Financial vanguard

JUNE 30, 2014

CAC’s 24hrs business registration collapses •It’s not true — CAC

By JONAH NWOKPOKU

B

arely two years after it was commissioned by the Minister of Trade and Investment, Mr. Olusegun Aganga, the 24 hours registration of businesses by the Corporate Affairs Commission, CAC, has collapsed due to technical hitches occasioned by server failure.

As a result, business registration now takes between one to three months, while business name availability search takes more than one week.

During the course of the

investigation, this reporter applied for business name availability search at the CAC office at Alausa, Ikeja. He was asked to check back in nine days. When he sought to know why, the attendant at the availability section responded, “because it is not ready”.

Stakeholders, who spoke to Vanguard about this development, said that the process is frustrating and it discourages business owners from applying for business registration.

Recounting his ordeal in this regard, a business owner, Mr. Yemi said that he is yet to complete the

process of registering his business, since he commenced three months ago.

He said: “The whole thing is frustrating. I have been pursuing this registration for more than three months now. At some point I stopped and when I came back they demanded I do a revalidation. Now I have done that but they can’t find my documents. I have complained but they asked me to check back.”

Another customer who spoke on condition of anonymity, said he was an agent who helps people to register.

He acknowledged that the Commission had been meeting the 24 hours deadline immediately after the service was

launched but since late 2013, it has been having problems with its server. He said as a result of that, availability search now takes more than a week, sometimes up to three weeks.

This was confirmed by a notice at the Commission’s customer service section, dated 27th of January, 2014.

In the notice, the Commission apologised to customers for its inability to continue with the 24 hours business registration due to server problem. It added that customers should bear with the Commission as the problem would soon be rectified and the 24 hours service restored.

A lady attendant at the customer

Continues on page 18

169.90 3,153.00

17.00

-8.90 98.00

-0.57

113.18 -0.03 105.74 -0.10 CURRENCY BUYING CENTRAL SELLING

*MEETING - From left: Executive Commissioner, Legal and Enforcement, Securities and Exchange Commission, SEC, Sa’adatu Bello; Director-General, Arunma Oteh and; Executive Commissioner, Corporate Services, Rt . Hon. Zakawanu Garuba, at the second Quarter Capital Market Committee meeting in Lagos.

DOLLAR STERLING EURO FRANC YEN CFA WAUA RENMINBI RIYAL KRONA SDR

154.73 262.1436 209.9067 172.2668 1.5137 0.3011 237.6733 24.8278 41.2525 28.145 238.3306

155.23 262.9907 210.585 172.8234 1.5186 0.3111 238.4414 24.9085 41.3858 28.236 239.1008

155.73 263.8378 211.2633 173.3801 1.5235 0.3211 239.2094 24.9892 41.5191 28.3269 239.8709

CBN Exchange rate as at 27/06/14

18 — Vanguard, MONDAY, JUNE 30, 2014

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.

Goal getter A 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

A

CAC’s 24hrs business registration collapses service desk also confirmed that due to server problem, the 24 hours registration has been put on hold. She said the Commission was working very hard to rectify the problem and return to 24 hours service.

24 hours registration mere propaganda

H

owever, another agent, Olajire Oladiran dismissed the 24 hours business registration as a mere propaganda, saying there was never anything like that in the first place.

Oladiran who is an Executive Director in a firm of Chartered Secretaries lamented the inability of the Commission to keep to its promise to offer 24 hour business name availability search at least.

He said, “The 24 hour registration is propaganda. It was the Minister of Trade and Investment, Mr. Olsegun Aganga who flagged this socalled 24 hours business registration sometimes in 2012. But then no one knew how they managed to do that for few weeks and then stopped. From November/ December, 2013 they stopped and have been making only excuses and promises.”

While unveiling the 24 hours business registration in November, 2012, the Minister of Trade and Investment, Mr. Olusegun Aganga said that, “The target is to ensure that companies are registered C M Y K

within two hours and to institute a vibrant and transparent companies’ registry, where services will be user-friendly.”

He had also at the time directed that a complaints register be opened for anyone who is not able to get his company registered within 24 hours. This he said was to show that, “We mean business and that we care about our customers.”

Oladiran however explained that despite such

,

Continues from page 18

But the 24 hour period was important for the availability search, because once the name is available, you will continue with the rest of the registration

,

promises, what the Commission was able to accomplish within 24 hours was business name availability search.

“Within that period, it was possible that you could drop your availability search today and within 24 hours really, if you check your mail, you will see it and then you wouldn’t

have to go back to the CAC office. It was a wonderful experience.

“But you see, all over the place CAC is advertising 24 hour registration but in reality the registration process would not have been completed within that time frame. But the 24 hour period was important for the availability search, because once the name is available, you will continue with the rest of the registration.

However along the line, the thing stopped and all we have been hearing is that the server has problem.

“Right now, sometimes availability search takes between three weeks and one month. But in all, the truth is that the registration does not take 24 hours; only availability search could be possible within that time.”

He however explained that what CAC may mean by the 24 hours business registration may be 24 hours express registration.

He said that, “In express registration, a customer is required to pay N50, 000 in addition to the regular fee, to have the registration completed in one day. But then because of their server problem, the 24 hours express registration is not even feasible at the moment.

Don’t forget that the 24 hours excludes the time you have waited for availability search to come out. It also excludes the days you

Continues on page 19

,

*AWARD - From left: Mr. Cyril Ekechi, Deputy Director/Tax Controller, Federal Inland Revenue Service, FIRS; Mr. Henry Akwara, Divisional Director, Claims & Risk Management, Mansard Insurance Plc; and Mr. Foluso Phillips, Executive Chairman, Phillips Consulting Group, at the Web Jurist Awards 2014 in Lagos.

A successful business man has the mindset of not just setting goals but also achieving the desired result

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 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, JUNE 30, 2014 — 19

In this column two Mondays ago, we wrote on the need for a competition or anti-trust law in Nigeria. There were several reactions. But this was particularly interesting and I decided to let our readers have the benefit of knowing what is happening in some sectors of the Nigerian economy.

he responsibilty and portfolio of the Federal Ministry of Trade and Investment is to attract investment, encourage trade and develop a policy in promoting and retaining vital instruments and vehicles for economic development of Nigeria. It is also the objective of the Ministry (MTI) to sustain the economic development through private sectors as drivers in Trade and Investment. Consequently, the Ministry (MTI) is to promote competition in the sectors and not to promote and grant monopoly to any Institution, private sector and government agency. The Ministry (MTI) should work against Monopoly in the economy.

“Many businessmen”, observed Ayn Rand in her article, the Property Status of Airwaves, “of the mixed economy persuasion, resent the actual nature of capitalism; they believe that it is safer to hold a position, not by right, but by favour; they dread the competition of a free market and they feel that a bureaucrat’s friendship is much easier to win.

Pull, not merit, is their form of ‘social security’. They believe that they will always succeed at courting, pressuring or bribing a bureaucrat , who is ‘a good fellow’ they can ‘get along with’ and who can protect them from that merciless stranger; the abler competitor.”

