not know where you are going, any road takes you there”. Mr John Etim Edet, on his part told the participants that making more money should

not be the motivating factor for starting a business but to create value because people who buy a product or patronise a service are seeking to satisfy a desire or meet a need not give just to give away money for the fun of doing so. “What the entrepreneur should do first is to develop a product or service that can meet needs because products or services are vital not because you want to sell it but because of the value people place on it or satisfaction they derive from the service”.

Akintola Williams Deloitte, West & Central Africa Women held a seminar to mark the International Women’s Day 2013 at the Sheraton Hotel in Lagos. From left: Mrs. Uche Erobu, Senior Partner, Akintola Williams Deloitte, Dr. Nadu Denloye; Director, Ecobank; Mr. Adeniyi Obe, CEO, Akintola Williams Deloitte; Dr. Nechi Ezeako, Legal Practitioner; and Dr. Ije Jidenma, CEO, Leading Edge Consult, at the occasion Px Biodun Ogunleye

BOI to grant facility to Ogun agricultural project By PROVIDENCE OBUH


HE Bank of Industry is set to grant agricultural aid to Ogun State government on its new agricultural development plan. The planned 500 acres of farm land for tomato farming is conceived under the “uplift development foundation” initiative by the state governor ’s wife Mrs. Olufunsho Amosun Speaking during a visit to the BOI Lagos office, Amosun announced her intention to grow agric, while soliciting for fund worth N100 million to upscale the project. According to her, “As the wife of the Governor of the state, my main mission is to try to assist the women in our

state as much as possible, I have done a lot of project on uplifting the women, widows in the state. Am thinking of uplifting agriculture and this is why I am here, we discovered some agricultural farm land in Ogun state about 500 acres of it which is at my disposal to use. “A very close lady in the state approached me and discussed with me that we could actually put the land to use to plant tomatoes, we capture like a thousand women or more, we put them on the farm to plant tomatoes, tomatoes takes like 3 months to harvest, is like a three months project,” she said. To further buttress her point, she noted that the tomatoes will be preserved by pasturisation and filled in a sachet for sale both locally and internally, this

process she explained will need an industrial machine which cost for about N80 to N85 million depending on options and other expenses. “To process and preserve, we actually need industrial machine running to the sum of 90 to a 100 million and I thought this is beyond me and that is why I came for assistance. With that machine, we can produce a minimum capacity of five tones daily. In order to attract youths and rural dwellers to do more of agriculture, Commissioner for Environment, Dr. Tejuosho added that it has introduced International body by contacting some companies in Europe, precisely in Italy and Slovenia for every aspect of agriculture, from planting, harvesting, up to processing.

BRIEF Fidelity Bank gives out N15m, 15 cars to promo winners By PROVIDENCE OBUH


IDELITY Bank, Thursday, handed out a brand new Hyundai Accent car and N450, 000 cash prize to the lucky winners of the on-going Cars and Cash Slash Promo from Lagos Zone. The presentation, which took place at the Bank’s Head Office, Lagos, brought the total gifts given out so far to N15 million and 15 Hyundai cars. A similar presentation, according to the bank, will be made to other winners of the third promo draw, who emerged from the other geographical zones on a later date. Expressing his joy, the winner of the Hyundai Accent car, Mr. Victor Arinzechi, said “I have decided to become the bank’s ambassador anywhere I go, and not only that, I will be a Public Relation Officer to the bank both in my house and at my place of work, adding, “They are wonderful, let them keep it up.” N100,000 cash reward was also won by each of Mr. Nebo Uchebneza and Mss Nwosu Chioma while small Ezeokoli Uchenna Paul won two hundred and fifty thousand naira (N250,000). Congratulating the winners, the bank’s Chief Executive Officer/Managing Director, Mr. Reginald Ihejiahi, said they share in the winners’ joy, adding that it showed that Fidelity Bank is a bank that truly keeps its words. “This gives us a lot of happiness, we announced that people are going to win and that they will win big if only they will just go to Fidelity Bank, open a saving account or if they already have a saving account and top-up their accounts. “And today is the evidence of it; Mr. Arinzechi has won a brand new car, he did not think it was possible but luck has smiled on him and that luck is called Fidelity Bank savings promo.” He continued, “More and more people are signing in to the Fidelity accounts and also, we are planning more surprises for them. We want to make sure that when they come, they have delightful service.”

24 — Vanguard, MONDAY, MARCH 11, 2013

Corporate Finance

Bond trading rises by 34%, as equities lose N106bn shares from 2.280 billion shares traded the previous week. The value of shares traded similarly dropped by 14.6 per cent to N20.99 billion from N24.633 billion. The shares traded this week were executed in 28,832 deals, slightly up from 28,170 deals the previous week. A review of the shares’ price movements indicated that thir-



ETAIL trading in bonds rose by 34 per cent last week reflecting increasing confidence in the retail bond trading platform introduced last month. But the total value of shares (equities) listed on the Nigeria Stock Exchange (NSE), or market capitalization, fell by N106 billion to N10.618 trillion last week. Results of the retail bond trading indicate that the number and value of bonds traded rose by 34 per cent. According to the NSE, “2,536 units of FGN bonds valued at N3.096 million traded during the week in 26 deals in contrast to 1,887 units valued at N2.314 million transacted last week in 20 deals. Likewise, 1,000 units of Lagos State Fixed Rate Redeemable Bond valued at N1, 000,000 was traded in 1 deal. There were no transactions in the Corporate Bonds/Debentures sector.” Results of the shares traded show the market capitalization declined by 1.0 per cent to N10.512 trillion from N10.618 trillion due to profit taking on the shares Nestle and five other blue companies that led the losers chart. These top six losers namely Nestle, Guinness, Dangote Cement, Mobil Oil, Total Nigeria Plc and Cadbury PLC accounted for 85 per cent of the total price decline of N77.64 recorded by the top ten losing stocks. The top ten gainers were led by UACN, Oando, Unilever, Glaxo Smithkline , Lafarge Wapco, and Okomu Oil. Together they accounted for 81.9 per cent of the price increase recorded by the top ten gaining stocks. Trading results indicated decline in activities with less shares traded compared with activities in the previous week. According to the NSE, total number of shares traded fell by 17.4 per cent to 1.928 billion

ty-six (36) equities recorded price increase while forty-four (44) shares recorded price declines and one hundred and seventeen (117) shares remained constant. When compared with the preceding week, thirty-eight (38) shares gained while forty-six (46) shares recorded price declines and one hundred and thirteen (113) shares remained con-

stant. Reflecting the decline in market activities and value, the NES All Share Index (ASI) depreciated by 334.09 points or 1.01 per cent to close the week at 32,849.11. Also, the Bloomberg NSE 30 Index, which represents the 30 most valuable stocks, depreciated by 12.80 points or 0.81 per cent to close at 1,572.76.


1 2ND 3RD 4TH 5TH 6TH 7TH 8TH 9TH 10TH


The Financial Services sector accounted for 1.510 billion shares valued at N13.532 billion traded in 17,688 deals. The Banking subsector of the Financial Services sector was the most active during the week (measured by turnover volume); with 1.074 billion shares worth N11.229 billion exchanged by investors in 11,333 deals.

WEEKLY 10 TOP LOSERS PRICE GAIN N54.77 N15.00 N14.52 N4.03 N2.01 N2.01 N1.01 N0.83 N0.61 N0.57


1 2ND 3RD 4T H 5T H 6T H 7T H 8T H 9T H 10 TH


PRICE LOSS -N13.70 -N12.00 -N7.13 -N7.13 -N5.08 -N2.90 -N1.79 -N1.75 -N1.68 -N1.62

Peak Professional joins Kreston International By JONAH NWOKPOKU


EAK Professional Services, PPS, an accounting firm, has been admitted into the membership of a global network of independent accounting firms, Kreston International. The membership agreement

was signed in Lagos last week. As a result, PPS now has the opportunity to execute transnational audits. At the signing ceremony, the Managing Partner of PPS, Mr. Andrew Uviase, said signing the agreement opens a new vista for the accounting organisation in globalisation. “We have been looking






FY 2012


FY 2012

N116.70BN N252.67B

N21.137B N38.04B


Q3 2012








FY 2012





forward to move to an international network that offers truly global reach with a culture built on quality service and the development of effective and trusted relationships between the member firms. Kreston meets all our requirements and we are delighted that our application was accepted. We look forward to working with our Kreston colleagues to serve both our client base when international assistance is required and those international clients looking to invest and trade in Nigeria”, Uviase said. Also speaking during the ceremony, the Chief Executive Officer of Kreston International, Mr. Jon Lisby, noted that the admission of PPS into the membership was as a result of consistency in quality of service that the organisation has delivered over the years. “Colleagues of mine in the

profession have worked with Andrew and his team for a number of years and have been impressed with the consistency of the high quality audit, tax and consulting services the firm provides. The firm works to international standards for quality control, ethics and audit and we are delighted that Peak Professional has decided to move its international network membership to Kreston.” He said. He noted that Kreston International client base are expanding globally and PPS would play a major role in meeting their demands. “We are experiencing a growing volume of clients looking to expand into the continent, including those from China and India and we remain keen to secure further high quality member firms from West, East, Central and Southern Africa to complete the Kreston’s coverage,” he added.

