Page 1

JULY 29, 2013












154.76 238.3923 205.3201 166.6057 1.5694 0.292 232.7076 RENMINBI 25.2253 RIYA 41.2649 KRONA 27.4013 SDR 233.5483

155.26 239.1625 205.9834 167.1439 1.5745 0.302 233.4595 25.3072 41.3983 27.4899 234.3029

SELLING 155.76 239.9327 206.6468 167.6822 1.5796 0.312 234.2113 25.3892 41.5316 27.5784 235.0574

CBN Exchange rate as at 26/07/2013

From Left: Dr. Joseph Odumodu, Director General, Standards Organisation of Nigeria (SON), Ini Onuk, CEO, ThistlePraxis Consulting Limited, and Jim Obazee, CEO, Financial Reporting Council of Nigeria (representing the Hon. Minister for Trade & Industry) at the launch of NIS: ISO 26000 in Lagos, recently.

Ownership tussle: GSK in fresh negotiation with shareholders … Shareholders list conditions for acceptance By JONAH NWOKPOKU


LAXOSMITHKLINE Consumer Nigeria Plc, GSK has resolved to commence fresh negotiation with shareholders over plans by its United Kingdom parent company, to increase its majority stake in the company. Meanwhile, shareholders have listed conditions for accepting the bid by GSK United Kingdom to raise its shareholding to 75 per cent from 46.4 per cent.

“There must be something for both to take away from the table at the end of the day. That is what we are in the process of arranging now that we are to resume talks afresh”, said Mr. Olusegun Osunkeye, Chairman, and Board of Directors. He spoke at a media parley at the end of the court-ordered meeting held last week Tuesday. “We feel it will be mutually beneficial for all shareholders to withdraw the scheme to allow for further consultations. We are going back to the drawing board, that is, GSK UK and GSK Nigeria to look at the new

Scheme of Arrangement and to look again at the terms; so that with those two when concluded, further announcements will be made,” Osunkeye said. The original agenda of the meeting was a resolution to consider and approve the Scheme of Arrangement for GSK U.K to increase its shareholding from 46.4 per cent to 75 per cent. But the company bulked and decided to withdraw the scheme due to opposition from shareholders. Alternatively, the company decided to use the meeting to formally announce

the withdrawal of the scheme, engage, and interact with shareholders on acceptable options for GSK U.K to achieve its intention. Osunkeye admitted that the thorny issues revolve around the right price to sell and willingness of shareholders to sell as well. He said that while the right price offered by GSK UK as at November, 2012 was reasonable and fair, it has become expedient to review the price to reflect the current economic realities. “The price has now moved incidentally from what GSK UK originally offered the shareholders. At the time it was announced, it was at a price that most people considered fair. But since then, a few things have happened, the price on the Stock Exchange has moved in the range of N50 to N58. So it is a question of now having to revise and so dialogue and consultations are taking place. “We could not conclude on where GSK UK who is the one offering should approximately pitch the price. We have recommended that the price should move up. So the question now is at what level. This is where we are,” he said. He further explained that, “When in November GSK proposed N48, it was Continues on page 18 C M Y K

18 — Vanguard, MONDAY, JULY 29, 2013

Cover Story

The Basic Guide to Starting Your Business Part 4 Daring successful business man has a mindset that is willing to take risks and tread on places people would not ordinarily want to tread. He would not chicken out at the slightest threat, so if you intend to start and own your business, you must have a die-hard mentality, otherwise you would quit before you even get started. It is also very important to consider the risks involved and your ability to handle them properly, since every business involves risks. Most business people are very comfortable with modest risk but quite uncomfortable with big risks. Although they are unwilling to gamble on long shots, they are more willing to take chances if their individual skills can affect the probability of success. Then will they have the courage to step out into the unknown and pursue their personal dreams.


Ownership tussle: GSK in fresh negotiation with shareholders a fair price because it has a premium built into it but six months later, that was no longer tenable because after November we had published our December Annual Account and have made more profits and paid dividends. “If the company continues to grow profitably, therefore we would rather be looking again at this point in time at the price which will move upward because that is what has happened on the Stock Exchange. It is important to note that it is yet to pitch at the right price in the principle of fairness and the discussions will be going on, on that. He however denied that there was any element of compulsion in the ownership bid, saying that no shareholder would be forced to part with his shares. “We understand that the concern of shareholders is that nothing should be by compulsion, so we are also looking at that seriously and to know what the best option is,” he said. Recall that the trouble started brewing for the company over who should own what when GSK Nigeria received signal from its parent company, GSK UK informing it of an intention to support it through upgrade of facilities but in order to do that on a sustained basis, it would like to increase its shareholdings in Nigeria. GSK UK shareholding at present is 46.4 percent but it intends to increase it to 80 percent. And that was where the problem started. C M Y K

Mr. Osunkeye recalls how GSK Nigeria reacted initially to the proposal. According to him, “We said fine, if you are going to support us more, make further investments, upgrade of facilities, support on marketing and all areas, we will go along with you. They now said they will prefer a scheme of arrangement which is more certain in the sense


Continued from page 17

Nigeria’s c u r r e n t economic development and evolution would not allow for the global best practices that t h e shareholders are calling for


that in the scheme of arrangement, they will propose to buy from existing shareholders such that they will get up to 80 percent. “So we got our advisers, Chapel Hill and Ighodalo, but when we got to a point they said it will be N48. This was way back in November and the share price at the Stock Exchange at that time was N37, so there was premium. When we held our annual general meeting in May, we put this proposal of 80 percent

at N48 to our shareholders but there were lots of oppositions from the shareholders in Nigeria and also from some of our institutional investors abroad. “First, our shareholders said, 80 percent is too much for GSK UK to have. At that point in time in May we didn’t talk much about the price because the price was still fairly stable between N48. If it moved at all, it was upwards. So we went back to GSK UK and told them the feelings of the generality of the shareholders, that 80 percent is too high for them to absorb in view of certain experiences that our shareholders in Nigeria have had in the past with other companies. “The shareholders also had this fear that 80 percent will lead next to delisting. So we went back to GSK UK and after conferring with them, raising the concerns with them, they came down to 75 percent and also made it clear that it was never the current intention to de-list from the Stock Exchange which means that they will continue to list as long as there is growth, and every shareholder will benefit.” These concerns were still fresh in the minds of the shareholders during the court ordered meeting. Some of them who spoke to Vanguard saw it simply as a brazen attempt to rip them off their investments. Hence they called for complete abandonment of the scheme, arguing that it was inspired by greed. Continues on page 19

Goal getter successful business man has the mindset of not just setting goals but also achieving the desired result. He does not settle for less but always has his eyes on the prize. To him there are no impossibilities and failure is just part of the game. He does not believe in half measures but believes that he can go all the way and this mentality inspires a lot of confidence in clients and customers and will keep them coming. A high level of energy also keeps the businessman trudging through road blocks because he has his eyes fixed on long term goals. It is important you are very energetic and vibrant as it will ensure that your business is up and running. You need to have a motivation from within and from those around you. The man who invented electricity, tried ninety-nine times and failed; he got it right the 100th time! I dare say, that is the spirit you must possess, no matter how many times you fail, you keep trying it out until you get it



From Left; Company Secretary, Mr Uche Uwechia, Chairman, Board of Directors Chief Segun Osunkeye and Finance Director, Mr Simon Hodge all of GSK Consumer Nigeria Plc at the Court Ordered Meeting for GSK Consumer Nigeria Shareholders Meeting Held on Thursday 25-7-2013, in Lagos.. PHOTO; Kehinde Gbadamosi.

Your love and passion is what takes you through those challenges


right….bottom line you must delete the word IMPOSSIBLE from your dictionary. Period! It’s very important you move with the right people and read books and materials that will prepare your mind and reposition your mindset towards positivity, because “if you can think it then you can be it”. Never forget “you are a product of your thoughts.” This reminds me of a Nigerian drama series that aired on the Nigerian national television network (NTA) in the early 90s, BASSEY& COMPANY. The lead act was fond of saying “if you want to be a millionaire, think like a millionaire”! As funny as it sounded then, it is still very true and applies to business. So permit me to say if you want to be a successful business man, then think like one! If you are going to run a business of your own, you should find something that makes you really happy. This should be at the core of why you are even looking at going into business of your own, because if you try and make something work and you have no passion for it, it probably won’t work out. If you have passion for the industry that you are working in, you will have a good chance of making it work out. What make a business great are the people that run it and the passion that they have for it. Keep this in mind when you are thinking of starting a business of your own. From experience, many just jump into business because they are excited about an idea and haven’t really thought about the ‘whys and wherefores’. Taking a moment to reflect on your motivations and defining your purpose will be time well spent. 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. The main ingredient for success is passion, and it’s virtually impossible to maintain high-levels of energy when you’re doing something you don’t love. There will always be challenges in owning a business. Your love and passion is what takes you through those challenges. Without that passion, you probably won’t make it.

Vanguard, MONDAY, JULY 29, 2013 — 19


hat makes economics an interesting science of behaviour is its attempt to predict the behaviour of economic agents. In the attempt to predict how certain economic actors will behave in a given situation, economic statisticians introduced the theory of probability. Using probability and permutations, the concept of zero-sum game emerged. In the game of zerosum, the winner takes all. Looking at the practice of politics in Nigeria, it was initially politics of sharing by allocation. It is now absolutely a zero-sum game. Political actors in Nigeria today are involved in the game to benefit themselves only. It is a situation in which one politician’s gain comes only democracy. The overall well- wants to stop me from being a from another politician’s being of society is premised on first lady, having access to losses. The net balance in total efficient allocation of scarce power, access to the purse of wealth allocation is now zero, resources. When such are Niger- Delta states. It is about allocated and the perception that if 2015 meaning that the resources rightly that should have been used to execution carefully monitored, comes and my bread winner is stopped, I will be in the cold. develop the nation are taken it ensures value for money. But what you find in Nigeria In decent and sane societies, over by political actors for their is war between political with her confession, she would use. The nation’s wealth is friends and foes. Nigerian have been picked up for simply shifting from one politicians are friends as long questioning, but alas, the politician to another. In the as they agree to a sharing attempt to make it, they stop formula. The moment there is short at nothing. Whoever gets disagreement on sharing, the in their way is an enemy that war starts. No Nigerian must be crushed to death. politician wants to lose a kobo They act like moving train, to any other. Ask yourself, why whose path no human must will 36 state governors enter cross when it is approaching. into a room to vote only to They have rendered come out to disagree and it has institutions of state now become an open war? Is this war between the unworkable. governors’ forum and the igerian politicians are Presidency because of the deadly. They employ Nigerian electorate? Certainly every means available to cling not! Nigerian politicians do not to power, not for service, but disagree on principles as it is machinery of state will not to dispense favour, enrich in other places. Not even allow that in Nigeria. along party line; they do so on themselves and secure the Is the in-fighting within the future of their unborn babies. what they seem to be losing PDP about the wellbeing of out from. The budget war about It is only in Nigeria that Nigerians? Of course not. It is politics is big business. The constituency projects is all positioning and repositioning about what comes to me in the more you sow either in to lay hands on the national resources or violence to budget. cake. It is to scheme out those diminish your opponent, the s the war between the opponents in the zero-sum more the benefit. Rivers State political games politicians In economics, allocation of play in Nigeria. Have you not resources is key to achieving legislators and the governor heard that Nigerian about the people? No, it is economic well-being of all, politicians, who find their way which is the ultimate goal of about the desire of the center to political offices earn the to cling to power! Is Patience good governance. highest wages in the world? This is because what is Jonathan’s involvement about Yet, in comparison, Nigerian the welfare of the people of available cannot go round all; economy is under-performing bring to the doorstep of every Rivers State? Not at all! It is compared to those of other about fighting the enemy, who citizen the dividend of

Nigeria’s politics of zero-sum game countries. It is only in Nigeria you go into politics not to serve but to be served. Nigeria politics is about making unjustifiable wealth. How do you explain that a kilometer of road in Nigeria is constructed at $1million? How do you explain that the President or Minister of Petroleum Resources can on


A politician, who performs creditably in office, has nothing to fear about re-election. Nigerians are no fools.




their own award oil blocks to whoever they wish? Why will politicians not kill, maim or do anything to become president? Why is every region fighting to have their own as the next president of Nigeria? So that the few that have access can make it. Is it not why selfish politicians, who were around Umaru Yar’adua did not want him out of office when it was obvious the man was incapacitated? How come that at 80, Papa Anenih is still out there struggling in the name of politics? In more decent societies, he should be resting,

waiting for the ultimate call. What value is an 85-year-old man adding to the polity? Why are these men still parading themselves as people, who have things to offer other than to share the nation’s cake?


hy must Nigerian youths allow themselves to be used by these no good politicians to kill, maim and destroy, all because they want access to power in 2015? Is it not time Nigerian youths and the middle class begin a movement to rescue Nigeria from these scavengers, who call themselves indispensable politicians? A politician, who performs creditably in office, has nothing to fear about reelection. Nigerians are no fools. They know who is serving their interest. If Mr. President has performed creditably, he has nothing to fear about 2015. But the question to ask him is, Mr. President in your mind and conscience, have you delivered on your promises? Politics of zero-sum game will not help this nation called Nigeria; it will only set us back. All of you involved in this unwholesome act of zero-sum politics are doing Nigeria a disservice. The economy is losing massively in terms of investment flow due to this mindless war. It has to stop now.

Business & Economy

Ownership tussle: GSK in fresh negotiation with shareholders Continued from page 18 “The market in Europe is crumbling and African market is where the opportunities are. They have seen that the future of African market is very bright. That is the reason for this hostile attempt for indirect ownership increase. This proposal is a pure attempt to deprive us of what is our right but I must say that no Nigerian must be forced to part with his share,” a shareholder, Nonah Awoh said. Adebayo Adeleke, the Secretary General of Independent Shareholders Associations, while condemning the proposal called on the company ’s

management to strive to follow due process and allow the law to take its course in their bid to reach a common ground with their shareholders. But Mr. Osunkeye said nothing was being done outside the law. He recalled that the Stock Exchange approves that a foreign company according to its regulation can get up to 80 percent share increase. He said, “GSK has decided that they want to do this within the laws of the country but Nigerian shareholders in view of their experiences in the past and so on decided that that 80 percent is too much.” In the meantime, the shareholders have decried

subtle compulsion and unfairness in the entire process and are therefore specifically asking that if they are going to sell at all, it would be at their chosen price of N75. They are also asking that global best practices be observed in the process whereby GSK UK, the bidding company be forbidden from voting. But Osunkeye said fairness has been the principle hallmark upon which the process has been built and argued that Nigeria’s current economic development and evolution would not allow for the global best practices that the shareholders are calling for. This idea, he said, might scare

away willing and capable entrepreneurs who would have listed on the Stock Exchange and enhance economic growth. “You see, in the UK, GSK UK as a UK company, under their practice, will not be allowed to vote in that scheme, so Nigerian shareholders are now saying that, that practice must be observed here in Nigeria. But my personal view is that, even though it is called global best practice, and we subscribe to global best practice, we must not forget that in every countr y, they have their deflections and adaptations to suit their conditions. “After all, this idea that a company in UK will not be allowed to vote in shares has

not been there forever, it’s something that started about last ten years. So it is a reflection of their economic development. They feel they can now move to that area. Maybe there are no majority shareholders anyway. So there is diffused ownership and the system in our country should rather be to encourage the few entrepreneurs who have the wherewithal to list on the exchange. There is dichotomy there. Our interest in respect to the state of our economic development is not yet in line with the interest in UK because they are more advanced and their environment is very much different,” he explained. C M Y K

20 — Vanguard, MONDAY, JULY 29, 2013

Full Page Advert


Vanguard, MONDAY, JULY 29, 2013 — 21

Business & Economy


HE Federal Government has reiterated its commitment to diversify the economy from reliance on the oil sector to the agriculture sector. Mr Greyne Anosike, the Director (Press and Public Relations), Ministry of Agriculture and Rural Development stated this in a statement issued in Abuja. According to the statement, the minister stated this when Prof. Oyewole Tomori, President, Nigeria Academy of Science (NAS) led a delegation to his office. It quoted Tijani as saying that the country should begin to marshal an economic plan as crude oil and gas dwindle in the global economic calculations. ‘’The repeated call for diversifying the economy is not a political gimmick, but a purely economic forecast. Nations should begin to evolve long term master plans as oil begins to play less critical role in the affairs of nations in the next decade,’’ the statement said. It added that the minister observed that most countries have found alternative sources of energy and aggressively embarking on agriculture using modern technology. It is also said that the minister called on the association to evaluate the role it will play to resolve these challenges and come up with a comprehensive proposal to the ministry. The statement said that the



UREAU of Public Enterprises (BPE) , has said that the 17 Power Holding Company of Nigeria (PHCN) successor companies will be listed on the floor of the Nigerian Stock Exchange (NSE). Director General of BPE, Mr. Ezra Dikki disclosed this during a courtesy visit to the NSE and also ring the trade closing bell of the exchange yesterday in Lagos. Dikki envisaged that in the next few years, as the Nigerian electricity supply sector moves into the hands of private sector owners and matures, the 17 PHCN successor companies will list on the exchange. According to him, this is because the remaining government shareholdings in the DISCOs that are currently being privatised through core investor sale strategy, will be divested through the exchange. “The GESCOs will come by differed public offer latter. We also expect many of them to come to the capital market to raise long term finance”, he said. He affirmed that, Preszident Goodluck Jonathan C M Y K

FG reiterates commitment to diversify economy association should take advantage of its agricultural research findings to move the country forward. It stated that the Federal Government has started planning ahead with the approval of 13 airports across the country as perishable

cargo terminals and creation of Staple Crop Processing Zones (SCPZ). The statement quoted Tomori as saying that the association was in the ministry to help with evidence based data driven and scientifically verifiable materials

that could help the agriculture sector. It said that the association was capable of evaluating facilities, survey available manpower needs and expertise in the area of documentation, cassava utilisation among others.