Coercive monopoly is dangerous to any economy as reflected in economic history around the world. Consequently, it is the

COERCIVE MONOPOLY

responsibility of the Ministry (MTI) to guide and disseminate vital information and lessons to other government Ministries, Departments and Agencies against the negative nature, effect and danger of coercive monopoly and negative side in its promotion in the Nigerian economy.

For instance, when in 2005 the President declared OILSS. SIIFZ, LFTZ, OLOKOLA and LADOL as a Free Trade Zones, Ministry of Transport (MT) which was relevant to the approval was administratively informed by Mr. President because of the Presidential Circular PRES/99 of 22nd May, 2002 on Stoppage of Midstream Discharge of Cargo and Presidential Circular letter PRESS/00 of 22nd May, 2002 on Closure of Private Jetties Nationwide, which technically would affect the smooth running and operation of these free zones because the circulars preceded the declarations and if not taken care of the contents of the circulars, it would negatively affect the smooth running of the free zones. Naturally, the free zones are situated midstream being Islands and they should have entry and exit points by the concept of free zones. However, the Ministry of Transport concerned, tends to ignore the Presidential

declaration of the free zones because of its involvement in the operation of another player in the same field of free zones.

The player is a tenant in the ports where the Ministry of Transport has supervisory authority. Any time there was a change of guard at the Ministry of Transport; these Presidential Circular letters are dusted up and circulated with different intention. One example was Operational Guidelines for Handling Oil and Gas Related Cargoes issued out on Ref T’ 4316/S.35/ Vol. 1/ 213 of 15th November, 2007 from the Ministry (MT).

The Industry challenged the validity of such Circular knowing that Mr. President

,

T

By YUSUFU ABDULLAHI

27th March, 2008 against the dispensation of Mr. President on AGBAMI PROJECT where MV Enchanter destined to Lagos was told to go to Onne, Calabar and/or Warri to pay terminal charges after which the vessel could proceed to discharge its cargo in Lagos.

Nobody told the industry how the extra cost of round trips would be covered which the Office of the Chief Economic Adviser considered as economic sabotage.

The reason for this roundabout trips by ships, going to Onne, Calabar and/or Warri before off loading its cargo say, in Lagos, was because of the out- sourcing of the statutory responsibility of the Nigeria Ports Authority in awarding Managing Agent Contract to the same private operator in Onne, Calabar and Warri to monitor and supervise support vessel movement in the compulsory pilotage districts within the exclusive economic zone of Nigeria – both eastern and western districts. Though

Nobody told the industry how the extra cost of round trips would be covered which the Office of the Chief Economic Adviser considered as economic sabotage

had earlier approved on 17th May 2006, the dispensation that” importers of oil and gas cargo should be free to choose port of preference”. However the Ministry of Transport insisted and acted vides T. 0160/S. 103/C2/T1A/176 of

,

Mr. President had also asked the Ministry of Transport to annul the contract with the private operator, Ministry (MT) had not done so.

Realistically, the Ministry of Transport has turned the Presidential Circulars and

Cover Story Continues from page 18 waited for incorporation. So in reality there is nothing like 24 hours registration,” he said.

He noted that if the server worked efficiently, a business name search should not take more than three or four hours and within that period that they were able to offer 24 hours registration. He added that when the system was operating, his company was able to register up to six names and was able to get the certificates of incorporation for the companies within one week .

Delay, bad business for operators

Oladiran further noted that

directives into a coercive monopoly documents assisting that major player in the field of oil and gas logistic services to dominate the market. The intervention of the stakeholders in the industry through the Office of Chief Economic Adviser to the President resolved the issue where Mr. President forced the Ministry of Transport to withdraw its Circular Letter and reverted to the Presidential dispensation vide T. 4316/S. 35/T3/24 of 7 th August, 2008, of allowing importers of oil and gas cargo to choose port of preference.

But just as mentioned above that immediately there was a change of guard in the Ministry of Transport , the two Presidential Circular letters are dusted up and reinsured, more especially in this case where the Ministry of Transport had failed to satisfy the private operator’s goals and objectives in 2007, the new Minister of Transport reissued same Circular letter to the Nigeria Ports Authority reference T.0160/S. 139/C. 2/IV of 7th January, 2009 to the effect that “ STOPPAGE OF MIDSTREAM AND OFFSHORE DISCHARGE OF CARGO AND BAN OF PRIVATE JETTIES FROM HANDLING OCEAN GOING VESSEL” were still in effect and copied NNPC, Port Concessionaires, NAPIMS and Oil Producing Services/Project Companies, these agencies are the main business partners of the private operator and tenant

* To be continued ABDULLAHI is Chairman, Export Processing Zones and Free Trade Zones Reform Committee

CAC’s 24hrs business registration collapses this delay in business registration process has negative implications both for the CAC, operators and the Nigerian economy.

“This is taking a toll on the integrity of operators. This is because if a client is hearing of 24 hours registration from CAC and yet they are not even able to get availability within three days, this will sow doubts in their minds and the integrity of the operator will appear questionable," he lamented, adding that the trend will further lead to loss of business confidence.

Foreign investors

disappointed

He said, “There was this particular incident, the clients came from Hong Kong, they came through Benin Republic to Nigeria and they came through us and initiated a name search. They were waiting for the name search result to come out before they go back to Benin Republic, from where they will head back to Hong Kong. But they waited for three days, the result didn’t come out. They waited for one week and the result still didn’t come out.

They were very angry and left. Their contact person who

gave us the job was infuriated and questioned our competence. At the end of the day, everyone was frustrated.

They wasted their time, we missed the business opportunity and Nigeria lost them as investors.”

He added that, “This is also leading to loss of revenue on the part of CAC because any availability search initiated is paid for and if a particular name is not available, a client may have to pay again to initiate another search. The implication is that the more names they search for, the more money they make but now that availability takes like

three weeks, it means they will generate less revenue from name search.”

He noted that the idea of prompt and timely registration is essential if government wants entrepreneurship to have a ripple effect on the economy, since every business ought to be legally registered for that to happen.

Implications for Nigerian economy

O

ladiran said that the inability of CAC to offer prompt business registration has severe implications for the

Continues on page 33 C M Y K

20 — Vanguard, MONDAY, JUNE 30, 2014

Business & Economy

Telecom subscribers appeal to FG to abolish arbitrary charges

T

he National Association of Telecom Subscribers (NATCOMS) have appealed to the Federal Government to abolish arbitrary charges by the network providers. Chief Dele Ogunbanjo, President of NATCOMS said in Lagos that the abolition of the charges would enhance the development of broadband and quality services by the operators.

Ogunbanjo lamented that the intervention of the Federal Government was necessitated by the multiple taxation by some state governments. He said that some state governments were charging between N500,000 and N800,000 monthly, on each mast.

“The telecoms operators are also charged N5,000 per metre as they laid their fibre optic cables across the country,” he said.

Ogunbanjo said the high charges and others like Right of Way restrictions and costs, as well as the security challenges “make things particularly difficult for the

ARSO advocates harmonising standards to boost international trade

T

he African Organisation Standardisation (ARSO) has reiterated the need for African countries to align with international standards, to improve their market access and boost regional trade. This was the view of stakeholders at the 20th General Assembly of ARSO in Kigali, Rwanda.