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Vanguard, MONDAY, MARCH 11, 2013 — 27

Corporate Finance

AGF reviewing implementation blueprint on removal of VAT — SEC … SEC to issue new capital base By BABAJIDE KOMOLAFE, PETER EGWUATU & NKIRUKA NNOROM


HE Securities and Exchange Commission (SEC), has said that the implementation blueprint for the removal of Value Added Tax (VAT) and removal of stamp duty on capital market transactions is being reviewed by the Attorney General of the Federation (AGF). Director General of the SEC, Ms. Arunma Oteh, disclosed this at a maiden press briefing for 2013 in Lagos, saying that the implementation would commence as soon as the AGF concludes his work. She said the Commission will soon announce new minimum capital base requirement for operators in the capital market, adding that the Board of the Commission has ordered it to expedite action on the implementation of dematerialisation of share records and documents. Speaking on the focus of the Commission in 2013, Oteh said, “The commission will show its effectiveness in technology, enforcement and disclosure regime during the course of the year. The market will see stronger and speedy enforcement and disclosure requirements in our market. We are already preparing our staff ahead of these tasks.” On the implementation of Stamp duty and VAT, she, said, “President Goodluck Jonathan has instructed the AGF to look into it and the process is being reviewed. Once it has completed the review process, the implementation will commence.” It will be recalled that as part of measures to improve the confidence in Nigeria’s capital market last year, the federal government decided to eliminate stamp duties and VAT on stock market transaction fees. Dr Ngozi Okonjo Iweala , Minister of Finance and the Coordinating Minister for the economy, who revealed this, said, “Taxes on stock exchange transactions fees are as high as 12 percent (five percent in VAT and up to seven percent in stamp

duties) – much higher than in other jurisdictions, and these constitute a major disincentive to invest in the Nigerian capital market. I will like to announce that the Federal Government has consented to: waive the 0.075 percent stamp duties payable on stock exchange transaction fees; and, exempt from VAT, commissions: (a) earned on traded values of shares, payable to the Securities and Exchange Commission (SEC), the Nigerian Stock Exchange (NSE) and the Central

Securities Clearing System (CSCS); by including these commissions in the list of VAT-exempt goods and services.” Commenting on the forbearance package recently granted to the stockbrokers, the SEC DG said, “59 of the stockbroking firms out of the 84 firms decided to accept it. Although there is no cash involved in the forbearance, but the bad assets totaling N22.9 billion was reduced to N10 billion.” She further stated that the SEC is committed to protect investors and would encourage them to patronize the Collective Investment Scheme (CIS).

Group managing Director, Courteville Business Solutions, Mr Bola Akindele and Angela Browne Burke, the Mayor of Kingston, Jamaica, during the Courteville Meets the Caribbean Trade Mission’ in Jamaica, Trinidad and Tobago.

Shareholders okay internal restructuring of Honeywell Flour By PETER EGWUATU


HAREHOLDERS of Honeywell Flour Mills Plc have endorsed a special approval to a resolution seeking the restructuring of the company by which Honeywell Superfine Foods Limited (HSFL) a wholly owned subsidiary of it will be converted into a division of Honeywell Flour Mills Plc. At a court-ordered Extraordinary General Meeting (EGM) of Honeywell Flour Mills Plc held recently in Lagos, the Company’s Board of Directors sought and obtained shareholders’ consent. Giving the rationale

for the decision, the Chairman of Honeywell Flour Mills Plc., Dr. Oba Otudeko, CFR, informed shareholders that even though both companies have hitherto enjoyed certain synergies as a result of their forward/ vertical alignment, there was still considerable scope for the derivation of other benefits with further integration. Dr. Oba Otudeko stated that “To further enhance shareholder value, an internal restructuring of the Honeywell Flour Mills Plc Group is required to optimise operational efficiencies, reduce costs and extract more synergies from HSFL and its parent company, HFMP.

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Homes & Housing Finance BRIEF NLC urges recapitalisation of FMBN


igeria Labour Congress has called for the immediate recapitalisation of the Federal Mortgage Bank of Nigeria (FMBN) to enable function effectively in ameliorating the effect of the huge housing deficit in the country, estimated at about 16 million units. Vice president, NLC, Mr. Isa Aremu, made the call at the groundbreaking ceremony of the 1,000 housing units of the Goodluck Jonathan Legacy Estate, Abuja, organised by the Ministry of Lands, Housing and Urban Development. Aremu, who represented the NLC president, NLC, Mr. Abdulwahed Omar, at the occasion, said that the Nigerian housing situation cannot improve significantly on a sustainable basis if FMBN is not strengthened. “The managing director of the bank reminded us that this project is being financed by the private sector, in particular, Ecobank, which is commendable; but it would have been more remarkable to know that FMBN is the one leading this project. I think we need to recapitalise FMBN. “The bank must have enough money, because these are the main development institutions that we need in this country. I think we are tired of those institutions that are notorious in catching thieves such as EFCC. We need institutions that are adding value critically, and the FMBN is one of them. These houses must be affordable and accessible. We all know that the Nigerian workers live on minimum wage, so the federal government has to make the prices accessible to workers,” he remarked. The labour leader asserted that in order to adequately address the huge housing deficit in the country, the federal government have to embark on massive mobilisation and building of millions of housing units across the nation.

Ebie faults government on housing finance, seeks intervention funding Stories by YINKA KOLAWOLE


oremost estate surveyor and the first General Manager of the Federal Housing Authority (FHA), Mr. Fortune Ebie, has blamed escalating the housing deficit in the country, estimated at 16 million units, on the insincerity of government in its policies towards housing finance. Speaking recently at a forum organised by the Presidential Technical Committee on Land Reforms, to fine-tune the draft regulations on Land Use Act, Ebie asserted that the solution to the housing crisis is for government to provide

intervention fund, as marching grant, for real estate developers and the mortgage sub sector. The former Managing Director of Shelter Afrique said if government could recognise the entertainment industry to the extent of granting it an intervention fund, it is unthinkable that the housing sector should remain at the lowest rung of government’s priority. He asserted that for the nation’s housing needs to be adequately tackled, government must show commitment by allotting funds to the housing sector. “There was an intervention fund for the Aviation sector, there was intervention in the Power sector, there was

intervention in the Banking sector, there was even intervention even in the Nollywood industry but when it comes to housing, government will say it is not sustainable and that is the end,” he remarked. In a related development, Mr. Emeka Eleh, President of Nigeria Institution of Estate Surveyors and Valuers (NIESV), has canvassed the establishment an intervention fund for the housing sector and review the country ’s mortgage policy. He noted that this will help rescue the housing sector from imminent danger by providing operators with the necessary resources to complete ongoing and abandoned projects as has

•Out of reach: Completed houses waiting for buyers

been done in other troubled sectors of the economy. Speaking ahead of the forthcoming 43rd Annual General Conference of NIESV scheduled for Benin, Edo State, Eleh identified high interest rates as a major challenge in the mortgage banking sector and argued that it would require a special intervention fund from the government for mortgage institutions to provide low interest facilities to property developers and individuals wishing to own properties. He suggested that conventional retail banks be involved in the administration of the intervention fund in order to ensure wider access to the facility. “There must be a direct intervention of government in the housing sector as was done to sectors such as banking, aviation and agriculture,” he said, adding that up to N500 billion is required to stimulate the housing industry and create jobs, thus reducing unemployment in the country as the industry supports many other subsidiary businesses. On the proposed mortgage liquidity facility company, Nigerian Mortgage Refinance Corporation (NMRC), being set up by government in partnership with World Bank and International Finance Corporation (IFC), Eleh suggested that retail banks should be made to administer the mortgage funds. “Mortgage banks, as presently structured and constituted, cannot stimulate housing development. The retail banks are better placed and structured to make the mortgage system more effective. The intervention fund to be provided through mortgage and retail banks will force down interest rates and ordinary Nigerians can access housing funds,” he said.