L-R: Mrs.Sewa Ayodeji,Group Head.Learning & Development,Chartered Institute of Bankers of Nigeria(CIBN);Mr.Reginald Akujobi-Roborts,MA Consultant,Member Consultative Committee;Mr.Ebenerzer Onyeagwu,ED,Zenith Bank & Chairman Consultative Committee, 7th Annual Banking & Finance Conference;and Dr. Uju Ogubunka,FCIB,Registrar/CEO CIBN, during a media briefing in Lagos on Friday on the Upcoming 7th Annual Banking & Finance Conference of the Institute.

Privatization: 17 PHCN successor companies to list on NSE administration's transformation agenda is committed to growing and increasing the depth of the capital market. The BPE boss stressed that the Federal Government recognises the role of the capital market in providing long term funding that will drive investments in the transport sector that will result from the reforms initiatives in the sector.Soon the roads, railways, inland

waterways and the ports harbour bills will be presented to the Federal Exceutive council for approval and transmission to the National Assembly for enactment, he said. He believed that once enacted and relevant regulatory agencies set up, it will create an enabling environment for private sector investment in concession and PPP contracts. Similar reform initiatives in the housing

sectors and agricultural sector through the privatisation of the Abuja Commodities and Stock Exchange will all throw up vast investment oppourtunities for the capital market to finance, he stated. He therefore promise that the BPE will continue to support and recommend initiatives to the Federal Government to ensure listing of enterprises through reforms and privatisation to deepen and improve the liquidity in the capital market.

Sokoto govt, Zenith Bank to disburse N1.6bn agric loan to farmers


OKOTO State Government said it would disburse N1.6 billion agricultural loans to farmers in the state. The commissioner for solid minerals in the state, Alhaji Dahiru Maishanu, said this while briefing newsmen on the outcome of the state executive council meeting. The commissioner said the state government would provide N512 million, while Zenith Bank Plc would provided the balance. “The loan facility was approved by the council and it will be distributed to rice and tomato farmers in the 23 local government areas of the state.”

The commissioner said the gesture was aimed at encouraging more farmers to produce more food for both local consumption and export. Similarly, the state government has approved the tarring of the road networks and parking spaces at the Usman Faruk Secretariat at the cost of N225.6 million. Alhaji Ahmed Aliyu, the Commissioner for Health said the council also approved the reconstruction of the 1.5 kilometre Unguwar RogoPolice Station-Minanata-Tudunwada road at the cost of N154.96 million. Aliyu said the council had approved the construction of new General Hospitals in Kware and Dange/Shuni local government areas at the cost of N172.26 million each.

BRIEF WSI-Axon sets new standard in internet marketing


S part of efforts to provide innovative digital marketing solutions for clients, developing and executing results-oriented marketing strategies, WSIAxon has set new standards for internet marketing in Nigeria. The Head Digital Marketing, WSI-Axon Nigeria, Ms. Amara Nwankwo, said “if you have invested in a traditional marketing strategy but haven’t fully explored the possibilities of digital marketing and you want to earn its benefits, WSIAxon is the way to go” “As a business owner, perhaps you have an existing Internet marketing campaign you’d like to augment, or a core digital strategy that works for you but you’re missing a piece of the puzzle, such as social media or mobile marketing. No matter where you are on the spectrum of digital marketing, WSI-Axon can help,” she said. She added that whether it’s a dynamic website design, search engine optimization, email marketing, or the emerging and exciting worlds of social media and mobile marketing, WSI-Axon is on the cutting edge of what’s possible to discover what works for your organization.

CSR: Falcon sets up evaluation team


ALCON Petroleum Limited said it will set up an evaluation team to monitor the impact of its Corporate Social Responsibility (CSR) initiative that seeks to empower indigent women in its area of operation in Ikorodu. The company will be empowering 58 women within the community through its vocational skills acquisition program. The CSR program entails a 3month vocational training in four key areas (Bead making & wire works, catering, decoration & events management and dress making & design), a mandatory one-month industrial placement and an endowment pack to start-up and run gainful business ventures all on the bill of Falcon Petroleum. Speaking during the graduation ceremony of the beneficiaries, the Managing Director, of the company, Professor Joseph Ezigbo, described the initiative as the company’s way of giving back to the society by empowering the less privileged women, as well as to entrench a better relationship with its host community.

22 — Vanguard, MONDAY, JULY 29, 2013

Banking & Finance BRIEFS UBS will pay $885 million BS will pay $885 million in a settlement with a U.S. regulator over allegations the Swiss bank misrepresented mortgagebacked bonds during the housing bubble, paving the way for billions more to be paid by other banks. European and U.S. lenders such as Credit Suisse and Deutsche Bank have set aside money to cover the cost of any losses arising from the dispute with the Federal Housing Finance Agency but estimates vary widely. Shares in Royal Bank of Scotland, which had risen by a quarter since July 3 having slumped following the ousting of chief executive Stephen Hester in June, dropped over three percent on Friday after the UBS settlement was revealed. The FHFA said late on Thursday UBS will pay $415 million and $470 million respectively to governmentsponsored housing enterprises Fannie Mae and Freddie Mac to resolve claims related to securities sold to the companies between 2004 and 2007. UBS is just one of 18 banks the FHFA pursued in 2011 for allegedly misrepresenting the quality of the collateral backing securities during the run-up to the financial crisis.


EMP sponsors AITEC banking & mobile banking conference MERGING Markets Payments (EMP) featured as a platinum sponsor of the AITEC Banking & Mobile Banking West Africa 2013 Conference. The two-day event was held at the Accra International Conference Center, Ghana. Managing Director, EMP West Africa, Tunde Coker, who was one of the keynote speakers at the occasion spoke on converting the African economy from cash to electronic payments. According to the Chairman EMP, Paul Edwards, “Just as the countries of Africa are dynamically changing and developing, so is the payment card industry. EMP is delighted to participate in AITEC 2013 as a platinum sponsor, particularly as an event of this caliber offers a vibrant regional platform to discuss trends and issues affecting the industry.



L-R: Head, Mobile Financial Services, First Bank of Nigeria Limited, Mr. Mike Ogbalu; Head, Technology & Services, FirstBank, Mr. Akin Fanimokun; Director, Regulatory Affairs & Special Projects, Airtel Nigeria, Mr. Osondu Nwokoro and Group Head, E-Business FirstBank, Mr. Chuma Ezirim at the formal launch of FirstMonie Talkmore Campaign, a partnership between FirstBank of Nigeria’s FirstMonie and Airtel Network, which took place at the bank’s Head Office recently.

MPC: Analysts predict 4% rise in interest rates By BABAJIDE KOMOLAFE


CONOMIC analysts have predicted sharp increase in interest rates, as high as four per cent, and increased inflow of hot money (foreign portfolio investment) into the country. This prediction is in response to the decision of the Monetary Policy Committee of the Central bank of Nigeria (CBN) to raise cash reserve requirement (CRR) on public sector deposits to 50 per cent from 12 per cent. “The liquidity gap created at the market is expected to result in a 3-4 per cent spike in interest rates, which are currently at an average of 11.2 per annum. There will also be a reduction in the use of Open Market Operations auctions as a mop-up strategy, which will be unnecessary in an illiquid market”, said analysts at Financial Derivates Company (FDC) Limited. A similar view was expressed by Mrs. Razia Khan of Standard Chartered bank. “By raising the costs associated with public-sector liability mobilisation, it encourages the banking sector to raise deposit rates to compete for other, non-public, liabilities.” According to Consolidated Discount House Limited, “Deposits rates will go up as banks resume fight over deposit liabilities.

At the end of its MPC meeting on Tuesday, the CBN though maintained its benchmark interest rate, the Monetary Policy rate (MPR) at 12 per cent, and CRR on private sector deposit at 12 per cent, it jerked up CRR on public sector deposits to 50 per cent .

Explaining the rationale for this radical decision in a communiqué issued at the end of the meeting, the CBN said, “The Committee observed the build-up in excess liquidity in the banking system, and expressed concern over the

rising cost of liquidity management as well as the sluggish growth in private sector credit, which was traced to DMB’s appetite for government securities. This situation is made more serious by the perverse incentive structure under which banks source huge amounts of public sector deposits and lend same to the Government (through securities) and the CBN (via OMO bills) at high rates of interest’. Analysts were of the view that the increase in interest rates prompted by the MPC decision, will occasion rise in bond yields. This coupled with appreciation of the naira, facilitated by the decision, will make investment in Nigerian fixed income instruments more attractive to foreign investors. Consequently this will enhance increased inflow of foreign portfolio investment (hot money) into the economy. Reviewing this development in the company’s Bi-monthly Economic and Business update, FDC analysts said, “The anticipated increase in interest rates due to the funding gap created would make interest rates in Nigeria more attractive relative to its emerging market peers. This we project would result to an increase in hot money of approximately $1-2 billion. Hot money inflows into Nigeria were estimated at $12bn in Q1’13, which has declined to a current estimate of $10 billion”.

First Bank unveils strategies to dominate mobile money business By JONAH NWOKPOKU IRST Bank Limited has c o m m e n c e d implementation of strategies to dominate the fledging mobile money business in the country. Last week, the bank lunched an international mobile money transfer platform, as well as a campaign to attract mobile subscribers to Firstmonie, its mobile money platform. The new international mobile money transfer platform is called Trans-Fast and it is the first to target international customers in Nigeria. It enables customers to access the Trans-Fast platform through a direct link from the First Bank Diaspora banking website and transfer money in multiple currencies including Euro, Great Britain pounds Sterling, Us Dollars and the Naira. This followed the signing of an agreement in Lagos last week, between executives of


First Bank and the provider of the money platform, Trans-fast Remittance Incorporated. Trans-fast Remittance Incorporated will make its over 200, 000 global network available for First Bank customers to transfer money directly via the internet while also allowing beneficiaries of international money transfer get money directly into their accounts in any currency through any of the first bank branches nationwide. Speaking at the launch of the event, the Group Managing Director, First Bank of Nigeria, Plc, Chief Bisi Onosanya said, “We have extended our frontier to Trans-Fast to leverage the eplatform capabilities to further provide a convenient and secure funds transfer service to our numerous customers in the Diaspora who seek to send money home for various transactions.” He added that, “Trans-Fast will contribute in fostering the CBN driven cash-lite and financial inclusion policies, as

the self-service money transfer enables senders transfer money directly via the internet, eliminating the use of agents and allows beneficiaries of international transfer get money directly into their accounts with any bank in any currency, through First Bank.” For head of marketing and corporate communications, First Bank, Plc, Mrs. Folake Ani-Mumuney, “With the Trans-Fast platform, customers will have the options of sending money directly to the receivers accounts, online transfers and as well as cash pick up at any of the first bank branches.” On his part, the CEO, TransFast Remittance, LLC Samish Kumar, “Trans-Fast has always offered excellence in the products and services we provide. This new partnership elevates quality and convenience of service for our customers, to provide value that is resoundingly unquestionable.”

Vanguard, MONDAY, JULY 29, 2013 — 23

Banking & Finance

Policy initiative: CIBN set to engage regulators, bankers, other stakeholders Stories by PETER EGWUATU


HE Chartered Institute of Bankers of Nigeria (CIBN) has concluded plans to meet government functionaries, bankers and other stakeholders on its policy advocacy drive that would engender growth and development of the economy. The institute noted that government has started giving attention to some of the recommendations made from its previous conferences such as: enactment of laws that support the banking industry, infrastructure enhancement, tax incentives issues etc. The institute, disclosed that its 7th Annual Banking and Finance conference has been scheduled to hold from September 10-11, 2013 in Abuja, where various stakeholders including the Central Bank of Nigeria, other regulators in the banking and Finance industry , policy makers from both private and public sectors of the economy and students are expected to discuss issues that affect the banking industry and the economy in general. Speaking at the press conference heralding the conference in Lagos at the weekend, Chairman, Consultative Committee on the 7 TH Annual Banking and

Finance Conference, Mr. Godwin Emefiele said, CIBN is constantly championing the need to enshrine best practices and ensure strong commitment to ethical and professional standards in order to ensure continuous confidence within the banking industry. As bankers, we know that the Financial Services Industry occupies a vital position in the development of Nigeria and African economy as it facilitates economic growth and development.” To this development, he noted that

CIBN is set to maintain and sustain the positioning of the Financial Services Industry as the bedrock of the Nigerian economy through advocacy for professionalism. The theme for the conference titled “Upholding professionalism in the financial services industry: Supporting the economy”, according to the Chairman of the committee has been suitably chosen for the conference. According to him, “ This will afford policy makers, regulators and operators in the financial services industry the

platform and leverage to share experience, network and exchange ideas on contemporary relevant issues affecting the financial Services Sector. The Registrar/Chief Executive Officer, CIBN, Dr. Uju Ogubunka, said “ President Goodluck Jonathan is expected to declare the conference open and the CBN Governor, Sanusi Lamido Sanusi will deliver the keynote address , while the Chief Host, Mr. Segun Aina will receive all special guests.

Commissioner of Justice, Kaduna State, Mr. Jonathan Kish Adamu and Managing Director, UBA Trustees, Mrs. Oluwatoyin Sanni at the Meeting of Bond Holders of the state’s N8.5bn Series 1 Bond, packaged by UBA Trustees in Lagos on Friday.

Genesis Analytics expands capacity in Nigeria


outh African banking strategy firm, Genesis Analytics, has said that it is expanding its capacity in Nigeria. This comes with the appointment of Ada PhilUgochukwu, who has a farreaching business development mandate, as Country Director. Phil-Ugochukwu will focus on expanding and consolidating the firm’s presence in Africa’s second-largest economy by deepening relationships with existing Genesis Analytics clients and expanding its presence into non-banking financial services. She will also focus on enabling clients to benefit from leveraging off the firm’s sector and continental knowledge in order to improve business performance. Genesis Analytics has been operating in Nigeria since 2001, where it has been advising and supporting

banks, financial sector regulators and development agencies with such services as market analysis, strategy and policy development, segmentation, value proposition development, operating model optimisation, pricing and evaluation studies. The firm has been doing this on a per-project basis, but increasing demand has resulted in the decision to expand the in-country team in order to provide clients with a more comprehensive service. Networked into the firm’s offices throughout Africa, the Middle East and India, the Nigeria office will be increasing its capacity to provide what Genesis Analytics is known for, namely rigorous analysis and added-value output. “We have been working with banks and related companies in Nigeria for 12 years, and are delighted to be able to

announce the increase in our capacity to serve this market,” said Richard Ketley, Head of the Genesis Analytics Financial Institutions Practice. “ He said, "Nigeria is by far the most significant market for growth-phased financial services institutions on the continent, and a stronger banking sector will play a key role in facilitating both economic growth and social development. “For Genesis Analytics, a stronger local presence will significantly expand our ability to support clients in the banking and other financial services industries, as well as regulators and donors.” Phil-Ugochukwu on her part said that, “As banks adjust to the worldwide restructuring of the financial services sector, they are facing many significant challenges particularly in developing economies. “Most importantly, they need to stabilise operations, invest in

solutions that will help them to integrate business units, explore alternative channels and income streams, and benchmark processes to meet global banking standards. Achieving all of this while running a bank on a day-to-day basis puts enormous pressure on executive and management teams and this is where Genesis Analytics has such a significant role to play. “The firm is well-resourced with research and analytical capacity, and can provide the invaluable intelligence needed for banks to make informed decisions in a difficult trading climate. Using a knowledge base developed by working with more than 50 banks on the African continent, as well as with many regulators and donor agencies, Genesis is able to offer its clients best-of-breed analysis and innovative solutions to the challenges they are facing.”

BRIEF Skye Bank posts N71bn gross earnings in Q2


kye Bank Plc has recorded total gross earnings of N71.1 billion for the second quarter ended June 30, 2013 as against N59.7 billion during the same period in 2012, showing an increase of 19 per cent. Similarly, the bank’s profit before tax rose to N10.5 billion during the review period compared to N9.9 billion during the corresponding period in 2012, representing an increase of 6 per cent. The IFRS compliant result submitted on the floor of the Nigerian Stock Exchange, NSE showed that profit after tax for the period stood at N8.4 billion as against N7.9 billion the previous year. Other highlights of the result included substantial increase in operating income which rose from N33.1 billion in 2012 to N41.4 billion during the period being reviewed, showing efficiency in resource utilization.

Nigeria to host students' global entrepreneurship competition


RESIDENT of Students for Advancement of Global Entrepreneurship (SAGE) Mr Agwu Amogu said that Nigeria had been chosen to host the 2013 world students’ global entrepreneurship competition in Abuja. Amogu told newsmen in Abuja that the competition th which was the 11 in the series was tagged “The SAGE World Cup”. According to Amogu, the competition is scheduled to hold between Aug. 6 and 12. He said that Nigeria earned the right to host the prestigious SAGE completion edging out Ukraine and South Korea. “SAGE mission is to create the next generation of entrepreneurial leaders whose innovations and social enterprises are to address the major needs of our global community. It engages young people in hands-on learning process on how to create wealth and also on how to help others and their communities. This is an honour and opportunity for Nigeria and Africa, as some of the world brightest young people will come to Nigeria and experience Africa’s business environment, culture and hospitality, ‘’he said.