The stakeholders are from standardisation bodies from 16 African countries and the international agencies.

The President of ARSO, Dr Joseph Odumodu, noted that standards had become a tool in the fight for competitiveness and for creating barriers in regional trade. Odumodu emphasised the need for African standards to be a benchmark against international standards.

C M Y K

Dangote to halt cement imports into Cameroon with $140m investment

By FRANKLIN ALLI, with Agency report

T

he Dangote Group has so far sunk $140 million (about N23 billion) into its cement grinding plant in the Cameroonian economic capital city, Douala.

The investment, according to the company is to help the country to attain selfsufficiency in cement production and consumption and to halt importation of the commodity into the country, Nigeria as a reference point.

The grinding plant with a capacity of one million metric tons of cement a year and which will be upgraded to 1.5 million metric tons is located in an area called Base Elf on the shorelines of the River Wouri off the Atlantic coastline.

Investigation revealed that Cameroon imports about 500,000 metric tons of cement annually and that the yearly demand for cement is estimated at four million metric tons. Efforts by the government to boost domestic production saw supply increase from 1.6 million metric tons to an estimated 2.2 million metric tons leaving a shortfall of 1.8 million metric tons. To this end, the government invited private sector investment s in the sector. It was based on this that the government signed an investment agreement with

the Dangote Group in September 2011.

Abdullahi Bada, General Manager of the Doula plant, noted that the entry of Dangote into the Cameroonian cement industry is premised on the fact that for long, Africa has been a dumping ground for products over which we have comparative advantages and we have seize this opportunity, taking the bull by the horn to make sure Africa has comparative advantage, especially in the area of

cement manufacturing.

According to him, the first 50kg bag of 42.5 grade of cement from the plant will be available in the market from August this year.

“As a policy, Dangote Cement worldwide produces 42.5 grade cement because we take the healthy and safety of our people very seriously. We can’t rule out the fact that most of the builders and contractors in the rural areas lack engineers to monitor what they do; however, if you have a good product they will be

able to come out with standard constructions that will last and won’t endanger people’s lives.”

Regarding competition, he noted, “The cement industry in Cameroon is largely dominated by the Cinmenteries du Cameroun, CIMENCAM, owned by the French group Lafarge, which has for a long time been the only firm in this activity. The presence of the Moroccan group CIMAF whose annual production capacity is 500 tons; a Korean firm is also

*MEDIA DAY - From left: Mr. Edem Vindah, Corporate Brand & PR Manager, Nigerian Breweries; Mr. Sampson Oloche, Marketing Manager, Non-Alcoholic Drinks, Nigerian Breweries; Warebi Martha, CEO, Catwork Productions; Nnenna Herneson, Fayrouz Senior Brand Manager; Mai Atafo, Grand Finale Judge & Inspired by Mai, at the Fayrouz L’Original Media Day,held in Lagos.

Non-oil export hit $2.97bn in 2013 — NEPC

By PROVIDENCE OBUH

T

he value of non-oil products that moved out from Nigeria in 2013 rose to $2.97billionfrom$2.561billion in 2012, Nigeria Export Promotion Council (NEPC) revealed.

Speaking during the NEPC workshop in Lagos, Executive Director/CEO, NEPC, Mr. Olusegun Awolowo, said that about 117 products were exported to 93 countries worldwide in 2013 as provided by Cobalt International Limited.

Awolowo said that Nigeria’s exports are no longer limited to the traditional markets of Europe, especially UK and products such as cocoa, bean, palmproduce,groundnutsand solid minerals.

He added that the increase in the number of products being exported and countries

destinations are strong indications of export diversification, pointing out that this is a measure of improvement in the Nigerian export culture.

According to him, “NEPC in its efforts to provide the platformforpenetratingtarget international market with made-in-Nigeria products spearheads Nigeria’s participation in International Trade Fairs/Exhibitions every year. This has largely succeeded in exposing Nigerian companies and organisations to the international market and opened up market contacts that have yielded much dividend to the individual companies and the nation in terms of increased in flow of foreign exchange.

“In the year 2013, 13 of such outings were spearheaded by the council. A total number

of 126 companies, mainly Small and Medium Enterprises (SMEs) benefited. On-the-spot sales and orders generated by these companies amounted to $627,108.23 and $3,716,920.51 respectively.

“Executed order as at the end of February 2014, that was reported to NEPC was $763,247.85. It is also on recorded that made-inNigeria products, especially in West African Sub-region market elicit great demand as customers marveled about the quality and wondered if they were ever produced in Nigeria.

“A number of indigenous SMEs that were introduced to the market in the year 2013, especially in processed foods and condiments are already making waves in Togo and Ghanamarketsamongstother markets being penetrated in

the region.

“Efforts to scale up the penetration of the regional market by made-in-Nigeria products led to the initiative of “Lome Trade Hub” which was kick started by the staging of a Solo Exhibition in Lome, Togo in the year 2013 and was closely followed-up with Nigeria’s participation at the 11thLomeInternationalTrade Fair same year. Already, large numbers of Nigerian companies that participated in the two trade events at Togo, have their Togolese representatives selling their various products in the market.

“Effortsathavingpermanent trade hub in place is yielding dividend and Togolese authorities have allocated a space at their trade fair complex to Nigeria and renovationworkisunderway,” he said.

Vanguard, MONDAY, JUNE 30, 2014 — 21

Business & Economy

BY OMOH GABRIEL, Business Editor

T

S

ince the announcement of the policy on BDC stakeholders in the sector have raised issues and some out of selfish interest. Many of those who operate these BDCs are within the CBN and government quarters. They are individual who uses surrogates to ripe off the nation. The genuine BDC operators are few and do their business genuinely. Before the policy was made public some of these vested interests have already gone to work preparing the minds of operators on the line of action to take. In recent years the Nigerian economy has been highly dollarised. The dollarisation of the economy was decried by Sanusi Lamido Sanusi as Governor of the Central Bank of Nigeria. In Economic parlance, dollarisation of an economy occurs when the inhabitants of a country use foreign currency parallel to or instead of the domestic currency as a store of value, unit of account, and/ or medium of exchange within the domestic economy.

Nearly every government functionary, from the presidency to governors, ministers, Bankers, and top business managers, spend dollars in Nigeria unhindered as if it has become a legal tender.

Where are these dollars coming from? Most of them

*PROMO - From left: Uche Onyia, winner of a 2.5 KVA generator; Dialose Chudey, winner of an LED TV; Isaiah Ajayi, Sales Representative - Festac, Nigerian Breweries ; and Oriyomi Idris, winner of a home theatre, at the Star Football Fan Park activation, held at Barbados Bar, Festac Town, on June 25

Diversion of foreign exchange from BDCs, an economic distortion are purchased from Bureau de Change. Bureau de Change is supposedly meant to serve small end users of foreign exchange. But the reverse is the case here in Nigeria. Many serve as a conduit pipe for political office holders to drain the nation through unhindered access to foreign exchange. In fact even the genuine small business men who go to some of these bureau de change purchase foreign to

,

he Central Bank of Ni geria (CBN) last week reduced the volume of weekly foreign exchange sales to Bureaux De Change (BDCs) by 70 per cent to $15,000 per BDC and announced a 250 per cent increase in the capital base for BDCs to N35 million from N10 million. In addition, the mandatory caution deposit was reviewed upward to N35 million from $20,000 per BDC while the licensing fee was raised to N1, 000,000 from N100, 000. Application fee and annual renewal fee was pegged at N100, 000 and N250, 000 respectively.