Pr oper ty ffirms, irms, mor tgage banks gear up ffor or ASO housing fair Proper operty mortgage


roperty firms, primary mortgage banks (PMBs) and construction companies across the country are set to converge at the 3rd ASO Housing Exhibition and Conference (EXCO) slated for April 11 - 13, 2013, at the International Conference Centre (ICC) in Abuja. According to a statement from ASO Savings & Loans Plc, organisers of the annual Fair, major players Nigeria’s housing and mortgage finance sectors have already been confirmed as Gold and Diamond sponsors at the forthcoming event. Organisations that have confirmed participation include: SystemProperty Development Consortium - a

multi lateral construction firm,which offers comprehensive consultancy services to various sectors in the construction industry; Investment Development Company (AIDC) limited - a fully integrated property development and management company tspecializes in procurement and development of property assets, especially in and around Abuja for residential and commercial purposes; and Brains & Hammers Property Limited - a real estate firm established 10 years ago, with the aim of delivering unique, beautiful and highly functional buildings that offer value for money. Other confirmed

participants are: Abuja Investments Company Limited (AICL) - a leading business development and investment holding company based in Abuja; The Greater Port Harcourt City Development Authority established in 2009 with a mandate to facilitate the implementation of the Greater Port Harcourt Master Plan and build the new city; and Federal Mortgage Bank of Nigeria (FMBN) - charged with the mandate of encouraging the emergence and growth of viable primary mortgage institutions to service the need of housing delivery in all parts of Nigeria, in addition to administering the National Housing Fund

(NHF) in accordance with the provisions of the NHF Act. Several other mortgage firms, construction companies, property development firms, reputable estate developers, experienced artisans, exquisite interior decorators, renowned architects, builders, painters, furniture makers and a host of others have also registered to feature at the three-day event. The theme of the Fair is “Achieving affordable housing delivery by creating 500,000 housing units by 2016”, where experts in the Nigerian housing sector are expected to deliberate on the challenges confronting the sector, and proffer solutions that can form policy direction for the government in its efforts at attaining the goal of Housing for all in Vision 2020.

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Where in Nigeria is cassava bread? E

ven a fool, in Nigeria, now knows that the last thing anyone should believe is anything announced by the Federal Government of Nigeria, its Ministers, agencies and especially the President’s Special Advisers on Media and Publicity. When Abati or Okupe appear on television, people switch to other channels. Nothing good can come out of listening to deliberate falsehood. Meanwhile, the President, on whose behalf this show of shamelessness was going on pretended not to listen. Still ringing in our ears are the assurances given by the Presidency that Mrs Patience Jonathan, the wife of our President, was vacationing, somewhere (undisclosed naturally) in Europe, after the hard work of campaigning for her husband and undertaking other busybody assignments. Well, Patience, I love her, had blown the lie in their faces – including that of the President who allowed his staff to spread falsehood as public announcement. Anybody, or group, who could concoct a colossal lie that a woman, “dead for seven days” was having a swell time, at the French Riviera, can no longer expect to be believed. They

might as well stop talking to us because nothing they say will ever again be believed. One Minister, whose pronouncements have almost driven me up a wall is the Federal Minister of Agriculture – Dr Adewunmi. His pronouncements about our agricultural productivity, last year, is similar to that of those who told us that a woman, who was kept alive by machines and artificial oxygen, was dancing the night away in Dubai. Adewunmi, as we know, is a great champion of cassava bread. Almost two years ago, he persuaded the President, who can be persuaded by anybody speaking excellent English; especially in borrowed accents, that substitution of cassava for wheat, for bread baking, within two years, was a feasible venture. That was in 2011. And to demonstrate the soundness of the proposal, he had the folks at UTC Nigeria Plc, whose shares I bought more than twenty years ago, at 50 kobo a share, without a kobo of dividend to show for it, to partner with the Ministry in baking a sample for Aso Rock. The track record of UTC Nigeria Plc offers anything, but comfort to anyone familiar with it. The share bought at 50 kobo in 1976 have crawled

up to 78 kobo last week – after almost 37 years. The NESTLE shares bought at about the same time, at about the same price now go for N868. That should tell Adewunmi, the President, who got snowed under half-truths and Nigerians, a lot about the technical advisers on this


“We don’t have enough cassava to make…….

When a scientist finds himself in a political role, he also finds it difficult to remain faithful to science. Great politicians or political appointees are liars


project. By any standard, imaginable, UTC Nigeria Plc is a loser. A major reason its shares has been languishing in the basement for years has been the company’s lack of sustainable performance in anything. There is probably no single best-selling product or brand in the Nigerian market for which UTC can claim credit. For one thing, its distribution network is extremely limited for a mass

consumer product reaching into every corner of Nigeria. UTC is simply the wrong partner to select for what at best will turn out to be a longterm campaign.


he gospel of cassava bread, as preached by Dr Adewunmi was, in actual fact, good and original. Unfortunately for Nigerians, starting with President Jonathan, the part that was good was not original; and the part that was original was not good (to paraphrase Dr Samuel Johnson, 1709-1784, English lexicographer). IBB’s government had the patent for introducing cassava bread to Nigeria and the Federal Institute of Industrial Research at Oshodi, FIIRO, was the technical partner at the time. Perhaps, if Adewunmi and his gang at the Ministry of Agriculture had asked for a brief history of cassava bread in Nigeria, we would not be writing this piece today. Cassava bread, as a substitute for wheat bread, failed for a number of reasons – virtually all of which are still present today. Food technology is both a simple and a complex subject. But, any average person can understand the underlying factors involved in baking wheat or cassava bread and the conditions under which

each can succeed. This is not a matter of politics; it is a matter of science. The problem is, when a scientist finds himself in a political role, he also finds it difficult to remain faithful to science. Great politicians, or political appointees, are liars; great scientists are never. Like accountants forging figures or dull students engaging in wuru-wuru to the answer, Adewunmi and UTC, must have ensured that their cassava bread was well fortified with the right enzymes, sugar and loads of butter and served smoking hot. Without meeting all the conditions stated above, what the President and the other members of the Federal Executive Council would have been eating, would have tasted more like brick. Cold cassava bread is as hard as rock. My personal experience in Sales and Marketing, covering the first twenty-one years of my working life, and the last eight in food and beverages sector, have taught me that one of the most difficult changes to get people to adopt is change in taste. The mouth is the gateway to the digestive system. And, as one NESTLE, S.A, book reminded us, “food means nutrition; but, first, it has to be eaten”. In its natural state, cassava bread tastes awful compared to wheat bread – unless specially prepared like the stuff given to the President.

Micro-Finance Stories by PROVIDENCE OBUH


HE Nigeria Copyright Commission (NCC) has vowed to bring to book, companies found replicating materials without the consent of the original owner, even as it revealed that 40 cases were prosecuted in two years. Speaking at a surprise check to optical disc factories in La-

NCC goes tough on piracy, prosecute 40 cases in 2 years gos, Director of Enforcement, NCC Mr. Augustine Amodu lamented that artists, right owners and producers are losing heavily on the issue of piracy, “if you note critically, you will notice that the market situation

has dropped because of the issue of piracy. Amodu maintained that the commission is bent on fighting piracy both from the market, from replicating companies, software and also on literary

works. He revealed, “Before the DG came in, there were only two cases prosecuted, but today we have close to 40 cases in less than two years, that is a plus which has never happened in the commission be-

Bolarinde seeks action against corruption, bows out of Vitafoam


HAIRMAN, Vitafoam Ni geria Plc, Chief Samuel Bolarinde, has demanded that the Federal Government take a more affirmative action against corruption in the country, even as he bows out of the company. This is against the backdrop of the Transparency International 2012 global corruption index which ranked Nigeria th 35 most corrupt nation in the world. Bolarinde said these in

his address at the Annual General Meeting of the company in Lagos, lamenting that it is disheartening to note that the pandemic had spiraled, especially as it affects the Nigerian business environment. According to him, “The state of insecurity which is a major concern to Nigerians and the banking sector reforms which created fiscal discipline and monetary stability, has not translated into improved living

condition for the masses due to the prevailing high level of profligacy at the various levels of government. On the company, he said that despite the challenges, the future holds great prospects for the company, saying, “In the coming year, efforts will be geared towards consolidating the various investments for optimal result. It is projected that the prevailing uncertainties in the global economy will persist

in the coming year resulting in reduced public spending and consumption rate across the globe. We will however continue to leverage our brand capital and the group synergy to ensure that the company stays resilient to anticipated impact of uncertainties in the global and local operating environment. Meanwhile, a dividend of N245, 700, 000 representing 30 kobo per share was approved by the board at the meeting.

fore and this has shown that the commission is working.” Asked why the surprise check, he said “We are engaging in enforcement action of the NCC on replicating plaque, we want to put the replicating plaque on their toes to know that the copy right commission is still standing that is why we did this surprise check today, those replicating companies engaging in illegal plaque should get ready for us,” he maintained. Meanwhile, he urged stakeholders and right owners to join force in the combat against piracy, noting that the NCC cannot do the check alone. Some of the companies visited include Nira Group of Companies Ltd, Chronotech Ltd, Shan audio visual Ltd, among others.