24 — Vanguard, MONDAY, JULY 29, 2013

Corporate Finance BRIEFS U.S. charges six in credit card, Nasdaq hacking case


.S. prosecutors charged six foreign nationals with hacking crimes, including credit and debit card thefts that authorities say cost U.S. and European companies more than $300 million in losses, and charged one of them with breaching Nasdaq computers. Prosecutors said the indictments unsealed last week for the payment card hacking were the biggest cyber fraud case filed in U.S. history. The long list of victims include financial firms Citigroup Inc, Nasdaq OMX Group Inc, PNC Financial Services Group Inc and a Visa Inc licensee, Visa Jordan. Others include retailers Carrefour SA and J.C. Penney Co along with JetBlue Airways Corp, prosecutors said as they announced indictments. Prosecutors said they conservatively estimate that a group of five men stole at least 160 million credit card numbers, resulting in losses in excess of $300 million.

Wakanow debuts in Dubai


N its bid to facilitate movement around the globe, has made it easier for travelers to make quick bookings with the debut of an office in Dubai. The Dubai office is set to make traveling to the iconic city even easier and affordable as travelers get to save more off their trips. In a statement made available to Vanguard, Wakanow, said thousands of fun seekers, travel lovers and adventure enthusiasts are trooping to Dubai this month for the summer. While it may seem a daunting task trying to book flights, hotels and tours this peak season, we will make it easier.” “Each year, millions of Nigerians visit Dubai with friends and family for the sole purpose of exploring the numerous sights and attractions the city is famous for like Burj Khalifa, Desert Safari, Dhow Cruise, or the Ferrari World in Abu Dhabi” said Ralph Tamuno, Deputy Managing Director for “But nowhere else do you get such personalized service as with us here. C M Y K

Interim dividends to boost stock market activities in H2 By NKIRUKA NNOROM


HE Nigerian capital market will see improved activities in the second half (H2) of the year as a result of interim dividends expected to be declared by blue chip companies. In a review of the capital market activities for the first half(H1) of the year, 2013 and outlook for third and fourth quarter, Cowry Assets Management Limited, said that positive expectations from 2013 year end results would also be an added boost. “We retain our bullish outlook for the equities market in H2 2013 as the bourse present attractive opportunities for both foreign and local participants; Expectations from interim dividend declaration by blue chips such as Nestle, Guaranty Trust Bank, Okomu Oil Palm Company will keep the tempo upbeat in second half of the year. “Also, investors’ positioning ahead for year 2013 end results will drive the market northward in Q3 and Q4 2013,” the company said in the review. It, however, stated that the capital inflows of Foreign Portfolio Investments, FPIs might be curbed if quantitative easing was effectively halted as planned by the United States. On the bonds market, the report stated that primary segment of the market was expected to be auctioned at higher discounts given higher expectations of both interest

rates and decline in foreign portfolio inflows. It added that the establishment of the self regulating FMDQ OTC Plc, for the hitherto unregulated OTC bonds market, expected to commence operation in August, would foster improvement in the OTC bond market, as well as boost confidence in the entire bond market, saying, ‘Hence, we anticipate higher volumes of transactions in the bond space.’ The equities market was bullish in most parts of six months of the year, culminating in a year-to-date high of 40,012.66 basis points and N12.85 trillion for the NSE All Share Index, ASI, and market capitalisation respectively. Cowry Asset Management attributed the positive

performance during the period to large capital inflows from foreign investors’ patronage enjoyed by the Exchange. “In the months of January and February, FPIs scrambled for opportunities in the emerging market space and the Nigerian stock market positioned herself as a choice investment destination. Consequently, the NSE ASI appreciated by 17.79 percent as at the end of February. The bulls run was sustained in March, albeit, mild as the benchmark index, NSE ASI, advanced by 1.39 percent in the month as investors took a breather to cash in on accumulated gains.“Also, sustained profit taking ensured that the market closed lower in April with the ASI retreating by 0.29 percent. Following a temporal price correction post result season,

Mr Tor Nygard, MD/CEO, Mr Yomi Odunaiya National Sales & Marketing Coordinator, both of Berger Paints Nigeria Plc and Dr Nwosu Personal Assistant to Chairman, Comet Shipping at the presentation of KCC’s products in Lagos recently.

Berger Paints launches KCC’s products into Nigerian market B

ERGER Paints Nigeria Plc has launched products of KCC Corporation of South Korea into the Nigerian marine and protective coating market. The launch is sequel to the recent partnership agreement between both companies to jointly serve the Nigerian paint and coating market in the first instance and thereafter, the broader business community of West African States (ECOWAS). Under the partnership, Berger Paints will provide KCC with ease of access it

bargain hunting assumed the center stage in May. However, the announcement by the United States Federal Reserve Bank to reduce ‘Quantitative Easing’ in early June sparked a bearish run driven by the gradual funds pull out by foreign participants, culminating a total market decline of N648.97 billion in the month of June. “Despite the sell pressure faced by the NSE in the last trading month of first half of 2013, previous months of impressive bull run, helped lift the equities benchmark index, ASI rising significantly by 28.80 percent year-to-date as against 4.19 percent recorded in first half of 2012. In the same vein, market capitalization grew by 27.32 percent or N2.45 trillion compared to a growth of 5.55 percent or N362.71 billion in the same period of 2012.”

requires to operate in Nigeria as well as a strong platform to access the growing marine and protective coating market in Nigeria while KCC Corporation will contribute advanced technology, technical and training support as well as research and development. Its products are internationally certified and qualified to operate in the Nigerian oil and gas industry. Addressing stakeholders at the product presentation in Lagos recently, Managing Director of Berger Paints, Mr.

Tor Nygard stated that the company decided to partner with KCC Corporation, the largest coatings manufacturer in Asia, to offer the growing Nigerian maritime market superior products that are comparable to competition. He noted that the introduction of KCC brands was a demonstration of Berger ’s commitment to providing customers with real choice and widest range of marine and heavy duty coatings that meet the specific needs of their vessels, ship,

fleets, offshore and mainstream operations. Also speaking, the National Sales and Marketing Coordinator of Berger Paints, Mr. Yomi Odunaiya, said the introduction of KCC brands into the Nigerian market would deliver demonstrable and transparent improvements in performance, efficiency and cost saving for vessels and ship operators in Nigeria. According to him, KCC product offering, which include anti-fouling, Epoxy protective coatings, zinc rich coatings amongst others are of high performance, which will deliver quantifiable added value for ship owners, indigenous and international oil and gas operators alike.

Oando’s shareholders approve N5.1bn dividend

Vanguard, MONDAY, JULY 29, 2013 — 25

Corporate Finance Stories by PETER EGWUATU


ANDO’s Plc shareholders have endorsed proposal by its Board of Directors to increase its authorized share capital from N750 million divided into 1.5 billion ordinary shares of 50 kobo each to N1.2 billion by creation of additional shares of 900 million ordinary shares of 50 kobo each , ranking in paripassu in all respect with the existing ordinary shares. The shareholders at the 14th Annual General Meeting (AGM) held last week in Lagos gave their approval to increase in authorized share capital and also requested that rights issue be floated to shore up the company’s capital base. Some of the shareholders who spoke the minds of shareholders present at the meeting having endorsed all the resolutions put before them at the AGM, commended the company for the 12 kobo per share dividend declared for 2012, which translated to a total of N180 million as against 10 kobo per share declared in the year 2011, totaling N150 million. Specifically, Michael Cole from National Independent Shareholders Association of Nigeria, ISAN, Yakubu Titilayo, Alex Okoh and host of other shareholders said, “We commend our board and management for giving us 12 kobo dividend given the harsh operating environment the company operated upon. However, we hope that the

Oando shareholders approve N5.1bn dividend dividend will be higher next year to say N1.00 per share. We also commend efforts by the company in ensuring that our products are available in most pharmaceutical stores in the country. The attendance of meetings by the directors is also okay, which is in accordance with good corporate governance. Our expenses are also going down.” The shareholders cautioned management to

increase its effort at recovering more debts and demanded that hard copies of Annual Report be giving to them in subsequent AGMs rather than the electronic copy. “We will prefer a rights issue than any other option of raising the capital base since our company is doing well. We will all support the offer,” the shareholders echoed. Speaking, the Chairman of Fidson, said,

“We commend the shareholders for your support and every issues raised will be looked upon. Fidson recorded a turnover of N7.168 billion, about the same for the 18 months ended December 31,2011. Profit After Tax (PAT) was N206.889 million, Earnings Per Share (EPS) grew from 4 kobo in 2011 (International Financial Reporting Standard ) to 14 kobo in 2012.”

L-R: Mr. Remi Oni, Head Origination & Client Coverage, Standard Chartered Bank, Nigeria; Mr. David Adepoju, Head Global Markets, SCB; Mrs. Stella Ojekwe-Onyejeli, Chief Risk Officer & Executive Director, Nigeria Sovereign Investment Authority; Mr. Leke Ogunlewe, MD/ CEO Standard Chartered Securities and Mrs Yemi Owolabi, Chief Financial Officer (CFO),West Africa & Executive Director, SCB, Nigeria, during the Standard Chartered Bank Finance Master Class 2013, held in Lagos...on Thursday.

GTBank synergy with Fina Bank to boost shareholders value


UARANTY Trust Bank Plc, GTBank proposed acquisition of Fina Bank is expected to boost Nigeria’s shareholders’ value when the bank enters East Africa through a multi country and scalable platform, says analysts from capital market The shareholders of Fina Bank Limited Kenya (“Fina Bank”) recently reached inprinciple agreement for the acquisition by GTBank of a 70 percent shareholding in Fina Bank. The agreement is subject to customary regulatory approvals in Kenya, Nigeria, Rwanda and Uganda. GTBank will acquire the 70 percent shareholding in Fina Bank through a combination of (a) a capital injection in Fina Bank, and (b) an acquisition of shares from the current shareholders. The total consideration to be paid by GTBank is estimated at around US$100 million

and is subject to closing adjustments and exchange rate movements. Headquartered in Kenya, Fina Bank operates in Kenya as well as in Rwanda through its 92 percent owned subsidiary Fina Bank Rwanda Ltd and in Uganda through its fully owned subsidiary Fina Bank (Uganda) Ltd. Based on its unaudited consolidated financials as of 31 March 2013, Fina Bank had total assets of US$338 million, gross customer loans of US$184 million and customer deposits of US$285 million. The Group currently operates through 38 branches and employs 550 people across the three countries. Meanwhile, It will be recalled that GTBank, recently, released its audited financial results for the December 2012 financial year to operators of the Nigerian Stock Exchange and reported a Profit Before

Tax of N103 billion, the highest for any Nigerian Bank. Commenting on the results, Mr. Segun Agbaje, Chief Executive Officer of Guaranty Trust Bank attributed the Bank’s success to its adherence to a defined growth plan, high corporate governance standards and the cultural values for which it is known. He said these factors, coupled with a resourceful board, an in-depth understanding of the market and the passion of GTBank employees have enabled the Bank grow market share and continue to avail its stakeholders with value adding services. According to analysts at the Nigerian bourse, this performance and an in-depth analysis of the results, which were recently approved by the Central Bank of Nigeria, confirm GTBank as the first and only Nigerian bank to

cross the N100 billion Profit Before Tax milestone fromContinuing Operations at both Bank and Group levels. The Group’s results also show improved Gross Earnings of N221.9 billion, 66% growth in Profit Before Tax to N103 billion (2011: N66.08 billion) and 69 percent improvement in Profit After Tax to N87.3 billion; (2011: N51.7 billion). The Bank closed the 2012 financial year with an OnBalance Sheet size of N1.73 trillion (2011: N1.608 trillion) while Total Assets and Contingents stood at N2.26 trillion (2011: N2.14 trillion) representing a growth of eight percent and 6 percent respectively. Further analysis shows that deposit liabilities of the Group grew by 12% to N1.15 trillion in 2012, reflecting a decent growth of N120 billion from the N1.03 trillion closing position in the corresponding period of 2011.

BRIEF FirstBank partners AIRTEL on mobile money services


n furtherance to its commitment to ensure that a vast number of Nigerians enjoy superior financial services, First Bank of Nigeria Limited, through its mobile payment solution FirstMonie is partnering with Airtel Networks Limited (Airtel Networks). The partnership aptly titled the ‘Firstmonie Talkmore Campaign’ was formally launched on Tuesday, July 16, 2013 and it will enable Airtel Network’s subscribers who sign up to the FirstMonie platform to send money, receive money, buy airtime, pay bills and so much more with the use of their mobile phones without the need of a bank account. Duly registered Airtel subscribers who register for the FirstMonie service will receive N100 e-value and will be eligible for N240 bonus Airtel airtime.

Dangote Sugar posts N27.4 bn sales in Q2


angote Sugar Refinery has reported N27.4billion and Profit After tax, PAT of N2.5billion for the first half,Q2 of 2013 Sequentially, sales were also flattish, according to FBN capital report. According to FBN Capital, “Pending management comments, it appears that sales from Savannah Sugar Company (SSC) earmarked for Q2 2013 did not come through; if they did, the contribution was probably modest. Although gross margin expanded 260 basis points, bps, a significant increase of 57.4 percent year on year , y/y in opex to N2.8billin limited PBT growth to 10.1 percent y/y. We believe the marked increase in opex is most likely related to the acquisition of SSC; however, we would need management to confirm this. Sequentially, with sales coming in flattish like we earlier stated, a 45.9 percent quarter on quarter q/ q rise in opex and 18 percent q/q decline in other income led to PBT falling 19.2 percent q/ q; the decline in PAT was greater (26.6 percent q/q) because of a 582bps q/q rise in the tax rate.

Compared with our estimates, while sales were 7.4 percent behind our forecast, Profit Before Tax PBT missed by 20.9 percent mainly due to opex negatively surprising by 36 percent. PAT of N2.5bilionn was 29.8 percent behind the N3.6bilion we were looking for.”


26 —Vanguard, MONDAY, JULY 29, 2013


Vanguard, MONDAY, JULY 29, 2013 — 27


Bio-nergy provides alternative power for micro entrepreneurs Stories by PROVIDENCE OBUH



enhance productivity, Bionergy Limited, a Biomass electricity solutions company has said that it will make power available for micro entrepreneurs, as an alternative power solution. This will only be possible if micro-entrepreneurs who are willing to get Biomass electricity supply could per into group of cooperatives to enable them acquire the machine, Managing Director, Bio-nergy, Mr. Ernest Onyenze, said, explaining, “Biomass is a process of putting dried agricultural waste into energy, while biomass energy is the power that you get from that process.”

Onyenze said this at an exhibition of Biomass power Generation solution, stating that the essence of the initiative is to ensure power supply gets to rural areas, where there are artisans and micro entrepreneurs whose businesses depends on electricity. He said, “We want people to come together and write us. There are interventional agencies, foundations that can give grants. Some businesses depend largely on electricity supply which affects their income welfare. “Darkness represents poverty and is a setback to any business and without light we cannot drive the change we want in this country.” Calling for government support, he called on the Federal Government to act as an intervention partner to

the project, saying, “The situation in Nigeria requires radical alternative to get what we want. The situation has gotten us thinking, is a project of about eight years since we started working with our partners in US, on how Nigeria agricultural waste can be transformed into energy. “Today we have about 500 units of that all over the world, only five in Africa, one in Kenya, three in Liberia and one in Nigeria, this is the only single unit in Nigeria and we are trying to see how we can get the government to know that this has its potential to sort our power problem, particularly the rural areas, within the schools, universities, places where power is required and need solution.

L-R: Director of Strategy, All Power Labs , Mr. Tom Price; Founder/President, Bio-Nergy Ltd, Mr. Ernest Onyenze; QA Engineer, All Power Labs, Mr. Bill Bayer; and Biofuel Support Partner, Rev. Francis Akinpelu, at the exhibition of Biomass Power Generation Solution.

Honeywell harps on expansion plan, graduates more bakers T


meet bakers increasing orders for its flour brand, Honeywell Flour Mills Nigeria Plc (HFMP) said, it is expanding its capacity, graduating more bakers from its baking school. Speaking at the Certificate Award Ceremony of the Regular Course 22, HFMP Baking School, Executive Vice Chairman/ CEO of the company, Mr. Babatunde Odunayo said that the school has trained and graduated over 300 master bakers across the country in 22 regular courses and one executive course. Odunayo said, “The Honeywell Baking School is a corporate investment aimed at empowering bakers by equipping them with modern baking skill and flour handling procedures that they can use to maximize yield from flour and run their bakery operationsmore professionallyand

profitably. “It is an experimental programme designed to give bakers firsthand baking training in a world class environment.” He noted that the 13 graduands, nine male and four female, trained within an interval of three weeks, were taught the science of baking ingredients, common bread faults and

how to solve them, how to maximize bakery output through the production of different bread varieties, basic selling, marketing, finance and people management skills. “This is the only baking school course worthy of note in this country, we are gradually trying to improve baking skills in this country.

