Financial 23 June 2014

ICAN should have been part of talks on missing oil money —AJAEGBU

JUNE 23, 2014

174.75 3,120.00

17.88

7.75 -20.00

-0.06

114.95 -0.11 107.11 0.68 CURRENCY BUYING

CENTRAL SELLING

DOLLAR STERLING EURO FRANC YEN CFA WAU RENMINBI RIYAL KRONA SDR

155.23 264.3722 211.3922 173.6548 1.5237 0.311 238.3393 24.9177 41.3847 28.3463 239.1008

154.73 263.5207 210.7113 173.0954 1.5187 0.301 237.5716 24.837 41.2514 28.255 238.3306

155.73 265.2238 212.0731 174.2141 1.5286 0.321 239.107 24.9984 41.518 28.4376 239.8709

CBN Exchange rates as at 20/06/2014

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HE Nigerian Export-Import (NEXIM) Bank supported Nigeria’s non-oil sector to the tune of N40.217 billion between 2009 and May 2014, and created over 24,139 direct jobs in the process.

Data available to Financial Vanguard showed that the bank spent N16.35 billion or about 40 per cent of the total amount in support of the manufacturing sector of the economy and N8.61 billion on agro-processing.

The data further showed that the bank, in support of solid minerals, disbursed N2.7 billion and another N12.544 billion on the services sector.

A further breakdown of the bank’s intervention in the economy and in pursuit of its core mandate of trade finance showed that between August and December 2009, it financed exports worth N1 billion and sustained 606 jobs while assisting exporters to generate $8.408 million.

In 2010, NEXIM financed export trade valued at about N5.655 billion.

It further provided trade guarantee of $21 million to exporters which created about 5,298 jobs and generated $73.406 million at the end of 2010. In the same vein, in 2011, the bank increased its export financing to N7.588 billion and provided a

INAUGURATION - From left: Deputy Editor-in-Chief, BrandiQ Magazine, Agbo Agbo; Editor-in-chief, Desmond Ekeh; Registrar, Redeemer’s University, Mrs B.A Oloketuyi; Head of Department of Mass Communication, Redeemer’s University, Professor Bayo Oloyede; Founder and CEO, Trends Intelligence Network (TINK), Mr Franklin Ozekhome at the inaguration of BrandiQ Campus Club at Redeemer’s University.

NEXIM leads growth of non-oil sector •Generates $325m non-oil exports •Creates 24,139 jobs •Engages Indian consultants to study Nollywood financing

By Omoh Gabriel, Business Editor guarantee of $6.3 million to exporters.

This resulted in the creation of 5,124 jobs in 2011 and foreign exchange earnings of $68.051 million.

According to the bank’s official figures, in 2012, its trade finance was in the region of N7.3 billion which

saw Nigeria earning $58.655 million, with 4,386 new jobs created. According to NEXIM records, in 2013, the bank assisted in financing N9.435 billion worth of exports from Nigeria which resulted again in the creation of an estimated 5, 661 jobs and foreign exchange earnings of $75.746 million.

In the first five months of 2014, the bank spent N5.106 billion financing non-oil export and has already

provided $27.3 million in guarantee to exporters. It is estimated that about 24,139 jobs have been created this year alone through the bank’s intervention in non-oil exports.

Confirming growth in non-oil exports, the Central Bank of Nigeria said in its 2013 annual report that Nigeria’s non-oil exports that year

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18 — Vanguard, MONDAY, JUNE 23, 2014

Cover Story

The Basic Guide to Starting Your Business Part 5

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GT BANK HERITAGE CUP: From left: Cathy Echeozo, Deputy Managing Director, GTBank; Segun Agbaje, MD and Lola Odedina, Head, External Communications and Public Affairs at the GTBank Heritage Cup 2014 Season 3 finals held in Lagos.

NEXIM leads growth of non-oil sector reached $2.97 billion by yearend, up from $2.56 billion recorded in 2012, a 16 per cent increase. In addition, non-oil exports to members of the Economic Community of West African States (ECOWAS) reported a remarkable improvement of 20 per cent, with a total value of $375.339 million, as against $312.478 million recorded in 2012. This is also a huge improvement from $276.527 million reported in 2011.

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ocoa and cocoa preparations have continued to dominate the top 10 products exported from Nigeria to different parts of the world, according to the report, during the interactive session between the NEPC and Manufacturers Association of Nigeria Export Promotion Group (MANEG).

In 2013, for instance, a total of $758,640,303 worth of cocoa and cocoa preparations were exported, translating to 36 per cent of world export. This was followed by sheep, goat skin and leather, sesame seeds, aluminum, rubber, tobacco products, cotton yarn, and woven fabrics. Others included copper, cashew nuts and edible nuts, prawn, shrimps, fish and crustaceans.

Nigeria is currently exporting tobacco products, plastics and rubber footwear, noodles and biscuits, poly bags, milk products, iron and steel, insecticides, beverages, tomato paste and fruit juice to African countries like Ghana, Niger, Togo, Benin Republic, Burkina Faso, Guinea, Mali, among others.

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Giving insight into the bank’s operations, the Managing Director, Mr. Roberts U. Orya said: “Arising from numerous challenges faced by traders in moving goods by road within the sub-region, NEXIM Bank, as a trade facilitating agency, initiated and is currently facilitating the establishment of a transnational shipping company in collaboration with the organised private sector associations in West and Central Africa in partnership

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Continued from page 18

With the turnaround in the bank’s performance, management ensured an appreciable return on the equity investment of the shareholders

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with the Federation of West African Chambers of Commerce and Industries (FEWACCI) and Transimex S of Cameroun. The proposed Sealink project is aimed at mitigating current non-tariff barriers and high logistics costs that have hindered the growth of intra-regional trade and competitiveness of Nigerian manufactured exports regionally.

“Though initiated and largely facilitated by NEXIM, the Sealink project is essentially a Public-Private Partnership initiative and the Private Placement for the raising of $60 million is

currently on-going, with application list closing on 30th June, 2014, while the shipping company is expected to commence operations within the fourth quarter of this year. The offer is being handled by FBN Capital, Nigeria (Issuing House) and SGI, Benin Republic (placement agents).

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his initiative has been endorsed by the ECOWAS Commission and is being technically supported by the African Development Bank (AfDB), the Directorate of Technical Cooperation in Africa, Maritime Organisation of West and Central Africa (MOWCA) and the Nigerian Shippers’ Council, amongst others.”

NEXIM, between August 2009 and May 2014, through its facilities would facilitate the generation of estimated foreign exchange earnings of $325.25 million annually.”

Orya said: “With the turnaround in the bank’s performance, management ensured an appreciable return on the equity investment of the shareholders. Accordingly, a dividend for the 2010 financial year performance was declared and paid, which was the first time since 2003 when dividend was last paid. Dividend for 2011 has also been declared and paid, while that of 2012 is in the process of being approved by the Board of Directors.

“The bank in the period

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carrying out a self analysis cannot be over emphasized.

Entrepreneurs are leaders, prime movers, authors, pacesetters, investors and risk bearers. They are usually pioneers who strategize and formulate the rules for the general interest of the enterprise for others to follow.

An entrepreneur conceives an idea and brings it to life through systematic and wellarticulated planning, driven by the passion and the need to achieve uncommon things. An entrepreneur not only assumes responsibility and the risk for a business operation with the expectation of making a profit, the entrepreneur also generally decides on the product, acquires the facilities, and brings together the labour

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WHO IS AN ENTREPRENEUR? here are many differing views on what makes someone an entrepreneur and what an entrepreneurial venture is. The term itself is believed to have originated from French, coined by a French economist, Jean-Baptiste Say, in about 1800, who defined an entrepreneur as “one who undertakes an enterprise , especially a contractor, acting as intermediary between capital and labour.” But it was first defined in English by the Irish economist Richard Cantillon, as” a term applied to the type of personality who is willing to take upon herself or himself a new venture or enterprise and accepts full responsibility for the outcome”. The definition of entrepreneur is not limited, as various writers and world renowned entrepreneurs have given it various meanings. For instance, one of the great motivational speakers and writers of our time Robert Kiyosaki, in his book “Retire Young, Retire Rich” defined an entrepreneur as “someone that sees an opportunity, puts together a team, and builds a business that profit from the opportunity.” As you can already see, the word entrepreneur is inexhaustible. According to the Merriam-Webster online an entrepreneur is “one who organises, manages, and assumes the risks of a business or enterprise.” A more detailed definition given by Daile Tucker, an entrepreneur herself, describes an entrepreneur as “a person who has decided to take control of his future and become self employed whether by creating his own unique business or working as a member of a team.”

Something that keeps coming up about entrepreneurs is their ability to see opportunities and make the most of it, not minding the risks they will undertake.

Entrepreneurs are generally in competition with themselves and believe that success or failure lies within their personal control or influence. So it is very important for you, when starting a business, to be sure that you can identify opportunities, make the most of them and have the wherewithal to thrive even in the midst of risks and unforeseen circumstances and that is why

An entrepreneur is a person who has decided to take control of his future and become selfemployed whether by creating his own unique business or working as a member of a team

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force, the capital and production materials. Simply put entrepreneurs are people who choose to see positivity where negativity abounds.

Bear it in mind, however, that if a business succeeds, the entrepreneur reaps the reward of profits; on the other hand, if it fails, he or she takes the loss.

Successful entrepreneurs are not perfect people but are brilliant, productive, and articulate; it takes both the heart and the head to successfully run an entrepreneurship. Also note that an entrepreneur is an inspirer, a motivator, a coach, a great listener, attentive, consistent and enthusiastic.

A lot of people go into business for the sole reason of making money; this is not a good idea. It’s not a good idea because the main ingredient for success is missing.

Vanguard, MONDAY, JUNE 23, 2014 — 19

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igeria is a country of ironies. Its officials make policy pronouncements they do not believe in. Most times, the action of government is the direct opposite of its policy statements. President Jonathan has stated time and time again that his focus is on the transformation of the Nigerian economy to becoming one of the 20th largest economies in the world come 2020.

The ambition is great and inspiring but there seems to a lot of gaps that if the

Where is trade financing in the Transformation Agenda, Mr. President? buy US-made goods, the bank is encouraging increased production in the US and other countries. As companies in these countries expand their production line to meet demands from the importing countries, they help grow their economies and create the much needed jobs. Nigeria, the importing country, instead of producing locally will buy made in US or China and export jobs to where the credit line is coming from that would have been created.

If this government is serious, it must begin to think of how to recapitalise the Nigeria Export-Import Bank to position it for a greater role now and in the future. The Federal Government has reiterated that if Nigeria must achieve the set target of becoming one of the 20 largest economies in the world, there was the need for the promotion of value added export of locally produced goods.

The expectation is that with the transformation agenda, the promotion of value added export of Nigeria’s indigenous products and generation of additional foreign exchange for

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unexpected happens that Nigeria has 24 hours of power supply, the agricultural sector delivers goods along the value chain, how will the products be sold? To whom and where is not currently on the drawing board. The Minister of Trade and Investment seems to be more interested in the direction of foreign direct investment without planning how goods produced in Nigeria are to be appropriately marketed and sold out there.

Nigeria is at the moment not engaging the appropriate technique of trade financing.

In other countries that are serious with export, apart from the various export incentives put in place and administered by export organisations, they set up a viable trade financing banks that guarantee export and import from their countries.

The United States of America which is the center of private enterprise has the US ExportImport Bank, EXIM. The bank helps the US economy by encouraging export of US products. The bank gives credit line to importers of US products from other countries.

The same applies to China, India, Britain and others. Very often, you hear Nigerian banks announcing that they have secured credit line from US and Europe that is available to Nigerians who want to buy products from these countries.

By financing Nigerians to

As companies in these countries expand their production line to meet demands from the importing countries, they help grow their economy and create the much needed jobs

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the country should be paramount in the minds of Nigeria’s economic policymakers.

But contrary to this noble expectation, the trade promotion organs of the government have been grossly neglected.

The Nigerian Export-Import Bank that should play a leading role in the export of Nigeria’s non-oil products have been relegated to the background by government.

It is highly under-capitalised and cannot reasonably intervene in trade financing.

Take for instance, the state of affairs of the NigerianExport-Import Bank

th before 14 August 2009, the bank was distressed. The bank at the time of the assumption of duty of the new executive management in August 2009 was that the financial and operational performance of the bank had deteriorated to an alarming level, in addition to a myriad of other problems, principal of which were: *Alarming decline in the quality of risk assets as the bank’s total loan portfolio as at 20 th August 2009 was N14.6 billion out of which 72 per cent was non-performing and within that category, N10.03 billion or 69.05 was classified as completely lost resulting in decline in the

bank’s income; paucity of funds with the outstanding called up/unpaid capital standing at N32.74 billion leading to decline in creation of risk assets; depletion of the bank’s shareholders’ funds as a result of accumulated losses; significant decrease in income and tolerance of excess & escalating overheads; worsening assets quality and poor record keeping; lack of strategic focus and distraction from core mandate; ineffective Risk Management Framework; non adherence to corporate governance tenets; over-bloated staff strength with significant skill gaps; lack of visibility of the bank.

But the bank has been successfully turned around and has since started reaping the gains of the Corporate Transformation exercise as it has been fully repositioned to deliver on its mandate through a robust strategy.

For a country that is aspiring to join the league of exportdriven economy, Nigerian policymakers must learn to place emphasis on trade promotion and financing.

Planning this along with investment in production in all sectors of the economy is the way to go. If Nigeria fails to plan for the export of products from the value chains being developed now, it means government's transformation agenda was set out to fail from the onset.

Business & Economy Continued from page 18 under review achieved a cumulative loan recovery of N1.96 billion. Loan recovery continues to be a major focus of management, with renewed and aggressive measures put in place to recover delinquent loans. In that regard, a Remedial Management Department has been specifically created to intensify the bank’s debt recovery drive and ensure that its portfolio remains healthy, through timely remedial actions and other measures to address the early warning signals. The ratio of NPL has reduced from 72 per cent in August 2009 to 14.95 per cent as at April 2014.”

He added: “The bank supported Nigerian exporters majorly the small and medium enterprises (SMEs) with some engaged in Greenfield projects, to the tune of N35.46

NEXIM leads growth of non-oil sector billion and issued guarantees valued at $27.30 million between August 2009 and May 2014. These interventions were in our target sectors with high growth potentials of Manufacturing, Agroprocessing, Solid Minerals and Services. ”Within 16 months of assumption of duty, the management had turned around the fortunes of the bank and ensured that it is a profit rather than a loss-making organisation with an impressive performance in year 2010, with an audited profit of N189.00 million as against the loss of N5.460 billion incurred in 2009. This profit-making trend has continued since then.

It is gratifying to note that since inception of the bank in 1991, this is the first time ever that

the bank has made profit consistently and consecutively for four years from 2010-2013 and declared dividends for its two shareholders - the Central Bank of Nigeria and Federal Ministry of Finance Incorporated."

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ntroduction of the ECOWAS Trade Support Facility (ETSF) He said: “In order to capture the huge informal intraregional trade, the ECOWAS Trade Support Facility (ETSF) was introduced and designed toward improving the current trade level of less than 12 per cent and deepening the volume of recorded/formal trade within the Sub-region, as well as fostering the implementation of

Government’s Trade Policy and regional integration policies like the ECOWAS Trade Liberalisation Scheme (ETLS), among others. Specifically, the ETSF aims at: facilitating formal/recorded trade within ECOWAS sub-region; deepening intra-regional payment system; increasing Nigeria’s trade flows within ECOWAS from the current level of 8.5 per cent of total non-oil exports; broadening trade and market access for Nigerian goods and services, especially manufactured goods; promoting the development of SMEs/cross border traders and facilitating their integration into the formal sector of the economy, and in the process, facilitating their access to credit.”

Support for the Creative

Arts and Entertainment Industry According to Orya: “In furtherance of government’s policy initiatives for strengthening the Creative Arts and Entertainment industry, the bank supported the industry through funding intervention with lending commitments of about N1 billion in the industry ’s various value chains in the last three years. The bank’s funding intervention in the sector is intended to address issues regarding the establishment of credible structures, attract investment in the development of content and infrastructure as well as facilitate improvement in production standards,

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20 — Vanguard, MONDAY, JUNE 23, 2014

Business & Economy

Tax payments seen boosting demand for African currencies

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frican currencies are likely to hold up against the U.S. dollar this week as companies make domestic tax payments, with only Ghana’s struggling cedi seen bucking the trend after touching fresh three-year lows.

KENYA Kenya’s shilling is expected to stay supported after Nairobi successfully launched its debut $2 billion Eurobond, which a National Treasury official said attracted, bids worth $8.8 billion. Commercial banks quoted the shilling at 87.30/ 50 to the dollar, up from 87.80/90 a week ago.

UGANDA The Ugandan shilling was seen trading in a stable range as companies paid their taxes in the local currency, keeping a lid on demand for dollars.