The apex bank also banned ownership of multiple BDCs, and said that membership of the Association of Bureaux De Change Operators of Nigeria (ABCON) would no longer be a compulsory licensing requirement. “All existing BDCs and those currently operating with a Final Approval Letter are required to comply with the requirement on mandatory cautionary deposit by 15 July 2014 while all current applications are expected to comply with these new requirements,” the apex bank said.

the Nigerian economy. Many Nigerians are not aware that at the moment the CBN is trying to fight the high level of capital flight in the country.

Available data showed that in the week of 31st March 2014, a total of $4.8525 billion left Nigeria shores as transfers and payment to foreigners by Nigerians. In the week ending 30th April a total of $3.64 billion left the Nigerian shores.

Before then the average week-

Many serve as a conduit pipe for political office holders to drain the nation through unhindered access to foreign exchange. In fact even the genuine small business men who go to some of these bureau de change purchase foreign to import goods that are not necessary in the country.

import goods that are not necessary in the country.

How can Nigeria being importing took pick made from bamboo? Yet the nation complains of dwindling foreign reserve.

In Nigeria today, many residents store their value in dollars, liquid assets are moved freely around with the dollar as preferred currency. Those who offer bribe use the dollar. The incidence of the use of dollar in Nigeria has weakened the naira and Nigerians are losing confidence in their own currency The second fundamental issue that requires action to curb the excess use of forex in all quarters is the high level of capital flight that attends

,

ly international payment made by Nigerians was $1.7 billion. A total of $18.3 billion left the shores of Nigeria to foreign lands through official channels in twelve weeks in 2013.

The $18.3 billion went out of the country in the form of capital flight, which Nigerians indulged in. According to figures available at the Central Bank of Nigeria, the amount was remitted through banks, bureau de change, travel agencies and debt payment to foreign creditors to which Nigeria owes some money. This and the monthly withdrawals from the Federation Account have resulted in the depletion of the nation’s foreign reserves. The financial haemor-

rhage, which has been plaguing the nation for years due to the low productivity of the economy, has resulted in blame games in political and financial circles in the nation.

The foreign exchange out flows has resulted in an average of $1.7 billion leaving the shore of Nigeria every week as payment on travels, cash purchased from banks and Bureau De Change, letters of credit, direct remittances on behalf of expatriates working in Nigeria, Wholesale Dutch Auction and debt service payment. In the twelve weeks under consideration, a total of $89.647million was spent

by Nigerians in foreign travels. Cash sales in dollars

by Bureau De Change to small scale businesses and individuals amounted to $2.665 billion. In the twelve weeks, amount attributed to dollars sales through letters of credit opened on behalf of Nigerians for business purchases amounted to $365.810 million, while a total of $1.159billioin went out of the country as direct total remittances.

According to the CBN figures, within the twelve months, foreign exchange purchases through the official market of the Wholesale Dutch Auction sales stood at $13.906 billion and payment of interest on foreign loans by the Federal Government took out the sum of $144.83million out of the nation’s coffers.

A break down of the foreign exchange out flows from the CBN showed that in the week ending 20th September 2013,

the sum of $38.93 million was spent on travels, while cash sales to bureau de change and banks took out the sum of $263.575 million out of the nation’s foreign reserves. In the same vein, within the same week, the sum of $96.05million went out through letters of credit and the sum of $1.26billion was sold by CBN at the foreign exchange markets to Nigerians, who apply to buy goods and service abroad. This resulted in the depletion of Nigeria foreign reserves by a total of $1.708 billion in this particular week.

The new CBN Governor Godwin Emefiele when he assumed office said the vision of the Central Bank of Nigeria is to “be the Model Central Bank delivering price and financial system stability and promoting sustainable economic development”.

This vision draws inspiration from our understanding of the multiple mandate of the Bank to pursue both price and financial system stability as well as provide complementary developmental functions by creating an environment for Nigerians to live better and more fulfilled lives”. If all Nigerians must have a better life, then the CBN can not continue to serve the interest of the elites in society. It must focus on policies that support the masses. By cutting down on foreign exchange available to the few privileged Nigerians is the beginning of such policies.

Nigerians must know that the persistent domestic foreign exchange demand pressure is for political activities and not for productive purposes.

Allowing the political class to continue to put pressure on the exchange rate by the CBN gives cause for worry. If the CBN allows the pressure to continue it will suggest that the apex bank is dancing to the whims of the political class. Coupled with this, is the ever increasing dollarisation of the economy by the same political class. The CBN says it remains committed to defending the naira, even if this requires depleting the nation’s foreign reserves. It has identified the major threat to the naira as the build-up of political activities, resorting to dollarisation of the economy.

This remains a key risk to the stability of the naira. CBN policies should be supported to tackle this pressure point by insisting that all local payments, purchases be made in naira and refusing foreign exchange cover for imports that are not essential needs.

22 — Vanguard, MONDAY, JUNE 30, 2014

Banking & Finance

First Bank sponsors journalists on international course

I

Agusto ugrades Access Bank rating to 'A+'

A

CCESS Bank Plc has been upgraded from “A” to “A+” with a stable outlook

by Agusto & Co. The rating, according to a statement by the bank, cements its position as a systemically important banking institution in Nigeria and reflects the full synergy of the merger with Intercontinental Bank Plc. According to the report by Agusto & Co, Access Bank achieved this by actualizing a good liquidity position, satisfactory capitalization as well as improved risk management framework which had a positive impact on asset quality.

The rating agency stated in their report that the Bank’s extensive network of 310 branches and cash centres has created improved visibility among the banking population and has translated to a significant market share across the key market indicators. NPLs to gross loans ratio stood at 2.4 per cent - the lowest recorded in the last five years and compares favorably with the industry average of 3.6 per cent.

The report further states that "Access Bank’s improved rating further corroborates the Bank’s enhanced capacity to execute larger transactions."

*From left: Chairman, International Chamber of Commerce Nigeria (ICCN), Mr. Babatunde Savage, in a handshake with the Assistant Comptroller-General, Nigeria Customs Services, Mr. Odunmbaku A.A, Chairman Emeritus, Chief Olusegun Osunkeye, Executive Board Member (ICCN), Mr. Segun Fagboyegun

Can of worms in bank customer relationship

By BABJIDE KOMOLAFE

T

he relationship between banks and their customers is based on trust. There are indications that some banks and bankers are betraying this trust, by taking advantage of the ignorance of most customers to steal and defraud them via excess charges and sundry fees.

This reality was brought to the fore at the 2014 summit of Bank Customers Association of Nigeria (BCAN) held recently in Lagos. Though designed to create awareness among bank customers, it became an opportunity for regulators to open cans of worms in bank- customer relationship in the country.