Winners emerge in Diageo Africa Business Reporting Awards


IAGEO, the world’s leading premium Drinks Company, has announced the winners of the 2013 Diageo Africa Business Reporting Awards. The Awards, held in commemoration of its tenth anniversary, showcases journalists and media outlets who have delivered excellent business journalism from and about Africa. Winners from the ten categories came mainly from the UK and West Africa including Nigeria. Anthony Akaeze won the award for the Best Tourism Feature while Olu Omoyele also won in the Best Financial Feature category. Davies, a BBC correspondent, was named Journalist of the Year while the Best Newcomer title was awarded to Sherelle Jacobs, a journalist for African Business magazine. C M Y K

28 — Vanguard, MONDAY, JULY 29, 2013



anaging Director and Chief Executive Officer of Resort Savings & Loans Plc, Mr. Abimbola Olayinka, in this exclusive interview with Vanguard, explains the modalities for its proposed N400 million investment in the Mortgage Refinancing Company (MRC) as well as the ongoing IT infrastructure upgrade being embarked upon by his company. Olayinka said the current reforms in the sector will herald a new refinace of affordable housing, not just for the middle class, but for all Nigerians. Excerpts.

players about this MRC and how can mortgage firms leverage it? The Mortgage Refinancing Company is one of government's efforts towards giving depth to mortgage banking operation in the country. The institution is to provide liquidity on turnkey and turnaround model to mortgage carriers or mortgage banks. The liquidity provided through this method will be used to create other mortgages, thereby improving activities with consequence on wealth creations for everybody. The players are yearning for the commencement of operations of the company.

What, in your opinion, are the major challenges of providing affordable housing in the country and how can these challenges be overcome? Provision of housing in the country has been affected by availability of housing finance, land and property documentation, dearth of information on mortgage operations and inadequate government support for operators. In the recent past, however, the Government has shown some commitment to provision of housing to the masses. Although some of these efforts are still at conceptual stage, we believe this will be concretised soon. Our Bank has been at the vanguard of creating awareness on mortgage banking operations in Nigeria. We did a successful promo tagged “Achieve Your Goal,” during which we educated the populace all over the country on mortgage opportunities. durng the promo, the Bank gave out some cars, landed properties, houses and some other gifts. We are presently enlightening people on the fact that mortgage banking can be done electronically, hence we have the jingle “Go cashless, Go Resort.” Other strategies and products are being developed to educate the populace on the mortgage banking as peculiar to our situation in the country. These we have done and will continue to do.

Reports say your company is planning to invest N200 million in the MRC; and then other reports say you may actually be investing N400 million. Kindly clear the air on what the actual figure is and how you would be making the investment.

One major challenge with housing is the complexity of the schemes, in terms of access to loans. Are things really getting better in this regard? •Mr. Abimbola Olayinka Resort Savings & Loans Plc has many mortgage products designed for all strata of the populace for which anybody can take advantage of. We place emphasis on mass housing since this will impact positively on the housing gap in the country. Things are really getting better in the areas of mortgage banking and housing finance. The Federal Mortgage Bank of Nigeria is The essence of Information qualitative manners to our better organised and their operation is impacting on the Technology is to ensure teaming customers. Financial operation of serious mortgage seamless service. Resort services is the same irrespective banks and this is expected to be Savings & Loans Plc is at the of the name giving to the more felt in the foreseeable future. vanguard of changing the system and the services we are face of mortgage banking providing is not only in line hat are your thoughts operation in Nigeria and with mortgage banking about the reforms in the serve as template for our operations but equally a mortgage banking sub-sector peers. The world is going stimulant for its effectiveness and what are the likely outcomes high-tech and we cannot and this will have positive result afford to be follower all the to show. There is nothing to in the industry? The reform in the sector is a time. Resort Savings & compete with other financial welcome development. What Loans Plc is just using the six institutions since we are can a mortgage bank do with locations as springboard dealing with real products that N100m capital base? The since the ultimate is to cover are mainstay of any system. outcome of this reform is having the country in due course. nly recently, RSL floated The Bank presently issues better capitalised mortgage banks an IPO and Rights that can really do the business of debit cards to its customers mortgage. I see some mergers, in the spirit of encouraging issue; how successful have acquisitions and dissolution but cashless policy, making these offers been? The IPO has ended but the the future is very bright for the mortgage servicing seamless sector of financial system. There and giving services in Rights issue is still on. The has been so much hype about the Mortgage Refinancing Company.

Mortgage sector ready for transformation, mergers and acquisitions imminent




Reports are rife in the media about RSL’s plan to upgrade IT infrastructure and roll out ATMs in six states. The mortgage bank is also said to be issuing out debit cards to customers. All of these activities do not really fit the description of what a mortgage bank should be doing. Does it not look like you are trying to compete with commercial banks?

There has been so much controversy about the NHF and how contributors are being short-changed.


feedback we have received on the offer has been very encouraging and working towards ensuring we reach all our shareholders since they gave the nod in the first instance. We are very sure that, by the time the offer is closed, we would have recorded oversubscription. The exercise has been very interesting and great. How is the bank faring operationally, and in terms of provision of housing in Nigeria? The bank has performed creditably well in provision of housing, but more needs to be done. We have projects in all states where we have presence that is Adamawa, Taraba, Lagos, Ogun (States) and Abuja. We are presently looking at increasing the stock by putting more in the present locations and even commence operation in other parts of the country. We are presently working on Kwara, Abia, Oyo, Rivers, Niger, just to mention few of the states. How confident are industry

The Bank is planning to invest N400 million on the company. The Bank is a leader in the industry and is poised to remain this. Beside this, we believe the level of investment in the company may affect the level of exposure the company may want to have in any mortgage bank among many other criteria that the management of that company will be using. We equally believe the investment in that company will give good returns in the foreseeable future considering the operations in view. There has been so much controversy about the NHF and how contributors are being short-changed. What actually are the issues and how clean is the Federal Mortgage Bank of Nigeria in all of these? National Housing Fund is one of the best schemes and the cheapest finance source in this country. People are being made to save for old age and at the same time being enabled to get mortgage finance. Let it be noted that the amount being deducted by the employers is not another tax as being view by some employees. It is savings, which can be collected on reaching certain age and the same value can be collected at that time to offset the loan (if any). I am bold to say that it is disservice to any employer not to deduct this amount from employee in their payroll beside the legal requirement that this should be done. It is great injustice for employer not to remit the amount deducted to FBMN and I believe machinery would soon be put in place to address this situation.

Vanguard, MONDAY, JULY 29, 2013 — 29

Full Page Advert

30 — Vanguard, MONDAY, JULY 29, 2013


Building collapse: NAICOM urges state govts to enact compulsory legislation


HE National Insurance Commission, NAICOM, has frowned at the spate of building collapse across the country and the absence of insurance compensation to victims. Accordingly, NAICOM has urged all state governments to initiate the process of enacting legislation to ensure that all buildings used by third parties within their states are adequately insured so as to give relief to victims of collapsed buildings whenever they occur. The absence of insurance compensation is in spite of the law which makes insurance of public buildings compulsory under the insurance Act of 2003. According to NAICOM, in Lagos alone, it is reported that well over 20 lives have been lost to building collapse in the last six months with no form of compensation. In a statement, the regulatory body said “NAICOM deeply sympathises with victims and family members of those that lost their lives in the recent collapsed buildings in Lagos and Kaduna States. “Most painful is the fact that

majority of those injured have to bear the treatment costs themselves while the families of those that lost their bread winners have no form of compensation, except maybe, the little that the state government could provide from the scarce resources of the state. The Commission is sad with this avoidable burden on

government and victims if only these buildings are adequately insured,” NAICOM stated. It will be recalled that the Federal Government through the Insurance Act 2003, made it compulsory for all buildings used by third parties to be insured against the risks of collapse, fire, earthquakes, storm or flood such that in the

event of any of these risks crystalising, adequate compensation would be paid to both victims and families of those who may lose their lives. NAICOM stated “Members of the public are hereby reminded that non-compliance with this provision of the law attracts a penalty of N100,000.00 or one year imprisonment or both. Let us all give hope to victims and family members of those who lose their bread winners in collapsed building incidences across the country.”

From left, National Coordinator, Nestle Health Kids Programme , Prof. Tola Atimo, Managing Director, Chief Executive Officer, Nestle Nigeria Plc, Mr. Dharnesh Gordhon and Vice President, Athletic Federation of Nigeria (AFN) Mr. Tade Abdulkareem during the flag off ceremony of Nestle Nigeria and IAAF Kids Athletic Programme held at Opebi Primary School on Thursday in Lagos.

Insurers oppose domicile of annuity fund with PFCs


NSURERS under the auspices of the Nigerian Insurers Association, NIA, the umbrella body of underwriters has opposed the initiative in the proposed pension bill to domicile annuity funds with Pension Fund Custodians, PFCs. Director-General of NIA, Sunday Thomas in an interview, said the Association expressed its misgivings on the issue at a public hearing for the review of the Pension Reform Act 2004, in Abuja recently. He noted that the Association is opposing the initiative because the management of annuity is totally different from programmed withdrawal, hence, the fund should not be left in the hands of PFCs. He said, “The Pension report is dealing with different aspects, one of them is the fact that life annuity funds should be domiciled with pension custodians. We have said that is not in practice in any known jurisdiction, and we do not think it should be so because the management of pension annuity is entirely different from programmed withdrawal. The bases of the liability from

both pension arrangements are totally different.” The proposed bill seeks to negate the operational guideline entitled, ‘Regulation on Annuity under Section 4.1 (B) of the Pension Reform Act 2004, issued by the National Insurance Commission (NAICOM) and National Pension Commission (PenCom), which provides that where a retiree chooses the retirement life annuity, the retiree shall based on the Retirement Saving Account (RSA) balance projected to the date of retirement, obtain quotes from life annuity from list of approved eligible insurance companies, as will be provided every quarter by the NAICOM.’ The guideline also states that the PFA managing the account of the would-be annuitant shall, within seven days from the receipt of application from the retiree, seek approval from PenCom to transfer the agreed premium to the insurer and the requests should be accompanied with a copy of a provisional agreement. And the PFA shall instruct the PFC to issue cheque for the premium in favour of the

insurance company within seven working days of receipt of approval. It noted that upon receipt of the cheque from the PFC, the life insurance company shall within seven days notify the proposed annuitant of such receipt, adding that the annuitant and his chosen life company shall jointly execute an annuity contract within 21 days from the date of receipt of payment. Thereafter, the life

insurance company shall cause a schedule of all policies written to be forwarded to NAICOM not later than 30 days of its execution. And that NAICOM shall forward a copy of the schedule to PenCom on a quarterly basis. The Life Insurance Company is also mandated to issue a standing payment order to its banker to credit the designated bank account of the retiree for the amount of monthly/ quarterly payments.

NIA to assemble investigators for large claims A pool of independent investigators to investigate the genuineness of claims above N500 million is being assembled, the Director General of Nigerian Insurers Association, NIA, Mr. Sunday Thomas, has said. Thomas said in an interview that the NIA is working hard to ensure that the pool is made up of experienced people, adding that the task is beyond the capacity of few individuals. He said, “The first point of call is to have a pool of investigators that would carry out that assignment on behalf of the Association. That is the stage that we are. We are trying to have a pool of investigators that would handle the task, for the assignment is beyond what a person can handle.” He said the decision to institute the investigative pool was reached at the Association’s Chief Executive Officers (CEOs) retreat held early in the year, stressing that the initiative would help operators learn from mistakes made in underwriting and claims handling.

BRIEF NZ awaits damage reports from Wellington quake


HE full cost of a 6.5magnitude earthquake that shook Wellington recently may not be known for weeks, according to the Insurance Council of New Zealand. “It appears a lot of commercial property has been affected,” the council’s Insurance Manager John Lucas said. Four people were injured in the quake, which lasted one minute. Some insurers are imposing “stand-down” periods, during which they will not provide new cover in parts of the country, he says. “What they are trying to avoid is people insuring uninsured properties that have already been damaged.” Insurance companies are “gearing up their staff ” to handle claims. But it was not a catastrophic event, Lucas said. “This was a moderate quake that has caused some damage. From our perspective, it is not a big event, but people are nervous and respond differently since Christchurch.”

Insurers face farreaching change, State Street says


OST-financial crisis regulatory reforms, distribution challenges and diminishing investment returns are transforming the insurance industry, according to a survey for US business consultant State Street. “No single route to the future will be right for every company,” State Street says. “However, it is clear the industry has reached a period of far-reaching structural change.” The Economist Intelligence Unit surveyed 307 executives worldwide for the survey. About 53 per cent of respondents were from life insurers, 19 per cent were from property and casualty groups, 12 per cent were from diversified insurers and the rest were reinsurers and health insurers. “Fully 29 per cent of survey respondents globally report that their companies have sold lines of business as a direct result of new capital requirements or risk management considerations, and this figure rises to 39 per cent in Europe,” State Street says.

Vanguard, MONDAY, JULY 29, 2013 — 31

Full Page Advert

l e

32 — Vanguard, MONDAY, JULY 29, 2013

Homes & Housing Finance BRIEFS LSHA re-orders budget to support HOMS By EBUN SESSOU


agos State House of Assembly has approved the request by the executive for the re-ordering of the 2013 budget on internal loans to support the Lagos Home Ownership Mortgage Scheme to enable the State Government address problems of housing deficit in the State. The House approved the request at plenary after adopting the recommendations of the joint Committees on Economic Plenary and Budget and Lands and Housing which were mandated to look into the request. The committee in its finding among other things said the State Government would not be able to realize its target on the capital receipts which was to support the capital development in the budget and that the initial Capital Expenditure of the Ministry of Housing is N10billion which has been increased to N17 billion.

Most African governments don’t take housing seriously — Shelter Afrique By YINKA KOLAWOLE


HELTER Afrique has said that most African governments are not giving due attention to the provision of housing, noting that that they have failed to provide meaningful incentives to investors in low-income housing. Kenya-based Shelter Afrique is a pan African Housing Finance institution established by 44 African member governments and African Development Bank, African Reinsurance Corporation and United Kingdom’s Development Finance Institution with the mandate of mobilising resources for housing development in Africa. Director of Business

*No incentives for low-income housing Development and Operations, Shelter Afrique, Mr. A. M. Adewole, made the remark in his presentation on primary mortgage market innovations and their role for housing supply, at the 9th International Housing Finance Workshop held recently in Abuja. The forum brought together some of the foremost and most enterprising of minds in real estate, construction and housing finance within and outside Nigeria to deliberate on various challenges affecting the housing and housing finance sectors and how these challenges could be tackled to ensure development in the sector. According to Adewole, “Shelter Afrique is committed

to financing housing initiatives across the various housing market segments and that includes social housing which had come to fore in the last couple of years.” He said that one of Shelter Afrique’s platforms of intervention is through lines of credit to financial institution particularly financial institutions for on lending to people on very low income to build or improve their own homes. He described the lowincome groups as the most forgotten of Nigeria’s population, noting that the private sector housing market currently caters for the uppermiddle income and highincome groups, leaving the lower middle and low-income

Ondo releases N62m housing loan to civil servants


NDO State government has disbursed N62 million housing loan to civil servants in the state at a reduced interest rate of 3 percent, under the State Staff Housing Loans Scheme. Governor Olusegun Mimiko, during the presentation of cheques to beneficiaries, said the disbursement of the loan underscores the commitment of his administration to improve the welfare of workers in the state with a view to repositioning civil servants for effective service delivery. He said the loan would be paid back over a period of 15 years at 3 percent interest rate. Mimiko pledged continuous implementation of the affordable housing loan scheme for the state public service that will guarantee access to financial assistance from government to enable them build or buy houses of their own. He recalled that his administration approved and disbursed the sum of N118 million in 2010 and the sum of N50 million in 2011 as housing loans to workers at three percent interest rate.

President Goodluck Jonathan handling the keys of a flat to a Police Corporal and beneficiary of the Goodluck Jonathan Housing Estate, Idimu, Lagos at the unveiling of the estate financed by ASO Savings & Loans Plc. With them from left: Chairman, ASO Savings, Mr. Olatunde Ayeni; Oba of Lagos, HRH Rilwan Akiolu; Aide de Camp to the President, Lt. Col. Ogogbane Adegbe; and Inspector General of Police, Muhammed Abubakar.

unattended. “The middle and low-income earners in Nigeria represent over 85 percent of the overall population. These are part of the target groups which I strongly encourage investors to turn their attention to, and engage with all manner of decent, stylish and affordable housing concepts.” He asserted that the prohibitive cost of constructing a house has made it difficult to offer affordable housing in Nigeria. “Single minded large scale housing programme is required as current approaches, while well intended, are not sufficient and if we must build at an unprecedented scale, the challenges of technology, economic viability, and capacity must be overcome to succeed. A decisive shift towards manufacturing based housing solutions offer the best chance of meeting the challenges,” he said. In a communiqué issued at the end of the workshop, real estate experts unanimously declared that the housing situation in Nigeria requires more complex solutions in order to be effectively tackled. They suggested that a largescale market solution is required to roll out viable and profitable models to serve lower income groups of the nation’s workforce. The forum noted that in addition to development finance and efficient land administration required for low-cost housing, sound governance, professional standards and norms, transparency, and good consumer protection are needed in the industry.