The shilling traded at 2,570/ 2,580 at 1050 GMT, weaker than last Thursday’s close at 2,555/2,565.

“I don’t see the shilling breaking out of the 2,5502,580 range in the short term,” said Faisal Bukenya, head of market making at Barclays Bank.

TANZANIA Traders expected the Tanzanian shilling to gain some ground in the days ahead, helped by greenback sales by corporates to meet quarter-end tax obligations.

Commercial banks quoted the shilling at 1,684/1,689 to the dollar on Thursday, stronger than 1,685/1,695 a week ago.

“I think dollar demand will keep shrinking as we are approaching the end of the quarter,” said Hamisi Mwakibete, head of trading at Commercial Bank of Africa Tanzania.

ZAMBIA The kwacha is likely to firm after Zambia’s central bank tightened monetary policy, signalling its intention to prop up a currency that recently plumbed all-time lows.

On Thursday, commercial banks quoted the kwacha at 6.1250 per dollar, up from 6.3000 seven days ago. The Bank of Zambia on Monday raised the effective annual lending rate to 28 per cent from 21 per cent; a move market analysts said would attract foreign investors to government securities, boosting the kwacha.

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National quality policy document to be completed by September

By PROVIDENCE O BUH

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he Federal Government, is set to ensure that all documentations on National Quality Policy (NQP) are concluded by September this year, with the submission of such document to Federal Executive Council, FEC. Minister of Industry, Trade and Investment, Dr. Olusegun Aganga, disclosed this during the maiden edition of the National Quality Stakeholders’ Consultative Forum, with the theme: “The Springboard to Global Competitiveness.”

Aganga who is also the Chairman of National Steering Committee (NCS) for the Nigeria NQP, described the quality policy as a building block for industrialisation. He said the plan is to allign the goals of the Nigeria Industrial Revolution Plan (NIRP) with the trend in all global economies.

He said that the development of the NQP should not be viewed as a federal government project, but a project involving all, for the use by manufacturers, traders in goods and services as well as consumers.

“With the NQI in place, and a market of 160 million people out of about 950

million in Africa, a sky rocketed increase is anticipated from our GDP which stood at $510 million as of 2013 within the first five years of the implementation.

“Experiences from advanced economies showed that the NQP strengthens institutions, private businesses, competence of measurements, competence of Laboratories/testing, and competence of persons. In this regard, all energies must be channeled to fast track its early takeoff, in order to stimulate our targeted industrial growth and job

Vanguard, MONDAY, JUNE 23, 2014 — 21

Business & Economy

Nigeria, Iran to establish trade centres

By VICTORIA OJEME and RAPHEAL IZOKPU

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n an Effort to develop trade relation between Iran and Nigeria, Iranian minister of industry, mine and trade and head of Iran delegation to Nigeria, Engr.

Mohammad Nematzadeh, has called for establishment of trade centres. He made the call at the opening of the 5th session of Iran-Nigeria joint commission at the Ministry of Foreign Affairs in Abuja.

He said: “Iran and Nigeria have great potentials for cooperation in the fields of mining, industry, oil and gas, technology, technical engineering services, health and petrol chemical,” he said.

“I think it is our responsibility to seriously identify and remove the obstacles on the way to further economic development of the two countries. Removal of obstacles regarding banking relations, finance, insurance investment and customs are highly necessary to facilitate trade flows between the two countries,” said Nematzadeh.

This, he said, can be considered as one of strategies to further develop trade relations between the two countries.

The head of the delegation advised that the long distance between the two countries hinder the expansion of the economic relations, saying both need to work together.

Speaking earlier, the Minister of State 1 for Foreign Affairs, Prof. Viola Onwuliri, said Nigeria is ready to participate effectively in the joint commission meeting saying Nigeria believes that it serves as a veritable mechanism and platform for effective cooperation and collaboration between both

countries.

Onwuliri noted the commitment of both countries to the peaceful resolution of international disputes and their large contribution to

stabilising roles in their respective regions. Four memorandum of understandings were signed at the end of the meeting on visa waiver for holders of

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Cashless transactions double every 6 months, says NIBSS

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SEMINAR/EXPO: From left: Dr Leke Pitan, Special Guest of Honour and former Lagos State Commissioner for Education; Mrs Gbemisola Adejumo, GM, Technologies Division, Halogen Security Company Limited and; Mr Olabisi Familusi, Channel Sales Manager,Technologies at the Total School Support Expo and Seminar organised by Edumark.

BA coming with 72 new aircraft to boost operations in Africa and 10 Airbus 320s aircraft.

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he British Airways (BA) airline said it would soon acquire 72 new aircraft, to boost its flight operations in Africa, particularly in Nigeria. Mr Kola Olayinka, BA Country Commercial Manager for West Africa, told newsmen at a briefing that the new aircraft would be acquired before the end of 2014.

He said that the acquisition of the aircraft would enable

the airline expand its existing route network in Africa.

Olayinka added that with the aircraft, the airline would be able to open up new routes on the continent. He said that BA operates 85 flights a week to 14 African destinations, including Nigeria, Ghana, South Africa and Kenya.

Olayinka explained that the airline had placed orders for 12 Airbus 380s, 24 Boeing 787s, six Boeing 777-300 ERs

Nigerian Sovereign Investment Authority, RDIF join IFSWF based on your proven willinghe Nigeria Sovereign Investment Authority (NSIA) has been admitted into the International Forum of Sovereign Wealth Funds - IFSWF. The Russian Direct Investment Fund (RDIF) was also added to the Fund, thereby bringing the total number of members to 28.

The IFSWF is a voluntary group of Sovereign Wealth Funds (SWFs) established by the International Working Group of Sovereign Wealth Funds in April 2009. Among its major objectives is the promotion of an understanding of the Santiago Principles - a set

diplomatic passports, tourism, industrial cooperation in the fields of geology, mining, mineral processing and metallurgy.

of 24 guidelines for the operation of SWFs. NSIA will be formally inducted at the next IFSWF Annual Meeting in Doha on November 19-20, 2014, where it will also sign the membership agreement and formal declaration of IFSWF membership, the IFSWF secretariat said a statement.

Communicating NSIA's membership, the IFSWF Chair/Managing Director, Kuwait Investment Authority, Mr. Bader M. Al Sa'ad, stated "It gives me great pleasure to inform you that your membership application has been approved by the IFSWF Board at our Board Meeting on May 28, 2014. Our assessment was

ness to endorse, on a voluntary basis, the Santiago Principles."

"We look forward to collaborating with the teams led by Mr. Uche Orji, CEO and Managing Director of NSIA and Mr. Kirill Dmitriev, CEO of RDIF," he added.

It will be recalled that the Excess Crude Account was replaced with the SWF. The sovereign fund is meant to manage Nigeria's excess earnings from crude oil and is being administered by NSIA. The NSIA will receive monthly funding of a significant portion of oil and gas revenue above the budgeted revenue and approved by the parliament.

The Country Commercial Manager for West Africa added that some of the aircraft had been delivered. According to him, no fewer than 20 modern aircraft will also join the growing fleet of the airline by the end of 2014.

“These modern aircraft will gradually replace some of the older, less fuelefficient aircraft in the BA fleet and allow the management to add new destinations and improve schedules. In West Africa, we increased our services to Ghana to 10 a week, and in October 2014, flights to Ghana are scheduled to increase to 11 per week. We’ve increased capacity to Kenya by introducing Boeing 747-400s on the route. Using larger aircraft provides over 780 additional seats every week,” he said.

Olayinka added that the new acquisition was good news for business travellers in the continent.

eneral Manager, Nigerian Inter-Bank Settlements Systems (NIBSS) Mr Folashodun Shonubi said that the volume of cashless transactions doubled every six months since its inception.

Shonubi said that the cashless policy was progressing but at a slow pace.

He urged Nigerians and business persons to embrace the government’s cashless policy as it would reduce financial crime and encourage prudent financial management.

“We’ve had issues, we’ve had challenges but the beauty is, it’s been changing, it’s been improving. The volume of transactions we’ve seen under cashless doubles every 6 months; so, it shows that there is some adoption. I won’t deceive you in saying its perfect but we are seeing quite a lot of adoption of people using cards, people using transfers in the bank. It is more common now for somebody who wants to pay his friend or his relative to do a transfer. So we are seeing adoption but it’s slow because this is about a change in behaviour. A change in culture, a change from cash for some people, what they can see and count, to trusting something that they say is in your phone that you cannot see.“

Nigerian bond yields to fall amidst govt cash flow

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igerian bond yields are likely to fall next week as state agencies get their national budget allocations, flooding the market with cash.

Yields on short-term Kenyan debt will rise in line with the recent upward trend in rates.

Bond yields have hovered around 11.6-11.7 percent at the short end of the curve and 12.15-12.35 percent on longer-tenure paper, in a week characterised by strong demand from local pension funds. “We expect demand for debt paper to rev up next week when portions of budgetary allocations to government agencies hit the market, with yields falling to around 11.25 percent on the 3-year paper,” one dealer said.

Nigeria issued 168.28 billion naira ($1 billion) in Treasury bills with maturities ranging from three months to one year this week. Yields were lower than at its previous auction.

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22 — Vanguard, MONDAY, JUNE 23, 2014

Corporate Finance

CSR: LBS Alumni impacts society

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he Lagos Business School, LBS Alumni Association has continued to create impact on the society through its support in various projects that the school has embarked upon.

Dean of LBS, Dr. Enase Okonedo, while speaking at the 20th President’s Dinner of the Lagos Business School Alumni Association (LBSAA), at Eko Hotels and Suites, said achievements recorded by the school would have been impossible without the alumni association.

She said that the school has every reason to celebrate the alumni association, which she disclosed has, in the last 20 years, contributed to the prestige of the school as well as the building a great institution. According to her, the school boasts an alumni association that makes it proud; an alumni association, which contributes its quota and in an exceptional manner, not only in public service, but also in the private sector.

Fitch affirms AAA ratings for Stanbic IBTC Holdings

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itch Ratings has affirmed Stanbic IBTC Holding Company Plc’s National Long-term rating at “AAA”and National Shortterm rating at ‘F1+. The affirmation follows Fitch’s rating action on South African banks on 17 June 2014, where the agency revised the Outlook on Standard Bank Group Limited’s (SBG) Long-term foreign currency Issuer Default Rating (IDR) to Negative from Stable and affirmed the rating at ‘BBB’ Nigeria is an important market for SBG and Fitch views SIBTCH as a strategically important subsidiary, underpinned by high integration with the parent group. At the current level, the ratings could withstand a downgrade of up to three notches of SBG’s ‘BBB’ IDR as Nigeria’s Country Ceiling of ‘BB-’ is currently four notches lower.

AGM - From left: General Manager, GSK Consumer Nigeria Plc, Mr. Justin Korte; outgoing Board Chairman, Chief Olusegun Osunkeye and Assistant Company Secretary, Mr. Olaleye Dada at the 43rd Annual General Meeting of GlaxoSmithkline Consumer Nigeria Plc held in Lagos.

NSE market capitaisations up by 0.15 %

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ransactions on the Nigerian Stock Exchange (NSE) closed upbeat on Friday as the market capitalisation improved marginally by 0.15 per cent.

The appreciation recorded at the last trading , last week, according to market operators was due

to price gains made by some capitalised firms.

As result of the bullish trading, the market capitalisation closed at N13.580 trillion when compared with the N13.560 trillion posted on Thursday.

Equally, the All-Share Index increased by 60.34 points or 0.15 per cent to close

at 41,129.27 as against the 41,068.93 achieved on Thursday.

Analysis of the price movement chart indicated that Conoil topped the gainers’ table by N6.37 to close at N68.60 per share. MRS Oil came second on the activity chart with N4.56 to close at N64, while Oando Oil

Skye Bank pledges support for SMEs

BY PETER EGWUATU

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mall and Medium Scale Enterprises, SMEs, have been identified as a significant sector that can grow the Nigerian economy if given the necessary support. Group Managing Director/Chief Executive Officer designate of Skye Bank Plc, Mr. Timothy Oguntayo, who disclosed this to news men during a courtesy visit to the Nigerian Stock Exchange , NSE pledged the commitment of the bank to support the SMEs in the country as a way of launching the economy on the path of sustainable growth and development.

While performing the bell ringing ceremony to close business of the day on the floor of the NSE last Thursday, he disclosed to the stockbrokers and capital market community the bank’s focus towards boosting the real sector.

According to him, the bank has a good track record and pedigree in SMEs development and financing, having taken some small scale enterprises from zero level to public liability (PLC) status.

The Skye Bank boss said the commitment of his bank to develop and fund the SMEs aligned with the agenda of the Central Bank

of Nigeria’s new leadership which has identified the small businesses as the engine of the nation’s growth.

He said Skye Bank would also support worthy micro finance banks for them to be able to successfully help fund the micro businesses which help power economic activities among the poor.

On the bank’s contributions in other key sectors of the economy, Oguntayo said the bank had helped many oil companies to grow, especially the indigenous oil firms which

are presently doing very well and contributing to national growth and development.

Besides, he said the bank was a strong force in real estate financing. Earlier, the Chief Executive Officer of the NSE, Mr. Oscar Onyema, described Oguntayo’s visit as a good development and a good investors’ relations strategy.

“When the market understands the people managing quoted companies, it helps them to make good investment decisions”, he said.

appreciated by N2.81 to close at N30.37 per share.

CAP gained N2 to close at N42 and Nigerian Breweries appreciated by N1.50 to close at N165.50 per share. On the other hand, Julius Berger led the losers’ chart by N1.52 to close at N69.35 per share.

Dangote Cement trailed with a loss of N1.19 to close at N225.01, while Glaxosmith dipped by N1 to close at N66 per share. GTBank dropped 87k to close at N28.83, while Bocgas lost N31 to close at N6.06 per share. A total of 419.092 million shares worth N4.44 billion were transacted in 5,740 deals from the 317.766 billion shares worth N4.19 billion traded in 5,162 deals on Thursday.

Transcorp remained the most traded stock, accounting for 80.19 million shares worth N392.80 million. Wapic Insurance followed with a total of 69.70 million shares valued N50.93 million, while UBA exchanged 23.74 million shares worth N190.19 million.

World Bank approves N80bn to boost agriculture in Nigeria

T

he World Bank said it had approved 495.3 million dollars (about N80.7 billion) to boost agriculture in Northern Nigeria.This is contained in a statement issued by Mr Bamidele Oladokun, Communications Associate to the World Bank, in Abuja.

The statement said that the bank’s executive directors approved the money to improve farmers’ access to irrigation and drainage services.It stated that the money was also to strengthen institutional arrangements for integrated water resources management.“The board also intends to enhance delivery of agricultural services in selected large-scale public schemes in the Northern

Nigeria.

“This will be done through a project, ”Transforming Irrigation Management in Nigeria (TRIMING).

“TRIMING will improve existing irrigation on 27, 000 hectares, irrigate an additional 23, 000 hectares, and benefit more than 140, 000 farmers, while mobilising private sector investment.

“It marks a transformational effort to improve large-scale public irrigation for expanding food production and encourage economic growth in rural areas.

“This is necessary to end poverty and boost prosperity, as well as enhance resilience of agriculture production systems,” the statement said.

It quoted the bank’s acting Vice-President for Africa Region, Mr Jamal Saghir, as saying that, “unlocking Africa’s development potential requires interventions in key sectors, such as energy and water.

“By taking a comprehensive approach, the TRIMING project will increase farm productivity, build climate resilience and reduce flooding risks.

“It will also improve the lives and well-being of millions of Nigerian citizens in Africa’s largest economy.”

The statement said that agriculture was a key sector of the Nigerian economy accounting for 22 per cent of gross domestic product in 2012.

Vanguard, MONDAY, JUNE 23, 2014 — 23

Corporate Finance

Shareholders, management should meet more often, says Guinness chairman

By NKIRUKA NNOROM

M

eetings between shareholders and management of their respective companies should not be limited to once in a year during annual general meetings, says Mr. Babatunde Savage, Chairman, Guinness Nig. Plc. He spoke at a forum organised by the Independent Shareholders Association of Nigeria, ISAN, in conjunction with PR Plus Consulting, saying that the Board of companies should evolve strategy where it can feel the pulse of the shareholders on the company’s business from time to time during the year both formally and informally.

Delivering a paper, “Managing AGMs – My Personal Notes”, he said that constructive dialogue between management and its shareholders during AGMs could help investors understand what the Board of Directors is planning and how the company intends to go about achieving the objectives.

He noted that AGMs offers shareholders opportunity to better understand the performance and financial position of their companies, while at the same time helping the Board to learn more about shareholders’ expectations and concerns, “This two way dialogue between the board and shareholders must be a continuous exercise and not just a once in a year event during or just before an AGM.” He pointed out that if well channeled, the active interest and participation by shareholders in AGMs could be a potent means of shaping the direction of corporate decision making in the country.