Vanguard, MONDAY, MARCH 11, 2013 — 33

Tax Matters


s earlier stated our transfer pricing regulation is benchmarked against the OECD transfer pricing guidelines. The Transfer Pricing Regulations also provide a “Safe Harbour ” which is an exemption from “ d o c u m e n t a t i o n requirement” of regulation 6 it to when price is in accordance with the requirement of Nigerian statutory provisions and/or when price approved by other government regulatory agencies/authorities established by Nigerian law provided that FIRS is satisfied that the price is at arm’s length. Though this can be tagged as mere “approval in principle” since the FIRS reserves the right to still scrutinize the transactions and ensure compliance to the “arm length” principle. The Regulations also make provision for a dispute resolution panel to serves as an administrative dispute resolution mechanism from issues arising from the provisions of the Regulations. In effect the Regulations provide an appropriate basis for taxing economic activities of associated enterprises as well as tools for fighting tax evasion. Provisions of the regulations also reduce the risk of economic double taxation. Also included is a level playing field between MNE and independent enterprises. The scope of the regulations covers sale and purchases of goods and services, sales, purchase or lease of tangible assets, transfer, purchase, license or use of intangible assets, provision of services, lending or borrowing of money, manufacturing arrangement and any transaction incidental, connected or pertaining to the above transactions. The Regulations also adopt popular transfer pricing methods such as comparable Uncontrolled Price (CUP), cost plus, resale price, transaction net margin method (TNMM) and transactional Profit Split. In all these, method used must be appropriate to the particular transaction bearing in mind the relative strength and weakness of each method, the nature of the transaction, availability of reliable information and degree of comparability. The arm’s length principle which is the global benchmark establishing transfer prices between related parties is recognized

Issues underlying transfer pricing (11)

•Tax Matter pics Alhaji-kabir-Mohammed-Mashi in regulation 4 of the Pricing Regulations. It empowers the Service to make adjustments where necessary to make a controlled transaction consistent with the arm’s length principle. application of the arm’s length principle assists governments to ensure that the taxable profits of multinationals are not artificially or deliberately shifted out of their jurisdiction and that the tax base reported by multinationals in their country reflects the economic activity undertaken therein. It also limits the risks of economic double taxation that may result from a dispute between two countries on the determination of the remuneration for cross-border transactions between associated enterprises. Nearly all systems require that prices be tested using an “arm’s length” standard. Using this method, a price is considered appropriate if it is within a range of prices that would be charged by independent parties dealing at arm’s length. This is generally defined as a price that an independent buyer would pay an independent seller for an identical item under identical terms and conditions, where neither is under any obligation to act. There are clear practical difficulties in implementing the arm’s length standard. For items other than goods, there are rarely identical items. Terms of sale may vary from transaction to transaction. Market and other conditions may vary geographically or

over time. Some systems give a preference to certain transactional methods over other methods for testing prices. The application of the arm’s length principle is generally based on a comparison of the conditions in a controlled transaction with the conditions in comparable transactions between independent enterprises, referred to as a “comparability analysis”. The OCED Transfer Pricing Guidelines (“TPG”), which has been adopted



Tax authorities in developing countries who wish to implement transfer pricing legislation may focus on the most common types of transactions and sectors in their economy first, for instance the exploitation of natural resources


unchanged by some jurisdictions contain guidance on comparability analysis and a description of five transfer pricing methods which can be used to establish whether the conditions of a transaction between associated enterprises satisfy the arm’s length principle. The OECD and the United Nations Tax Committee have both endorsed the “arm’s length” principle, and it is widely used as the basis for double taxation treaties between governments. The rules of nearly all countries permit related parties to set prices in any manner, but permit the tax authorities to adjust those prices where the prices charged are outside an arm’s length range. Rules are generally provided for determining what constitutes such arm’s length prices, and how any analysis should proceed. Prices actually charged are compared to prices or measures of profitability for unrelated transactions and parties. The rules generally require that market level, functions, risks, and terms of sale of unrelated party transactions or activities be reasonably comparable to such items with respect to the related party transactions or profitability being tested. Most systems allow use of multiple methods, where appropriate and supported by reliable data, to test related party prices. Among the commonly used methods are comparable uncontrolled prices, cost-plus , resale price or mark-up, and the TNMM .Many systems differentiate methods of testing goods from those for services or use of property due to inherent differences in business aspects of such broad types of transactions. Some systems provide mechanisms for sharing or allocation of costs of acquiring assets (including intangible assets) among related parties in a manner designed to reduce tax controversy. Most tax treaties and many tax systems provide mechanisms for resolving disputes among taxpayers and governments in a manner designed to reduce the potential for double taxation. Many systems also permit advance agreement between taxpayers and one or more governments regarding mechanisms for setting related party prices. Many systems impose penalties where the tax authority has adjusted related

party prices. Some tax systems provide that taxpayers may avoid such penalties by preparing documentation in advance regarding prices charged between the taxpayer and related parties. Some systems require that such documentation be prepared in advance in all cases. Developing economies are keenly aware of the challenges posed by transfer pricing. Their goal is the same as for OECD countries: protecting their tax base while not hampering foreign direct investment and cross-border trade. The arm’s length principle can help them achieve that goal. The key is to tailor the legislative measures and administrative effort to the strategic needs and resources of each country. Applying the arm’s length principle can become complex and resource-intensive, though policy makers should bear in mind that most OECD countries started modestly and built their transfer pricing legislation and practices gradually over several years. Indeed, they are still in the process of improving them. Tax authorities in developing countries who wish to implement transfer pricing legislation may focus on the most common types of transactions and sectors in their economy first, for instance the exploitation of natural resources, manufacturing, or service activities. Enforcement objectives should be realistic, given the available capacity, and compliance requirements made reasonable for taxpayers in light of the size of the cross border trade. Socalled “safe harbours” are sometimes used to simplify compliance by small taxpayers, or to deal with small and less complex transactions carried o u t by multinational enterprises. Given the global, and sometimes controversial nature of transfer pricing, it is important to develop internationally shared principles to help each country fight abusive transfers of profit abroad, while at the same time limiting the risk of double taxation of those profits. This is what the arm’s length principle is for. As more developing countries apply it, new lessons will be learned. This is a key step on the road to building a stronger and fairer world economy.

34 — Vanguard, MONDAY, MARCH 11, 2013

People in Business

Fayemi reaffirms pact with indigent elderly of Ekiti State By PROVIDENCE OBUH


OVERNOR Kayode Fayemi of Ekiti State has reaffirmed his determination to sustain policies aimed at eliminating poverty in the state. Speaking at a dinner hosted in Lagos by the Igbimo Ure Ekiti, a non-partisan group of indigenes of the state, Fayemi maintained that despite the state’s low revenue ranking, his social security scheme would be sustained and improved upon to take care of especially indigent aged citizens of the state. The scheme offers indigent elderly citizens a monthly stipend of N5, 000 and was commenced in October 2011 as the first social security scheme in West Africa. According to him, “Some ask what the N5000 we pay elderly people achieve. The scheme is part of a poverty reduction strategy which will cater for the indigent elderly and reassure them of their importance and usefulness in society. I once met one of these elderly persons and she said she was feeling guilty at being paid for doing nothing. And then the amazing thing is that she said she doesn’t finish the money for the month before the next payment comes. The fact that there were people that could live on N5000 for 30 days made me realise the level of poverty we are dealing with here. And we will constantly work to eliminate that.” He outlined the roadmap for the state’s development including his achievements in education, agriculture, business, health, infrastructural development and women empowerment, saying, “in education, we have renovated all the schools in the state, we used to have three of what I call glorified secondary schools as tertiary institutions but we merged all to form one university and we have increased the subvention to the university to improve standards. I also intend to start lecturing for free at the university later this year.”

Most of the challenges in water transportation are government-related — Ganiyu Balogun By JIMOH BABATUNDE


NE of the major stake holders in the water transportation and recreation business in Lagos State is Ganiyu Sekoni Balogun, popularly called Tarzan the Boat man. In this chat with Financial Vanguard, he shares his views on water transportation in Lagos state, the challenges facing practitioners among other issues. Excerpts: On how he got into the boat business, Ganiyu Balogun said; “I got into the boat business because my father used to work for the Nigerian Army and he lived in Tarkwa Bay and there was no other way of getting there without travelling by boat, so that means everyday movement to Lagos must be by boat. “Going to school was at the island, Tarkwa Bay, but any time we were leaving the island, it has to be by boat and my father had one and since then, I fell in love with water-related businesses.” Growing up on the Island of Tarkwa Bay probably formed his love for the water, but his venturing into the business of ferrying people could be traced to his father and a chance meeting with a white man called Hammond. “Through the help of God and my father, when I finished my early school, I met a white man called Mr. Hammond who worked as an insurance broker. There was a time he came to Tarkwa Bay but unfortunately missed his boat back to Lagos. I had to assist him to get another boat to take him to town. “I paid for the boat that took him to town, so he asked me to come to his office for the money I paid and on getting there, he asked me what I was doing and I told him I just finished school and not doing anything at the time. He asked if I would not mind driving him around. “Since I love machines, I told him yes and started driving him around, but my father was not happy about that at all.


e did not want me to be a driver and since my father had a lot of machines parked in the house, whenever I closed from driving Mr. Hammond, I will go back home to start working on those engines. He added; “Weekends that I don’t drive Mr. Hammond, I assist my father to drive his boats for commercial purposes. From there, with the