“The realities are different from the theoretical expectations regarding duties and rights of banks and customers in the bankcustomer relationship”, said Umir Dutse, Director Consumer Protection Department of the Central Bank of Nigeria (CBN).

He said, “One key indicator of the reality of the banker/customer relationship is complaints management. Usually, complaints arise where customers perceive that their banks may have acted unethically or inappropriately.

The Consumer Protection Department (CPD) received and treated 1071 petitions

against financial institutions and got a refund of N2.955 billion in 2013. The total petitions received by the department from when it was an office at the inception of the Financial Policy and Regulation Department in March 2010 to May 2014 were 4,141. The petitions were generally for issues relating to excess charges, unauthorized deductions, dishonoured cheques, cheque conversion, foreign remittances, and ATM frauds. The cumulative refund, for the period of March 2010 to May 2014 was N14.69billion, and $1.1million.

“Instructively, excess charges constituted over 50 percent of the petitions the CPD had received and treated as at May, 2014. We have observed that many reasons accounted for this development. They included greed, and poor service delivery by banks as well as failure to adhere to the provisions of extant guidelines and agreements. For example, whereas Section 2.9 of the Revised Guide to Bank Charges (RGBC) requires that Management fee for a loan, which is one-off, should be negotiable subject to a maximum of 1 percent, it is common to see banks charge either more than one time or in excess of 1 percent as required by the Guide. Also, we had received many petitions where banks charged COT in excess of the provisions of the RGBC, or where banks introduced fees that were not initially in the agreement between them and their customers. In these, and

similar cases, the banks involved invariably breached the customer ’s right to fair treatment.”

D

utste’s disclosures were corroborated by the Consumer Protection Council (CPC). Head of CPC Lagos Office, Mr. Tam Tamunokonbia,. He noted that illegal bank charges, ATM frauds, and non- disclosure of terms and conditions, are some of the common complaints the Council receives from bank customers.

Citing recent examples, he said, “A lady’s N1.9 million

,

n continuation of its commitment to enhance capacity building in the media industry, First Bank of Nigeria Limited has sponsored selected Nigerian journalists across various media platforms for a four-day broadbased international Advanced Financial Journalism Course at the prestigious Press Association Centre in London, United Kingdom. The course which kicked off on Monday, June 23, 2014 will run till Thursday, June 26, 2014.

The highly successful international training programme is currently in its second year and falls under the Bank’s widely acknowledged intervention initiative tagged, “Media Thought Leadership Capacity Enhancement Initiative”.

As in the previous year, the journalists who cut across from different beats including online, electronic and print journalism will be trained in core financial journalism which will cover macro and micro economics reporting as well as

such customers. The reality we face is, however, different.

Every day, we are inundated with reports of poor or total lack of disclosure by some banks that refuse to inform their customers on the intricacies of products and services they offer to them.

Additionally, we had received not a few petitions where banks attempted to shy away from liability arising from the dishonesty of their staff who acted in ways that were inconsistent with their normal duties for which the banks never objected.”

Dutse said some customers have also been found to be dishonest in their relationship with their banks by trying to evade financial obligations to their banks. Others he said, also failed in their duty to protect and keep vital instruments and information like cheque book, ATM card, PIN and codes safe. “While, in a few cases, banks have been found to be liable in this regard, often, it is the customers who compromise these instruments and information. It is worthy to emphasis that where customers lose money as a result of their negligence, their bank cannot bear any liability.”

Addressing these violations of trust in the bank customer relationship, according to Dr. Uju Ogubunka, calls for increased awareness and education on the rights and obligations of banks and customers. The summit, he said is one of the efforts in BCAN in this regard.

He said, “This summit is borne out of the obvious need for banking business to be conducted based on values and best practices that not only promote and support fairness between providers and

“We are inundated reports of poor or total lack of disclosure by some banks that refuse to inform their customers on the intricacies of products and services they offer to them”

withdrawn in one week without alert – case in Enugu High Court. A Company was charged in excess of N1,984,662.40. Another in excess of N592,681.61. Yet another in excess of N552,597.01."

He said when confronted with these complaints, banks give defensive answers such as; “Customer compromised PIN numbers. CCTV Footage could not be generated; we are investigating and will get back; the customer signed an agreement; the customer was given the form; It is an error etc.” Speaking further Dutse said, “A bank is obligated to provide full disclosure to its customers regarding every product or services they offer

,

consumers of banking services but also the stability, growth and sustainability of the banking system, hence the economy. “Thus, this maiden edition is aimed at empowering participants to know their rights, privileges and of course obligations. It is also aimed at providing opportunity for them to share their experiences on what they expect from their banks and what they are getting.

The time has come when bank customers and indeed, consumers of banking and financial services should be knowledgeable on basics of the business in order to maximize their benefits and also protect themselves against any unfair treatment.”

Vanguard, MONDAY, JUNE 30, 2014 — 23

Banking & Finance

Trustfund Pensions declares N1bn profit …Shareholders laud performance

By FUNMI KOMOLAFE

T

RUSTFUND Pensions Plc, has declared a profit after tax of N1.005,792 billion, even as shareholders are expected to get a dividend of 25 kobo per share amounting to N250Million.

In the company’s financial result of the year, total income amounted to N3.897, 293 billion while profit before tax

was N1, 089,909billion.

From its financial analysis, the company’s profit after tax increased by 28 percent from N788 million in 2012 to N1.005,792 in 2013, fund under the management grew from N210.5billion in 2012 to N272.1billion in 2013 Addressing shareholders and others, at its 6th Annual General Meeting, AGM, Chairman of the Board of Directors, Dr. (Mrs) Ngozi Olejeme, said Trustfund

Pensions Plc had recorded another year of progress for the year ended 31 December, 2013, saying the financial results showed a healthy growth in adjusted earnings despite the challenging macro-economic environment.

According to her, “a lot of work went into improving the quality of earnings, increasing the proportion of our more resilient, visible income streams and cutting our exposure to volatile areas

such as benefit payments and fund management. We made good progress in the building of our long term goals in line with our strategic objectives.

Our actions in 2013 undoubtedly left the Company in a stronger position as we enter 2014. I commend the Board, Management and Staff of the Company for their fortitude and commitment.”

Speaking on the financial statements, she said “The

financial statements for the year ended 31 December, 2013 have been prepared in line with the International Financial Reporting Standards, IFRS. The Company’s Gross earnings and Profit after tax increased by 22% and 28% respectively resulting in a corresponding increase in the Total assets and Shareholders’ fund of 17% and 30% respectively.

“During the year under review, the Directors paid a final dividend of 23kobo per ordinary share on the issued capital of 1,000,000,000 for the financial year ended December 2012.

24 — Vanguard, MONDAY, JUNE 30, 2014

Corporate Finance

NAHCO FTZ to boost shareholders’ value

By NKIRUKA NNOROM

S

hareholders of Nigerian Aviation Handling Company Plc(NAHCO) have expressed optimism about the future prospects of the company following the establishment of a new subsidiary, NAHCO FTZ to operate a free trade zone(FTZ) within the Murtala Muhammed Airport, Lagos. NAHCO FTZ was recently given a licence by the Federal Government to operate a free trade zone, a development that is capable of attracting about $500 million investment into Nigeria.