He added it could be a strong force in helping management deliver optimal return on investment to shareholders, adding that relationship between the company ’s Board and its shareholders are an important aspect of corporate governance and should be considered as imperative to organisational growth and survival He called for collaborative effort towards educating shareholders on their rights, particularly on conduct at AGMs, saying, “This duty to educate shareholders must be a shared responsibility

between the Boards, the individual shareholder, shareholders’ associations and regulatory agencies such as the Nigerian Stock Exchange, NSE, and the Securities and Exchange Commission, SEC”.

Savage equally cautioned shareholders against using AGMs as avenue to avenge a grouse against the Board or any particular director, saying that criticisms must be constructive and in the best

interest of the company.

Also speaking, the Director General of SEC, Ms Arunma Oteh, called on shareholders to comply with the provisions of codes of conduct for shareholders association issued by the Commission, saying that observations at AGMs show that companies are praised when actually their performances are poor.

She added that shareholders’ roles are important in ensuring

effectiveness of internal control of companies.

“For us to succeed in ensuring effective corporate governance in public companies, the regulators and shareholders have to work together to ensure that the right people are on the Board of companies, making sure that they do their job effectively, evaluating the outcome of processes and structures they put in place and proper scrutinisation of individuals before they are put in important positions that will have impact on shareholders’ benefits,” Oteh said.

PRESENTATION - From left, Mrs Modupe Adekunle, Ogun State Head of Service; Mr Sanjay Kumar, CEO, African Foundries; Mr Agunbiade, Head of Corporate Affairs, African Foundries, Barrister Uche Iwuamadi, Executive Director, African Industries Group and Mrs. Adeola Showunmi of OGEPA during a presentation.

NASCON repositions for profitability, expands production line

By WILLIAM JIMOH

N

ational Salt Company of Nigeria, NASCO Plc, has announced the diversification of its production line into tomato and vegetable oil segments in order to boost profitability.

According to the company, the development was necessitated to better reflect the portfolio of activities that the company is currently embarking on.

Addressing shareholders at its 2013 Annual General Meeting, AGM, in Lagos, Alhaji Aliko Dangote, Chairman Board of Directors of the company, stated that they have been able to undergo the expansion process without any borrowing, adding that this will better position the company for profitability and higher returns for both stakeholders and shareholders of the company.

According to him, “As promised in 2013 Annual General Meeting, I am happy

to announce to you that our company entered into foods segment in March 2013 with DAN-Q cubes. We intend to re-enter the tomato and vegetable oil segments before the end of the year. This positive development necessitated the resolution put before you today to change the name of your Company from National Salt Company of Nigeria Plc to NASCON Industries Plc, which better reflects the portfolio of our activities into the years ahead.”

The company at the end of the 2013 financial year posted a turnover of N10.8 billion, operating profit before tax of N4.0 billion, while its profit after tax was N2.7 billion. The turnover for the financial year under review reflects a decline in comparison to N 13.4 billion posted in 2012 financial year.

This performance, according to the chairman, reflects the impact of the operating environment on turnover and response by way

of measures and policies put in place to ensure that the company continues operating at profitability. “ We are, however, committed to the continued growth of the business and we are implementing policies that will ensure that your company remains competitive so as to deliver sustainable returns to all shareholders.

“The global economy continued to exhibit signs of economic turbulence, which has negatively impacted business operations globally.

The Nigerian economy was no exception, which invariably affected our company’s operations in the year under review.

“We continued to face the usual challenges of the business environment.

Northern security challenges and other issues such as high cost of energy, poor infrastructure, uncoordinated tax administration, amongst others, played a role in preventing the manufacturing sector in the country from reaching its full potential,” he said.

Shire props up European shares on bid hopes A rally in drugmaker Shire helped European bourses hold onto gains on Friday on news the British firm had been the target of a takeover bid from U.S. rival AbbVie. Shares in Shire rose 13 percent to 42.31 pounds after AbbVie confirmed it had made a bid approach, which was rejected by Shire’s board.

AbbVie said its final indicative offer was worth 46.26 pounds, adding talks are no longer ongoing.

Shire has been seen as a prime takeover target for U.S. drugmakers thanks to a mid-sized market value and its tax base in Ireland, where effective corporate tax rates are among the lowest in the world.

“I’d probably take some profit there and then go back in,” said Mike Reuter, a broker at Tradition. “The stock won’t crash. It’s an M&A candidate and I think there will be an offer, eventually.”

Creative Focus Africa offers N7.5m to enterprenuers

By ANOZIE EGOLE

C

reative Focus Africa, a corporate social enterprise initiative by Urban Dice Designs, has provided N7.5 million to aid the growth of Small and Medium scale Enterprises in the country.

This is aimed at showcasing, promoting and encouraging young start up entrepreneurs in some sectors of the economy including Interior Design, Architecture & Landscape, Publishing Industry, Photography & Arts, Food & Beverage, Agriculture, Fashion Design & Accessories, among others.

Speaking ahead of this year ’s exhibition being organised by the comapny, the founder, Omowunmi Imuokhede, said, “Feeling empowered personally is important to every small and medium scale entrepreneur.

The Creative Focus

C M Y K

24 — Vanguard, MONDAY, JUNE 23, 2014

Banking & Finance

AfDB moves to address fragility in Africa

T

he Board of Executive Directors of the African Development Bank Group (AfDB) has approved a new Strategy for “Addressing Fragility and Building Resilience in Africa (2014-2019)”. The Strategy aims to place the institution at the center of Africa’s efforts to address fragility and pave the way for a more resilient and inclusive development trajectory.

Over the past decade, Africa has seen enormous growth and transformation that has expanded opportunities and improved living conditions for millions of people.

However, as shown by the AfDB’s report of the High Level Panel on Fragile States, there are significant risks that this momentum could be undermined by important pressures – including continuing patterns of exclusion and poverty, unemployment, climate change and poor management of natural resources.

The discussions of current and former African Heads of State during the AfDB Group’s Annual Meetings in Kigali, Rwanda, in May 2014 highlighted that no country is immune to fragility. Policy makers emphasized the critical role of leadership, the multiple sources of fragility, the political dimension of conflicts, and the limited capacity of institutions to put in place mechanisms for dialogue and reconciliation.

And the AfDB has been called to enhance its leadership role in this context and to mobilize regional and international efforts to address the development challenges posed by fragility.

Understanding fragility as a condition of elevated risk of institutional breakdown, societal collapse or violent conflict, the AfDB recognizes that fragility does not respect state boundaries.

“The African Development Bank will stay engaged across the spectrum of fragile situations, making use of all available instruments and focusing its resources on the areas where it can have the biggest impact,” said President Donald Kaberuka who chaired the meeting.

C M Y K

Fraudster withdraws N1.9m through ATM

By BABAJIDE KOMOLAFE

I

n apparent reflection of the rising incidence of electronic payment fraud, a fraudster withdrew N1.9 million from the bank account of a customer through ATM in one week.

This was disclosed by Tam Tamunokonbia, Head, Consumer Protection Council, Lagos Office.

Speaking at the maiden summit of Bank Customers Association of Nigeria (BCAN) in Lagos last week, he said that ATM fraud is one of the commonest complaints received by the Council from bank customers. He said in addition to this are: Illegal bank charges as against the minimum rediscount rate; Nondisclosure of terms and conditions by Banks and financial service providers; Mobile Payment Systems – online trading and Improper cheque verification.

Citing example of these complaints, he said, “A lady ’s N1.9 million withdrawn in one week without alert – case in Enugu High Court. A Company was charged in

excess of N1, 984,662.40, another in excess of N592, 681 .61, and another in excess of N552,597.01.” He said the general responses of banks to complaints against ATM fraud are: “Customer compromised PIN numbers. Camera footage could not be generated.We are investigating and will get back.” On complaints of

excess bank charges,he said banks’ responses are: The customer signed an agreement; The customer was given the form; It is an error etc.”

Consequently,Tamunokonbia advised that: “Banks should respect the customer’s rights to disclosure; Banks should provide written terms and conditions in simple language and legible words; Charges and fees should be

made known to customers before opening their accounts – no hidden charges; change in terms and conditions should be adequately disclosed to customers – prior notice; Statement of Accounts to be provided to customers at regular intervals; applicable interest rates, how it is calculated and when to apply the rates should be made known to consumers; terms and conditions to be in line with prevailing laws; avoid Council’s summons and prosecution – Section 12, 18 and 21 of the CPC Act, CAP C25, Laws of the Federation of Nigeria, 2004.”

VISIT - From left: Prof. Victor Murinde, Director & Head of African Development Bank (AfDB) Training Institute (ADI); Cecilia Akintomide, Vice-Chairman/Secretary-General, ADB; Alh. Umaru Ibrahim, NDIC MD/CEO; Dr. Shehu Yahya, Executive Director, ADB; Yakubu Shehu Mohammed, Deputy Director & SA to NDIC MD/CEO and Muhammad Aminu Ahmed, Director, NDIC Human Resources Dept during a working visit by NDIC executive to African Development Bank in Tunis,Tunisia.

Sterling Bank to dedicate 7% loan portfolio to agriculture

S

terling Bank has expressed readiness to dedicate seven per cent of its total loan portfolio to the agricultural sector.

The Bank’s Group Head, Agriculture Finance, Mrs. Bukola Awosanya who stated this while receiving the leadership of the National Groundnut Producers, Processors and Marketers Association of Nigeria at the Bank’s Head Office in Lagos, assured that the Bank will continue to provide the much needed financial support to all stakeholders in the value chain to ensure the revival of the sector in the country.

Mrs. Awosanya disclosed that the Bank had devoted five percent of its loan portfolio to the sector for the current financial year adding that this will be increased to seven percent by year end.

“At the moment, we had utilised 3.5 per cent out of the five percent budgeted for the sector this year. We also have plans to increase this

to about seven percent by year end. We leverage on the various Central Bank of Nigeria schemes and our Bank’s funds for lending to the sector. The Bank had also been in the forefront of the Growth Enhancement Scheme (GES) initiated by the government since inception and has been actively involved in financing Agro dealers under the scheme”, she restated Mrs. Awosanya also said at the meeting that the Bank was also involved in the financing of one of the largest rice mills in Nigeria, a state of the art soya bean oil milling plant, poultry which is regarded as a high risk business venture and also provides advisory services to operators in the business.

She expressed her optimism that the Agricultural Transformation Agenda will make Nigeria an agriculturally industrialised economy in the medium to long term especially as the efforts of the government has attracted new investors and

unprecedented foreign direct investment to the sector.

She stressed further: “Agriculture was the main source of the country’s foreign earnings before the discovery of oil. At that time, Nigeria was the leading exporter of groundnut, cocoa, groundnuts, palm oil and cotton to mention a few. Prior to the recent rebasing of the economy, agriculture was one of the largest contributors to the country’s Gross Domestic Product GDP and provided 60 percent of employment opportunities in the country.

The major problem with the sector came after oil was discovered as successive governments shifted their focus from agriculture to oil.

This led to the near collapse of the sector. This was the situation with the sector until the present government came up with the transformation agenda to reposition the sector to drive Nigeria’s economy. Through the various items under the agenda, a lot has been done to bring back the lost glory of the sector”.

She specifically commended the introduction of the GES which had led to the deregulation of fertilizer sales and distribution to farmers. “One major part of the transformation agenda is the deregulation of fertilizer distribution. With the introduction of the scheme, fertilizer is sold directly to farmers through the Agro dealers. This has eliminated governments’ involvement in the direct sale of fertilizer and has led to a lot of improvements in the sector as farmers now buy fertilizer directly from designated Agro dealers at a subsidized price in their localities”.

In his remarks, the President of the Association, Hon Aimu Foni commended the Bank for its support to the Agriculture sector adding that the Association was willing to partner with the Bank to support farmers in the production, processing and marketing of Groundnut in the country.

Vanguard, MONDAY, JUNE 23, 2014 — 25

T

“

he activities of oil thieves in Nigeria are currently telling on the output of the Organisation of Petroleum Exporting Countries in terms of depleting oil exports.”

PUNCH, June 18, 2014, p 29.

Part two of this series touched on the critical role of the price of crude oil in the success, or otherwise, of the NISSAN Assembly plant – as well as others about to start up again. It is vital to point out that the price of crude might not be the only variable which can have a significant impact on the survival of the assembly plants. Decline in crude oil exports could also produce the same result.

Today, the share of OPEC producers in global oil trade is declining and that of nonOPEC members is rising.

Thus even when crude oil prices have stayed above $110 per barrel for over a month, the aggregate revenue had been declining steadily. All tiers of government in Nigeria are already feeling the heat.

Public servants are now owed several months’ salaries in several states. The Central Bank of Nigeria, CBN, which

Thank you Nissan; but will history repeat itself? (3) had tried, in vain, to avoid steep devaluation of the naira and the inevitable high inflation that would result is on the verge of caving in.

Governments and their officials which constitute the largest market segment for automobiles are getting ready to slash expenditure on vehicles. This is one problem NISSAN and others will have to watch carefully.

MADE IN NIGERIA AND ITS APPEAL Nigerians are unquestionably in love with their sports teams, especially the Super Eagles. They are also increasingly becoming fond of their entertainment sector from singers to Nollywood. But, those two have probably exhausted the list of products and services, entirely home-grown, about which Nigerians are enthusiastic. Beyond those, the aversion to products manufactured in Nigeria is almost national. Perhaps

because Nigerians know themselves, they find it difficult to believe that the same carefree neighbours, now working for a manufacturer can rise above himself and become a global competitor in terms of knowledge, skills and attitude – especially, attitude. Given a NISSAN imported from Japan which retails for ten to fifteen percent more that the locally assembled vehicle, most Nigerians will gladly pay the difference to buy imported NISSAN. That attitude will not change soon – even with total government support.

Unfortunately, government support seldom is total; neither can it be guaranteed to last the number of years required to convince Nigerians that Made In Nigeria NISSAN is as good as imported NISSAN. The same is true of every brand about to be assembled here.

WHAT CAN BE DONE? The first thing to do is to

acknowledge the fact that overcoming the perceived quality superiority of imports will not be easy; neither will it come about in a few years.

Those who have made these investments must have patient capital which can be deployed for a decade or more. If domestic cable and cement manufacturers are still struggling to be accepted as attaining the same quality standards as imports, after almost thirty or more years in the business, car manufacturers should also expect a long struggle.

H

owever, there have been some remarkable victories by local brands competing against imports in the past. In the food and beverages sector, particularly brewery industry, brands like STAR and GULDER have overcome the original resistance by consumers who had grown up preferring HEINEKENS, BECKS,

CALRSBERG etc. Today, even Heineken is still a distant fourth or fifth to STAR and GULDER which remain the top two nationwide. The question the NISSAN management should be asking is: how did they succeed against established imports? Fortunately, the secrets are still available for use by a new generation of marketing and salesmen and women handling the NISSAN brand. At the core of those success stories is IMITATION and how the brewers used it to convert Nigerians to local beer brands. Incidentally, with communications networks so primitive in the 1950s, it was about five years before the local brands started to make any headway. Given today’s ICT, it will be possible for a local manufacturer to make significant headway. But, like their great grandparents and grandparents in the 1950s, Nigerians today need to be jolted and persuaded with the right message – the sort to which they are susceptible. In very many fundamental ways, the Nigerian consumer is not radically different from the consumer of 1960, 1970 and 1980. So, there is hope.

C M Y K

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

Opening Price (N) 0.50

Daily Stock Market Report Closing Price (N) 0.50

Opening Price N

Quantity Traded 2,500

Year High 0.50

Year Low 0.50

E.P.S.