•Ganiyu Sekoni Balogun



Government policies at times are at variance with what the operators need, there are some overzealous officials who use the name of government to create obstacles for business


assistance of the man (Mr. Percy) that took over from Mr. Hammond, I was able to buy a boat. I refunded the money before Percy left. “From there, I got more boats from where I was operating at the Federal Palace Hotel and then moved to Marina and from there to Eleke Crescent. That was how I grew the business. Balogun revealed that from the savings he made from working and the loan he got from Mr. Percy, he was able to buy a boat. “My salary then was less than N500, but the total money, I can’t remember, but the loan from Mr. Percy was about N1000. I paid back that amount. There was an American diplomat that I used to work on his boat, he assisted just like other friends, but the major help was from my father as he was into the business too.” Challenges:Having spent years ferrying people, goods and cars on Lagos waterways, Balogun said the major challenge facing the water transportation business today has to do with the dirty nature of our waterways. “In fact, our waterways are now dirtier

than before as there was control.


n the past, you could not throw things in the water, but the control is gone. If you look around, you can see many of our engines parked up because of the debris on waterways. He added that fuelling the boat engines is another major challenge. “You need fuel stations on the waterways from where you can buy fuel for the boats, but they are not there yet. “Government policies at times are at variance with what the operators need, there are some overzealous government officials too who use the name of government to create obstacles for the business. Most of the challenges in this business are government-related. I am a contented person by nature, and I am not the type that wants to take from the government without giving back to same government.” Balogun revealed that sometime in 2006, he was

invited along with other stakeholders in the sector by the government as well as those interested in water transport business in the state. “They said they wanted the support of the stakeholders as many Nigerians had not seen the brighter side of the investment in the sector. “Many people are scared of water and so will not want to invest in the sector; my company took up the challenge and took up many of the routes that were not run then. Asiwaju Tinubu had the foresight by asking that jetties be built in many places. “We took over four of the jetties, the government then felt the development of the waterways will reduce traffic on our roads and it did, as many people parked their cars to take boats. Today, there are more commercial boats operating on Lagos. Speaking on the profitability of the business, he said it is profitable for those who have the passion. “As it is not a business you go into if you want quick money, if you are just interested in the business because of the profit, you might not get it right. You need the passion, because it is not like buying and selling, here we are talking of transportation business. Balogun, who built barges that can ferry cars on Lagos waterways, said; “In this business, you invest millions or billions which you don’t expect to recoup in a year Unlike trading where you buy a good today for N10 and sell tomorrow for N20, in water transport, you invest a huge amount of money in and you need to wait for the investment even before talking about profit.”

CPN approves accreditation of UNILAG, OAU, others


FTER accreditation visits to private and public Computer Training institutions across the nation in order to ensure quality control assurance in IT education , the Computer Professionals (Registration Council of Nigeria) (CPN) at the end of its 65th regular Council meeting held recently in Lagos approved the results of accreditation teams to three Universities as well as two private computer training schools. The Head, Media, Communication and Brand Management of the Council Amoo Taofeek Akanni in a statement disclosed that the accredited

Universities will include, University of Lagos, Lagos State University and Obafemi Awolowo University while the private Computer Training Schools will also include Software Technology Park Limited, Abuja and Meridian Technologies Limited, Maryland, Lagos, both franchisee of APTECH. The CPN accreditation of academic programmes, he said was a detailed appraisal of public and private computer training institutions in Nigeria for a level of performance, integrity and quality which entitles them to the confidence of the educational

Vanguard, MONDAY, MARCH 11, 2013 — 35

Insurance BRIEF


CIIN to hold Miss Insurance dance


ue to the high cost of doing business in Nigeria, manufacturing firms owned by multinationals have formed the habit of cutting down on insurance, experts have said. According to Managing Director of Royal Exchange General Insurance Company, Mr. Olutayo Borokini, such development has resulted into falling of premium rates in the industry. Borokini said “”The issue is complicated by multinationals because most manufacturing firms owned by multi-nationals have to contend with the cost of doing business in Nigeria, which is very high, they try to manage their cost and one of the areas of doing so is insurance. For an example, the management of a company would tell their broker, we are not ready to spend more that N100 million on insurance for a year, how you are to structure the programme is up to you. “Then the broker would go around shopping, trying to beat down rate through reduction in prices. That would force the price down. That is the trend we are having now. Most of the industrial risk businesses are not well priced. In some cases the re-insurers have to intervene by rejecting the risks,” Borokini said. According to him, the future of the insurance companies lies in retail, adding that the growth of the industry in past years has been skilled towards wholesales which have narrowed the distributive channels of operators, coupled with the fact that there are too many players for the businesses that are available. Borokini wondered how


L-R: Managing Director, HRG Nigeria, Mr. Olufemi Adefope; Regional Director, Africa, South Africa Tourism (SAT), Mr. Phumi Dhlomo; South Africa Consul-General in Nigeria, Amb. Mokgethi Monaisa, and President General, Nigeria Football and other Sports Supporters' Club, Dr. Rafiu Oladipo, during the SAT Networking event to toast Nigeria's victory at the just concluded AFCON 2013, held in Lagos on Thursday.

High cost of doing business hampers insurance growth – experts possible it is, to effectively control 60 insurance firms in Nigeria, stressing that in most cases there are about five underwriters on a particular business, and if the five reject a risk, a broker who has the business still has an opportunity to take other five in the market and can continue until he exhausts all available underwriters in the industry. He said, “The bane of the industry is rate cutting. Because of the number of players in the market and with few businesses available, coupled with the weak economy, we have more demand than supply. And there are no new businesses, so there are intense

competitions. With the competition, some operators have to lower the price in most cases. There are supposed to be industry standard, but it is not adhered to. Competition has forced down the prices of insurance products.” Also, Managing Director of Riskguard-Africa Nigeria Limited, Mr. Yemi Soladoye, said the industry is made up of too many cottage companies, adding that what the industry writes as annual premium income is not up to premium that a branch or agency of a company writes in a normal insurance setting, as such the industry does not need many small firms to thrive. Soladoye said “We do not

have what I would call real insurance company in Nigeria. What we have is what I can call cottage companies. What the industry writes as annual premium income is not up to a premium that a branch or agency of a company writes in a normal insurance setting. “For example, look at the results of Fortune 500, American Insurance Group (AIG) and more. These are companies that are generating about $250 billion premium each year. If you convert that to naira, it is about N4 trillion. Last year, analysis was done of the 500 biggest companies in Africa, on the report was 20 insurance companies, none is from Nigeria.”

STI engages new human resour ces manager resources M

anagement of Sovereign Trust Insurance Plc, STI, has engaged the services of a Human Resource Manager to assist in furthering the growth agenda of the organisation in line with the adoption of its new business model. In a statement, the company said the move is in a bid to further strengthen its human resource capacity as one of the forward-looking underwriting firms in the country, and by extension, fortify the human capacity building in the years ahead.

The new Human Resource Manager is Mrs. Ivie Ogbemudia, who joins the organisation as Manager/ Head, Human Resources Department under the Finance & Administration Division. Ivie Twiggy Ogbemudia holds an M.Sc in Human Resource Management from the Robert Gordon University, Aberdeen, United Kingdom. She graduated with a Second Class upper degree from the Law Faculty, University of Benin, having capped it all with an outstanding

performance at the Nigerian Law School. Twiggy is an Associate of the Institute of Chartered Secretaries and Administrators, (ICSA) and also a member of the Chartered Institute of Personnel and Development, (CIPD). Until her recent appointment, she was a Human Resource Associate at Evaluation and Staffing Africa (ES-Africa). She was at one time, a Human Resource Officer at Aberdeen City Council, Aberdeen, UK. She also

worked as a Human Resource Advisor at Thistle Hotels, Scotland. She has over six years experience in Human Resource Management and Development. She will be bringing her wealth of experience and expertise to bear in Sovereign Trust Insurance Plc. Ivie is to oversee the affairs of the Human Resources Department with responsibility for learning and development, talent management and performance management respectively.

he Chartered Insurance Institute of Nigeria, CIIN, is set to hold the Miss Insurance dance for this year. In a statement, the Institute said that insurance practitioners are already warming up for another opportunity to select the industry queen. Obah said that the annual beauty pageant has continued to provide the platform for women empowerment in the insurance sector through social engineering, adding that the contestants, who are usually young single ladies, are emboldened by the courage to participate in the pageant while also developing the spirit of sportsmanship and tolerance engendered by the keen contest. The 2013 edition of the dance will take place at the K & G Events Centre along Kudirat Abiola Way, Oregun in Lagos, on Friday 15th March with the star prize of a Kia Picanto car and the glamour of a one year reign. According to Obah, the contest has in the last four years attracted higher quality contestants. The outgoing Queen, Miss Onyeka Adigwe who is an employee of Goldlink Insurance Plc, said it had been a rewarding experience and an opportunity to flag the industry banner as its ambassador for a period of one year. Miss Adigwe said the experience had made her bolder and more matured, stating that it had brought out the best in her in terms of skill and talent. Miss Adigwe’s pet project, anchored on Youth Empowerment and Insurance Awareness among secondary school students, had also pulled her out of her former comfort zone and made her a motivational speaker. The star prize of a Kia Picanto car has been sponsored by Unity Kapital assurance Plc while prizes for the first runner-up.