Building collapse: Falana wants prosecution of culpable professionals A

GAINST the backdrop of the recent collapse of buildings in Lagos and Kaduna, and many other previous such occurrences across the country with attendant loss of lives, a Lagosbased lawyer, Mr. Femi Falana, has called for prosecution of professionals found culpable in such incidences. According to the legal practitioner, any professional whose negligence is found to have led or contributed to the incidence of building collapse should be put behind bars to serve as deterrent unto others. Falana stated this at a forum, in Lagos, organised by the

Building Collapse Prevention Guild (BCPG) in the quest to minimise cases of building collapse in the country. Pledgeing his support for the efforts of the group, he said, “As far as the law is concerned, if you put up a building that is structurally defective and liable to collapse, you are liable for the loses and that can wipe you off your profession. "The beauty of your commitment to this project is that you want to weed out those destroying this profession. In this regard, I want to pledge to offer my service Pro Bono to you. We live in a country that has no regards for the rule of

law. If we were in other climes, all those involved in collapsed buildings would have been in prison. But we cannot allow quacks and unprofessional builders to destroy this profession.” The Senior Advocate of Nigeria (SAN) recalled that the Lagos State government has passed a law setting up coroner inquests which ensures that when people die through unnatural causes, including building collapse, an inquiry be conducted and those found liable will be brought to book. “The laws are there and they are for all of us, and if we are not careful in handling building

projects, we may run into problems,” he stated. Also speaking at the forum, Special Adviser to Lagos State Governor on Projects Implementation and Monitoring, Mr. Sulaimon Yusuf, said the state government is interested in ensuring that the right thing is done by the right professionals. He urged the guild and other professionals in the built environment to respect one another, demonstrate integrity in their practice without compromise, build capacity especially with the artisans and strive to be excellent in the execution of their duties.

Vanguard, MONDAY, JULY 29, 2013 — 33

Full Page Advert

34 — Vanguard, MONDAY, JULY 29, 2013

Homes & Housing Finance BRIEFS FG to conduct housing census


N its bid to ascertain housing deficit in the country, the Federal Government will conduct housing census, Minister of Land, Housing and Urban Development, Ms Amal Pepple, has said. The minister announced this in Abuja when she met with members of the steering committee on the restructuring and commercialisation of the Federal Housing Authority (FHA). According to her, the census will determine what had been achieved and what needed to be done in the housing sector, noting that much has been done in the sector since 2011. She said that in spite of the challenges and measures taken by FHA in housing delivery, other means initiated by the Federal Government had boosted the housing sector. The minister said the census would expose states that had not met the minimum expectation in the housing sector and serve as avenue to commend those that had achieved the minimum standard. Pepple said the 36 state commissioners as well as the FCT had been requested to submit the number of housing projects delivered and those still in progress from 2011 to date. She added that some states had started collating data on the housing projects they embarked on. (NAN)

Fashola tasks NASS on mortgage culture


AGOS State Governor, Mr. Babatunde Fashola, has charged the National Assembly to initiate legislations that will lead to deepening the mortgage culture in the country, concentrate on research and development as well as education to improve building methods as part of strategies in solving the nation’s housing problems. The governor said the Federal Government must also address the cost of demurrage of landing imported building materials, noting that Nigerians know how to build houses but that the problem is that they can’t afford to buy it. Fashola told the Senate Committee on Land, Housing and Urban Development which paid him a courtesy visit, that deepening the mortgage culture would enable Nigerians obtain loan that they could pay within the productive period of their life at minimal interest rate.

•Housing development in a natural habitat

‘Housing policy should target most houses for most people’ By YINKA KOLAWOLE


N the quest to provide affordable housing for Nigerians, a call has to government to formulate policies that will ensure that resources are deployed to provide the highest number of houses to the highest number of people. National President, Nigerian Institute of Quantity Surveyors (NIQS), Mr. Agele Alufohai, made the call at the 5th annual distinguished lecture of the Lagos State chapter of the Institute held recently in Lagos. He said any concept of housing affordability should bear in mind questions of sustainability and social justice. “It is better for N20 billion of government input in cash and kind to provide houses to 10,000 Nigerians over 20 years at N2 million each rather than 1,500 Nigerians at N250,000. The latter scenario is of course affordable but doesn’t boost the supply of housing as the element of government subsidy is too high and extended to only a few citizens,” he said. He submitted that creating incentives that would stimulate and enable private investment and transactions should be the focus of government intervention in housing, rather than provide underpriced inputs such as land or finance. In a keynote address, Minister of Lands, Housing

and Urban Development, Ms. Ama Pepple, who was represented by Federal Controller of Lands, Housing and Urban Development, Lagos State, Mr. Temitope Onayekan, said affordable housing would continue to be the pre-occupation of government until the required results are achieved. She

asserted that lack of access to decent and affordable housing is the worst form of poverty, adding that it is a gross violation of the rights of homeless or inadequately housed individual and families. Pepple declared that the key to sustainable and affordable housing delivery is the active

participation of all stakeholders in building effective partnerships and leveraging on resources and talents to reinvigorate the housing sector for optimum contribution to sustainable national development. “The 1999 Constitution of the Federal Republic of Nigeria, in Section 16(1), urges the three tiers of government to direct state policy towards the provision of sustainable and adequate shelter for all citizens. Affordable housing is always targeted at those residents who, based on their incomes and assets, as in the case of Nigeria, housing is considered to be affordable when it costs no more than 30 per cent of a household’s income,” she stated. The minister said her ministry was working out plans aimed at addressing some of the basic components of housing affordability, including access to land, location and land use density, funding, building materials, approval process, planning data and policy direction. “Our goal is to make affordable housing delivery in Nigeria a reality and thereby raise home ownership to about 50 per cent, improve Nigeria’s human development index ranking, and make the housing sector contribute over 20 per cent to Nigeria’s Gross Domestic Product as envisioned in Vision 2020,” she said.

NASS to build 32 buildings for legislative institute By FAVOUR NNABUGWU HE National Assembly is erecting a 32 state-of-theart buildings occupying 80 square meter land in Abuja for the permanent site of the National Institute of Legislative Studies (NILS). The project which is expected to be completed by Julius Berger Nigeria in 2015 at the cost of N51 billion include the convention centre, administrative building, librar y, lecture theatre, hotel, clinic and residences. Other infrastructure includes preparation of roads and parking areas, underground services, as well as construction of several technical buildings on an area of more than 80, 000 metres. Senate President, David Mark and Speaker of the House of Representatives,


Aminu Tambuwal, laid the foundation stone for the construction of permanent site in Abuja. Mark said the project was the first of its kind to be initiated by the legislative arm of government. “This is the first time we are embarking on a project that is purely a National Assembly project from conception to this stage. The importance cannot be over-emphasised, NILS is our own creation and has grown to the level we want it. We know it is an expensive project because we want it to meet international standard,” he said. Mark said the current leadership of the National Assembly would like to commission the first phase of the project before the end of the present administration. He noted that the project was conceptualised to meet international standard and said the institute would provide training in conduct of

legislative business upon completion. “I am not a party to white elephant project and I won’t be a person to lead a group that will embark on white elephant project, but if for any reason all the parties are not able to meet their obligation, Julius Berger don’t stop work.” He said that on completion, the institute was expected to boost training and research as well as advocacy in legislative business at the federal, state and local government levels. Also speaking at the ground breaking ceremony, Tambuwal described the commencement of the project as a historic march towards deepening of democracy in the country. He noted that the institute has done a great deal in supporting the work of legislature in the country and was also increasing its support for legislative business in the sub-region.

Vanguard, MONDAY, JULY 29, 2013 — 35

Full Page Advert

36 — Vanguard, MONDAY, JULY 29, 2013

People in Business

• Iroghama Ogbeifun standing by her 2013 Ford Focus, displaying her N5 million cheque

Female entrepreneur emerges as MTN’s Next Business Titan By EBELE ORAKPO


T has been proved over and over again that Small and Medium Enterprises (SMEs) are the way to go if a nation wants to grow its economy. The reason is that SMEs are known to create more jobs than governments and with job creation, crime rate is reduced as more people and gainfully employed. With this at the back of their mind, MTN Nigeria, through its MTN Next Business Titan, a proudly Nigerian Entrepreneurial Reality TV Show for young Nigerian Entrepreneurs, sought to empower entrepreneurs who will create the much needed jobs for the teeming youths of Nigeria and help grow the nation’s economy. At the end of the 13 weeks MTN Next Business Titan reality contest which featured 16 contestants, 27year-old Iroghama Ogbeifun, Chief Executive Officer of Hairven Hair care products, a London-based, emerged winner and went away with the N5m jackpot in addition to a 2013 Ford Focus plus a four-year free post-

presentation service of the car by Briscoe Ford. Born in Port Harcourt, Nigeria, Iroghama studied in the UK and later returned to Nigeria for the one year compulsory National Youth Service. After her youth service, she went back to the UK for her Master’s degree. She started the hair care products business in London as a result of her passion for stylish hair and today, she has continued to build upon the business in Nigeria. According to Iroghama, she took part in the MTN Next Business Titan show because she felt it was the perfect platform to realise her “burning desire to take Nigerian youths off vices by providing them with employment opportunities.”

The contest:


TN Next Business Titan ran for a period of 13 weeks, featuring 16 bright young Nigerian contestants, competing to earn support and investments for their business ideas. The 16 contestants were selected from thousands who went for auditioning in three major cities in Nigeria.

Every week, the contestants worked in two teams, each under the guidance of a project manager, to compete in business-driven tasks around Lagos, Nigeria. With each week coming with its own unique tasks, each team deployed ideas, creativity and business acumen to surmount challenges. Contestants were subjected to long hours, tough deadlines, intellectual challenges, personality clashes and intense analysis under the alert observation of their supervisors and judges. The end of each boardroom session saw the eviction of those contestants who were not strong enough to take the heat.


s the weeks rolled by, it seemed the female contestants were taking the lead, proving that the African woman is, indeed, no longer a push-over or one to be relegated to the kitchen. The performance of women challenged viewers to realise the undeniable role of women in the world economy. One of the contestants, Zion, confessed that in the house, he met “women who acted like ladies but thought and fought like



n week 12, only three of the contestants were left Olanrewaju Tinuade, Iroghama and Ejeke Emeka. At the grand finale, which held at the Grand Ball Room of Oriental Hotel Lekki, the final three contestants, in executing their final tasks, displayed the creativity, zeal and viability of their personal business ideas. They slugged it out before hundreds of guests who came to watch the titans battle. Each presented and defended their business ideas. After their presentation, Ejeke Emeka was voted out as the weakest link while Ogbeifun Iroghama was declared the winner. Speaking at the grand finale, the General Manager, Enterprise Sales, MTN, Onyinye Ikenna-Emeka, noted that the show was committed to exposing young Nigerians to business and entrepreneurial experiences inherent in our environment, thereby supporting and building upon the enterprising spirit embedded in the average young Nigerian. The contestants confessed that MTN Next Business Titan had made a positive impact on them, noting that their stay in the academy had made them stronger and put in them the faith that they could achieve their dreams.

Vanguard, MONDAY, JULY 29, 2013 — 37

Full Page Advert

38 — Vanguard, MONDAY, JULY 29, 2013


Okwuada urges Nigerians to embrace agriculture BY VICTOR AHIUMA-YOUNG


leading Agriculturist in Delta State, Dr. Philip Okwuada, has called on Nigerians to embrace agriculture as a viable platform for employment generation and wealth creation. Okwuada who is the Managing Director and Chief Executive Officer of Phed Breeder Farm and Hatchery Limited, Agbor, Ika South Local Government Area of the state, spoke in Agbor. According to him, the call had become imperative as agriculture remained one viable sector in the Nigerian economy that had the capacity of reducing the increasing rate of unemployment in the country, noting that God had endowed Nigeria with a good arable land and climate that favoured agricultural productivity, saying that “if the agricultural potentials of the country are maximally harnessed, Nigeria will be able to produce enough food for domestic consumption and for export.”

Rice, tomatoes farmers to access N1.5bn agric loan facility By ABDALLAH EL-KUREBE


ENITH Bank Plc in conjunction with Sokoto

state government have concluded arrangements to provide N1,536,000,000.00 agric loan facility for rice and tomatoes farmers in the state. Commissioners of Information, Danladi Bako; Solid Minerals Resources, Dahiru Maishanu and Health, Ahmed Aliyu briefed news men shortly after the state’s Executive Council meeting, which took place on Wednesday. According to Bako, “We have received an offer of agric loan facility from Zenith Bank Plc for the promotion of the production of rice and tomatoes to the tune of N1,536,000,000.00.” “Of the amount, Sokoto state government would provide the sum of N512 million as counterpart funding; 9% interest rate and 2.5% processing fee would apply while 3% Credit Risk Guarantee (CRG) has been paid by government,” Bako said.

'Commercial banks can’t finance agric as BOA' Increasingly , we are improving this through cooperatives as they know each others and they bring pressure to bear and so on . So in our experience some of these methods have paid off because the level of defaults has significantly reduced in the last two years as compared to what obtained in the past.

The Managing Director/Chief Executive Officer of the Bank of Agriculture (BOA) Limited, Dr. Mohammed Santuraki during the recently held Agriculture council meeting in Abeokuta took time out to talk on agriculture lending in the country, mechanization and why the bank remains the choice lending house for smallholder farmers in the country. Here is an excerpt from the interview with JIMOH BABATUNDE On access to funds by farmers through Bank of Agriculture The requirement in agricultural sector in terms of funding is too large for one player to meet, but with the advent of Agriculture Transformation Agenda (ATA) and the Nigerian Incentive based Risk Sharing for Agricultural Lending (NIRSAL) program, which seeks to encourage banks to lend to agriculture, things are looking up as commercial banks are coming in. You know the commercial banks have the largest pool of fund , so they are doing that but they need to do more like the Minister of Agriculture pointed out. At the level of Bank of Agriculture, (BOA), as a development bank and fully owned by the government, we are also doing our best, but things are beginning to look up. Part of the challenges we had was lack of lending resources, but this is being addressed like the minister pointed out. The President has approved the recapitalization of the bank of agriculture to the tune of N15b. Even before this money was announced, we had also been reengineering the bank, we have repositioned the bank into a more formidable institution and we are supporting farmers. It is an ongoing thing. On the average, using our own resources, we do about N5b every year, we can do more, but the resources are not just there. We want to scale that up to about N20b in a year , so the N15b capitalization we are going to receive is going to support what we are doing. We are working with other partners, this figures I have given you is just the fund on the part of the bank , we also have a scheme where we collaborate with governments. We are into partnership with most of the state governments in the federation. We just signed up with Lagos. We are going to flag off with Lagos, we have done Sokoto state , we are in Osun state, FCT and other states. What we do in these states are matching funds arrangement. Government put in money and we put in additional resources . We then use the money to support there farmers. On support for mechanization Beyond that also, critically for the first time, BOA is also working very closely with the mandate ministry, which is the ministry of

•Dr. Santuraki with Minister of Agriculture, Dr. Akinwumi Adesina

agriculture. As you know, the ministry has a very big ambitious mechanization program worth about N3.6b. This is actually being driven by the ministry , we are a collaborator in this case . Soon , we are going to roll out. Part of the problems of agriculture in this country is lack of mechanization. The fact that you use hoe and cutlass in farming is not farming but punishment. We need to scale up our farming and need to do the right thing as far as mechanization is concern. We are supporting the ministry to do a mechanization program worth N3.6b in about 80



hiring providers to provide the services, the reason being that the average farm land holding is usually too small to make it effective for a farmer to go and buy a tractor. So the approach of pool services is very attractive when you have cases like this. On loan recovery You know agricultural lending is a very important space , but it is also a space that is a bit risky. Now, what they are talking about is the inputs supply arrangement with agro dealers and so on. You know it is a value chain , inputs to outputs . Now the top end of the value chain, which is inputs supply , is with a minimal risk

We are the only one in this country that can give loans at micro level based on cash flows and without physical collaterals.

mechanization supports sites. Although it is going to be driven by the private sector, but the government is supporting the initial creation. We are going to have about 40 such centres throughout the country , we are going to provide about 400 tractor implements in the first stage and that project is already on going and it is part of the ministry program. It is hiring scheme, but in a different way. You know in the past government import tractors and give to farmers or set up hiring services that are never sustainable. So, what is happening in this case, is that we are going to have pools, we are going to have mechanization service providers which will hold at least five set of implement and they are going to be private sector. It is not government. The government will set it up, the promoters will pay some amounts, the bank will also contribute, the suppliers of tractors will also provide some trade finance. We are going to empower tractor


because you don’t have issue of weather, pest and so on . But most of the lending we are doing up to this moment is for production and we are lending to small farmers, so our demographics are bit different . In the past there used to be political interference in what we do and now it has significantly reduced because of the level of professionalism that we have in the ministry as nobody is giving notes to farmers saying give this person loan. If you want loan, you come and we assess you . We have now strengthened the risk management of the bank in terms of who gets a loan and the condition they have to meet, but again you need to balance it between access and security for the loans. So what we have done is to make sure that farmers are properly identified . One of the things we are also using is the co-operative approach , as you know our small holder loans are not secured by properties, they are secured by personal guarantees and peer pressure and so on.