The shareholders, who spoke at the yearly meeting with the management, said the new subsidiary, which is part of the NAHCO’s expansion initiative, will not only attract investment into the economy but will also boost the fortunes of all stakeholders of the company.

Some of the shareholders who spoke at the AGM include: the National Coordinator, I n d e p e n d e n t Shareholders Association of Nigeria (ISAN), Sir Sunny Nwosu, the Chairman, Progressive Shareholders Association of Nigeria, mr. Boniface Okezie; Bishop Goodluck Akpore of Onitsha Zone S h a r e h o l d e r s Association, Alhaji Muktar Muktar, Mrs. Oludewa Thorpe and Mrs. Esther Augustine.

They commended the board and management for the FTZ idea and pledged to support the project that will take off fully this year. In his comment, Nwosu said, “NAHCO FTZ is a clear value to the company and its stakeholders. FTZ gives the company the opportunity to be a cargo hub for West Africa and entire Africa because those companies that are either importing or exporting will always like to pass through FTZ because they will not pay any duty for that. This gives NAHCO opportunity for growth.”

Earlier in his address, the Chairman of NAHCO, Mallam

Suleiman Yahyah, said already a management team has been put in place to run the affairs of the new subsidiary, adding that they are developing a 25-year master plan for NAHCO FTZ in that direction. ”NAHCO FTZ will afford us the opportunity to import goods in a borderless environment. It will also improve our shipment capacity and capabilities and give us a unique platform to service valueadded aviation-related business. This will enhance significantly air traffic into the country and bring for NAHCO Plc increased volume in form of cargoes.

“We also believe that when the FTZ comes into full operation, some of the exports that we lose to neighbouring counties would revert to us,” Yahyah said. Reviewing the performance of the company for the year ended December 31,

2013, the chairman said turnover rose by 11 percent from N7.4 billion to N8.1 billion, while profit after tax rose by 35 percent from N609 million to N820 million.

“Accordingly, the Board is pleased to recommend a modest increase of 20 percent in dividend payment from 25 kobo to 30 kobo. We have increased our liquidity position, cash flow and amount retained in the business in order to support future capital expenditure and our West Africa roll-out strategy,” he said.

Also speaking, the Managing Director/Chief Executive Officer of NAHCO, Mr. Kayode Oluwasegun-Ojo, said the company will build on the 2013 performance, saying that the team of resilient business development strategists is well positioned to secure emerging business opportunities for the company.

Fidelity Bank partners PayPal on payment processing

F

idelity Bank Plc has announced the acceptance of its payment Cards on the PayPal platform.

With this development, Fidelity Bank’s cardholders can now shop from the world’s major international Retailers with more flexibility and convenience.

Coming on the heels of the proposed nationwide adoption of the CBN’s cashless initiative from July 1, this move is seen as part of the bank’s efforts at boosting electronic payments and fostering ease of transactions.

PayPal, a global player in the e-commerce industry, offers a faster and effective means of conducting transactions over the internet and is being used by millions of customers across the world.

Divisional Head, Electronic Banking, Adedeji Olowe, who spoke on behalf of the Managing Director/ Chief Executive Officer, Fidelity Bank Plc, Nnamdi Okonkwo, said

the introduction of PayPal is a deliberate attempt by the bank to make financial services easy and accessible to its customers.

Specifically, Olowe said that the development is in line with the bank’s commitment to consistently deploy innovative strategies to make life easier for its customers. “We believe that our customers will benefit immensely from this innovation and the registration process is straightforward.

He, however, explained that the bank would adopt a phased approach to deployment, saying, “Only shopping on international websites is available at this time, other services will be introduced in the coming months.”

While the surge in ecommerce has given rise to concerns about online security, the bank has allayed the fears of its customers by confirming that its Cards are protected with top-notch security tools.

Vanguard, MONDAY, JUNE 30, 2014 — 25

Corporate Finance

NSE: Enlightenment, tax cut needed to jump start securities lending Stories by NKIRUKA NNOROM

E

nlightenment of market participants, potential lenders and borrowers, on how securities lending can help to boost the performance of the capital market is a major tonic needed to jump start securities lending in Nigeria.

There is also need to streamline existing tax structure, which currently covers stamp duty and transaction taxes, as well as tax on securities lending fee income and capital gain tax, said Mr. Jude Chiemeka, Chief Executive Officer of UBA Capital Plc. Securities lending is a capital market system that allows an investor to loan a stock or any other security to another investor or firm.

In borrowing a security, the borrower hopes to profit by selling the security and buying it back at a lower price. When a security is loaned, the title and the ownership is also transferred to the borrower.

Securities lending was approved by the Securities and Exchange Commission, SEC, in quarter one, 2012, but feelers from the stock market indicate that it has not been operational.

Speaking while making a presentation on Issues in Securities Lending at the last Capital Market Committee meeting in Lagos, Chiemeka said the current fee of six percent will have to be revisited and possibly

reviewed down to two to three percent to align the cost structure with that of other international markets.

He said there is need to also revisit the collateral aspect, saying that it will address the fear factor arising from lending ones security to another investor.

Listing other boosts to securities lending, Chiemeka said, “Given the expected return on securities lending, the current margin requirement of between 135 percent and 160 percent will not attract investors.

“The responsibilities of all parties should be clearly understood and agreed on and participants as a matter

of prudence should carry out credit assessment of their counterparties.”

“The regulators should ensure that participants maintain adequate capital to cover the risks they undertake,” he added.

Moreover, he stated that if fully operational, the act will improve the participation of Market Makers, thereby deepening and providing the needed liquidity in the capital market.

In his response, the Chief Executive Officer of the Nigerian Stock Exchange, NSE, Mr. Oscar Onyema, emphasised that Securities Lending took off with Market Making in 2012, saying that

the Exchange has put the framework in place to facilitate full operation of the system.

He further stated that provision has already been made for Securities lending agents, who are saddled with the responsibility of loaning and borrowing securities on behalf of interested investors. “I believe a number of them have been registered by SEC but they still have not taken off operations and so, we are trying to address the concerns they have in order for them to actually start functioning as Securities Lending agents,” he said.

hareholders of NPF Microfinance Bank have approved distribution of N228.7 million dividends earlier recommended by the Board of Directors of the bank.

The dividend so approved translates to 10kobo per every 50 kobo ordinary share held by the shareholders.

Addressing shareholders at the 20th Annual General Meeting, AGM, in Lagos, the chairman, Mrs. Florence Adebanjo, said the bank set out in 2013 to conduct its business in a manner that will be beneficial to all its stakeholders and to strengthen its leadership

T

he Africa Finance Corporation, AFC, has become the mandated lead arranger of $1.305 billion prepayment facility for Glencore Energy UK. The facility will be used by Glencore to provide financing of up to $1.450 billion to Société des Hydrocarbures du Tchad, SHT, the national oil company of Chad.

The pre-payment facility will, in turn, be used by SHT to acquire Chevron Global Energy Inc’s 25 percent participating interest in the Doba consortium, which owns and operates oil producing assets in Chad.