P.E. Ratio

0.50 33.50 36.00

200 481,054 107,300

0.50 24.58 8.30

0.50 14.53 6.40

0.10 7.33 2.75

50.00 2.77 4.37

3.11

3.05

1,375,670

0.66

0.48

0.11

15.00

1.38 3.95 1.15 5.06 4.67 59.58

1.38 3.95 1.15 5.06 4.89 59.52

48,829 500 15,000 1,000 80,195,033 427,369

2.54 7.60 8.82 8.28 1.82 42.50

1.45 6.43 5.89 5.52 0.50 28.70

0.16 0.31 0.00 0.35 0.24 6.89

5.18 20.74 0.00 15.77 3.64 4.14

70.87 8.46

5.30 1.40

31,443 640,950

4 2,720,390.38

69.35 8.46

208,861 200

62.26 8.28

32.96 3.01

4.11 4.73

10.11 2.26

17.65

17.65

185,045

20.15

11.59

1.69

7.33

95.00 47.59

95.00 47.59

4 70

100.00 -

97.00 -

11.75 -

8.51 -

785

10.54

9.52

0.00

0.00

0.50

392,500

0.50

0.50

0.00

3.72 2.52 3.00 67.00 1.70 1.25 7.36 1.57

3.72 2.52 2.99 66.00 1.65 1.24 7.36 1.57

162 14,000 3,216,173 564,443 706,965 235,272 50 510

5.31 1.45 3.20 23.11 5.61 1.96 12.91 200

5.31 0.70 0.83 2.58 3.61 0.95 0.95 4.28

ICT Computer Based Systems Courteville Investment Plc

0.57

0.58

19,106,900

0.52

0.50

0.10

10.00

Computers and Peripherals Omatek Ventures Plc

0.50

0.50

1,100

0.50

0.50

0.00

12.50

15.21 1.97

15.20 1.97

42,300 20,000

9.31 3.59

3.25 3.25

0.00 0.01

1.43 0.00

0.50

0.50

3,602,000

50,000

0.50

0.50

4,000

1.47

0.50

0.00

0.00

28.88 9.00 40.00 10.67 226.20 0.50 1.11 109.50 4.81 1.40 10.00

28.90 9.00 40.00 11.00 225.01 0.50 1.06 109.99 4.81 1.38 11.00

1,600,856 115,078 2,262 967,005 1,176,521 5,000 413,333 773,903 99,200 10,000 123,564

30.00 12.57 43.98 15.49 132.51 0.75 3.51 48.05 5.28 3.36 13.40

12.00 8.10 15.16 4.16 95.00 0.50 1.02 36.58 5.11 0.51 10.93

2.14 1.09 2.28 1.47 7.56 0.00 0.00 4.10 0.44 0.23 0.00

7.86 4.97 8.88 2.31 13.17 0.00 0.00 42.86 14.19 2.89 0.00

1.77 2.70

17,562 2,717,101

6.91 3.60

7.46

5

8.69

0.50

0.50

200,000

0.50

0.50

0.00

0.00

11.26 180.00 26.00 166.50 0.77

75,000 89,136 233,952 667,479 400

4.63 255.00 7.10 100.00 1.01

2.23 186.00 5.23 72.50 0.93

0.00 9.95 0.41 5.08 0.00

0.00 19.98 16.29 22.22 0.00

Beverages-Non-Alcoholic 7-UP Bottling Company Plc

91.00

91.00

12,254

51.49

,39.00

2.69

13.92

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

Tools and Machinery Nigerian Ropes Plc

8.40 9.50 77.00 4.07 11.50 0.55

8.50 9.60 77.00 4.07 11.52 0.54

359,926 3,117,165 140,573 1,334,001 1,406,127 226,312

19.90 16.20 95.00 6.60 6.70 0.88

4.31 4.02 57.00 2.31 3.80 0.50

0.00 0.91 4.09 0.39 1.01 1.13

16.91 14.38 16.89 16.92 5.75 8.83

NATURAL RESOURCES Chemicals BOC Gases Plc

Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc

81.89 1,050.00

81.89 1,050.00

63,681 535,014

37.27 840.10

8.33 400.00

1.35 25.43

27.61 32.84

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

32.27 4.72 1.44

32.27 4.72 1.44

100 91,600 499,723

36.19 5.54 2.88

33.96 2.91 2.88

13.89 0.61 0.00

2.44 7.07 0.00

Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc

38.00 50.03

38.00 50.03

264,284 335,726

41.02 47.39

21.02 27.60

0.82 1.44

4.39 32.91

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

9.80 6.30 15.32 2.03 4.75 29.70 3.40 2.40 8.03 9.95 0.50 0.95 24.00

9.80 6.47 15.99 2.07 4.75 28.83 3.36 2.42 8.00 10.22 0.50 0.94 23.80

6,117,545 3,391,187 2,793,915 9,448,164 865,336 23,250,741 9,049,163 10,176,004 23,743,997 262,644 746,115 1,416,701 10,243,904

0.50 0.84 1.09 0.50 0.50 2.00 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 2.70 0.52 0.85 0.50 0.51 0.54 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.75

0.50 0.88 1.06 0.50 0.50 2.06 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 2.65 0.54 0.85 0.50 0.52 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.72

10 4,787,889 616,957 129,035 3,000 9,054,578 107,652 93,000 40,000 2,200 100,000 1,670,890 115,400 1,600 115,400 1,687,500 15,589,037 3,822,971 500 3,488,000 2,529,251 200 2,000 1,000 120 45,000 23,000 116,825 69,703,465

6.27 1.02

6.27 1.02

1.35 0.50 0.50 0.50

1.35 0.50 0.50 0.50

3.20 0.50 0.99 15.41 552.20 0.53

3.36 0.50 0.99 15.39 552.20 0.53

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

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

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

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

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

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

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

1,000 6,100

6.00 1.18

0.00 0.92

0.04 0.92

150.00 10.56

80 100 2,500 500

1.57 0.50 0.50 0.50

1.37 0.50 0.50 0.50

0.19 0.02 0.00 0.00

47.6 7 25.00 0.00 0.00

90 22,000 500 13,304,003 1,145

0.75 0.50 2.02 20.00 250 0.78

0.00 0.50 2.02 8.57 552.20 0.50

0.19 0.00 0.00 2.03 12.68 0.13

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

9.16 0.00 0.00 9.85 43.55 6.00

P.E Ratio

2.23

11.26 180.01 26.00 165.00 0.77

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

Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company

0.50

E.P.S

9.71 18.03 6.71

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

1.91

Year Low

10.56 0.87 0.21

ICT Telecommunications Starcomms Plc

98.33 25.80 2.35

Year High

103.50 10.64 0.03

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

103.50 25.25 2.40

Quantity Traded

103.50 15.69 1.41

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

20

Closing Price N

15,358 889,225 10,802,183

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

0.09

0.50 33.50 36.00

5.30 1.47

Sim Capital Alliance Plc Stanbic IBTC Bank Plc UBA Capital Plc

as at Friday, June 20, 2014

1.77 2.74 7.46

5.94 1.47 8.26

0.19 0.44 2.62 0.20 0.09 0.00 0.00

0.5 0.25 0.00

0.78

0.00 88.50 0.00 3.07 9.05 14.13 0.00 0.00

39.60 9.16 0.00

6.37

6.06

229,816

9.20

6.80

Metals Aluminium Extrusion Ind Plc

10.50

10.50

10

12.39

10.70

0.13

85.77

7.37

Non-Metalic Mineral Mining Multiverse Plc

200

0.50

0.50

0.01

0.00

0.50

0.50

Paper/Forest Products Thomas Wyatt Nig. Plc

0.79

0.79

1,000

1.38

1.38

0.00

0.00

Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc

1.99 0.50

1.90 0.50

1,203,000 10,000

2.50 2.58

1.62 2.58

0.11 0.00

13.15 0.00

Mortgage Carriers, Brokers and Se Abbey Building Society Plc INDUSTRIAL GOODS Packaging/Containers Abplast Products Plc Beta Glass Co. Plc

1.44

1.44

2,000

1.51

1.33

0.03

28.80

3.98 16.59

3.98 16.59

6,888 47,711

3.98 15.58

3.98 12.71

0.00 3.90

0.00 3.26

Nampak Nigeria Plc Poly Products (Nig) Plc Studio Press (Nig) Plc W.A. Glass Ind. Plc

4.30 1.05 2.92 0.63

4.30 1.05 2.78 0.66

29,198 200 84,311 2,749,340

4.30 1.86 2.92 0.63

3.60 1.05 2.92 0.63

1.22 0.30 0.07 0.00

3.52 6.18 41.71 0.00

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

0.50

0.56

4,686,117

0.97

0.87

0.19

6.06

Intergrated Oil and Gas Services Oando Plc

27.56

30.37

17,487,992

78.97

27.99

1.73

4.17

20.50 0.50 62.23 250.01 129.00 59.44 170.51

20.50 0.50 68.60 250.01 129.00 64.00 170.51

82,191 1,000 2,399,334 754,495 25,205 337,016 27,379

37.10 0.70 5.59

0.50 0.50 3.89

4.93 0.00 0.61

7.40 0.00 6.99

163.50 2,100 240.00

141.00 63.86 195.50

6.11 2.98 14.63

11.11 19.23 17.07

0.50

0.50

100

200

0.50

0.50

30

0.72

1.01

3,174,203s

3.65

1.30

0.21

2.65 0.25

0.60 11.12

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

1.05 4.98 0.50 4.50 0.79

4.98 2.24

153,504 2.35

3.67 30,000

0.50

1,000

1.64

4.55 0.82

100 181,209

400 2.07

Media/Entertainment Daar Communications Plc

0.50

0.50

15,000

0.50

Printing & Publishing.

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

1.71 1.61 2.40 4.57

1.71 1.61 2.40 4.57

12,548 305,000 540 21,311

3.68

0.84

Road Transportation Associated Bus Company Plc

0.00 6.82

0.01 0.51

0.90 3.00 1.33

0.00

0.04

12.75 8.19 4.91 11.25

0.34 0.92

34.09 2.12

0.48

0.00

0.00

3.17 0.30 0.00 3.60

0.25

12.19

0.54

27.69

0.00

0.00

0.85

1,385,315

0.80

Speciality Interlinked Technologies Plc

4.90

4.90

6

5.15

4.90

0.50

0.00

0.00

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

2.54 4.80

2.54 4.80

51,983 2.587,807

2.78 11.75

1.57 6.50

0.60 12.53

4.22 8.75

26 —Vanguard, MONDAY, JUNE 23, 2014

Capital Market

Vanguard, MONDAY, JUNE 23, 2014 — 27

Micro-Finance

Ghana to host West Africa micro-finance conference Stories by PROVIDENCE OBUH

T

he 2014 West Africa Microfinance Conference (WAMIC 2014) will hold in Accra Ghana, with over 300 experts from different sectors sharing knowledge in their various fields.

The conference scheduled to hold from July 23 and 24, 2014 is themed: “Reducing Extreme Poverty through Microfinance” Some of the conference objectives are to equip participants with the needed skills in managing microfinance business, to provide a common platform for the

participants to share ideas and resources, to empower businesses with the skills they need to be stronger and also to help participants identify and take advantage of the microfinance business as an emerging market in Africa.

The 2014 WAMIC also present another unique benefit to participants as a larger platform for sharing ideas and information in the field, showcase their Micro finance companies, identify other areas of business investment and to network with key figures and stakeholders from the microfinance industry. According to the organisers, “The 2014 WAMIC targets 300 experts in the

microfinance sector, ICT, Media, Civil societies, telecom, academia, banks, policy makers and legislators to share knowledge and information on the best practices in the field and how the sector can be improved to meet its original objectives.

“It will also present an opportunity to develop a road map to a legislative framework for the sector.

The microfinance sector plays a significant role in the development of the Africa’s economy. It provides employment and other positive engagements, and access to credit facilities to especially the informal sector which constitutes the larger portion of Africa’s population.

A

ctivities in the financial ecosystem will help eradicate extreme poverty by 2030, a report stated. The report released, weekend, by the Microcredit Summit Campaign, is in line with the World Bank’s new goal of reaching the end of extreme poverty by 2030, as announced by the President, Mr. Jim Yong Kim. The report showed that the Microfinance Institutions (MFIs), commercial and social businesses, mobile network operators, regulators and policy makers, and government social welfare programs fit within the context of the larger call from United State Agency for International Development (USAID), the World Bank, and the United Nations to end extreme poverty by 2030 “These actors in the

Financial activities in microfinance’ll end extreme poverty by 2030 — REPORT financial ecosystem can play an important role in promoting the frameworks, systems, partnerships, and strategies that deliver the types of products and services that help build resilience, allowing for the poor to move and stay out of poverty, the report said, alluding that through the creation of a system that benefits everyone, it is possible to empower people to move out of poverty by making the financial system more inclusive, and also creating a more inclusive system requires proper targeting of the very poor and providing them with appropriate

services.

According to the report, “in 2012 the total number of clients reached by MFIs rose to 203.5 million, recovering its trajectory from the previous year’s drop, while the sub-set of families living in extreme poverty, defined as less than $1.25 a day continued to decline for a second year from 124 million to 115.6 million.

“Deeper analysis of the numbers suggests that some of the decline can be explained by the increased use by MFIs in recent years of poverty measurement tools in which they often found that they were overestimating their poverty outreach.”

Vanguard, MONDAY, JUNE 23, 2014 — 29

28 —Vanguard, MONDAY, JUNE 23, 2014

Interview

Interview

,

ICAN should have been part of talks on missing oil money —AJAEGBU

What is your vision for the institute?

The thrust of my presidency is protecting public interest and enhancing professionalism. Public interest is basically about advocacy and advocacy is basically about public interest and making aggressive input into policy making processes of the government and also challenging them if necessary and making independent opinion. So, essentially that is what is going to drive this year.

When you say protecting public interest, what do you really mean?

Let me just say that our institute,

In recent times, there have been reported cases of chartered accountants allegedly being involved in fraud and it seems like ICAN does not do anything about that?

Let me say that there is this misconception that we are not doing anything. We have disciplinary processes. You need to report a Chartered Accountant of having committed some form of infraction

,

before we can set up what we call an investigative panel. If for example the accountant in your office commits fraud and you report him or her to the institute; the register will direct the investigative panel to investigate the allegations. When the allegations are investigated and there is a report and the committee finds that person ‘culpable,’ the next level is to take that investigation and the accountant to the tribunal. The tribunal is an equivalent of a high court meaning that whatever decision we take at the tribunal level can only be challenged at the court of appeal.

But is it a deliberate attempt not to allow members of the public know the outcome of the disciplinary panel?

The point is that we don’t publicise in the sense that we don’t go to the print media. If you go to our websites, journals, financial statements, they are all there. You will get the names, what they were tried for, what happened and the outcome of the cases. They are all there. But what we don’t do is to go to the media and advertise it. There have been a lot of discussions and arguments around that, but we haven’t come to the conclusion that, that is the best way.

At one point, during one of the past presidents, our proceedings were

C M Y K

,

employment. Full employment is driven by growth, inclusive growth and not non-inclusive growth. What we have here is non-inclusive growth.

For us to have an inclusive growth, we have to basically look at our structures. We have a distorted structure such that the policy impacts are not felt. So when people come around and talk about policies, I don’t think the problem with the country is the policy, I think it is the structure on which those policies are hanging on. The rebasing of the economy itself does not drive economic development.

What it is just telling you is that you have higher capacity that you didn’t know before. South Africa congratulated us, but if you look at the key indicators, South Africa is still

being televised. But we did a policy impact assessment and the feedback we got didn’t add much to the brand and we needed to rethink it and to find other ways of doing it. But don’t forget, as I said at the beginning that we are very conservative.

We have an enabling Act and what it says is that there must be a petition. In fact, what it says is that the petition must be under oath to serve as a deterrent for people lying. So, if your petition is under oath, you can’t come up with allegations that are not true.

A lot of professional bodies, including ICAN, seem not to be comfortable with the Financial Reporting Council (FRC).

What is the view of ICAN on the status of the FRC? First of all, that is the law. You see, when they are about to make a law and there are public hearings and so on, you don’t fold your arms and the law is made and when it is now being implemented you start complaining. I think that is very typical of our people. If you had any misgivings about the law, the point you should have challenged it should have been during the public hearing. Now, the law has come to stay. What we can now do is to go into discussions with the FRC and then those complaining should come up with the specific areas they want us to deal with. But our law is our law, whether they are bad or good. So, for it to become something else might be as a result of implementation or some part of the law that you want to be amended. But it is about dialogue because it is our law. When you say members are complaining, of course we have about 39,000 members and some people might have some misgivings. On paper the way it looked, it was a good bill

,

M

r. Chidi Onyeukwu Ajaegbu, was recently elected the 50th President of the Institute of Chartered Accountants of Nigeria (ICAN). In an interview with journalists, he articulated his agenda for the accountancy profession and the Institute. He also commented on recent developments in the nation’s economy. Excerpts:

because of our conservatism over the years, we have been running away from getting involved in conversations in the society. So, what we want to do in the next one year is to come up with well researched positions on topical national issues and come out to talk about them, send representatives to government and if we need to use the media to achieve that, we may do so.

For example, all through the issue of the missing money at the Nigerian National Petroleum Corporation (NNPC), we were not involved in the debate. I think the institute, as a protector of public interest, ought to have gotten involved in the discussion and probably set a template, process to ascertain what the position is. We intend to do more of that this year.

,

BY BABAJIDE KOMOLAFE

What we want to do in the next one year is to come up with well researched positions on topical national issues and come out to talk about them, send representatives to government and if we need to use the media to achieve that, we may do so.

the IFRS requires a lot of details and it takes a lot of time. So, I wouldn’t know specifically why they are having problem with the insurance sector, but I do know that a lot of details and provisioning are required to migrate.

For us to have an inclusive growth, we have to basically look at our structures. We have a distorted structure such that the policy impacts are not felt. So when people come around and talk about policies, I don’t think the problem with the country is the policy, I think it is the structure on which those policies are hanging on.

,

and we can get into dialogue about the implementation of the Act. How are your members taking the aspect of the FRC Act that states that ICAN should no longer grant licence to individual members?