36 — Vanguard, MONDAY, MARCH 11, 2013

Appointment & Promotions 08033348923

DHL appoints Country Operations Nted gets fresh four Manager; Head, Customer Service year term D

HL, one of the leading courier companies in Nigeria, has appointed Mr. Stephen Inegbedion and Olayemi Olusona, Country Operations Manager for Nigeria and Head of Customer Service, respectively. According to a release by the company, Inegbedion, a computer science graduate and Systems analyst joined DHL International Nigeria Limited 17 and half years ago. He started his career in DHL as Fleet/Data Executive, then Operations Analyst and later combined the two roles as Fleet and Operations Analyst Executive. In 2004 he was appointed Operations Performance Manager – Nigeria and until recently the Ground Operations Manager LOS & Western Nigeria Inegbedion is an experienced Express logistics manager whose training and develop-


•Olayemi ment cuts across DHL’s vast global network and with Excellent knowledge of Operations tools, system and applications. For Olusona, prior to this, she was the Customer Enquiry Manager and was responsible for the management of day-to-

Dallaji bags African Achievers’ award


OUNDER and President of African Children Talent Discovery Foundation, Noah Nuhu Dallaji, has won the African Achievers Award for the year 2013. The award is bestowed annually to recognize excellent individuals and organizations that have distinguished themselves in their contributions to the growth and development of Africa. Past recipients of the award include Nobel Laureate, Arch Bishop Tutu, President of Malawi, Rt. Hon. Joyce Banda, Deputy Prime Minister of Zimbabwe, ThokhozaniKhope and Lagos State Governor, BabatundeRajiFashola. At an award presentation held in Nairobi, Kenya, Dallaji was declared winner of the award alongside other reputable recipients including the First Lady of Benue State, Yemisi Suswan. According to the citation read


by the panel of judges, Dallaji’s nomination and conferment of the award was informed by his “rare and unique peoplecentric leadership and philanthropic qualities displayed through the instrumentality of his foundation. The work you have done through the foundation is commendable and worthy of mention at any international platform.

•Stephen day operations of the Contact Centre. She was also ensuring adherence to processes, systems and schedules, to drive Service excellence, quality, and productivity and maximize revenue generating opportunities. She joined DHL Express Customer Service in 2004 and has held various positions in the CS department. Olusona has good experience and knowledge of the various processes in the department. In her current position she has a responsibility to design, develop and execute Customer Service initiatives and strategies that will ensure Service Excellence and best – in – class service is delivered to DHL Customers. Olayemi was born in Nigeria. She holds a BSc (Ed) in Economics and an MBA in Marketing from Ladoke Akintola University in Nigeria.

EMBERS of the Mari time Workers Union of Nigeria, MWUN, have given their President-General, Comrade Emmanuel Anthony Nted, a fresh four year mandate to run the affairs of the union. rd At the union’s 3 Quadrennial National Delegates Conference, QDC, in Abuja, over 1000 delegates from across the country and the ports formations, returned Comrade Nted unopposed. The conference was witnessed by stakeholders and government officials including the Minister of Labour and Productivity, Chief Emeka Wogu. Earlier, Minister of Labour and Productivity, Chief Emeka Wogu while urging delegates to elect officers who will promote and defend democracy and enhancement of industrial peace and harmony for national development, he declared “I urge all delegates to


Labour gets new permanent secretary


HE Federal Government has approved the deployment of Dr. Clement Illoh, a former Director in the Federal Ministry of Labour and Productivity as the Permanent Secretary in the Ministry. Illoh who was recently appointed a Permanent Secretary in the Federal Civil Service, started his carrier as a Labour Officer 1 in the Ministry of Labour and Productivity in 1983. He rose through the ranks to become a Director of Labour in 2009. Illoh traversed the gamut of labour administration as a colossus and was globally recognised in such technical areas as Maritime Labour Services, International Labour Diplomacy, Productivity Improvement, Employment Services, Labour Protection and High Level Expertise in Policy and Programme Devel-

opment. The new permant secretary, through dint of hard work and divine intervention, was appointed a Permanent Secretary in the Federal Civil Service through a transparent and

elect Officers who will continue to promote and defend the rights, wellbeing and interests of workers as well as promote and defend democracy, probity and transparency in the Trade Unions and civil governance.” Speaking on his immediate concern, Comrade Nted said; “The problem in the Maritime industry is enormous. We will seat down collectively to see how to resolve them. The first thing is to seat down either in Nigeria or abroad to have a retreat for us to talk to ourselves. We need to be disciplined. There are too many issues affecting the maritime industry especially the Dockworkers branch where workers remuneration is very poor. The Federal Government is banning a lot of things and increasing tariffs. That is affecting the ports operations. We need to seat down and study those banned items and those affecting the nation financially.” “The government is saying the more we import, the more our foreign earnings depreciate. Our job is based on traffic. If there is no vessel coming in, the dockworkers will die of hunger. We will also look into the sharp practices in the maritime industry especially the under declaration of vessels and the malpractices being perpetrated off-shore. A vessel will come, off-load and run away without recourse to the stevedore contractor operating off-shore.

th tedious process on the 15 January 2013, by President Goodluck Jonathan. Illoh is a native of IsseleAzagba, Aniocha North Local Government Area of Delta State, he holds a Bsc (Hons)

in Sociology, Msc in Sociology in 1982 (University of Lagos), Diploma in Training and Development, 1986 (International Labour Institute in Turin, Italy), PhD in Industrial Sociology 2010 (University of Abuja). He is happily married with children.

196 firms bid for supply of NYSC batch ‘b’ kit items


BOUT 196 Companies have been an nounced by the National Youth Service Corps, NYSC, to have submitted bid for the production and supply of kit items for 2013 Batch ‘B’ Corp Members. At the opening of Pre-qualification Documents in Abuja, the Director General of NYSC, Brig-Gen Okore-Affia said the scheme would not deviate from transparency and due process it had been known for, promising to follow Public Procurement Act to the letter. “It is important to inform you that this exercise will be followed by the critical examination of your documents by the Technical Evaluation Committee, who will eventually produce the qualified companies that will be issued with bidding documents for financial

bidding coming up March 25, 2013. Let me appeal to you not only as contractors, but also as members of the NYSC family to cooperate and make this exercise a success”, he pleaded. Also speaking, the Director of Procurement, Mr. Gabriel Alonge explained that being a registered contractor with the scheme would not give anybody undue advantage above others, telling contractors not to give anybody kick-back for their company to be selected as the whole process will be made open. “It is not do or die affair, if you are not in now, don’t be discouraged. Please, you need not to see anybody; the only thing you can do to assist yourself is by meeting the requirements”, he maintained.

Vanguard, MONDAY, MARCH 11, 2013 — 37


Why Jonathan should sign Biosafety Bill — Prof Ishiyaku


ROF. Muhammad Faguji Ishiyaku is the Dean of Student Affairs of Ahmadu Bello University, Zaria and Programme Leader of Biotechnology Research Programme of the Institute of Agricultural Research (IAR) of the University. In this exclusive interview with Abdallah elKurebe who was at a Media Training organized by Biosciences for Farming in Africa (B4FA) at the Institute, Prof. Ishiyaku spoke on Biosafety & Biotechnology and the need for President Jonathan to expedite assent on the Biosafety Bill and other issues relating to mass food production. Excerpts: Against Nigeria’s quest for food security, do you see any need for the application of biotechnology for mass food production? First of all, the application of science on Agriculture is aimed at solving the problems of food security in Africa, not Nigeria alone. There is the need for Africa to keep its citizens from hunger against the evergrowing population. This is as important as keeping a standard army in any country, except if we want to lag behind. Talking about Nigeria, for the country to attain the Agriculture Transformation Agenda, which is now being pursued, necessary steps aimed at institutionalizing biotechnology in the country must also be aggressively pursued. On the whole, I think there should be pressure on policy makers to refocus and reprioritize their area of attention, especially where food is involved. Do you see the Agricultural Transformation Agenda (ATA) as being comprehensive enough in the absent of the Biosafety Bill? In the first place, the researches being conducted in all our research centres on biotechnology would be useless if that law is not signed into law. We have a law that backs the conduct of research. But for commercialization purposes, we need to have an act from the

•Prof. Ishiyaku National Assembly to allow for the commercialization of these products. If the President refuses to ascent to that bill into a law, which I doubt, it means that the results of these researches would remain on the shelves of our laboratories. What we are doing is targeting the problems that our people are facing with a view to solving them.


hat is your take on the reluctance of our leaders to approve the cultivation of Genetically Modified Organisms (GMOs)? Our politicians should listen to the needs of the people. Until our leaders come to terms with the hunger and starvation staring us in the face, and until we see the importance of fighting this menace by creating a legal framework for commercializing agro-research breakthroughs for improved food production, all efforts by researchers to develop improved crop varieties that would aid in creating wealth and generating income for farmers in the country would come to nothing. The African Agricultural Technology Foundation, AATF was developed under the aegis of New Partnership for African Development, NEPAD for them to become a linkage between licensed technology owners and African farmers. It is aimed for African farmers to be able to have access to licensed technologies, which are most likely generated privately or in joint partnership with the private.