On routing agric loans through commercial banks I don’t think it is right to do so, because the evidence does not support that. Last year, the Central Bank of Nigeria and the federal ministries of finance and agriculture went into agreement with the commercial banks to deliver N30b worth of credits and they had guarantees but I am not sure what they disbursed was up to N5m So it is not true the commercial banks can do it better as the conditions for accessing commercial loans is very tight and most farmers can not get through. We are the only one in this country that can give loans at micro level based on cash flows and without physical collaterals. So I believe the space is wide enough for everyone to make its impact felt. For the large farmers the commercial banks can do that because the big farmers have collaterals but for medium scale agriculture, the Bank of Agriculture is the place to go to. On the adeni pilot program The adeni programme is based on the concept of ware housing , where farmer will bring their produce , because you know at the beginning of harvesting season, prices usually crash so that is not the best time to sell. Most farmers sell then because they need money either to pay loan or do other things. So the adeni program was a pilot scheme that we used to say let us do the ware housing scheme . In the developed country they do it a lot. You go and put your produce in a warehouse and then the ware house issue you a receipt and banks can provide lending against that. What we did in the past was a pilot, but what we are trying to do now is to widen it , but to do that we must put in place the required warehousing infrastructure. That is why we are working with the commodities exchange. You know the law that will require the acceptance of ware house receipt as a bank security has not been passed. So what we are waiting for is for that law to be passed. We are working with the commodities exchange commission to support the passage of that law , but we are not resting on our oars as we have a bilateral committee now that is looking on what we can do before these loans are approved. So,it is something we are also very passionate about. It is a warehouse receipt kind of lending. We want to do it in a bigger way.

Vanguard, MONDAY, JULY 29, 2013 — 39


Managing Director, Levant and Emerging Africa Region, EMC, Mr. Nazim Fraijat; Vice President and Global Chief Technology Officer (CTO) for EMC Sales , Patricia Florissi; and Regional Manager for English-speaking West Africa, EMC, Rasheed Jimoh, at the EMC Forum held recently in Lagos and hosted by EMC to chart the course for IT Transformation in Nigeria recently.

Resourcery, Cisco prescribe video solution to Oil & Gas operations By PRINCE OSUAGWU


esourcery Plc, a sys tems integrating com pany and its networking partners, Cisco have advised to oil and gas executives to embrace videon solutions to improve their operations. This

advise was given at a one-day business seminar or business executives in the Oil and Gas sector. This C-level business gathering held at Novotel Hotel in Port-Harcourt. Tagged “Breaking down the wall of communication;” The event aimed at

addressing the business benefits of the effective application of Cisco Video conferencing, WebEx, Internet Protocol (IP) telephony and digital media signage as it relates to the peculiar oil and gas sector of our business environment. According to the Eastern Re-

FG empowers 29 inventors with N18m grant By EMMANUEL ELEBEKE


HE Federal Government has empowered 29 local inventors and innovators with a financial grant of N18 million. The grant presented through the Presidential Standing Committee on Inventions and Innovations, PSCII was meant to assist them in creativity, inventions and innovation that will further boost national development, economic growth and global competitiveness. Presenting the cheques to the beneficiaries in Abuja, the

•Prof. Ewa: Science & Tech Minister

Minister of Science and Tech, Professor Ita Okon Bassey Ewa, charged them to be more creative in their inventions and innovation. “I challenge all the beneficiaries to work towards further creativity, inventions and innovations, using this grant” He stated that a total number of 103 inventors and innovators have so far benefited from the grant across the six geo-political zones, since the inauguration of the committee in October, 2005. The minister disclosed that the committee was making efforts at improving the funding level of the grant, disclosing that “collaborations with relevant stakeholders such as the Education Trust Fund, ETF, the Petroleum Technology Development Fund, PTDF, and others would assist in achieving the ultimate goal of providing a solid foundation for a technological breakthrough in the country. Prof. Ewa also encouraged Nigerians to see Science, Technology and Innovation as the tools for national development. The Chairperson of the

Presidential Standing Committee on Inventions and Innovation, and Permanent Secretary, Federal Ministry of Science and Technology, Mrs. Rabi Jimeta, congratulated the beneficiaries and advised them on the need to plough back the funds into their work, Responding, Mr. Ekpo Cletus who spoke on behalf of the beneficiaries promised that they would plough the money into the businesses to ensure improvement in the work.

gional Manager, Resourcery, Mr. Ifeanyi Ikoro, considering that the oil and gas workforce had become more mobile, business executives should also position themselves to appreciating the benefits and growing impact of video as an integral component of the development of their organizations. He told the gathering that, “whether you are an indigenous or international oil and gas company growing your information technology infrastructure to support the use of video as an effective business tool, this meeting provides you a veritable opportunity to see and test how this is applicable to your business environment. With competent professionals from Cisco and Resourcery, we aim to fully explore some of the technical applications of these business solutions as it affects our local businesses here in Nigeria.” “The Cisco video conferencing solution that started out as a technology that would alter the way we meet has evolved into something much more. It is transforming the very way that organizations do business. Forever changing how petroleum rig operator in the Jubilee Oilfield at Cape Three Points in the Western Region of Ghana seeks subject matter expertise from an engineer in Nigeria.” he added. Meanwhile, Business Solution Manager, (voice and video) Resourcery, Mr. Gbenga Adanlawo added; “ we recognize the shift in global work practices which also affects how we do business here in Nigeria. We also know that technology needs to evolve to allow people communicate and collaborate in a more social, more virtual, more mobile, and more visual way. That is why we are providing this opportunity for our oil and gas sector customers to experience how seamless business video communication can enhance their internal and external service delivery.”

BRIEF LG donates tech products to SOS children By ADEBADE ADEJIMI G Electronics has said that its recent visit to SOS children’s village in Isolo, Lagos, was not only to express its commitment to Corporate Social Responsibility (CSR) but also to put smiles on the faces of the children. General Manager, Home Appliance division, of the company, Mr. Hyunwoo Jung, said that the children had dreams and aspirations and it was a high time somebody supported them to realising it He added that “as a leading global brand we are committed to making a real difference in improving society and helping address poverty problem in the communities we operate in. for us at LG Electronics, CSR is a natural inclination. Children are the future leaders, and for that reason, they deserve all the love and attention in order to ensure that their development is not in anyway disturbed.” Also Managing Director of Fouani Nigeria Limited, partners to the company, Mr. Mohammed Fouani, added that “Children, as we all know, are the leaders of tomorrow, and in order to ensure that they are able to live their lives in the best way possible, devoid of any form of limitation, they deserve to be given all the love and care we can provide. It is my firm belief that the items we are donating will make everyday life enjoyable as well as ameliorate the perplexities of the children in the home. It has been proven that youngsters thrive and grow in calm and nurturing environment devoid of need and distress.”


Jonathan drags Ehud Barack to Cybersecurity Confab in Abuja By PRINCE OSUAGWU


HE First Lady of the Federal Republic of Nigeria, Dr Dame Patience Goodluck Jonathan, who was recently appointed as ITUIMPACT Champion on Child Online Protection (COP) and former Prime Minister of Israel, Ehud Barack will next week be keynote speakers at the 2013 World Cybersecurity Conference slated for July 30

at the State House, Presidential Villa in Abuja. The conference with the theme: ‘Cyber Insecurity- A Latent Threat to National Security and Economic Development’ is being organised by Office of the First lady of Nigeria, International Multilateral Partnerships Against Cyber Threat (IMPACT), Nigerian C o m m u n i c a t i o n s Commission, NCC, National Infor mation Technology

Development Agency, NITDA and Technology Training Institute, New Horizons Nigeria. The conference is expected to map out new strategies to securing government assets and individual security on the cyberspace. Mrs Jonathan will highlight her programme for Nigeria and Africa as a whole with regards to Child Online Protection and security.

40 — Vanguard, MONDAY, JULY 29, 2013

Aviation BRIEFS Etihad Airways , Korean Air sign codeshare agreement TIHAD Airways, the national airline of the United Arab Emirates, has signed a new codeshare agreement with Korean Air, South Korea’s largest airline. The partnership subject to regulatory approval, brings to 46 the number of codeshares operated by the Abu Dhabibased flag carrier. In the first phase of cooperation, Korean Air will place its ‘KE’ code on Etihad Airways’ daily services between Seoul (Incheon) and Abu Dhabi. Members of Etihad Airways’ Etihad Guest and Korean Air’s SKYPASS loyalty programmes will also enjoy full reciprocity. These reciprocity benefits include lounge access, priority check-in and excess baggage allowances for top tier programme members and the ability to earn and burn frequent flyer points on all Etihad Airways and Korean Air flights. Etihad Airways’ President and Chief Executive Officer James Hogan said the new commercial partnership with Korean Air was a significant development for the airline, in both strategic and commercial terms.


Overland Airways rewards customers on Asaba route


VERLAND Airways has introduced a special fare on its Asaba- Lagos and Asaba - Abuja routes to reward her customers for their patronage. This started on July 18, 2013 when passengers started paying N18,000 for flight services from Asaba to Abuja and Lagos. According to the Chief Operating Officer of Overland Airways, Mrs. Aanu Benson, as the pioneer airline to Asaba International Airport, the introduction of the special fare offer on Asaba route is to appreciate and reward customers for their patronage since Overland Airways commenced flight operations at Asaba Airport. Mrs. Benson further said Overland Airways is determined to continue offering excellent and satisfactory services to her customers and will not compromise in the delivery of effective and comfortable services at all times. She said for the convenience of customers, Overland Airways has also adjusted its flight times on the Asaba Abuja and Asaba Lagos route.

The DG NAFDAC held a press conference in Lagos on activities of the Agency in recent times . Px shows right Prof John Ibu,Chairman,NAFDAC Governing Council Board, Dr Paul Orhii,DG NAFDAC and Mrs Stella Denloye, Director Laboratory Services NAFDAC during the briefing in Lagos yesterday. Px Biodun Ogunleye.

NAF, NAMA collaborate on Air safety By LAWANI MIKAIRU IGERIAN Air Fo r c e , N A F, has re affirmed its commitment to continue to work with the Nigerian Airspace Management Agency, NAMA to ensure that the security of the nation’s airspace is not compromised. The Chief of Air Staff ,Air Marshal Alex Badeh made this commitment when he played host to the management of NAMA led by its Managing Director, Engr.Mazi Nnamdi Udoh in Abuja . Air Marshal Badeh said NAF would continue to collaborate with the agency on issues bordering on security, surveillance and personnel training. According to Supo


Atobatele ,General Manager, Public Affairs, NAMA, “Air Marshal Badeh ,who appreciated the coverage and operation of the new radar

in the country, said that the system has improved the surveillance of the airspace tremendously. He lauded the initiative of the agency on its

FAAN says low activity in Kano Airport due to insecurity By LAWANI MIKAIRU


HE Federal Airports Authority of Nigeria, FAAN, has attributed the low activity in Mallam Aminu Kano International Airport, Kano to insecurity in the historical city, which has affected socio economic activities in the state. The agency said it is not true that the airport was dormant,

as the airport is being affected by the impact of the insecurity which has stifled most economic activities in the state. The General Manager, Corporate Communications of FAAN, Yakubu Dati, who made this explanation in Lagos said that media attacks against the project, especially the report that the international terminal of the Mallam Aminu Kano Airport has not been put to use

Scarcity of aviation fuel: FG urged to give license to more independent marketers By DANIEL ETEGHE


HE Federal Government has been urged to give more license to independent fuel marketers in the aviation industry to allow them import JET A1 otherwise known as aviation fuel as a fast remedy to the problem of scarcity of the products before it gets out of hand. Out-going Secretary General of the Airline Operators of Nigeria (AON), Alhaji Mohammed Tukur made the call while speaking with

proposed deployment of Automatic Dependent Surveillance Broadcast-ADS -B multilateration to capture low flying aircraft like helicopters in the Niger Delta area “. Atobatele further said “ Earlier in his speech ,Engr.Udoh acknowledged the current partnership between the two organisations, pointing out that such effort has enhanced the smooth running of the nation’s airspace under the joint civil/military joint users’ collaboration.” “NAMA’s boss, assured the Chief of Air Staff that the agency would always be willing to make available its facilities for NAF personnel training necessary for their practical exposure ,especially on engineering and air traffic control.” On the courtesy visit were: the director of engineering ser vices, Engr.Ifeanyi Nwankwo, director of finance and accounts, Mrs Clara Aliche, director of human resources, Dr Dr.Uwem Akangson,Director of administration, Dr.Yahaya Saleh,Company Secretary, Mrs Anastasia G b e m , E n g r. M u y i w a Adegorite ,SA to the MD, and Engr. Ikenna Anyaegbunam.

newsmen at the Murtala Muhammed Airport, Lagos. According to Alhaji Tukur, the major reason for the scarcity of aviation fuel is that, it is only one fuel marketer that is supplying the product at the moment stressing that if the government should allow other independent marketers into the system, the scarcity of aviation fuel will become a thing of the past. He said “The major reason for the scarcity of aviation fuel is that, it is only one marketer that is supplying fuel at present as I am talking to you. So the

government should give more hands and allow other marketers to supply aviation fuel and with that I think this problem of scarcity of the product will be a thing of the past” “So what the government should do, is that they should allow everybody to go and import the fuel and bring it or they should give people more license to come into the system, Sahara oil and other oil marketers, they have made some difference and that is why they have not increase the price of aviation fuel, because in

after its remodeling was merely to score cheap political goals as the criticism stemmed from ignorance and mischief of some anti- progressive elements. ‘This report alleged that there was sabotage by FAAN and the Ministry of Aviation to make the terminal and perhaps the airport dormant, but this is not true. We wish to state that Kano has been and will continue to be one of the major airports in Nigeria and it is because of the importance attached to the airport that FAAN embarked on rebuilding the domestic terminal which was commissioned in early 2011.” Dati explained that the viability and utilisation of airport is dependent on passenger movement, adding that it would be difficult for economic activities to go on under threat to lives and property. “If the terminal or the airport is alleged to be dormant, it means that there is low passenger movement and it is not the responsibility of FAAN or the Ministry of Aviation to attract the passengers to the airport.

Vanguard, MONDAY, JULY 29, 2013 — 41

Business & Economy By NKIRUKA NNOROM


anufacturers Association of Nigeria, MAN Ikeja branch, has expressed concern over numerous charges their members are made to pay to secure the Bank of Industry, BoI, loans, calling for immediate review and possible reduction. Expressing this position at a business luncheon for chief executives and managing directors of manufacturing companies under the chapter, the chairman, Rev. Isaac Ade Agoye, said the problem has

Manufacturers raise concern over charges on BoI loans the capacity of inhibiting their collective growth as manufacturers, as well as hamper the survival of the real sector if unattended. He noted that in all, manufacturers pay as much as 21.125 percent interest on BoI’s loans, saying, ‘We consider these surcharges as too cumbersome and demanding, hence we invited the BoI management for enlightenment.”

“We believe that if manufacturing is made easy and less cumbersome by way of accessibility of loans, manufacturers will obviously be encouraged and this could act as a stop-gap measure for militating the high rate of unemployment. We have the capacity to do so, all we need is encouragement,” Agoye added. Going forward, he said that the association would form a

Head, Research, Planning and Development, Soyem Osakwe; CEO, Chief Edirin Abamwa; and Head, Digital Marketing, Amara Nwankwo, all from WSI-Axon West Africa at a media briefing held in Lagos recently.

working committee that would collaborate with the management of BoI to fathom ways of either eliminating or reducing those surcharges to the barest minimum. He implored the management of BoI to look at the various surcharges with a view of doing away with some of them that are inimical and irrelevant to the exercise of lending, adding that, ‘a situation where charges on loans amount to 21.215 percent and above is certainly worrisome. Speaking on the theme of the programme, “Bridging the Gap between Manufacturing and the Bank of Industry ”, the Managing Director, BoI, Ms Evelyn Oputu, represented by Mohammed Alkali, ED, Operations, said that interest charges on loans do not constitute as much problem as infrastructural problem, generating own power and lack of incentives. She assured that as part of incentivising the real sector, the BoI is engaging in continuous advocacy with all stakeholders towards improving the operational environment, adding that the bank leverages international resources for the development of the real sector in the country through collaboration with UNIDO, UNDP and AGOA among others.

BRIEF IDL spends N150m on distributors


NTERCONTINENTAL Distillers Limited (makers of Chelsea Dry Gin) rewarded customer’s loyalty by giving more than 150million in cash and prizes during her annual distributors’ award held recently in Lagos. The award ceremony was well attended by distributors from all over the country with Sir Mathew Ugwueze of Blessed Mattex emerged overall winner, with a Platinum award worth N7.2million and a 3 ton truck. Other platinum award winners Asizebu Enterprises and Merdian Marketing went home with N6.4million and N5.19million respectively alongside the 3 ton truck The Managing Director of IDL, Engr. Patrick Anegbe, in his address acknowledged the hard work and success recorded by the distributors in the previous year despite hard business terrain in Nigeria. He announced that the factory expansion project will be completed and commissioned in September this year. He noted that in the previous year, two distributors were caught aiding and abetting the faking and adulteration of their products.

Uturn holds 2013 Forum

Ghana said to plan 10-Year Eurobond priced above Nigeria A G

HANA plans to sell its second Eurobond after investor meetings in Europe and the U.S. this week, with yields priced over Nigeria’s latest dollar-bond issuance, three people with knowledge of the transaction said. The yield for the 10-year, dollardenominated notes will be around 8.125 percent, according to the people, who asked not to be named as the details are private. That compares with 6.63 percent yielded in Nigeria’s sale of 10year bonds on July 2. Ghana is planning $1 billion of Eurobonds after stops in London, Frankfurt and Los Angeles, Adams Nyinaku, head

of treasury at the Accra-based Bank of Ghana, said July 11.