At ICAN, we have changed the way we sign our financial statements and that was as a result of the direct ruling of the FRC. There was a court ruling which actually was in tandem with what is obtainable in a sane environment and aligns with the FRC law.

So you now sign your name with your membership number, put your firm’s name and your FRCN number. It is all about trying to let people understand the seriousness of that signature because what it is talking about is to make the individual liable. For you to put your name and signature on a financial statement, it means you are taking responsibility for that financial statement as the engagement partner.

Has ICAN given up on the fight against the multiplicity of accounting bodies in the country?

Taking you back, I will want you to understand that it has been established beyond reasonable doubt that the ANAN bill was signed by the military government and we have been in court, from the court of first instance to the Supreme Court. But as time went by, there have been some form of relationship between both organisations that we had to lend support to ANAN for associate membership of some associations. The Supreme Court has not ruled, but our relationship has become more cordial.

Essentially, the ANAN law is our law and it is here to stay.

What is your take on the recently rebased GDP of the country?

I think the key indicator of every economy is the human development index and that has to do with full

ahead of us, but they sent a congratulatory message and wished us well.

Why is it that a lot of insurance companies are finding it difficult to migrate to the International Financial Reporting Standards and it appears as if the accountants are also not finding it easy to support them?

Let me put it this way, the IFRS requires a lot of details and it takes a lot of time. So, I wouldn’t know specifically why they are having problem with the insurance sector, but I do know that a lot of details and provisioning are required to migrate.

Vanguard, MONDAY, JUNE 23, 2014 — 29

28 —Vanguard, MONDAY, JUNE 23, 2014

Interview

Interview

,

ICAN should have been part of talks on missing oil money —AJAEGBU

What is your vision for the institute?

The thrust of my presidency is protecting public interest and enhancing professionalism. Public interest is basically about advocacy and advocacy is basically about public interest and making aggressive input into policy making processes of the government and also challenging them if necessary and making independent opinion. So, essentially that is what is going to drive this year.

When you say protecting public interest, what do you really mean?

Let me just say that our institute,

In recent times, there have been reported cases of chartered accountants allegedly being involved in fraud and it seems like ICAN does not do anything about that?

Let me say that there is this misconception that we are not doing anything. We have disciplinary processes. You need to report a Chartered Accountant of having committed some form of infraction

,

before we can set up what we call an investigative panel. If for example the accountant in your office commits fraud and you report him or her to the institute; the register will direct the investigative panel to investigate the allegations. When the allegations are investigated and there is a report and the committee finds that person ‘culpable,’ the next level is to take that investigation and the accountant to the tribunal. The tribunal is an equivalent of a high court meaning that whatever decision we take at the tribunal level can only be challenged at the court of appeal.

But is it a deliberate attempt not to allow members of the public know the outcome of the disciplinary panel?

The point is that we don’t publicise in the sense that we don’t go to the print media. If you go to our websites, journals, financial statements, they are all there. You will get the names, what they were tried for, what happened and the outcome of the cases. They are all there. But what we don’t do is to go to the media and advertise it. There have been a lot of discussions and arguments around that, but we haven’t come to the conclusion that, that is the best way.

At one point, during one of the past presidents, our proceedings were

C M Y K

,

employment. Full employment is driven by growth, inclusive growth and not non-inclusive growth. What we have here is non-inclusive growth.

For us to have an inclusive growth, we have to basically look at our structures. We have a distorted structure such that the policy impacts are not felt. So when people come around and talk about policies, I don’t think the problem with the country is the policy, I think it is the structure on which those policies are hanging on. The rebasing of the economy itself does not drive economic development.

What it is just telling you is that you have higher capacity that you didn’t know before. South Africa congratulated us, but if you look at the key indicators, South Africa is still

being televised. But we did a policy impact assessment and the feedback we got didn’t add much to the brand and we needed to rethink it and to find other ways of doing it. But don’t forget, as I said at the beginning that we are very conservative.

We have an enabling Act and what it says is that there must be a petition. In fact, what it says is that the petition must be under oath to serve as a deterrent for people lying. So, if your petition is under oath, you can’t come up with allegations that are not true.

A lot of professional bodies, including ICAN, seem not to be comfortable with the Financial Reporting Council (FRC).

What is the view of ICAN on the status of the FRC? First of all, that is the law. You see, when they are about to make a law and there are public hearings and so on, you don’t fold your arms and the law is made and when it is now being implemented you start complaining. I think that is very typical of our people. If you had any misgivings about the law, the point you should have challenged it should have been during the public hearing. Now, the law has come to stay. What we can now do is to go into discussions with the FRC and then those complaining should come up with the specific areas they want us to deal with. But our law is our law, whether they are bad or good. So, for it to become something else might be as a result of implementation or some part of the law that you want to be amended. But it is about dialogue because it is our law. When you say members are complaining, of course we have about 39,000 members and some people might have some misgivings. On paper the way it looked, it was a good bill

,

M

r. Chidi Onyeukwu Ajaegbu, was recently elected the 50th President of the Institute of Chartered Accountants of Nigeria (ICAN). In an interview with journalists, he articulated his agenda for the accountancy profession and the Institute. He also commented on recent developments in the nation’s economy. Excerpts:

because of our conservatism over the years, we have been running away from getting involved in conversations in the society. So, what we want to do in the next one year is to come up with well researched positions on topical national issues and come out to talk about them, send representatives to government and if we need to use the media to achieve that, we may do so.

For example, all through the issue of the missing money at the Nigerian National Petroleum Corporation (NNPC), we were not involved in the debate. I think the institute, as a protector of public interest, ought to have gotten involved in the discussion and probably set a template, process to ascertain what the position is. We intend to do more of that this year.

,

BY BABAJIDE KOMOLAFE

What we want to do in the next one year is to come up with well researched positions on topical national issues and come out to talk about them, send representatives to government and if we need to use the media to achieve that, we may do so.

the IFRS requires a lot of details and it takes a lot of time. So, I wouldn’t know specifically why they are having problem with the insurance sector, but I do know that a lot of details and provisioning are required to migrate.

For us to have an inclusive growth, we have to basically look at our structures. We have a distorted structure such that the policy impacts are not felt. So when people come around and talk about policies, I don’t think the problem with the country is the policy, I think it is the structure on which those policies are hanging on.

,

and we can get into dialogue about the implementation of the Act. How are your members taking the aspect of the FRC Act that states that ICAN should no longer grant licence to individual members?

At ICAN, we have changed the way we sign our financial statements and that was as a result of the direct ruling of the FRC. There was a court ruling which actually was in tandem with what is obtainable in a sane environment and aligns with the FRC law.

So you now sign your name with your membership number, put your firm’s name and your FRCN number. It is all about trying to let people understand the seriousness of that signature because what it is talking about is to make the individual liable. For you to put your name and signature on a financial statement, it means you are taking responsibility for that financial statement as the engagement partner.

Has ICAN given up on the fight against the multiplicity of accounting bodies in the country?

Taking you back, I will want you to understand that it has been established beyond reasonable doubt that the ANAN bill was signed by the military government and we have been in court, from the court of first instance to the Supreme Court. But as time went by, there have been some form of relationship between both organisations that we had to lend support to ANAN for associate membership of some associations. The Supreme Court has not ruled, but our relationship has become more cordial.

Essentially, the ANAN law is our law and it is here to stay.

What is your take on the recently rebased GDP of the country?

I think the key indicator of every economy is the human development index and that has to do with full

ahead of us, but they sent a congratulatory message and wished us well.

Why is it that a lot of insurance companies are finding it difficult to migrate to the International Financial Reporting Standards and it appears as if the accountants are also not finding it easy to support them?

Let me put it this way, the IFRS requires a lot of details and it takes a lot of time. So, I wouldn’t know specifically why they are having problem with the insurance sector, but I do know that a lot of details and provisioning are required to migrate.

30 — Vanguard, MONDAY, JUNE 23, 2014

Homes & Housing Finance

Police delivers 2,000 housing units in 2 years

T

he Nigeria Police has built and delivered 2,000 housing units to its personnel across the country over the last two years through Public Private Partnership (PPP) initiative.

President Goodluck Jonathan noted this in a remark during the inauguration of 1,000 housing units for the Police recently at Dakwa, Abuja.

The president, who was represented by Vice President Namadi Sambo, said the development was encouraging one, worthy of emulation by other security agencies and Ministries, Departments and Agencies (MDAs).

He said that the project demonstrated the commitment of the leadership of the Police Force to the overall welfare of its personnel. He remarked that the houses comprising of three, two and one bedroom flats would be delivered to the personnel at the lowest cost through equity contribution.

BoE hints of mortgage rates rise

B

ank of England Governor Mark Carney’s hint that interest rates could be set to increase “sooner than markets currently expect” has led banks and building societies to begin pricing in a hike this year and signals the end of cheap fixed-rate mortgage deals.

When Carney made his Mansion House speech over a week ago, two-year swap rates were 1.2 per cent, the following day they rose to 1.35 per cent and last week hit their highest level since May 2012, at 1.38 per cent.

The Monetary Policy Committee has kept the base rate at 0.5 per cent for now, but Legal & General Mortgage Club director Jeremy Duncombe suggested that many banks are already increasing the rates they offer borrowers. He said: “This means that the historically low mortgage deals now available won’t be around for much longer. The average rate for borrowers on a two-year fixed mortgage is currently 2.68 per cent, compared to 3.67 per cent for the same product 18 months ago.”

C M Y K

Stories by YINKA KOLAWOLE, with agency report

R

eal estate portal, Lamudi.com, has unveiled the world’s first Android app for houseseekers in Nigeria and 27 other emerging markets worldwide.

Lamudi is a global property portal established in 2013 which offers sellers, buyers, landlords and renters a secure and easy-to-use platform to find or list properties online, focusing exclusively on emerging markets.

Lamudi Nigeria currently hosts more than 18,000 property listings from Lagos, Abuja, Port Harcourt, Ibadan and other cities and towns across Nigeria. Globally, the Lamudi ventures collectively list over 400,000 properties from across Africa, Asia, the Middle East and Latin America, giving international house-hunters a free mobile platform to buy, rent or sell real estate on the go.

A statement from the firm noted that the launch of Lamudi’s Android app in Nigeria follows the successful roll out of the company’s iOS app in four countries. It added that the iOS app for iphones and ipads will be available in the Nigerian market soon after. “The Lamudi apps are designed to meet the growing demand for mobile internet services in emerging markets. A recent State of the Internet report highlighted the pace of growth for mobile in these regions. Out of 56 million Nigerians going online today, an estimated 20 million access the internet via Smartphone devices. The Android platform is now the

A decent house with beautiful back garden

Firm unveils house-hunting app in Nigeria, 27 other countries dominant mobile platform globally, according to recent figures from Statcounter.

More than 52 percent of Smartphones are now running Google’s operating system. Apple’s iOS is the world’s second most common platform, capturing 23 percent of the global Smartphone market.”

Managing Director of Lamudi Nigeria, Obi Ejimofo, during the official launch of the Lamudi App expressed his excitement at the innovation. “At Lamudi we are in constant evolution mode and constant expansion simultaneously.

While launching this ground-

breaking app, we are also capping another milestone with 18,000 listings this week. We want to make finding your next home as simple as making a phone call – the Lamudi app makes this possible,” he said.

Sacha Poignonnec, co-CEO of Africa Internet Holding, Lamudi’s holding company, commented on the launch: “The Lamudi app is the first app of its kind in the world, due to the vast outreach of the app to 28 different emerging markets around the world, 17 of which are in Africa. This is a huge step for Lamudi in bringing the global real estate market into the pockets of

millions of new users, who will now have access to the world’s largest online real estate platform on the move.

Lamudi is revolutionising the way that users are searching for their ideal home, and will continue to underline its dominance as the market leader in Africa and the world.”

Both the Android and iOS apps have customised search functions, allowing users to easily filter results by country.

A key feature of the app is the match alert function, which notifies users as soon as a property that suits their needs hits the market.

Building collapse: Experts emphasize use of appropriate cement grade plastering, block making and in many countries, notably

By BOSE ADELAJA The issue of building collapse has sent many Nigerians to their early grave and rendered many others homeless.

Concerned Nigerians as well as stakeholders have suggested several measures to be taken to tackle the menace, including a recent proposal by the Council for the Regulation of Engineering in Nigeria, COREN, that death penalty should be imposed on owners of such properties.

COREN President, Mr Kashim Abdul Ali, was unequivocal in the council’s submission at a three-day public hearing organised by

the House of Representatives’ Ad-Hoc Committee on the “composition and pigmentation of cement.”

The council however noted the concerted efforts of the Nigerian Customs Service, NCS, and Standards Organisation of Nigeria, SON, to curtail the problem of lowgrade cement and importation of poor-quality building materials into the country.

Indeed, some stakeholders and regulators have called on government to outlaw the use of 32.5-grade cement in the country. The 32.5 grade, which is being commonly used in Nigeria, they contend, has been prohibited

the United States, India and China. According to them, the particular grade of cement is mainly good for plastering, but many contractors use it to build pillars, columns and beams, thus causing structural failures and eventual collapse.

SON’s Director-General/ Chief Executive, Dr Joseph Odumodu, in a memorandum to the House of Representatives’ Ad-Hoc Committee, noted “At the moment, two cement types are prevalent in the Nigerian market: 32.5-grade and 42.5grade, with the former constituting about 50 per cent of the cement produced in Nigeria. Two years back, it accounted for over 85 per cent.

The 32.5-grade is suitable for

light concrete activities, while 42.5-grade and above are for more solid structures and heavy concretes. Using 32.5grade type of cement for works that require 42.5 type of cement would amount to inappropriate application.”

In the same vein, Clement Orimade, Secretary, Coalition Against Building Collapse, CABCO, said it was time Nigerians did away with the notion, “cement is cement”, implying that any cement could be used for any form of building projects. In a statement, he said: “It is not surprising that numerous construction failures have been recorded in Nigeria, to which inappropriate application of cement grade may have contributed a lot.

Vanguard, MONDAY, JUNE 23, 2014 — 31

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32 — Vanguard, MONDAY, JUNE 23, 2014

Insurance

Guinea Insurance readmitted into AIO

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uinea Insurance Plc has been readmitted into the African Insurance Organisation (AIO) at the 41st Conference and General Assembly held in Rwanda recently even the company has been certified to undertake large energy businesses.

In a statement signed by Head of Communications of the company, Mr. Hanson Ufot, the readmission is in line with the strategic reengineering initiatives launched by the company which is beginning to yield dividends.

According to Ufot, Guinea was given a clean bill of health to handle large accounts following the successful conclusion of the prequalification audit recently conducted by the Nigerian Petroleum Exchange (NIPEX).

The NIPEX certificate affirms Guinea Insurance as a viable player in the industry and attests to its capacity to take on mega oil and gas businesses in Nigeria. He said the readmission into AIO will avail Guinea Insurance the privilege to subscribe to the African Oil & Gas and Aviation pools. It will also enable the company to place part of its energy and aviation acceptances/risks businesses with the mega pools in Africa.

Premium Pension conducts medical checks on retires

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remium Pension Limited has been carrying out basic medical check-ups on retirees whose pension is managed by the company. This medical evaluation is carried out during retirees’ interactive forums that have been taking place across the country.

Retirees’ forums are interactive events organised by the company across the various geopolitical zones of the country to essentially identify avenues of further consolidating and even enhancing the quality of the rendition of pension fund administration by the company. It is also a way of evaluating the success of the contributory pension scheme in the country.

“We are interested in the health status of retirees whose pension is under our management” said Mr. Wilson Ideva, Managing Director of Premium Pension Limited.

TPL calls for quick passage of insurance bill *Unfolds plans to deepen micro insurance penetration

By EMMANUEL ELEBEKE

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ransparent Protection Limited, TPL has lamented the continued delay in the passage of the newly drafted insurance bill and warned that the action if not checked could hamper the ongoing revolution in the insurance sector.

Founder of Transparent Protection Limited Guarantee, TPL Mr. Sam Onyeka, who sounded the warning in Abuja, said the growing insurance awareness in Nigeria has made it imperative for stakeholders to begin to ask questions about the intent of the anti-revolutionary forces, who have vowed to stop the bill from seeing the light of the day, against the national interest.

He said that the advent of information technology had ushered in a new vista of insurance in the form of online insurance, with insurance products being sold online, which has proven to be the most convenient platform and has the potential of causing massive micro-insurance awareness and promotion, hence the passage of the bill become critical for proper regulation.

Onyeka said though TPL is particularly concerned about the potential unwholesome outcomes of this revolution in the absence of a proper framework for protection of the interest of policyholders, it is also concerned about the ripple effect on the growth of micro insurance in the country, which has the capability of growing the economy in an unprecedented way.

He said, “It is a fact that information technology remains one of the most convenient platforms with potential for massive microinsurance awareness and promotion. Already, a number of insurance products are being sold on-line leveraging on the facilities of some mobile telecommunication services, in Nigeria.