But also, questions of safety of these GMOs are being asked. Some see them as harmful for mankind. Do you share this fear? There are immense opportunities of biotechnology for the benefit of mankind. Unlike what we now have, chemicals are used to control pests and diseases of plants. These are unsafe for consumption and not environmentally friendly, aside from being expensive. But quite oppositely, with science and technology, host resistant plants are now bred. We have worked on the genes of cowpeas, tested them and seen that they are safe. We are hopeful that the biosafety would be signed. However, more awareness, enlightenment and education of farmers and consumers should be intensified in other to achieve food security as fast as possible. You are currently the Principal Investigator for the Development of Maruca resistant transgenic Cowpea. Why Cowpea and how far have you gone in this research? In the first place, Cowpea has economic importance in the areas of food, fodder, soil fertility enhancement; soil erosion control, provision of employment and serves as medicine. Why Cowpea? Nigeria is both the largest producer and consumer of the product, globally. With a national average of about 350kg per hectare, the national cowpea deficit for Nigeria is put at 500,000 tones. It is cultivated in cereal-based system and grown everywhere, mostly in the Savannahs. Cowpea is used traditionally and at low-level industrial levels. So, which are the common diseases that attack Cowpea? The diseases that attack cowpea include bacterial blight, dumping off, septoria leaf spot, scab, rust, ashy stem blight and aschochyta blight. There are also parasitic flowering plants like Alectra and Striga. Insect pests also serve as constraints against cowpea.

38 — Vanguard, MONDAY, MARCH 11, 2013


NIMC: Nigeria ready to capture citizens’ accurate identity data By PRINCE OSUAGWU


HE National Identity Management Commission NIMC is gearing up to kick start a data collection exercise which would put the country among the top information managers in the world. The exercise would see to the electronic enrolment of the over 167 million Nigerians and legally resident foreigners in the country before the end of second quarter of this year. At the head of the squad to see this happen is the Director General of the commission Dr. Chris Onyemenam who is upbeat that by the time the exercise is in full swing, problems associated with accurate data of nationals and legally residents persons in the country. He has put up teams and facilities which would ensure that the usual trend of issuing just identity cards without adequate security features, which data may not be read electronically, is reversed.

ICAO security guidelines

This time around, Onyemenam said that several security features and methods were pressed together to give every identity a world class specification in line with the ICAO guidelines. He addressed a select technology Journalist, last week, during a facility tour of its National Identity Management System infrastructures located at its head office in Abuja and its world-class Data Recovery Centre in Minna, Niger State. Onyemenam’s argument was that in the past, the focus of all identity registrations was on issuing of Identity cards without relevant security features. To that extent, the current exercise was mandated to issue National Identity Numbers, NIN, which is uniquely assigned numbers to individuals upon successful enrolment. The enrolment processes consist of the recording of an individual’s demographic data, capture of 10 fingerprints, headto-shoulder facial picture

•Onyemenam: NIMC D-G and digital signature, which are all used to cross-check existing data in the National Identity Database to confirm there is no previous entry of the same data. Pilot scheme Though the pilot exercise on the scheme started in Abuja on February 23, 2012, Onyemenam, said the pilot exercise has been extended to each state and now to the 774 local government area, saying that the nationwide enrolment will commence before the end of June. He said: “By the end of second quarter of 2013, we expect the actual nationwide enrolment exercise will be launched by the Presidency. From the time it is launched, it is our target to have hit 100 million enrollments in 30 months. “This will be followed by the issuance of cards that are Chip & PIN-based and designed with more than 18 security features embedded, making it difficult for the cards to be cloned by fraudsters. ”We are not perfect but we are completely in compliance with necessary International Standard Organisation (ISO) and ICAO specifications. But we have made much effort to ensure that the cards are not easily forged”

75 percent of IDs in Nigeria, fake

In his presentation, Director, IT and Database, NIMC, Mr. Aliyu Aziz, noted that 75 per cent of Identity cards in Nigeria are counterfeits without any form of verification or authentication while over 100 million Nigerians have no official identity at all. Meanwhile, he prom-

ised that several forms of Identity systems by private organisations such as banks and many other government agencies that do not communicate together could be integrated as the NIMC’s National ID Management Systems (NIMS) infrastructure will provide a common key for such separate databases. Aziz noted that, although initial enrolments have started ahead of the official nationwide launch, all the commission was focusing on at the moment was to provide more redundancy and increase availability of its infrastructure. He said when the exercise fully begins, mobile enrolment services will also be provided to people in the far rural areas to make it convenient for more Nigerians to get enrolled on time. Infrastructural Challenges He said: “However, we are facing challenges ranging from infrastructure, power, as evident in the poor power situations in the country. Now we have resorted to powering all our data centres which are supposed to work round-the-clock, with alternative power supply. We also have capacity and funding problem because the private partners are yet to commit like the government has done. You know, this project was conceived as a Public Private Partnership, PPP initiative. “We also have challenges having to do with geographical reach. However we are going to use mobile registration points to address this. Scalability is another issue, but we have also found a way around it.” Managing crowd at enrolment centres Earlier, while conducting the pressmen around the Minna DRC, the Director, Information Technology, NIMC, Mr. Emmanuel Ogungbe, said the execution of the exercise has been designed in a way some cumbersome experiences in part exercises would not recur. He even assured that cases of multiple enrolments would not happen due to the technology involved in the exercise.

Vanguard, MONDAY, MARCH 11, 2013 — 39

Advertising, Media & Marketing

Competition brews in stout market •Guinness promo winners recount experiences •Others float promo soon Stories by PRINCEWILL EKWUJURU


HE African Cup of Nations (AF CON) competition has come and gone with the winner having emerged, but the South Africa experiences still linger with winners of the ‘Guinness fly with Eagles promo.’ Aftermath of the tournament the stout market will soon witness a promo war. A glimpse into the necessity of promos by Vanguard showed that when brands organise promos there are more to it than meets the eye. Arguments in this school are of two folds, in one, the argument is that, it’s a waste of scarce resources organising promo (s), they insisted further that brands organise promos because their market share are declining. The second school say promo helps to build a brand’s profile and grow it’s market share and because brands are part of a company’s capital, hence the exploitation of promo as a tool to drive the brand. A probe into the market revealed that brands connect with consumers easily through promos. The edge the Guinness brand is presently enjoying in the market has been attributed to the just ended ‘Guinness fly with Eagle promo’ where consumers were flown to South Africa courtesy of the promo, this in effect has re-ignited consumers confidence and assurance, which invariably has increased the brands relevance and loyalty to its customers. Indications in the market has however shown that with the upsurge in Guinness consumption, other brands like Legend, Dark Ale, Castle stout and Turbo king are gearing up to introducing one promo or the other to stem the rising profile of Guinness stout in the

market. In the last decade, major players in the stout market have been Guinness, Legend and Dark Ale whilst Guinness Stout has consistently maintained leadership of the market, but with a serious resistance from Legend. However, towards the end of year 2010, Pabod Breweries Limited, the Nigerian subsidiary of SAB Miller, threw a shot, when it unveiled Castle milk stout, with the promise that it was in for business. But surprisingly, it was not long before the brand was put in its position, with little or no national prominence, even till now. Invariably, for the two hundred fans sponsored on an all-expenses paid trip to South Africa to watch the Super Eagles live, there could not have been a better opportunity. Like the Managing Director, Mr. Seni Adetu had said at the launch of the campaign in November 2012 that as part of the national consumer promotion on the campaign, two hundred fans will have a once in a life time opportunity to win tickets to travel to South Africa to watch the Super Eagles play live. “It is our desire to give our numerous consumers, the fans of our darling Super Eagles a unique opportunity to cheer their favourite football team live as they take on the rest of Africa” Adetu retorted. According to Alexander Oseghale, a trader in the Adegbayi area of Ibadan Oyo State, “it was a dream come true”. “The first time I was called from Guinness, I thought it was a joke, but then I heard from the Guinness team again a little before the start of the Nations Cup tournament. That was when I realised it was true” Oseghale said. Oseghale had an opportunity to watch the Eagles play Zambia live.