The planned bond sale in the world’s second-biggest cocoa producer follows Rwanda and Nigeria as African nations tap appetite for assets from the world’s fastest growing region after developing Asia. Ghana is rated five steps below investment grade at B by Standard & Poor ’s, compared with BB-for Nigeria, which is three steps away. Emerging

borrowers have raised at least $13 billion since July 10, when comments from Federal Reserve Chairman Ben S. Bernanke tempered speculation the U.S. would scale back stimulus. Developing-nation yields had soared to 5.54 percent June 24, the highest since 2011, as Bernanke signaled he may reduce bond buying that fueled gains in emerging assets. Yields were at 4.87 percent ye,

the Bloomberg USD Emerging Market Sovereign Bond Index shows. “At first glance, the new bond looks cheap, but this suggests that Ghana is offering a decent premium to compensate investors for the risks associated with the country ’s fiscal and macroeconomic imbalances,” Samir Gadio, an emergingmarkets strategist at Standard Bank Group Ltd. in London, said.

Ghana’s budget deficit jumped to 12.1 percent of gross domestic product in 2012 from 4.3 percent the previous year as the government boosted salaries for civil servants. The Finance Ministry is forecasting the gap will narrow to 9 percent this year. In the first four months of 2013, the shortfall was 3.8 percent of GDP, compared with a forecast of 3 percent, the central bank said in May.

FAA to airlines: remove or inspect Boeing 787 beacons


HE U.S. Federal Aviation Administration has instructed airlines to remove or inspect emergency beacons in Boeing Co’s 787 Dreamliners, following a fire earlier this month that was traced to one of the units, made by Honeywell International Inc. The airworthiness directive goes farther than the guidance from the FAA last week, when it said airlines should inspect the units on 787s for pinched wires in the casing and

evidence of heat or moisture. The agency is now aligned with Boeing, which advised airlines last week to inspect or remove the device, known as an emergency locator transmitter or ELT. The issue arose after fire broke out on a 787 owned by Ethiopian Airlines after it had been parked for eight hours at a remote stand at London’s Heathrow airport. The fire caused extensive damage in the rear of the plane and

scorched the top of the outer skin of the fuselage just forward of the vertical tail fin. The Dreamliner’s fuselage is made of carbon-fiber composite, a material that burns at a lower temperature than the aluminum alloy used in traditional aircraft designs. The fire has set up the first test of a major repair of the jet, which industry experts say airlines will be watching closely to determine both the length of time required and the cost to fix the jet’s body.

LL is now set for the 2013 Uturn Africa stakeholders Forum tagged: “Alluvion, Creating Momentum, Driving Change”. The forum will attract several corporations, foundations and donor organizations. Featured speakers include Andrew Alli, President/CEO Africa Finance Corporation, Paul Noumba Um, Finance &Private Sector Development for West and Central Africa (AFTFW), The World Bank, Godfrey Mwindaare, Director, Acumen Fund West Africa; Chinyere Almona, Head, Africa Corporate Governance Program, IFC Sustainable Business Advisory; BisiLamikanra, Partner, KPMG Professional Services, and a whole lot more. Focusing on the Extractive, Energy & Infrastructure Sectors, Uturn Africa Forums engages the region’s most influential leaders and those with interest in Africa in critical discussions designed to create partnerships, networks, knowledge and collaborative pathways to achieve effective social change and impact in the region; to work towards a cohesive operational framework.

42 — Vanguard, MONDAY, JULY 29, 2013

“When the housewife announces that “the soup in the pot is totally burnt”, she is telling the family that there will be no dinner”, Old Uncle in Lagos. “We are losing revenue; 400,000 barrels of crude oil are lost on a daily basis due to illegal bunkering, vandalism and production shut in”. Dr Ngozi Okonjo-Iweala, Federal Minister of Finance. Madam Ngozi, who is in charge of our kitchen, has in a manner of speaking, told us that the “pot of soup” is on fire. She has done her work, as expected; what we do with the information is our affair. But, it will be in our interest if we listen carefully to what she says. The fate of the Federal Republic of Nigeria might depend on it. A sharp and sudden downturn in crude oil revenues next year will induce deep budget cuts, increase unemployment and provoke mass anger given nothing positive in the polity to reduce the impact. Governors now parading jets might find their people are no longer amused. Perhaps because she knew that she was addressing a nation of almost deaf people, including their political leaders, the Minister added that “the Federal government may not be able to implement the budget”. Economists and financial experts, as well as, keen observers of the global oil market were aware of the dangers all along and the consequences for the 2013 Budget as well as the Nigerian economy. Certainly, Gross Domestic Productivity, GDP, will drop; so will allocations to states and local governments. States, which had embarked on ambitious projects, without taking a glance at the future, will have a great deal of trouble continuing with some of those projects. The era of “abandoned projects” might be with us again. If 2013 is bad, and



N recent times there has been cheering news about the Bank of Industry and its profitable operations. As eagerly anticipated, the government has finally given the nod for the recapitalisation of the bank to the tune of N750b. Currently the Development Finance Institution (DFI) manages various intervention funds for the Central Bank and one of its more successful programmes is the states counterpart SME financing schemes in conjunction with about 20 forward looking states. Information made publicly available by the bank indicates that in Ondo state for instance, over N600m has been disbursed to successful beneficiaries. The writer can also confidently attest to the success of the scheme in Ogun state, as the sole consultant contracted by the state to pilot the scheme. To date the bank has disbursed over N400m in Ogun state to about 40 co-operatives societies thereby creating/ sustaining over 3000 jobs. There is no gainsaying that the under capitalisation of the BOI has limited the vast potentials of the bank in achieving its mandate and hindered its developmental impacts. This notwithstanding, the performance of the bank under the firm leadership of the Managing Director, Ms Evelyn Oputu, is nothing short of commendable.

Fire alarm from finance minister it is, 2014 could be worse – for a lot of reasons that we already know but which the President, the Governors, the Minister and Commissioners of Finance choose to ignore. For once, we have a potential national calamity, almost inevitable, which should engage our collective attention in a nonpartisan manner. We all stand to lose – PDP, APC, oil-producing and non-oil producing states. We are all in the same leaking boat. And right now, I want to join the Honourable Minister of Finance in raising the alarm. This is because, the President and the National Assembly, NASS, are currently engaged in a contest of wills which will lead us straight into economic catastrophe and the poor woman is becoming the sacrificial lamb for the collective absence of leadership on this matter. Although she also said, “I have to clarify that it is not the entire 400,000 barrels that is stolen, no. What happens is that whenever the pipelines are attacked and oil is taken, there is a total shutdown. All the quantity of oil produced that day will be lost because it means government cannot sell it and it means a drop in revenue”, she actually exposed the impotence and incompetence of the Federal Government, the Armed Forces of Nigeria, especially, the Nigerian Navy and the Security agencies (SSS and NIA) when it comes to protecting the national interest against saboteurs. It is simply impossible for sabotage of this magnitude – 400,000 barrels a day at $100 per barrel comes to $40 million per day and N2.4 trillion per annum. Can any responsible government on earth find time for anything

else other than finding a solution to the loss of almost 40% of its annual budget? If we cannot find the answer ourselves, why not engage international organizations which can help us find the answers? However, before we invite foreigners into the affair, there is a need for the Federal government to level with the people of Nigeria. It is impossible for a group of foreigners who had never been to Nigeria, or a Nigerian group not conversant with the Niger Delta and the routes of the pipelines to bring a boat into Nigeria and smuggle our crude. So, the criminals are our own people or foreigners working with oil companies or oil supply companies in Nigeria. Some of them might even be people working with owners of marginal fields stealing oil from the pipelines of Shell, Chevron. Mobil etc. Furthermore, it is virtually impossible for sabotage of this magnitude to continue for so long without the active connivance of corrupt Navy officers and the same security agents assigned to guard our national interests.


or some reasons still difficult to understand, the loss of crude keeps increasing periodically. In 2011, the announcement was 160,000 barrels per day of crude oil stolen or lost; last year the figure climbed to 200,000 and now we are being told it has jumped to 400,000 barrels a day. The obvious question is: what is the Joint Task Force in the Niger Delta doing while all these thefts and vandalisation is going on? What is the Navy doing while stolen crude is increasingly exported? Why has the President not sacked

the military officers and the security agents in the region as a warning to other that he wants to get results? However, there is more to the Minister’s inadvertent disclosure than she realizes. When oil pipelines and gas pipelines jointly owned by government and foreign firms are wantonly vandalized now, which foreigner will be foolish enough to invest in any project in the region on his own? As it is, none of the majour investors in Nigeria depends on public power supply because they are forced to generate the power they need for operations. Mobil, literally, had to build Eket and Q.I.T in Akwa Ibom to be able to drill oil. Companies operating in this country are forced to undertake for themselves what other nations provide for them at lower cost. They endured the insult because the returns were favourable. But, as more countries are discovering oil and shipping it, it will soon become a buyers’ market and Nigeria will have to go begging for investors to come and for buyers as well. Next year might be the beginning of a long and tedious journey for this country down the road to oil glut and economic disaster. The Minister did not say this; and she cannot really. But, there is no doubt in my mind that she is aware of the dangers ahead. The obvious question is: what needs to be done? The short answer is: Jonathan should spend more time on economic policy than he spends on politics. The critical Ministries are: National Planning, International Trade and Investment, Agriculture, Power and Works – in addition to Finance. The reason is simple. If we are ever going to avert the disaster that will result from sharp

drop in oil revenue from now on, these are the people who will provide the soft landing. Politics, for Jonathan, is already poisonous – if the economy gets worse. If budgets are slashed by governments this year or next year; and if salaries are delayed or unpaid in many states; and if ASUU again proceeds on another indefinite strike, nothing and nobody can save the President. If anything, he needs to find his way back to peace with most of the people who provided the coalition which brought him to office. Difficult, as it is for him to accept, now more than ever, he needs the governors; and they need him. When federally allocated revenue dwindles, every elected official faces monumental problems at his own level. The President nationally and the governors in their states will find the voters totally united against them. Irrespective of political party or affiliation, any possible upheaval will affect all because most politics is really local. What then should be the first order of priority for the President and the governors? That is simple. They should start with themselves to cut down on the cost of running their offices and significantly downsize their cabinets. The President should set the example by scaling down to no more than twenty four Ministers and no state governor should engage more than fifteen. Similarly, the number of Special Advisers should be reduced by at least sixty percent. Most of them are assigned responsibilities which should be handled by career civil servants anyway. They only help to get the payroll bloated for political reasons. Now, and in the near future we cannot afford them – unless our leaders really want the economy to crash. Madam had raised the fire alarm, I support her. We must act now.


Re - recapitalising the Bank of Industry However, while the modalities and the time frame for release of funds are still been worked out by the Ministry of Finance and the Central Bank of Nigeria, the writer wishes to suggest to the bank management, government and various other stakeholders to consider a change in its operating model, especially as it concerns financing of co-operatives and micro enterprises. In line with this, I propose that for greater development impact, inclusive job creation, desired industrialisation and economic growth, the BOI should consider spinning off the unit that handles the states counterpart SME financing scheme into a fully fledged subsidiary. Taking a cue from the Small Enterprise Finance Agency (SEFA) model, which was established as a result of the merger, of the small business activities of the Industrial Development Corporation (IDC) of South Africa, Khula Enterprise Finance and the South African Micro Apex Fund. This newly formed DFI subsidiary of the Bank of Industry will handle all financing for co-operatives, survivalist, micro small and medium enterprises nationwide. The financing model will range from a minimum of N10m to a maximum of N100m. (which is the

current financing range for the states financing scheme). And more importantly ensure that the ethos and firm credit principles of the parent bank are sustained. My reasons for advocating the setting up of this subsidiary includes the following; 1. There are currently 20 states involved in the states SME financing scheme, which means there is already an existing portfolio/funds available of at least N20b. While most states contributed N500m as counterpart funding, states like Bayelsa contributed N2.5b. Furthermore, forward looking states like Ogun have indicated desire to make available another round of financing based on the success of the current scheme. 2. The new DFI will ensure regular and effective enterprise support and managerial skills training/mentoring for beneficiaries. For instance, the institution could develop a pre loan support programme for prospective beneficiaries in partnership with SMEDAN. Numerous studies have shown that a dearth of managerial skills by small business owners to operate profitably for long periods was a bigger threat to the survival of the enterprise than a lack of funding. It will be recalled

that under the Small and medium enterprises equity investment scheme (SMEEIS) over N55b was set aside yet only N28b was disbursed. Undoubtedly, lack of managerial skills and affordable business development services providers were some of the myriad of reasons for the failure of the scheme. Aside from financing of the right temperament, small business owners require motivational, entrepreneurial and business skills to survive and operate profitably on the long run. While providing financial and business support services to small and medium enterprises is already one of the missions of the BOI, it is believed that with a defined division of labour, the fully fledged subsidiary will be in a better position to offer these services to the survivalists and micro enterprises rather than the bank itself. 3. The subsidiary will also ensure that there is more dedicated and effective monitoring of beneficiaries. It is not unlikely that many of the BOI officers on the states financing scheme also work on other in house projects, thereby dividing their time, attention and technical skills. There is no gainsaying that it’s more expensive and time consuming to monitor a loan of

N10m than N1b. Cooperatives and small enterprises in most cases, have no structures unlike the well established SMEs. 4. A dedicated DFI for providing finance with a minimum and maximum range of N10m to N100m respectively will definitely be more nimble and ensure swift turnaround times. Loan approvals will go through the institution’s credit processes and not have to wait for the credit committee of the BOI to sit. Small business owners are very particular about timing because of their inability to retain price quotes especially from suppliers and manufacturers for too long. 5. The operations of the DFI are in line with the objectives of the BOI and will enable the bank have an even greater development impact with the multiplier effects of poverty alleviation and job creation through a sustained grass roots financing. This will invariably enhance the social and economic conditions of Nigerians on the long run. 6. The ambitious NEDEP programme of the Ministry of Trade and Industry will also be better implemented through the newly established DFI. The subsidiary will be better tuned to work closely with SMEDAN and the ITF to ensure the success of the programme and creation of jobs. Olatunde Akande is a Partner at Carson Capital Limited.

Vanguard, MONDAY, JULY 29, 2013 — 43

Full Page Advert

44 — Vanguard, MONDAY, JULY 29, 2013

Advertising, Media & Marketing

GATS report & tobacco use in Nigeria R

ECENTLY, a report by Global Audit on Tobacco Survey (GATS) indicated that incidence of tobacco use in Nigeria is low, a report that may not go down well with the civil society groups that campaigned against tobacco smoking, advertisement and production. Tobacco smoking in various parts of the world had been a topical issue leading to its ban in some public places in many parts of the world. Not until recently, the Lagos State House of Assembly proposed the Non-Tobacco Smoking Bill, which seeks a total ban on smoking in public places. The Bill, however, did not get the nod of the Trade Union Congress, TUC, led By Mr. Anthony Ibafor, representative of hotel and club owners and tobacco distributors, who argued that the Bill would lead to unemployment, if tobacco smoking was totally banned. Reacting to the proposed bill, the Head of Regulatory Affairs of British American Tobacco of Nigeria (BATN), Mr. Sola Dosumu, expressed the company ’s support for the passage of a balanced and evidence-based Bill for the industry. He also stated that it was in the interest of stakeholders to ensure the passage of a balanced, workable and evidence-based Bill, adding that it would help to reduce the impact of tobacco on public health in the country. Dosumu went further to say that BATN had always supported appropriate regulation for the industry in Nigeria and had co-operated and collaborated with government agencies towards ensuring that existing regulations were enforced. On the other hand, Representative of Nigeria Tobacco Control Alliance and other CSOs, Nurudeen Ogbara, sought for total ban of

tobacco smoking in the public. Today, GATS report has lent credence to Dosumu’s views as a cardinal factor of modern life, which is the adoption of constitutions by nations of the world and one of the reasons for adopting same is to put in proper perspective ways and manners of peaceful coexistence among the citizens of the particular country. One basic inclusion in such constitution is human rights and freedom of choice. Even



A r g u a b l y, countries that have adopted h a r s h regulations as anti-tobacco laws are feeling the effect of increased t o b a c c o smuggling leading to astronomical rise in the sales


though those rights are enshrined in the constitution, the authors are mindful of the need to restrict the exercise of those rights to persons of certain age and above.


ne of such rights is the universal adult suffrage, which empowers adults of 18 years old and above the right to vote in an election so long as the person is of sound of mind. This is premised on the thought that at 18, and barring any mental deficiency, the person is capable of making an informed and reasonable judgment. The same is the issue of alcoholic beverage and tobacco consumption in many countries, Nigeria inclusive. If the report of the survey is right that “Nigeria has a relatively low rate of tobacco smoking compared to other countries, then we must safe

guard this by having the appropriate laws that is suited to our local context in place and not simply copy one that will cause more problem in the country. Given Nigeria’s peculiarity, coupled with the physiological make up of the human mind to crave that which is shrouded in mystery, the chances that over flogging the issue, as some anti-tobacco campaigners are clamouring for are high. In order not to regress in the tobacco use roll back campaign, anti-tobacco use advocates and the government in particular should thread softly, Mr. Tomiwa Alegusi, a tobacco distributor, said. The reality of the modern world is that stringent laws inexplicably grow interests in the particular habit that it seeks to discourage. The more the law around a practice gets stringent, the more the curiosity around it grows, leading to increased indulgence in the act. We should be mindful of this in formulating more stringent anti-tobacco legislation. While the push for public health must be sought, we should, however, avoid sensationalism for the sake of advocacy. It is also pertinent to do a reality check on the antitobacco measures and laws that several countries have adopted over the years with a view to ascertain if they are achieving results or not. Arguably, countries that have adopted harsh regulations as anti-tobacco laws are feeling the effect of increased tobacco smuggling leading to astronomical rise in the sales and purchase of illegal products and funding of criminal groups. Among such countries are Ireland, Canada and South Africa. On the other hand, countries that have adopted moderate laws which are well balanced and applicable and enforceable locally have little incidence of smuggling, examples are Ghana and Russia.