“As a civil society organisation working in this sector, TPL is concerned about the potential unwholesome outcomes of this revolution in the absence of proper frameworks for protecting the interest of policyholders. There is therefore, urgent need for Nigeria to develop appropriate legal frameworks for protecting on-line policy holders.

“We have not seen that done and we therefore call on the appropriate bodies to move quickly to introduce rules for online insurance and also to forge a workable strategic relationship with Nigerian Communication Commission, NCC for on-line insurance policyholder’ protection,” he said.

He underscored the need to empower the micro and small enterprises through microinsurance and risk management capacity building, as it has the potential of increasing productivity and economic growth, and expressed optimism that the micro-insurance sub sector and insurance generally will have great future in Nigeria if the enabling environment is

provided.

Onyeka, who bemoaned the low penetration of microinsurance in the country, said over 70 per cent of micro enterprises in Nigeria do not have any form of insurance protection, adding that there is urgent need to mobilise the sector through micro-insurance awareness for economic growth.

Pursuant to this mandate of creating elaborate awareness and enhancing transparency in the sector, he explained that the organisation had initiated partnership with the Small and medium Enterprise Development Agency of Nigeria, SMEDAN to map and build capacities of micro and small enterprises in Nigeria in the areas of micro-insurance

and risk management.

As part of effort by TPL to deepen micro insurance penetration, he said the company had concluded plans to flag off Micro and Small Enterprise Insurance Initiative, MASI to drive the awareness and transparency in the sector.

According to him, the MASI initiative was put together to address what he described as unfortunate trend of low insurance awareness in the grassroots especially among the SMEs in the country, with the objective of reducing the risk profile of the relevant enterprises and have them more properly packaged for increased sustainability.

FORUM - Mr. Wilson Ideva, Managing Director, Premium Pension Limited addressing retirees during the retirees’ forum held recently in Enugu.

Death of celebrities: Health insurance convention to hold soon

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s part of efforts to reduce the level of ignorance on insurance by celebrities which has led to the untimely and unavoidable deaths of several prominent entertainers in the music and movie industries, the first Nigerian Entertainment Industry Health Insurance Convention is set to hold soon.

The convention will serve as a forum to introduce health insurance policies and its benefits to the Nigerian entertainment industry and the society at large.

Accordingly, the convention is designed as a customised learning and education platform for the practitioners of the entertainment industry.

According to the organisers, the convention is a child of necessity inspired by the Nigerian entertainment industry’s lack of a unified form of health insurance policy and the near complete ignorance of it which has led to the untimely and unavoidable deaths of several prominent

entertainers in the music and movie industries alike. Amidst the perceived and misconstrued stupendous wealth on display, most of them later resort to the very degrading act of “public begging” to raise large sums of money for their medical bills when the tides turn.

The convention seeks to illuminate complex issues of health care practice and policy by bringing together leading-edge doers and thinkers, from operations to academia, from clinical practice to corporate management. The convention delineates perspectives of stakeholders throughout the healthcare community in addressing broad issues and the type of health insurance to go for. Some of topics to be discussed at the convention are the health implications of celebrity life styles; benefits of health insurance policies; health insurance policy, at what cost?; the health insurance policy, how dependable?; and the role of Government in health insurance policies.

Vanguard, MONDAY, JUNE 23, 2014 — 33

Interview

Government, banks paying lip service to SMEs — NASSI

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takeholders in the Micro, Small and Medium Enterprises sector of the economy met penultimate week with the United Nations Industrial Development Organisation (UNIDO) to discuss issues affecting the industry and to proffer solution on the need to meet international standards for made in Nigeria products.

National President, Nigerian Association of Small Scale Industrialists (NASSI), Mr. Chuku Wachuku, spoke with Vanguard, claiming that the government of Nigeria and banks only pay lip service to SMEs, which according to him, contributes 95 per cent to the country’s GDP. Excerpts: Are Nigerian products marketable?

Once the product meets international standards, it is marketable and that is what we are trying to establish, that the Nigerian standard is able to meet up with the international standard. We cannot have a separate Nigerian product away from Ghanaian standard, it does not make sense. Standards Organisation of Nigeria (SON) and National Agency for Food, Drug Administration and Control (NAFDAC) must meet with other agencies, that is why we have international standards and once you do that, then you build confidence in the Nigerian manufacturers that our products meet international standards and you sell them abroad. The more of our exportable goods you sell abroad, the more employment you create, the more wealth you create and when you create wealth, it drives demand and demand will trigger supply and that is how you create employment.

How is SON building this confidence in the international market?

We hold seminars and workshops abroad with interested agencies, government and media. They can hold trade fairs, and when the Ministry of Industry, Trade and Investment goes out, they can then expose this desk to

outsiders, invite the people, Business Membership Organisations (BMOs) also and standard organisations.

The problem is that they do not know made in Nigeria products because some madein-Nigeria products are labelled made in Dubai, China etc., and they buy them because they trust those standards. We have to know a made in Aba, Nigeria shoe that is of good quality when we buy them. So just talking about it as the Nigerian government has done is not enough to make them understand that this product meets international standards and that is why UNIDO should partner with us to help us do this because it is a United Nations Organisation.

How do we start creating awareness?

This is really a problem in Nigeria. Nigerian government and banks pay lip service to SMEs. We talk about SMEs contributing 95 per cent to GDP, what are we doing about it? We just talk about it but do nothing about it. BOI talks about meeting quality standards to access their loans but how do you do that? You just sit down and expect organisations to meet your standards, it does not work that way. You have to encourage these manufacturers to meet your standards for them to have the access to finance.

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s the National President of NASSI, this access to finance is something I would like to talk about because when you go to banks, they give you conditions and how do you manufacture without capital?

When you approach a bank for capital, they tell you, you do not have collateral, if you give them collateral, they say it is not acceptable, so how do we solve this problem? And that is why at the national conference, I will submit a motion that there should be a fund set aside to be able to collateralise loans that SMEs require. The policy statement/issue is just lip service, we haven’t gotten down to the fundamentals and the fundamentals are the standardisations we need to stimulate growth and if you want to stimulate growth, you must stimulate export and domestic production.

In fact, Nigeria has enough market to consume whatever we produce. We have a market of

Dr. Chuku Wachuku: We have institutions that are just talking but they are not doing anything.....

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By PROVIDENCE OBUH

China makes lots of gains here because they bring in inferior materials at cheaper prices so they beat domestic production

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over 300 million people across the West Africa sub-region.

So why are the small scale industrialists not being assisted to produce? The simple fact is possibly adding value to production system, creating access to finance and training.

We have institutions that are just talking but they are not doing anything. If they are doing it, I will not be complaining. We have financial institutions that cater for 25 per cent of the institution that generates 95 per cent of GDP and you are neglecting the 95 per cent, that is Small and Medium Enterprises Development.

And until there is a good policy to address these issues, how you can link access to finance to industrialists; we are not going to get it right. That is why I will be proposing a motion that

a particular fund be set aside under whatever act, at the national conference.

We tried it with First Bank.

NASSI has MoU with First Bank, and it hasn’t worked, the reason it hasn’t worked is because part of the need to grant access to finance is for the state government to pay in fund to guarantee this funds that will be given out by First Bank, the First Bank can then give out the fund but they say they cannot give out the fund unless there is a collateral, so we came up with a policy where state governments will pay in money. First Bank will crash interest to single digit and loan this fund out to them.

Again, they insisted it must be collateralised, the key issue is collateral, and so without collateral, you cannot access funds.

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hen I was DirectorGeneral of National Directorate of Employment, the concept was self-employment as opposed to paid employment. We discouraged young entrepreneurs and young school leavers from paid employment. Why is everybody looking for paid employment when we have enough market to consume whatever we produce? The reason you are looking for paid employment is because you do not have access to start your own business. Everybody likes to be their own boss. We should stop paying lip service to small scale industry in this country.

We are talking about FDI, you must have a healthy domestic economy because even what you produce must be consumed. You cannot buy to consume unless you can afford it, so we try to create impetus to earn wealth.

All the efforts and songs government and its agencies have been singing about creating a market for made in Nigeria goods, is it working?

It is working even if we don’t export, we can consume everything here if we can create confidence, quality and standards to what we produce in Nigeria, and that is where SON, NAFDAC and other agencies come in. When you assure Nigerians that made in Nigeria products meet international standards and quality, Nigerians should have enough confidence to purchase such goods. It is not enough to say I decree you must buy made in Nigeria good.

And pirating of intellectual materials There are agencies like the Customs at the borders. I will rather co-opt the question to corruption and not protecting common interest, national values, where you see agencies that are supposed to regulate, prevent these things from entering our shores, they should be able to confiscate, at least subject them to quality controls. Nigeria should not be a dumping ground, we have institutions that are required to counter those dumping. All materials coming in from China, India are supposed to be subjected to the same standard and quality regulations.

If Nigeria-made products were cheap, you will not have substandard goods dumped here. The reason it is not cheap is because interest rate in Nigeria is high, cost of production is high, we have the raw materials but who is financing you to process those raw materials to produce fine products? Nobody! And it goes back again to access to finance.

If there was a holistic approach, where BOI will say let us focus on raw material production, happily, we have Raw Material Research and Development Council.

Cost of labour in Nigeria is cheaper than any where else in the world. China makes lots of gain here because they bring in inferior materials at cheaper prices so they beat domestic production, so you buy China-made suit because the cost of material in Nigeria is high. If you want to talk of clothing material in Nigeria, then you have to talk of cotton and cotton production is dead.

Nobody is talking about cotton because Indians have come and bought all the cotton in Kano and Katsina to sell to us.

When we took a tour of Kano State, we discovered that most of the industries were dead so we need to address these issues.

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34 — Vanguard, MONDAY, JUNE 23, 2014

Aviation

By LAWANI MIKAIRU & DANIEL ETEGHE

Spanish pilots ordered to speak only English

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he Spanish Air Security Agency is preparing a controversial new law which will order all pilots and air traffic controllers in Spanish airspace to speak only English.

Spanish, along with English and French, is one of three original official languages accepted by the International Civil Aviation Organisation (ICAO), the United Nations agency responsible for air navigation.

Since 1944, Russian, Chinese and Arabic have been added to the ICAO’s list.

Conversations between aircraft crews and traffic control in Spain are currently conducted in the common language of both parties, resulting in multilingual chatter over the radio waves.

But now the Spanish Air Security Agency (AESA) wants to limit all communications to a single language: English.

Spanish daily, El Diario reported that the agency has already contacted companies in the sector warning them of the impending switch. AESA hopes that those affected will begin making voluntary changes before the Ministry of Development introduces the law.

The proposed law, which would be unprecedented in the world, has not been wellreceived in the sector and faces stiff opposition, especially given the status of Spanish as an officially accepted language of international aviation.

The country ’s main associations of pilots and air traffic controllers issued a joint letter to the head of AESA and the head of Spain’s civil aviation authority.

In it, they claim that instead of making Spain’s air space safer, the new law could in fact endanger lives.

“The prohibition of the use of Spanish in aeronautical communications could reduce the situational awareness of Spanish crews and air traffic controllers when foreign aircraft are not involved, and could therefore reduce the levels of safety,” the letter states. Many individual pilots are baffled by the move, which they say no-one has asked for.

“Obviously, we will not stop speaking English when necessary. Whenever we leave our borders, we do it, but why here? Who cares if we speak in Spanish if there is no problem between controllers and pilots?” an unnamed pilot told El Diario.

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he Nigerian Civil Aviation Authority, NCAA, has inaugurated the National Facilitation Committee which is expected to serve as a vehicle for carrying out the National Facilitation Programme.

The responsibilities of the National Facilitation Committee are to designate Customs airports in Nigeria, develop procedures through which operators of scheduled and non-scheduled services may request permission to land or depart from

NCAA inaugurates National Facilitation Committee Customs airports and arrange for border inspection services at the Customs airports.

Disclosing this development to newsmen, Acting DirectorGeneral, NCAA, Engr.

Benedict Adeyileka who was represented by Alhaji Adamu Abdullahi, the Director of Consumer Protection, DCP, said the setting up of the committee was pursuant to the recommendation of the International Civil Aviation

Organisation (ICAO) stipulating that each contracting state shall establish a National Facilitation Committee.

Adeyileka said at the inauguration which was held at the NCAA’s Annex Conference Facility that the committee is composed of heads of government agencies and the chief executive officers of the national organisations representing the aircraft

CONFERENCE - From left: Chief pilot, Arik Air, Capt. Adetokunbo Adekunbi; Senior Vice-President, Commercial, Sivaswamy Ramachandran; Managing Director, Mr. Chris Ndulue and Group Chief Executive Officer of the airline, Michael Arumemi-Ikhide, during Arik Airline press conference in Lagos.

operators and airport operators.

According to him, in the course of carrying out the work of the committee, the members may designate one or more middle level management staff in their respective organisations to represent them in meetings at the working group level.

“The primary responsibility for the National Facilitation Committee is domiciled with the Nigerian Civil Aviation Authority (NCAA) in Nigeria."

He added that the purpose of the National Facilitation Programme is to implement the Chicago Convention mandate that contracting states shall provide for and facilitate the border-crossing formalities that must be accomplished with respect to aircraft engaged in international operations, their passengers, crews and cargo."

The DCP continued by revealing that membership of the committee which will be headed by the NCAA DirectorGeneral, shall comprise of the following - Aviation Ministry, Customs, Immigration, Police, Foreign Affairs Ministry, Agriculture/Environment, Security and Narcotics, Public Health, FAAN, NAMA, Tourism, International Airlines and National Aviation Security Committee.”

Ikenga Foundation slams Reps Aviation Committee for attack on Oduah

By LAWANI MIKAIRU

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kenga Award for E x c e l l e n c e Foundation, a global platform geared towards celebrating prominent Igbo sons and daughters, has condemned the recent attack of former Aviation minister, Princess Stella Oduah, by Chairman, House of Representatives Committee on Aviation, Mrs Nkiru Onyejeocha.

According to the DirectorGeneral of the foundation, Mr Ben Ugwu: “It is shocking that recently, an Igbo daughter, Hon Nkiru Onyejeocha, the Chairman, House Committee on Aviation has unleashed unwarranted attacks on the former Minister of Aviation purporting that Princess Stella Oduah left an unsustainable and scary

debt profile for the ministry.

“That the House Committee on Aviation is unaware of the aviation master plan. Also, that Princess Stella Oduah should return the security vehicles to the suppliers.

“It is rather inconceivable that the Honourable Chairman can deny knowledge of the aviation master plan. This is because it was a master plan which she co-signed with the Senate

Committee Chairman on Aviation approving the utilisation of $60m from BASA funds and also conveyed her approval and appropriation for the utilisation of BASA funds of N25 billion for the ministry’s project execution. It is surprising that she also denied knowledge of this master plan, yet she travelled to China with the President and the former minister to sign the MoU of the

loan.”

Enumerating the achievements of the former minister, Mr Ugwu said “Nigerians are fully aware of the total transformation of the 22 airports across the country.

Nigerians are also aware of the massive infrastructural development in the aviation sector under the administration of Princess Stella Oduah.

Arik Air partners Emirates on Dubai route

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rik Air has revealed that it will partner with Emirates to operate its new long haul Lagos-Dubai route, en-route Abuja. This is to avoid economic clash with Emirates, which has established a reputation as a reliable airline on the route. It will be recalled that Emirates had frustrated other airlines in the past from flying the lucrative route.

This development was revealed by Dr Michael Arumemi-Ikhide, the Group Chief Executive Officer of Arik Air during a press conference at the airline’s head office in Ikeja, Lagos. The first commercial flight on

the new route, according to him, will begin in July, with five weekly flights, using the state-of-the-art Airbus A330-200 aircraft.

Dr Arumemi-Ikhide also said: “This is another moment for us all at Arik Air, not only launching a new international destination, but becoming the first airline to link the capital, Abuja to Dubai. The importance of Dubai as the Middle East’s commercial capital makes it imperative for Arik Air to connect the city with Lagos which is the commercial capital of Nigeria.”

Vanguard, MONDAY, JUNE 23, 2014 — 35

Tax Matters

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stances where WHT will apply in relation to any production activity.

Where there is a dual relationship between parties in a business transaction An example of this contract is where a manufacturer/ producer require raw materials from a supplier for its production. This is dual relationship between both parties and the transaction will not be liable to WHT. E.g. a farmer supplies groundnut to a manufacturer of groundnut oil; a manufacturer of glass supplies bottles to a bottling company or soft drink manufacturer or an oil marking company supplies diesel direct to a user.

ithholding Tax (WHT)is an advance payment of income tax. In principle, WHT is a payment on account of the ultimate income tax liability of the taxpayer or company. Withholding tax is not a separate tax on its own and does not confer an exemption from the filing of annual tax returns by the company which had suffered WHT. The tax is normally to be deducted at source when a payment is to be made to the beneficiary.