CPC, APCON, others discuss consumer at BJAN summit T

HE Consumer Protection Council (CPC), Advertising Practitioners Council of Nigeria (APCON), Advertisers Association of Nigeria (ADVAN), Standard Organisation of Nigeria (SON), amongst other relevant agencies, are set to address the continual violation of Nigerian consumer’s right for the first time at a colloquium cum Inauguration of new Executives of the Brand Journalists Association of Nigeria, (BJAN.) Other relevant government agencies schedule for the industry discourse include National Agency for Food, Drug Administration and Control, (NAFDAC), Nigerian Communication Commission, (NCC) and Nigerian Civil Aviation Authority, (NCAA) through its Consumer Protection Unit, (CPU). The director generals of these reputable agencies have confirmed their participation at the event. The event, which is being organised by BJAN, comes up the March 15 in Lagos with theme: Consumer Right in Nigeria, the Most Violated? The Role of the Regulators, organised to coincide with the World Consumer Day. To mark the day with the global con-

sumer day, which urges industry stakeholders worldwide to use the occasion to create awareness and expose the damage caused by poor or non-existent of consumer protection around the world, BJAN has confirmed that the DG of CPC, Mr. Emmanuel Amlai will lead the discussion as the keynote speaker while the Chairman of APCON, Lolu Akinwunmi; DG of NAFDAC, Dr. Paul Orhii, DG of SON, Dr. Joseph Odumodu, DG of NCC, Mr. Eugene Juwah and President, ADVAN, Mr. Kola Oyeyemi are listed as discussants. According to the newly elected Chairman of BJAN, Mr. Goddie Ofose, in line with the World Consumer Day and advocacy of Consumer International, CI, the only independent global campaigning voice for consumers with over 220 member organisations in 115 countries, BJAN is initiating the move to building a powerful Nigeria consumer movement and wake the stakeholders to help protect and empower Nigerian consumers with the role given to them to salvage the helpless Nigerian consumers whose right had been violated overtime.

40 — Vanguard, MONDAY, MARCH 11, 2013, Blog Website:

Tel:0817 002 3569

ATELY, the Central Bank of Nigeria in a two-page Press Release, laboured to corroborate the Finance Ministry’s earlier clarifications on “the meaning, structure and management of the nation’s foreign reserves”. CBN defines external reserves, appropriately, as external assets held in foreign currencies by a country’s Central Bank for the “primary purpose of safeguarding the international value of the legal tender currency (i.e. the naira)”. In an earlier article titled “ECONOMY & RESERVES: BETWEEN THE TRUTH AND GOVERNMENT CLARIFICATIONS” http:// yahoo_site_admin/assets/docs/ 04032013-P.6235524.doc, we discussed the Finance Minister’s tripartite classification of our external reserves into Federation, Federal Government and CBN Reserves. We observed that the accumulation of the component of federation reserves otherwise known as Excess Crude Account (ECA) remains unconstitutional until enactment of the relevant bill! The National Assembly’s acquiescence to this illegality may be seen by critics as indication of conscious complicity in constitutional violation with shared culpability in deliberate economic mismanagement. It is mischievous to have accumulated over $10bn ‘surplus’ crude revenue by January 2013, while government borrowed over N1 trillion, with oppressive costs to supplement deliberately understated revenue projections in 2012 budget. In contrast to the declared objective ”of safeguarding the legal tender of the nation’s currency,” the process of consoli-

CBN’s unrelenting stranglehold on the economy! dating CBN’s rising reserves inevitably pitches humongous naira ‘tsunami’ against relatively austere bi-weekly forex auctions by CBN. The resultant huge imbalance in favour of the dollar remains a constant threat to naira exchange rate and price stability. Paradoxically, the accumulation of CBN’s lion share of about $32bn out of Nigeria’s total external reserves of about $45bn has instigated adverse ripples on interest, inflation, and exchange rates and ultimately also, on fuel subsidy. Consequently, in reality, increasing CBN reserves actually translate into deepening poverty nationwide. Furthermore, CBN’s core mandate of price stability is similarly adversely impacted by its management of external reserves in line with the three declared objectives of stability of principal sum, adequate liquidity and maximization of return on principal. In reality, possibly over 80% of Nigeria’s total reserves are held as convertible US dollars; consequently, it follows that since the American currency has lost over 25% of its value in the last decade or so against the euro, Nigeria’s average reserve base of $40bn would have also depleted by about $8bn in the same period! Thus, CBN’s management strategy may have inadvertently, also, failed to protect the principal sum as

envisaged. Any claim of success in achieving the second objective of maintaining adequate forex liquidity “to safeguard the international value of the naira” is equally contentious; for example, in 1996, when naira was N80=$1, with Nigeria’s total reserves of $4bn projected to cover imports for just four months; inexplicably, however,



CBN's lion share of about $32bn out of Nigeria's total external reserves of about $45bn has instigated adverse ripples on interest, inflation, and exchange rates, and ultimately also, on fuel subsidy

in spite of exceptional dollar liquidity, the naira rate fell to over N120=$1, with $60bn reserves and over 30 months imports cover in 2006! Similarly, Nigeria’s current total external reserves of over $45bn also poses a threat to the value of the naira! Additionally, achievement of CBN’s third objective of maximization of returns in the management of our reserves appears equally controversial in the light of actual reality; it is inexplicable that government pays up to 7% interest on foreign borrowings such as the $500m Eurobonds, while CBN would be challenged to report a 4% yield on Nigeria’s external reserves domiciled with the

chievous and a deliberate misrepresentation of the constitution for CBN to claim to derive the rights to acquire federation dollars from FAAC!! The word ‘monetize’ is an exotic euphemism for the economically poisoning process in which CBN prints/creates naira balances as substitution for distributable dollar revenue; the adverse impact of this process instigates high lending cost, inflation, increasing debt accumulation and a weak currency; ultimately also, the weaker the naira, the higher will be fuel prices and related subsidies. This obtuse process of N/$ exchange rate determination is regrettably, not market determined, but is rather consciously contrived in favour of the dollar by CBN’s unholy monopoly of the forex market. With reference to its ownership of $32bn reserves, the CBN’s Press Release vainly concludes that, “it is erroneous to expect that the CBN should make available this same portion of the reserves again for expenditure after it has been spent when it was monetized to naira.” Ultimately, however, since a slave’s wealth belongs to his master, CBN may have successfully achieved the impossible feat of eating your cake and having it! Sadly, Nigerians are the unknowing victims of this sleight of hand! SAVE THE NAIRA, SAVE NIGERIANS!!

same international merchant bankers, who incidentally, also midwife our more expensive external loans! In conclusion, let us examine CBN’S justification of the process by which it consolidates its lion share of reserves! The following is an excerpt from CBN’s Press Release in this regard “…when the monthly Federation Accounts Allocation


Committee (FAAC) has decided on the distribution amongst the three tiers of government, the foreign currency is then SURRENDERED to the CBN, which MONETIZES this amount into naira for the accounts of the respective tiers of government. Let us comment on two key words; i.e. ‘surrender’ and ‘monetize’ in above passage. Firstly, the FAAC, as a mere allocation committee is not constitutionally empowered to surrender public sector dollar revenue to anyone! In fact, Section 162 of the Constitution does not distinguish the currency denomination of distributable revenue. It is patently mis-

Business & Economy ploring skill exportation as a veritable avenue for employment creation for surplus labour in the country, “poverty and unemployment increase the vulnerability of our youth to trafficking and other ills in the society,” he said.

Government alone cannot create job — Wogu By PROVIDENCE OBUH


INISTER of Labour and Productivity, Barr. Emeka Wogu, has said that the government alone cannot create enough jobs to reduce the level of unemployment in the country, calling on private sector to assist in employment generation. Speaking at the AES Excellence club bimonthly business luncheon, held in Lagos, Wogu stated, “The unemployment challenge is enormous but it is not insurmountable, therefore we must all rise to take our destinies in our hands by creating descent employment. Government alone cannot create enough jobs; the private sector which is the engine of growth should not be left out.”

Despite Government policy that all universities should introduce entrepreneurial studies as a course in tertiary institutions, he noted that there is need for more intervention. He pointed out that unemployment is a global problem, describing as worrisome, current unemployment rate in the country which stands at 23.9 percent. According to him, “youth unemployment is assuming a frightening dimension that now constitutes an affront to government developmental efforts with wide range implication for social stability and the dignity of human person. Recent release from the International Labour Organisation, ILO indicates that 40 per cent of the jobless people world-

wide are young people. “Government is not insensitive to the plight of youths who spend their youthful years and vigor going in search of nonexistent jobs or helpless parents who sacrificed their comfort to educate their children and watch disillusioned on how to get them gainfully and decently employed. “We have come to the realization in the Federal Ministry of Labour that if millions of productive and decent jobs are to be created to meet the challenges of mass unemployment, the internal robustness of the National employment Policy must necessarily be strengthened. This is so because if the policy environment is conducive, it cannot turn a flawed employment policy to an effective job

creation process.” In addition, the Minister revealed that the ministry is ex-

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


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CONTRIBUTORS Princewill Ekwujuru Naomi Uzor Providence Obuh LAYOUT


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