AFC was one of the six Mandated Lead Arrangers of the pre-payment facility, the others being Credit Agricole Corporate and Investment Banking, Deutsche Bank, FBN Bank (UK) Ltd, Natixis, and Société Generale Bank, with Citibank N.A. as the Account Bank. AFC’s contribution to the financing was USD100 million.

Dangote Cooperative gross earnings up by 68%

D

*COUNSELLING - From right: Mrs. M.T Iji, Tutor-General/Permanent Secretary, Education District 5, Lagos State; Rabi Isma, Director, Leadership and Organisational Development, Etisalat; Mr. Oziegbe Ip, Director, Special Duty Education District 5, Lagos State; and Mrs. Tonne Saheed, Senior Project Officer, LEARN at the Etisalat Career Counselling in Lagos. PHOTO BY AKEEM SALAU

NPF MfB shareholders approve N228.7m dividends S

AFC finances $1.3bn oil project in Chad

position in the microfinance bank sector.

She explained that the bank redirected its focus to increased microfinance activities by tailoring its services and delivery channels through improved technology in order to meet its clients’ needs.

Speaking on the financial performance, Adebanjo said, “”The results for the financial period under review are once again a testimony to the sound financial health of our bank.”

She stated that total assets grew from N7.690 billion in 2012 to N8.680 billion in the

year under review, representing an increase of 12.87 percent.

Total deposits, according to her, stood at N3.858 billion as at December 31, 2013, compared to N3.271 billion recorded in 2012, an increase of 17.95 percent.

“Profit before tax, however, dropped by 18.73 percent from N630 million in 2012 to N512 million. This was due to additional provision of N106 million made due to impairment in loans.

“The cheering news, however, is that a 100 percent of the profit made in the period under review came

from organic operational activities of the bank, which is sustainable as against a 46 percent write back to profit from capital market in the previous year’s result,” she said.

Speaking on the outlook, she said, “The Central Bank of Nigeria’ commitment to the pursuit of financial inclusion is expected to result in increased competition in the banking industry during the year as Deposit Money Banks intensify their efforts to gain the confidence of micro customers.

angote Group Staff Multi-Purpose Cooperative Society Limited, DANCOOPS, has declared gross earnings of N87.32 million in 2012 compared to N52.86 million in 2011, representing 68 percent increase.

Presenting the financial result for 2012 to members of th the co-operative during its 7 Annual General Meeting, AGM, in Lagos, the cooperative said it is also proposing a dividend payout of N34 million for members whose names appeared on its register as at the close of business as at 31st of December, 2012.

In an address, the President of the co-operative, Reuben Odetunde, told the members that the co-operatives’ total savings increased from N717.5 million in 2011 to N983.10 million, about 37 percent increase.

He also noted that the cooperative’s personal loan scheme, which is a strategic activity of the society to make loans available to members, has continued to attract strong patronage by members compared to the previous year.

C M Y K

26 —Vanguard, MONDAY, JUNE 30, 2014

C M Y K

Vanguard, MONDAY, JUNE 30, 2014 — 27

28 —Vanguard, MONDAY, JUNE 30, 2014

Interview

How would you describe the level of education in the country?

It is still not where it should be. Yes government is doing so much to develop the sector but we are not there yet, that is why the private sector must come in and invest in the education sector if we really want our children to get quality education without having to pay so much for it.

It is so bad that most well to do and not so well to do strive to send their children abroad to obtain what they see as quality education.

Unfortunately, this has constituted a major drain on our foreign exchange earnings as a country. It is alleged that there are 75,000 Nigerians studying in various educational institutions in Ghana. Just estimate the amount of money these 75,000 students would have saved the country in dollars if they were in Nigerian universities.

Rolling back the years when I was an undergraduate studying International Relations, about 45 per cent of my classmates were foreigners from Equatorial Guinea, Niger Republic and even from France. Such people came for exchange programmes to understand the concept of international relations in Nigeria. Thus, beyond the capacity issues, the quality of education is very critical to make our people stay.

So what is the way out?

First and foremost, government must increase funding to the education sector and ensure that public schools are better equipped to compete fairly with the private institutions. Most importantly, there is a need for urgent intervention in the education sector by private sector companies because government cannot do it alone. This is why we have decided as a bank to focus on the sector. Sterling Bank’s intervention in the sector will help to ameliorate some of the challenges the sector faces.

Over the years, youth unemployment has remained one of the daunting challenges in Nigeria, as recent statistics show that over 25 million youths in the C M Y K

Government needs help to finance education sector — Sterling Bank country are unemployed.

This abysmal statistics is linked to, among others, the issue of employability as even where jobs abound, the lack of competence to handle them arises. This problem can be attributed to the declining quality of education in the country.

All this has necessitated our foray into education. We realise that Nigeria will require an investment of about $1 billion yearly for about 55 to 56 years to transform the education sector.

Our intervention in this sector will hopefully contribute to resolving the problem of unemployment. It will help Nigerians create their own businesses.

State governments are beginning to come up with initiatives to develop the education sector.

For instance, we are aware that Lagos State government has introduced the Lagos EKO project. We have similar projects in other states especially in the south west.

In what ways can the private sector support such initiatives?

The facts are there. We are the first bank in Nigeria to partner the Lagos EKO Project using our staff as volunteer teachers to teach different subjects, all of these are part of our corporate social responsibility to support education, to aid employment and bridge the estimated $1 billion gap that exists in terms of funding education in Nigeria.

Apart from that, Sterling Bank has also helped to improve the look and feel of some schools and we are also supporting with books, writing materials, as well as textbooks. Our books ‘My Little Money Book’ and ‘Funds’, is our way of providing a learning/teaching guide on saving, loans and other financial concepts.

Now what is Sterling Bank doing to support the sector?

The Bank’s focus on education is strategic. We are

looking at all actors in the value chain. For instance, the bank has set up an education desk to look at the total value chain of education, from suppliers of inputs to the end users.

The bank intends to use it’s expertise to contribute to the development of the sector through a •Mr. Shina Atilola, Group Head, Strategy & Communications, Sterling Bank Plc

,

T

he challenges in the education sector are so enormous that private institutions would need to lend the government a helping hand. Mr. Shina Atilola, Group Head, Strategy & Communications, Sterling Bank Plc in this interview explains what the Bank is doing to support the education sector.

We are the first bank in Nigeria to partner the Lagos EKO Project using our staff as volunteer teachers to teach different subjects, all of these are part of our corporate social responsibility to support education, to aid employment and bridge the estimated $1 billion gap that exists in terms of funding education in Nigeria

variety of initiatives.

Statistics from EFInA shows that 1.9million people are borrowing for education needs, meaning that there is a need in this sector. The bank intends to reduce the burden on parents occasioned by bulk payment of school fees through our school fees finance product. It provides convenience to parents and peace of mind that their children can stay in school while we finance their education.