Tax Coverage and Income subject to Withholding Tax The WHT provisions seek to collect taxes that may otherwise have been lost through evasion and/or avoidance. The aim is to ensure that taxpayers' are correctly taxed but it must be understood that transactions that are ordinarily not liable to tax in Nigeria are also not liable to WHT; thus, contracts and supplies of goods and services performed entirely outside Nigeria by non-resident taxpayers will not be liable to WHT. The residence of the taxpayer is generally not relevant for the purpose of determining liability to tax or the application of WHT, but it is important to consider whether the provider/supplier of the goods or services is liable to Nigerian tax.

The rate of tax applicable to the various goods and services is provided in later parts of this paper. The introduction of the WHT regime came about in order to address the problem of tax evasion although, there is the overriding objective of full disclosure, transparency, predictability and fairness. In the light of these objectives and bearing in mind that the tax is intended as an advance payment of tax, its operation should always be optimized to ensure that taxpayers are not overtaxed and Government does not lose revenue.

Rents:This includes rental income on both real and per-

LAUNCH: From left: Mr. Udeme Etuk GM, HR/Adm; Engr. Patrick Anegbe, MD/CEO Intercontinental Distillers Ltd (IDL); Mr. Esijolomi Rewane, a Director at IDL, and Chief Kayode Moradeyo, President, Lagos Country Club, Ikeja, during the unveiling of IDL's Chapeau Wine Friday in Lagos.

Administration of Withholding Tax (1) sonal property. As a general rule, income on a property (rent, hire or lease payments or rights (royalties) situated in Nigeria is liable to tax in Nigeria, the place of payment notwithstanding.

Where a person rents or hires property/services from another, WHT at the rate of 10% will apply. But where a person provides services to another for e.g. air/land transport service, using its own equipment/facilities, the transaction becomes a contract of services rather than rental or hire.

Interest: This is income from investments of every kind. WHT is applicable to income from government securities and income from bonds or Treasury bills. Interest on loans paid by a Nigerian company is often not subject to WHT. Dividends: Refer to income from shares. The income is subject to tax whether it is received by a Nigeria company or a nonresident company. The tax imposed is regarded as final tax, but corporate bodies are allowed to recoup WHT deduction where the dividend is to be redistributed as Franked Investment Income (FII). The Petroleum Profit Tax Act (PPTA) however, exempts dividends payable by oil-producing companies on petroleum operations from WHT imposition.

Royalty: Refers to unearned income which accrues to the owner from past endeavors. Permission must

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Applicable Tax Law Withholding Tax is not a distinct tax type and therefore has no legislation of its own. It is only a mechanism for the collection of other taxes. Consequently, its application is provided for in the enabling law of other tax types i.e. Section 81 of Company Income Tax Act, Section 54 of Petroleum Profit Tax Act, Section 73 of Personal Income Tax Act and Section 13 of Value Added Tax Act

The aim of withholding tax is not to compound the problems of producers, manufacturers and those engaged in any forms of activities, other than services

be obtained before it can be used. It is payment of any kind as a consideration for the use of or the right to use any patent, trade mark or right/ Consultancy/Professional/ Management/Technical Services: These are specialized services rendered by persons with the required knowledge and skills. The mere fact that services are provided by a company which has consultancy as part of its name does not by itself render such service as consultancy. The real content of the services being provided must be examined and if it amounts to a consultancy service, then the appropriate rate would apply; the same treatment applies to Professional/Management services. For instance, if an engineering company is carrying out a construction activity, the proper classification for the services would be ''construction'' as opposed to Professional/Technical services; similarly, the use of industrial machinery/equipment to provide a service does not render it to be 'Technical'' because the industry position requires that only arrangements thatinvolve a transfer of Technology should be

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classified as technical.

All types of Contract Activities and Arrangements, other than Outright sale and Purchase of Goods and Property This classification is wide enough to capture every transaction, other than outright purchase/sale of goods and property.

The Revenue holds the view that majority of the activities carried on in the oil industry are done by way of contractions, and should properly fall under this category. The issue of contracts and transactions, not being conducted in the ordinary course of business has over the years been subjected to series of reviews and amendments, aimed at improving the WHT system in order to achieve efficiency as well as minimize the cost of doing business. The aim of withholding tax is not to compound the problems of producers, manufacturers and those engaged in any forms of activities, other than services. The definition of manufacturing activate as contained in the FIRS information circular No. 2002 appears to have further generated more controversy than expected. The following classification will assist in the understanding of circum-

Where there is a tripartite relationship between parties in a transaction: In a tripartite contract relationship involving a manufacturer, supplier and agent, there could be either two options, depending on the level of financial arrangement.

For example, where Manufacturer A, engages Agent C to procure or source for raw materials from Supplier, B, for his production line, there is a tripartite arrangement here.

There is nothing preventing Manufacturer, A from dealing directly with supplier B in order to achieve a dual contract relationship. (a) If Agent C is mobilized

by Manufacturer B with fund to source for materials for its operation, there will be need to segregate the service cost from the entire contraction, and only the service component will be liable to WHT. (b) If the Agent, C, entirely finances the sourcing of the raw materials for Manufacturer A, the entire contract value will be liable to WHT at the time of payment.

Where a manufacturer delivers its normal products to its distributors and dealers for sale: In this situation, the income accruing to the manufacturer will not be liable to Withholding tax (WHT) as it is regarded as transaction in the ordinary course of business, but theCommission earned by the distributors/Dealers will be subjected to WHT. Agency Transactions & Arrangements Agency arrangement implies a contract between a principal and agent.

The reward payable for services rendered by the agent is Commission, which is subject to WHT of 10 per cent. However, if the principal is a nonresident, any sales proceeds from the arrangement will attract 5 per cent WHT, where any of the conditions in Section 26(1) (b) of CITA holds.

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36— Vanguard, MONDAY, JUNE 23, 2014

E - Commerce

Adibba, Smile partner for improved service

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Shoprite plans new outlet in Ibadan

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frica’s one-stop retail outlet, Shoprite has concluded plans to open a store in Ibadan, Oyo state, as part of its expansion plans in Nigeria.

The store would be located in the just completed Palms Shopping Mall in Ibadan city.

This new store would be the tenth store since Shoprite opened its first Nigerian store in 2004.

Speaking on the development, Shoprite store manager in Ibadan, Mr. Fatai Oshungboye, said: “We’re delighted to be opening a second store in Ibadan. This is one of Nigeria’s largest cities and one filled with friendly people who are renowned for their effortless taste and we have the quality to satisfy them.” Commenting on the store expansion projects, he said, “Shoprite have plans of opening 44 new stores in Nigeria as we believe by going to all places where our customers are located we can serve them better.”

As a run down to the store opening, the management of Shoprite has put together a series of activity. Within the period, there would be free breast cancer screening, donations to schools and lots of giveaways.

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BREAKFAST MEETING: From left: Chief Executive Officer Old Mutual Nigeria Life, Keith Alford; Consul-General of South African High Commission, Mokgethi Monaisa and Chairman/CEO, Phillips Consulting, Foluso Phillips at the June Breakfast Meeting of the Nigeria-South Africa Chambers of Commerce sponsored by Old Mutual Nigeria in Lagos.

Online retailers withdraw free shipping Stories by By JONAH NWOKPOKU

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igeria’s online retailers have started gradual implementation of strategies that will eventually culminate in complete withdrawal of free shipping services.

Vanguard’s investigation of major online retailers in Lagos showed that Nigeria’s online retailer, Jumia.com has restricted free shipping to Lagos and for items above N10, 000. It could be recalled that the retailer, including many others offered free shipping nationwide when they started. However, Jumia gradually limited the free shipping to Lagos and then imposed N10, 000 and above price benchmark for items that could be shipped free.

On their part, Nigeria’s online marketplace, Konga.com had since inception shipped free nationwide but towards the end of April, 2014, it made a move to end free shipping entirely. However, from first day of May, the company made a quick turn around and announced it had commenced free shipping again. The company at the time said it was in its resolve to celebrate with

Nigerian workers and that it would run the free shipping throughout the month of May. The company had also, within that period, disabled its pick-up centres in Surulere, Ikeja and Victoria Island. The implication was that customers no longer had the option of picking up their ordered items.

When contacted on the move, konga’s Head of Marketing, Gabriel Gab-Umoden told Vanguard that the company has continued the free shipping promo for the month of June and that it would finally end free shipping after the promo and limit offer for Lagos only.

He said: “We are currently offering free delivery nationwide on every order purchased on Konga.com. So, every Nigerian that orders on Konga, regardless of location or order value (no minimum order value), will enjoy free delivery to wherever he/ she is. This has been going on for a month and will continue for another month.

However, after the promo, we plan to continue to offer free delivery on orders delivered in Lagos.”

On disabling the pick-up centres, he said: “Our pick-up centres now serve as drop off points for the many merchants that sell on our platform. This business decision was made so we can offer our merchants an extra avenue to drop off their items for quick delivery to customers. The ‘Drop off points’ will still tend to customer

queries/ general assistance as needed.”

Investigations further revealed that Girlyessentials.com, an online shop that specializes in cosmetics charge N700 for todoor delivery. In its website, it noted that, “Epe, Amuwo Odofin, Ikorodu Town, Badagry and some other areas will attract an extra charge.”

The company also said that the cost of shipping to all states in Nigeria will cost N2, 500 except

,

dibba.com, an online retail store has entered into partnership with Smile Communications to provide increased accessibility to Smile products and services.

The partnership would ensure that users of Adibba.com services have unhindered access to Smile products and services 24 hours a day at the comfort of their homes via Adibba.com website.

By placing its products online, Smile now adds the convenience of door-to-door delivery and same-day activation, to the list of customer services it currently offers. The service will be coordinated by adibba.com’s professional delivery network.

According to the Chief Executive Officer, adibba.com, Chris Udeji, the partnership is one designed to create convenience for customers and other consumers willing to join the growing consumer base of the business.

He said, “Customers would have Smile products delivered to them wherever they so desire as long as Smile service coverage is in that area.”

Some online customers who spoke to Vanguard on the trend attributed this move to various reasons. Some believe that the free delivery services have started to affect the retailers’ profitability in the face of increasing decline in online retail patronage.

A customer, who simply identified himself as Alex said, “The moves by some of them to end or limit free shipping is a big statement that they have created the necessary attention they need and they are now ready for business.”

He explained that, “It makes some business sense for them to make the move since the operators having offered some free services and sometimes mind boggling discounts just to attract customers, must now take the bold step to start real business and become profitable.” Also speaking on whether these moves will affect online shopping in any significant way, an industry expert and Co-founder of Supermartng.com, Raphael Afaedor noted that delivery as a service come with costs that must be borne by either the retailer or the customer. He opined that whether this will affect online shopping depends on what drives e-commerce in the country. According to him, ”The broad business logic here is that delivery is a service and it has cost implications.

Someone has to pay for it. If the customer sees the value derived from the service provided, as worth the amount being charged for the service, they will pay for it. If not, then the seller has to swallow it. The key here is that the service has to be valuable enough to the customer that they are willing to pay the price for it. If that is not the case, the customer will look for more affordable alternatives."

The broad business logic here is that delivery is a service and it has cost implications. Someone has to pay for it. If the customer sees the value derived from the service provided, as worth the amount being charged for the service, they will pay for it.

where a customer opts to pick up items at ABC terminals available only on fifteen destinations, then N1, 500 will apply. Also, Fashpa.com, an exclusive online fashion merchant, said it undertakes free shipping but only for orders above N5, 000 and within Lagos only. For them, “All orders of products in Lagos over N5, 000 qualify for free shipping while orders outside of Lagos over N15, 000 will be charged a flat fee of N1, 950.”

Checks on other online retailers like Africdeals.com showed that the firm only offers free shipping on select items which were yet to be named at the time of this report.

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On whether the withdrawal of free shipping will affect online shopping patronage, he said, “It all depends. The key here is determining what is the actual driver behind why people buy online? Some will find the convenience of online shopping to be worth more than the delivery fee. Those will pay. Overall, online shopping also makes it easier for people to easily discover products which they would otherwise not have had known they could buy locally. I think that will also be a powerful driver for people to shop online irrespective of delivery fees, so long as the delivery fee is reasonably priced.”

Vanguard, MONDAY, JUNE 23, 2014 — 37

People in Business

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Type of business: The business is classified under nylon sector of the Nigerian packaging industry, and could be categorized as informal sector, due to its operational structure.

Nylon production is almost dominated by Indians, followed by the Chinese.

This has made small players in the industry go through lots of challenges in a bid to survive.

In other words, the foreigners are basically in control of the industry and in many situations, determine direction of activities in the business.

Challenges: According to Nwolisa, one of the toughest challenges is in getting competent human resources.

"This accounts for more than 80 per cent failure in the business and by extension, many other small businesses.

Lack of competent human resources is one major reason why most businesses in Nigeria fail to survive the first 12 months after start-up. It is often difficult to get honest and committed workers who can manage nylon production.

"Energy is another critical challenge confronting nylon production. Electricity has been the bane of industrial development in Nigeria and the high percentage of unemployment in the country.

"This issue has greatly contributed to the high cost of goods and services in the industry.

Funding also is another major challenge for the fact that it is capital-intensive.

Seeking funds from lenders, especially banks, is very difficult. Lenders/banks would rarely lend or loan out money to small businesses and this has made it all the

zMr. Michael Nwolisa....It is often difficult to get honest and committed workers who can manage nylon production.

Govt. should focus more on SMEs — Nwolisa

By VERA SAMUEL ANYAGAFU more difficult for operators in the industry to acquire needed machineries to grow their businesses.

Another challenge is locating strategic sites. It is sad that properties in major cities are way out of the reach of small investors who are intending to set up nylon production plants in the country. The situation has necessitated prospective investors to move their businesses to remote areas.

"Developing this type of business in remote/ inaccessible areas often impede the growth of the business, but in a situation whereby it becomes difficult to get the much needed space and affordable site, one is left with no other option," he said.

Multiple taxation: "Although the operational environment for most businesses in Nigeria appear hostile, the impact of multiple taxation is unbearable.

The hostility, apart from the huge tax demand, includes poor electricity supply and exploitative nature of some members of the communities where these nylon factories are located.

The impression by people in most communities is that the sizes and shapes of machines translate to money automatically and therefore owners of such businesses should be at the beck and call of host communities whenever they need money.

All these add up to the overall cost of doing business and this in turn, makes our products less

,

e started his business at a very young age with a seed capital of just a few thousands of naira.

Today, the CEO of Elkalisa Royal Nig., Ltd., Mr. Michael Nwolisa’s success in Nylon business has immensely contributed to reducing the number of unemployed youths in the country.

A graduate of Archeology from the University of Nigeria, Nsukka, Nwolisa waded through vicissitudes of life to consistently approach the manufacturing of varieties of polythene bags with vigor.

In this chat, Nwolisa, who could be best described as a visionary, speaks on the stage to stage progression of in nylon production in Nigeria, the prospects and challenges.

He also suggested ways the Nigerian government can assist manufacturers achieve success.

Excerpts:

If the government does not do something urgently to this trend and the dangerous monopoly by Indians in the raw material supply chain, the nylon industry will go the way of the textile industry

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competitive when compared with imported products," he lamented.

On the category of people needed to start the business, Nwolisa said: "Just as every business needs an admixture of people to start up, so is the nylon business. To start up this type of business, one needs both low and high skilled personnel and must ensure a smooth take-off in order to avoid early bankruptcy."

Sourcing raw materials: "Raw materials for nylon production are mainly imported from Asia and Middle East with less than 20 per cent produced locally.

The little produced locally are in the hands of the Indians, since the Eleme Petrochemical plant, which was initially managed by the Federal Government, was sold to Indorama, an Indian company."

Regulatory requirements: "Every new business needs to be registered with relevant authorities at the three tiers of government.

Business

registration/incorporation at the federal level is key for any investor to venture into nylon production.

Both at state and local council levels, business permit, land use charge etc are required.

Having done all these as a basic requirement, you need to follow it up with registering the business to bring it into the tax net of the state where the business is located. Again, there is NAFDAC certification that is needed especially from those companies producing feeder rolls for sachet water

packaging industry."

How government can assist: "Since it is a fact that no country can develop economically without recognising the importance of small businesses and their role in her growth and development, it is important that government should develop policies that will guarantee the stability of all small businesses in the country.

Firstly, they have to build industrial clusters and provide all the needed infrastructure such as stable electricity, good access roads, more friendly tax laws that will eliminate the current multiple taxation regime that is in place right now. In the nylon sub sector, the government should do everything possible to eliminate the current high level of smuggling of imported nylon products into the country as this is currently having a negative effect on local manufacturing. The imported nylon coming in from Togo, China and India are substandard and sold below real cost. If the government does not do something urgently to this trend and the dangerous monopoly by the Indians in the raw material supply chain, the nylon industry will just go the way of the textile industry. This, by my estimation, will have negative implication on the socioeconomic life of the country especially now that the country is grappling with very high unemployment rate.