FROM LEFT: Patrick Anegbe Managing Director, Intercontinental Distillers Limited , Dorothy Anegbe , Rev Odeyemi, Director in IDL, Mike Murray Bruce, Director in IDL at the distributors award held in Lagos recently.

WOM and WOW!


et’s start by unravelling the acronyms in the headline of this write-up. WOM stands for Word of Mouth. It sounds familiar and it simply means what the words say – what one person tells another. On the other hand, WOW stands for Word of Web (I’d thought it was an original coinage from this writer until I came across a website bearing that as its domain name!) It means what one person tells another through the web. WOW is just WOM via the web! In recent times, word of mouth has gained much currency in (services) marketing circles. Marketers are getting more and more interested in what customers tell their relations, friends, colleagues or even other customers. Studies indicate that people tend to believe what they hear from other people more than the advertisements from organisations. It is also proven that the more involving and expensive a service is, the greater the reliance of potential customers on word of mouth recommendations. It is important to note, however, that word of mouth is a double-edged sword. It could be negative or positive. If customers are happy with your organisation they are more likely to spread positive word of mouth. If they are not, you know what to expect. You may want to believe, however, that there is a limit to the number of people one can easily reach through word of mouth – if that’s any consolation. Enter word of web. Today, a customer doesn’t have to step outside his living room to inflict substantial damage on an organisation. The options for him are too many. He may start a blog overnight to thrash an erring organisation. You can bet he will pull many sympathisers. He may also post details of poor service encounters on social networking sites – Facebook, Myspace or Nairaland. Some five years ago, I stumbled on a debate by nairalanders on which bank in Nigeria delivers the best customer service. (I was quite surprised recently to find the posts still there, although some of the banks no longer exist in the way they did then. Take a look, especially if you work in the banking industry: http:// Also check out You’ll find the exchanges very intriguing


hat’s more? In world that sends over 400 million tweets daily, a twitterer (someone who uses Twitter) with a good following can hit hard on an organisation, using less than 140 characters! There may also be numerous retweets (tweets forwarded) if people feel strongly about whatever went amiss. Make no mistake about this. Technology has made it easier for dissatisfied customers to bash you! But the good news is that your truly happy customers can also easily root for you (don’t bank on this, anyway). So what to do? Let’s get back to the basics. To avoid negatives WOM and WOW, you need to deliver exceptional service – that is service with speed, courtesy, empathy, fairness and, yes, a smile. In addition, when things go wrong, take a smart step to resolve matters “out of court.” You may not easily win in the court of the mouth or web! You may also want to take the proactive step of finding out what people are saying about your organisation. If you manage customer service or a brand, I suggest you google your company (or brand) name at least twice a week to find out what people are saying. Search for something like “complaints about XYZ” (assuming that’s the name of your company). Someone also said you should look out for “XYZ sucks.” That way you may catch and fix some negative WOM that turned WOW before they do much damage. Now think about it. What can you do to encourage your customers to spread positive WOM and WOW? That’s your challenge. Savvy organisations are beginning to look for ways of moulding the WOM and WOW from customers.

Vanguard, MONDAY, JULY 29, 2013 — 45

Full Page Advert

46 — Vanguard, MONDAY, JULY 29, 2013

Advertising, Media & Marketing

Expert challenges experiential marketing agencies on business model Stories by PRINCEWILL EKWUJURU


hief Executive Officer of EXP Nigeria and organiser of the Africa Experiential Marketing Summit (AEMS), Wole Olagundoye has charged agencies in experiential marketing business and others to continually challenge conservative

clients to embrace new thinking in the profession rather than being scared of doing anything beyond traditional realms. Olagundoye, who spoke recently at an Africa Experiential Marketing Summit in Lagos, also promised to consolidate on the successes recorded at the maiden edition of the summit in Nigeria.

He said “Whereas we cannot do all these things, the clients on the brand side need to begin to develop the courage to be able to do these things because they are always scared of doing anything that is beyond traditional realms. We have to start to challenge these frontiers and push these boxes as well.” Highlighting the successes of the

programme, the CEO of EXP Nigeria said “On a more serious note, as you can see for yourself I think we’ve had a full house. Why the summit started slowly was because it rained in the morning but gradually it filled up, and we have diverse audience raging from people from fast moving consumer goods (FMCG), banking, telecoms, manufacturing

as well as agencies. So I think, for a very first event, we’ve done very well and what we are looking at doing is that we are looking at building on the success of this first one and taking that to subsequent years.” lagundoye said the goal of the company is to differentiate itself in the marketplace. “For us, this is how to differentiate ourselves in the market. “Things are evolving, he said but we need to get into the mix, and as you can see from the case studies that are being shown, the world is moving on a fast pace and we cannot be left behind. Speaking on whether Nigerian market would be able to accommodate some of the experiential marketing case studies shown at the event, the frontline experiential marketer said that Nigerian market is sophisticated enough to begin to demonstrate some of those cases highlighted at the programme. “Yes of course, and to put things


in proper perspective, some of the things that the facilitator showcased in some way or form have happened here and has been done here already but we haven’t chronicled them properly, so we don’t have the documentation of them such that we can show them. People don’t have faith that it’s going to happen like this or just haven’t really followed the process properly, but some of these things have happened here and to tell you the truth, a lot of those things can be done here too,” he said. On technology, he said “ we have the technology and we can do them but what we need is collaboration with clients, and brand managers to take the bull by the horn and do things that have not been done before. Everybody fears for their career and they fear that if anything goes wrong their careers will be on the line so because of that they stay with things that are normal and usual to be on a safer side.”

10 x 4 Advert

African businesses responsible for Bain’s Whisky growth — S/African distiller


OUTH African Master Distiller of Bain’s Cape Mountain Whisky, Andy Watts, has attributed the global recognition of the Whisky to the capacity of African businesses to conceptualize, design, and develop brands that can compete on the global stage. He also noted that the brand utilized available local material resources and naturally endowed environment to grow its market share. It will be recalled that Africa’s first single grain whisky, Bain’s Cape Mountain Whisky, was voted the World’s Best Grain Whisky at the annual Whisky Magazine’s World Whisky Awards (WWA) held in London a few weeks ago. Andy Watts, who was in London to personally receive the award, said

the win was overwhelming news not only for the brand and South Africa, but for the whole Africa continent. According to him, Bain’s Cape Mountain Whisky became the first South African whisky to be awarded this coveted accolade, ahead of those from traditional whiskyproducing countries such as Ireland, Scotland and the USA. The whiskies were assessed blind, based on three tasting rounds, by an independent panel of judges that included some of the foremost international whisky palates. Bain’s Cape Mountain Whisky Distiller, Jeff Green also shared his excitement on the award, noting that: “This isn’t just a win for Bain’s Cape Mountain Whisky but for South African whiskymaking.

Vanguard, MONDAY, JULY 29, 2013 — 47

Business &Economy

NLC plans assault on Diamond Bank over workers’ sack ...ASSBIFI’s Labour Radio hits air wave By VICTOR AHIUMA-YOUNG IGERIA Labour Congress, NLC, is planning a massive assault on Diamond Bank Plc, over alleged sack of workers including officials of the National Union of Banks, Insurance and Financial Institutions Employees,


NUBIFIE, without due process as well as without paying their entitlements. The management of Diamond and leaders of NUBIFIE have been engaged in a running battle over the sack of about 100 workers including all the union officers in the bank since June. Earlier in July,

NUBIFIE, Association of Senior Staff of Banks, Insurance and Financial Institutions, ASSBIFI, NLC and civil society allies picketed the banks for about two days before Labour Minister, Chief Emeka Wogu, intervened and invited the parties including ASSBIFI to a meeting. When the problem started, the bank was

10 x 5 Advert

said to have taken the matter to Abuja Division of the National Industrial Court, NIC, which was said to have referred the case to the Lagos division since both the head office of the bank and headquarters of the unions are in Lagos. It was gathered that the court had earlier advised the bank against the termination of the

appointments of the workers without due process. Similarly, the Lagos office of the Federal Ministry of Labour was also said to have advised the bank against the sack without due process to no avail. However, during the picketing, the bank was said to have gone back to the NIC for protection.

It was gathered that the court at its recent sitting adjourned the case till September, but this seems not have gone down well with labour leaders. Their grouse is that the sacked workers have been out on the street for about two months now without anything and by September, it will be over three months, meaning the workers be left in the cold without job and benefits for such long time. As an affiliate of NLC, NUBIFIE was said to have reported its challenge to the leadership of NLC. Vanguard gathered that NLC has already taken over the matter and is planning to bring its weight to bear to ensure that the workers get justice. Vanguard gathered that leaders of NLC consider the action of the bank as an attack on labour and are said to be planning to use the bank to sound a note of warning to others in the industry that the era of management impunity is over. President of NLC, Abdulwaheed Omar, while addressing affiliates and state councils last week, at Rain School in Uyo, Akwa Ibom State, said congress would meet in the next two weeks to take decisive action against Diamond Bank.He advised all affiliates and state councils to be on the alert and get ready for a massive action against Diamond Bank to ensure that the sacked workers were recalled. Meanwhile, efforts by the Labour Ministry to resolve the issue has hit a brick wall as only NUBIFIE and ASSBIFI have been attending meetings called by the ministry. It was gathered that the management of the bank is of the opinion that there is no need to attend such meetings since the matter is before the NIC. Meantime, ASSIBFI has announced that its radio station, christened ASSBIFI Labour Radio will hit the air wave before the end of the year.

48 — Vanguard, MONDAY, JULY 29, 2013, Blog Website: Tel:0805 220 1997


How banks make free money from government funds, by CBN governor inadequate credit to a cash beleaguered real sector. This column has consistently drawn attention to the obvious reckless strategy of banks lending so-called surplus funds at atrocious interest rate to the same CBN, which inexplicably instigated the excess cash in the system in the first place. Thankfully, Sanusi has finally recognised that “If you want to discourage such perverse behaviour, part of it is to basically take away some of this money, and therefore, reserves requirement is suppose to make sure that the excess liquidity in the banks’ balance sheet, is evenly distributed”. The critical question, however, is how CBN can satisfactorily monitor banks’ compliance with the new directive. In the absence of strict compliance, surplus cash will still persist in the system and inflation will still remain untamed with disastrous consequences for the economy! The CBN Governor’s fear that even the higher reserve requirement may not adequately cage inflation is probably also embedded in his warning that “if spending continues, and we are concerned about the liquidity conditions, we foresee in the nearest future, continued increase in the CRR (Cash Reserve Ratio) across the board….” In other words, if surplus cash deposits persist in spite of the new measure, CBN would further increase its oppressive interest rate benchmark beyond 12%, and ultimately instigate interest rates to the real sector, to about 30%! However, what options other

than further increases in Monetary Policy Rate, are available to control excess money supply? We had consistently decried the foolhardiness of government’s borrowing back


“…First of all, you have got liquidity surplus in the banking industry; … there is over N1.3tn or so sitting in banks and belonging to government agencies. Now basically, they (these funds) are at zero percent interest and the banks are lending about N2tn to the government and charging 13 to 14%! Now, that is a very good business model, isn’t it? Give me your money for free and I lend it to you at 14%; so why would I go and lend to anyone?” he above text, which corroborates views regularly canvassed in this column, is surprisingly from an address to journalists by none other than Lamido Sanusi, Governor of the Central Bank of Nigeria after the recent two-day Monetary Policy Committee (MPC) meeting in Abuja, last week. The statement is in defence of CBN’s attempt to contain harmful credit expansion with the introduction of a 50% Cash Reserve requirement on all public funds domiciled in commercial banks! Prior to this development, the prevailing requirement was 12% reserve for all deposits! Evidently, larger cash deposits create liberal opportunities for banks to leverage on these deposits to expand credit and increase public and private sector spending, which may inadvertently instigate an injurious rise in the price level of goods and services. Thus, the latest requirement for higher cash reserves is really an admission that the existing 12% CRR has failed to contain the discomforting inflationary push. However, some critics may regard the higher cash reserve requirement by CBN as inappropriate, since it would further reduce the already

S a n u s i ’ s new directory of 50% CRR for government deposits, is clearly an uneasy half way measure, and critics may wonder why the CBN Governor cannot in his characteristic style, take the bull by the horns, and demand that all government funds should be banked with the CBN!


its own cash deposits in the banks, at extortionist interest rates (see for “Will you Borrow Back Your Own Money and Pay 17% Interest? ...Ask Cbn!”, 27/12/ 2004 and “MPR Hike: Failure of CBN’s Monetary Framework”, 01/08/2011); we advised that it would be more businesswise, for ministries, departments and

excess cash is the direct product of CBN’s monthly substitution of naira allocations for dollar revenue, and secondly, to ensure that beneficiaries of the federation pool receive dollar certificates for their share of monthly dollar revenue. Such an arrangement would immediately finally eliminate the perennial burden of excess liquidity and its train of adverse consequences. In its place, lower single digit rate of interest will become available to the real sector, with a minimal socially and industrially supportive rate of inflation in tow! The naira will become extremely stronger, and eliminate any remote possibility of subsidizing fuel prices, thus achieving the erstwhile impossible task of benignly deregulating the downstream sector. The resultant trillions of naira fuel subsidy savings can then be ploughed into social infrastructure and positive welfare programs. Furthermore, purchasing power of all income earners will improve and stimulate increasing consumer demand, which industrialists and entrepreneurs would hasten to satisfy profitably, with the prevailing low interest rate and stronger naira. For now, I sincerely congratulate Lamido Sanusi for his bold step in the right direction; however, my abiding hope is that, shortly hereafter, the CBN Governor will be on the same page with the position of this column on this matter also.

agencies to domicile their monthly naira allocations with the CBN itself. Obviously, it makes no sense, as Sanusi rightly observed, to borrow back your own noninterest-yielding savings at a cost, even though a similar borrowing strategy applied also to Nigeria’s external borrowings! If our advice had been adopted in 2005, the perennial issue of excess funds would have been eliminated with hundreds of billions of naira savings. Indeed, a move was made to domicile all government funds with CBN under former President Olusegun Obasanjo’s tenure , but intense pressure from beneficiaries of the free cash tradition quickly killed this initiative!


onsequently, Sanusi’s new directory of 50% CRR for government deposits, is clearly an uneasy half way measure, and critics may wonder why the CBN Governor cannot in his characteristic style, take the bull by the horns, and demand that all government funds should be banked with the CBN! Without a doubt, such intervention will lead to a significant contraction in the cash available, and it will become possible to better control inflation in the system; regrettably, however, if government still remains actively in competition with the real sector in the market for long term loans, cost of funds may not fall. Ultimately, an enduring solution to the high cost of funds and unyielding inflation is to tackle the root cause of excess liquidity; i.e. first recognize that


Cover Banks’ loans to agric sector rise by 3.7%, says CBN By PETER EGWUATU HE Central Bank of Nigeria, CBN, said that Deposit Money Bank’s (DMB’s) credit to the agricultural sector has risen to over 3.7 per cent. A statement from the CBN reveal that the figure, which is for 2012, indicates an increase of 85 per cent over the two per cent growth of the agricultural sector share of banks’ credit five years ago. Also, data obtained recently from the Bankers Committee show that between July and November last year, the country’s lenders issued over N6 billion in credit guarantees to farmers. The loans came with the following broad parameters: Average loan


guaranteed amounting to N397 million, with a range of N4 million to N1.5billion and average duration of loans at 285 days. “It is anticipated that under Nigerian IncentiveBased Risk Sharing System for Agricultural Lending NIRSAL, collaboration between banks and counterparties will push loans under guarantee in excess of N20 billion by end of the first quarter of this year,” the CBN said. The increase has been linked to the N200 billion agriculture credit scheme and N600 billion (NIRSAL). Some of the banks told reporters that regulator plans to spend an estimated $500 million to create further incentives for the banks to sustain the flow of agric credit. The NIRSAL initiative, which is brainchild of the CBN, the

Bankers’ Committee and the Federal Ministry of Agriculture & Rural Development (FMARD), seeks to create incentives and catalyse processes to encourage the growth of formal credit, direct and indirect, for the agriculture value chain, as a mechanism for driving wealth creation among value chain participants. The NIRSAL guarantees up to 75 per cent of bank loans to the sector. According to the apex bank, NIRSAL is also expected to be a catalyst for innovative risk management strategies, longterm financing for agribusiness and significant job creation by new entrepreneurs. “The mandate of NIRSAL is to act as the custodian of all credit guarantee schemes, interest draw back schemes,

agribusiness in Nigeria,” the CBN said. Under NIRSAL, there are five pillars to be addressed by an estimated $500 million that will be invested by the CBN, according to the programme document.

and commercialisation initiatives related to an integrated value chain approach to agriculture and

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


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

CONTRIBUTORS Princewill Ekwujuru Naomi Uzor Providence Obuh LAYOUT


Media/Marketing Industry Micro Finance Graphics Department

Financial Vanguard July 29 2013