In other words, the Federal Government should be more committed in the effort to provide enabling environment for SMEs in order to reduce the number of unemployed youths in the country.

IDL launches Chapeau natural red wine find in the market made of adBy EBELE ORAKPO

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ast Friday at La Mango in Ikeja, Lagos, Intercontinental Distillers Limited (IDL), brought together the who is who in Nollywood and the corporate world for the official launch of its new product, Chapeau Wine.

Speaking to journalists before the unveiling, the Managing Director/Chief Executive Officer of IDL, Engineer Patrick Anegbe, said he was delighted that at last, IDL has been able to "come up with a very good natural wine to tell Nigerians what a good natural wine should be as against many wines in the market which are synthetic."

Describing Chapeau as one of the best in Nigeria, Anegbe said the wine which comes in three variants - Merlot, Rose and Cabernet Sauvignon - is made in South Africa from "well fermented fresh grapes to get the natural red wine unlike what you

ditives, sugar, alcohol and flavours." He added that although the product is of high quality, it is affordable.

Asked if they plan to produce in Nigeria, the IDL boss answered in the affirmative saying that although grapes are not normally grown in Nigeria because of the weather, IDL, however, intends to produce in Nigeria with time. "We shall have our own equipment and bring the product into the country in form of concentrate and we will do the dilution, bottling and everything right here in Nigeria."

Chapeau, a French word which means hat, is also a short way of saying 'I take my hat off,' and this, according to IDL, is a befitting name for the product going by its quality.

Among those present at the launch were and Chief Kayode Moradeyo, President, Lagos Country Club, Ikeja, Mr. Sugun Arinze, Klint the drunk, Benita Nzeribe, Fred Amata, Kempy Ekpenyong who was the MC, and many others.

38 — Vanguard, MONDAY, JUNE 23, 2014

Vanguard, MONDAY, JUNE 23, 2014 — 39

Advertising, Media & Marketing

PR professionals decry low level of practice in Africa Stories by PRINCEWILL EKWUJURU

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ublic Relations practitioners in Africa, under the aegis of Africa Public Relations Association, APRA, have described the level of public relations practice in the continent as very low.

The Association stated that there is need for collaboration among practitioners in the continent to make the practice more competitive globally.

Speaking at a review session of the just ended APRA Mauritius 2014, in Lagos recentlyMr. John Ehigueze, one of the participants at the Conference noted that it had become imperative for PR practitioners in the continent to re-position the practice to enable it change the culture of multi-nationals using points men, instead of real professionals, in different African cultures.

Ehigueze , who is the Chief Executive Officer of the MediaCraft, believes the time has come for practitioners to begin to act on how to harness the much-touted potential that abound in the continent and prepare themselves for competition at the global stage.

Speaking, Secretary General of the association, Mr. Yomi Badejo Okusanya, argued that the continent had continued to have its brand equity eroded because opinions about it were being formed from materials provided by the western media.

The CMC Connect boss explained that the association would be coming up with the Campaign Africa, an initiative that is designed to change the

negative perception about Africa, in partnership with the African Union Commission.

‘The whole idea is to allow Africans to tell their own stories, instead of the outside world telling it for us. ‘ We believe there is a lot to do in laundering the continent’s image. We have to take it upon ourselves to begin to tell the outside world that

LAUNCH: Mr. Princewill Omorogiuwa, CEO of Simon Page (left) and Chief Digital Enabler, 3rdFloor Limited, and Mr. Kawosha Abdulwakili, Anti-Illicit Trade Marketing Manager, West Africa, British American Tobacco at the official launch of 3rdFloor Limited.

Dettol embarks on campaign to tutor consumers on wellness

By PRINCEWILL EKWUJURU & RICHARD UDOFIA

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eckitt Benckiser ’s flagship brand, Dettol has embarked on a new campaign; Mum to Mum (MOMentum) to empower mothers, teaching them about best hygiene practices.

The company said that with the campaign it plans to raise the bar by strengthening its

Capri-Sonne targets kids with ‘Collect the Fun’ promo

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apri-Sonne from the stable of CHI Limited said its promo, ‘Collect the Fun’ is targeting children to reenforce its position in the market. The promo which will utilize RIO 2 merchandise and gift items in one million cartons of Capri-Sonne will cover pan Nigeria.

RIO 2 is a 2014 American 3D computer-animated adventure-comedy film. It is the sequel to the 2011 computer-animated blockbuster movie Rio. The title refers to the Brazilian city of Rio de Janeiro, where the first film was set and Rio 2 begins,

Africa is no longer that dark continent,’ he argued.

According to him, besides its primary aim of providing a veritable platform for the nurturing of professional excellence on the continent, the current leadership of APRA had also identified some key intervention areas on the continent, where it plans to focus its activities in the next few years.

though most of its plot occurs in the Amazon rainforest.

Produced and marketed by Chi Limited in Nigeria, Capri Sonne is a fruit juice that is every child’s delight and trusted by mothers because it contains 100 per cent natural ingredients.

Speaking on the promo at the company’s head office in Lagos recently, Managing Director of Chi Limited, Mr. Deepanjan Roy said the company is excited to tie up with Capri-Sonne Worldwide in the Capri-Sonne Consumer Promo where gifts will be inside 1,000,000 cartons.

commitment and efforts aimed at reducing child mortality rate in Nigeria, an initiative targeted at saving 10million children in Nigeria. Marketing Director, West Africa, Reckitt Benckiser, Mr. Oguzhan Silivrili said in Lagos, th at the 50 anniversary celebration of the company’s product, Dettol antiseptic brand has embark on a new journey to reach mothers all over Nigeria with the message of easy simple Health and Hygiene practice.

Oguzhan said that the new Mum to Mum (MOMentum) campaign is about empowering and enabling mothers to teach other mothers about the best hygiene practices which is directed towards having a direct positive impact on families.

“We intend to take pledge from each mother we contact in the direct contact program to teach 2 other mothers, thus making a chain of empowerment all over Nigeria” Oguzhan said.

He said over 50 years of Dettol in Nigeria, the company have being at the forefront of educating Nigerians on health and hygiene benefit via mass consumer education programs like, New Mothers Program where 5 million mothers have been reached since 2006 teaching them good hygiene habits to be used on their new born babies.

Moments of Difference

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oment of Truth. That expression is already a cliché in customer service-speak. Customer service trainers, most times, use the expression without bothering to explain it to their audience. I first encountered that expression some time in 1998. My trainer kept using the expression without giving any information about its origin, although we, the trainees, understood it to mean the point at which a customer encounters the service of an organisation – face-to-face, by email or even by phone. I kept wondering the origin of the expression.

Years later, I realised the expression was first used in the service management context by the Swedish management scholar, Richard Normann, who borrowed it from the sport of bull-fighting. In that morbid sport, “the moment of truth” is the point at which the bull-fighter comes face-to-face with the bull. In Nigerian political parlance, it is a “do-or-die moment” because the matador either kills the bull or gets killed by the bull. The expression was popularised by the former CEO of Scandinavian Airlines System (SAS), Jan Carlzon, with his top-selling book, Moments of Truth, published in the late 1980s. Many people will see this expression as a gory way of describing an encounter with customers. Is it really so?

When you realise that each If you want encounter with a customer is a your business to moment that can make or mar a survive longrelationship, you’ll probably see term, I suggest Normann’s point. Interestingly, you hire like the bull-fighter, the employees with customer-facing employee is great attitude, usually on their own when train them very relating to a customer. At this critical moment, the employee’s well great attitude, training, empowerment, experience, initiative – or lack of all these – are usually on display for the customer to see. At this point, this single employee holds the ace on the fortunes of the company. At this moment, this employee can help the company keep or churn customers. At the moment of truth, even the CEO of the company isn’t as powerful as this employee facing the customer because that single employee is the embodiment of the brand.

All the great marketing communications, coupled with fantastic physical facilities, will come to nought if that single employee fails to impress the customer. For a nation of football lovers, perhaps the best way to capture the moment of truth is to compare it to the last and (usually) decisive shot of a tense penalty shoot-out at the end of a pulsating 120-minute football game. Will your last player score? Or will he miss and let the other team carry the day?

It’s amazing that many corporate leaders around here don’t get it. No matter how much you spend on the look of your corporate office and creative advertising, it is the actual customer contact with your people – by person, email, phone – that will make all the difference.

It beats my imagination how organisations will spend fortunes to attract customers only to hire lowly-paid, poorly motivated, ill-trained, ill-equipped, rude employees to attend to those customers. A case in point usually comes to mind whenever I ponder this matter. Years back, someone decided to build a good hotel in Ibadan. The rooms were well-appointed and the halls good for events. Unfortunately the hotel staff looked scruffy, dirty, unhelpful and clueless.

They could not say “yes” to anything without getting clearance from their supervisor. Talk about emasculation!

Those people had no idea what they were hired to do.

They wasted so many moments of truth. Today, that hotel is less than a shadow of what it used to be.

If you want your business to survive long-term, I suggest you hire employees with great attitude, train them very well, motivate them, empower them and appreciate them.

They will turn your moments of truth into moments of difference!

40 — Vanguard, MONDAY, JUNE 23, 2014 Email:lesleba@lesleba.com, lesleba@gmail.com Blog page:www.lesleba.com/blog2 Website: www.lesleba.com Tel:0805 220 1997

The darker sides of the “Safe Schools Initiative” outs is certainly more firmly rooted in the prevailing social culture on girl child education. Thus, the Boko Haram threat to security and girl child education may be seen as the insurgent’s endorsement of this retrogressive abiding cultural practice.

Nonetheless, the limited opportunities for formal quality education in Nigeria is certainly also a contributory factor to the large population of Nigerian children who miss school. For example, the former CBN Gover nor, Lamido Sanusi noted in a public lecture last year that “Every year, about 1.5m school leavers sit for the compulsory Entrance examinations into 150 public and private universities which have approved carrying capacity of only about 600,000 students”. Thus, over 900,000 youths are unceremoniously denied the opportunity to pursue higher goals and make more meaningful social contributions.

Regrettably, only a small percentage of these 900,000 bustling youths may find employment as an intermediate or stop gap measure, the larger majority will swell the already huge market of frustrated and unemployed Nigerians.

Ultimately, if these youths have parents or sponsors with deep pockets, possibly over 10% of the domestically disenfranchised youths may look outside Nigeria for further education.

Indeed, the value of education as a vibrant, profitable economic sub-sector with great potential for Export revenue is not lost on some of our trading partners who publicly make sympathetic noises and philanthropic gestures in favour of

improvement of the quality and provision of increasing education opportunities in Nigeria; for example, a report titled – ‘International Education: Global Growth and Prosperity ’ from the British Government’s website, www.gov.uk, reads as follows: “overseas students who come to Britain to study make a huge contribution to our economy. Each student of higher education on average pays fees of about £10,000 a year and spends more than this again while they are here.

In 2011/12, we estimate that overseas students studying in higher education in UK paid £10bn in tuition fees and

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T

he “Safe Schools Initiative” (SSI) is a brain-child of Gordon Brown, former UK Prime Minister who now serves as United Nations Special Envoy for Global Education. The SSI was earlier launched at the World Economic Forum Africa in April/May this year in Abuja, in response to the abducted 200 school girls from Chibok, Borno State.

Gordon Brown in collaboration with some of Nigeria’s wealthiest business leaders had pledged $10m to the SSI and explained that “the programme would start with 500 schools as the pilot in some northern states”. The initiative according to Brown “ will help schools create security plans and work with government to develop a rapid response system to quickly repair or rebuild and ensure that destroyed education materials are replaced”.

The Finance Minister, Dr. Ngozi Okonjo-Iweala, later in June also confirmed that President Jonathan has keyed into this initiative with a counter pledge of $10m.

Meanwhile, in a related development, the United Nations Children Education Fund (UNICEF) reported that Nigeria has the largest number of children, globally, who miss school. The report noted that out of 10.5m children who do not attend school in Nigeria, 60% are girls who live in the north.

(See Pg 47, Daily Independent newspaper of 18/6/2014).

Although UNICEF also fingered the insurgency and insecurity in the north-east as primarily responsible for the millions of out-of school children, the reality of cause is that the high rate of drop-

Thus, it is certainly true that the social turmoil caused by Boko Haram, and our lack of a coherent and responsible educational plan and the heavy dose of corruption in public spending, are all favours to those countries who benefit from our confusion.

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living expenses and they boost the local economy where they study… it is because we value this massive contribution that there is no cap on the number of legitimate students coming to Britain nor do we plan to impose one”.

Indeed, if only 30% of the reported 180,000 UK visa applicants were students, this would translate to an outflow of at least £2bn (N500bn) from

Nigeria alone every year.

Additionally, last year, Lamido Sanusi, the former CBN Governor also revealed in a public lecture, that “about 71,000 Nigerians students in Ghana pay about £1bn annually as tuition fees and up-keep in contrast to the sum of $751m which was allocated for all of Nigeria’s Federal Universities last year”.

But in reality, Nigerian students are also well represented in Canada, the United States, South Africa and several European countries and if only ten thousand more Nigerians studied in these other countries, Nigeria may be contributing well over £3bn (N750bn) to these favoured and stronger economies annually.

Thus, it is certainly true that the social turmoil caused by Boko Haram, and our lack of a coherent and responsible educational plan and the heavy dose of corruption in public spending, are all favours to those countries who benefit from our confusion.

Nonetheless, it is worrisome that less than 0.1% of over 160 million Nigerians spend disproportionately more than the remainder 99.99% on much more expensive, and presumed better quality education abroad, in spite of the attendant impact of the substantial revenue leakages from our treasury and the engendered conspicuous social inequality and subsisting poor education infrastructure.

Worse still, those Nigerians with excellent results from foreign institutions are readily creamed off by headhunters and encouraged to remain abroad; inevitably once again, the Nigerian economy suffers additional loss; indeed, our reality

becomes a curiously macabre case of a supposedly poor disadvantaged country subsiding the economy of much more successful nations.

Nonetheless, for the sake of argument, let us assume that the Safe School Initiative would achieve its objective of providing safe and better learning environment for our youths; thereafter, however, what happens, when these youths finally leave school, with very limited opportunities for further education or job placement.

We may belatedly discover that well educated insurgents may have replaced the current unlettered breed. (God forbid).

Evidently, Gordon Brown’s pledge of $10m and the additional $10m from President Jonathan will ultimately be too small to make any meaningful impact; nonetheless, there is an urgent need to quickly reduce the large army of unemployed youths by adopting monetary and fiscal policies that will rapidly positively drive the economy. Such change strategies must not include government borrowing back its own free funds at double digit interest rates which ultimately instigate high cost of funds to the real sector and which also restrain inclusive growth and the creation of increasing job opportunities.

Besides, our fiscal strategy must adhere to the UNESCO best practice recommendation for the dedication of at least 26% of annual budgets to the education sub-sector. The paltry capital votes in annual budgets are certainly not a serious remedial growth strategy, especially when most of the budgeted meager funds get looted without sanctions on the perpetrators.

SAVE THE NAIRA, SAVE NIGERIANS!!

Business & Economy Continued from page 19 distribution, and marketing and exhibition standards.

On its developmental role to support capacity-building, the bank had undertaken the following; “Commissioned EXIM India to undertake a study to review the industry and recommend best financing programmes in line with global best practices/ standards, which led to the development of the operating guidelines for financing projects in the sector.

Sponsorships of various capacity-building programmes, events and film festivals such as Zuma Film Festival, BOBTV African Film

C M Y K

NEXIM leads growth of non-oil sector & TV Programmes Expo, Eko International Film Festival, Nigeria Music Video Awards, Nigerian Copyright Commission (NCC) Stakeholders’ Forum on review of the Copyright Law, sponsorships of Nigerian Pavilions at Cannes International Film Festival, France in partnership with the Nigerian Film Corporation and DISCOP Africa, South Africa to showcase Nigeria’s creative talent and attract investment capital and partnerships.

Partnerships with Federal Ministry of Culture and National Orientation on the

1st National Policy Dialogue on the Development of the Creative / Entertainment Industries in Nigeria, British Council on Creative Industry Expo and Mapping of the Industry.”

He said the bank is currently engaged in policy dialogues with development partners, relevant regulatory and statutory institutions in the entertainment value-chain on ways of improving industry framework /structures on issues relating to access to finance monetizing intellectual property/ copyrights and risk-mitigating instruments.

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

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Group Business Editor Deputy Business Editor Energy Editor Asst. Business Editor Snr Bus. Correspondent Insurance Correspondent Maritime Correspondent Maritime Correspondent Energy Reporter Industry/Agric. Reporter Energy Reporter Maritime Reporter Insurance Reporter

CONTRIBUTORS Princewill Ekwujuru Nkiruka Nnorom Jonah Nwokpoku Naomi Uzor Providence Obuh LAYOUT

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