We have also instituted scholarship opportunities for brilliant children that excel in competitions organised by the bank. Just recently, we concluded a Mathematics competition in collaboration with a school in Lagos. More than 1,000 children entered for this competition and top performers were beneficiaries of various cash awards. The winner got N500,000 scholarship support, the

,

second N300,000 scholarship support, and the third got N200,000 scholarship support. The scholarships were extended to the top 51 students: The student that came fourth got N150,000 while the fifth, sixth and seven positions got N125,000, N100,000, and N75,000 respectively. The remaining 44 students got N50,000 alongside books and other materials. We are doing all these to encourage healthy competition among students and at the end of the day develop the sector. I can assure you that by next year, the Mathematics competition will go national.

To encourage students improve on innovation and critical thinking another competition is ongoing for students between ages 5-12.

Basically, the kids are allowed to design and create the bank of their imagination which could be expressed as a

painting, drawing, writing or even through a presentation.

The most creative ideas will be shortlisted for various prizes. The first, second and third prize winners will go home with a scholarship awards of N500,000, N300,000 and N200,000 respectively. There will also be other cash awards, gadgets and other prizes to be won.

This initiative is aimed at identifying talents and harnessing same for global competitiveness.

It is also important l mention this. Sterling Bank supported the 2014 edition of the “We are The Future of our Nation” (WATFON) program, an initiative of Edumark Consult.

Over 3,500 final year students in various secondary schools attended the event aimed at providing leadership skills and career development knowledge yearly. We did this as a way of investing in our collective future and create the society we want by investing in our youth. This platform provided the children to meet with accomplished Nigerians, who have excelled in various fields and have thus become role models to inspire the children to greatness There is need for institutions to promote financial literacy among students which would prepare them with the ability to make informed financial judgments and effective decisions about the use and management of money from the young age which determines the child’s longterm financial security.

Vanguard, MONDAY, JUNE 30, 2014 — 29

Homes & Housing Finance

FMBN partners Police, others to boost housing delivery

T

he clamour for a better standard of living for security officers and operatives in the country received a boost recently when President Goodluck Jonathan commissioned 1,000 housing units for the rank and file of the Nigeria Police in Dakwa, Abuja.

At the commissioning on 10 June, 2014 of the 1000-unit housing estate christened, Sunday Adewusi Housing Estate, consisting of three, two and one bedroom units, the President applauded the initiative of the Nigerian police in collaboration with the Federal Mortgage Bank of Nigeria (FMBN) to provide affordable housing for its officers and men.

Jonathan, who was represented by Vice President Namadi Sambo, noted that the project which was developed through public-private partnership (PPP) between a developer and the Police Cooperative Society Ltd as financier will motivate members of the Police Force towards effective and efficient service delivery.

In his remark, InspectorGeneral of Police, Mohammed D. Abubakar, said that the vision behind the project was to provide comfortable houses for men and officers of the Nigeria Police. Chairman of the Police Service Commission, Mr. Mike Okiro, on his part,

said that officers and men, who are beneficiaries, will pay for the houses through the NHF loans which the Nigeria Police has accessed to through FMBN. “These houses have been delivered at the lowest cost, which is made possible through equity contribution to relevant stakeholders,” he stated.

It would be recalled that President Jonathan last year commissioned the first modern police housing estate named after him in Lagos, where he commended the initiative of the Nigerian police in collaboration with FMBN to provide affordable housing for its officers and also reiterated the commitment of his administration to provision of affordable housing for Nigerians. The estate which comprises 200 units of 3bedroom flats was built under a PPP scheme financed

by Aso Housing and Loans and developed by Remax developers.

IGP Abubakar disclosed then that buyers would be expected to repay through a mortgage scheme made available by FMBN. He also noted that similar estates were being built in other parts of the country including Abuja, Kaduna and Kano.

The President also recently launched the National Housing Fund (NHF) e-Card and commissioned the FMBN-financed ‘Aviation Village’ housing estate in

*FMBN MD, Yaú Kumo

,

Stories by YINKA KOLAWOLE & FAVOUR NNABUGWU

Since the introduction of the e-collection platform, NHF collections have improved by more than 500 percent

Abuja. The estate was developed by Suntrust Real Estate Investment Limited, a private developer based on funding for both construction and infrastructure financing provided by FMBN to the tune of N2.4 billion. The estate which covers a land mass of 11.9 hectares comprises a total of 270 housing units made up of 144 units of 2 bedroom flats, 50 units of 3 bedroom semidetached bungalows and 76

Housing: AHCN seeks government guarantee for offshore funding A ssociation of Housing Corporations of Nigeria (AHCN) has called for provision of necessary government guarantee to enable its member organisations access offshore funding for housing development.

AHCN which is the umbrella body for all federal and state housing agencies, and housing research institutes, stated this in a communiqué issued after a two-day National Workshop on “Housing Sector in Nigeria in the last 50 Years” and its 41st Annual General Meeting to mark its Golden Jubilee. It noted that the existing funding arrangement for the provision of housing in Nigeria is grossly

inadequate, hence the need for support in providing government guarantees.

The communiqué signed by both the AHCN P r e s i d e n t , D r .

Ifenna Chukwujekwu and its Secretary General, D.A. HarYusuph, noted the availability of offshore funding for housing delivery and its attendant challenges, and identified collateral and bank guarantee as the main issue affecting smooth access to such offshore funding in the recent past.

While commending activities and roles of the association in housing development over the last 50 years, the communiqué noted the potentials of member organisations in

,

housing provision has not been fully realised. The association therefore urged housing agencies to explore the usage of instruments such as bond, stocks, mutual funds, insurance policies, Gold certificates, corporate guarantee, which are accepted by some lenders to secure offshore funding.

AHCN further identified availability of untapped resources and funds in trillions of naira lying fallow in pension and insurance funds, unclaimed dividends and other related instruments that could be harnessed to the real estate sector. It also called for pragmatic actions by member organisations that will enable them access funds for housing development from the capital market.

units of 3 bedroom detached bungalows.

“We are moving forward as a nation in our quest to reduce the housing deficit in Nigeria and I wish to commend FMBN for successfully delivering this project through the Estate Development Loan granted Sun Trust Investments,” the president stated.

Speaking at the occasion, Managing Director of FMBN, Mr. Kimba Ya’u Kumo, said mortgage arrangement has been made for beneficiaries. “Regarding this estate, FMBN has approved mortgage loans to 171 NHF contributors to the tune of N1.4 billion, out of which about 20 beneficiaries are occupying their houses as we speak. Mortgage loans for the remaining 99 units are being processed and would be concluded shortly,” he said.

The FMBN boss noted that the launch of the NHF e-Card was a huge step forward in delivering the advantages of speed, accuracy, transparency, accountability and superior customer experiences to NHF contributors. He said since the introduction of the e-collection platform, NHF collections have improved by more than 500 percent and has also assisted to ensure transparency and accountability.

“Mr. President would be pleased to know that we have begun to harvest the benefits of the NHF e-Collection platform, especially in the volume of NHF collections.

For instance, the rate of NHF collections rose significantly from about N700 million to over N2.2 billion per month.

We estimate a further 100 percent increase in monthly collections to about N4 billion per month before the end of Year 2014.

“By using the NHF eCollection platform web portal, a contributor can review his/her record of contributions online and print out a statement of account at a computer workstation from anywhere in the world. In addition, contributors can use the NHF e-Card as an e-Purse that can be loaded with extra cash to make purchases via POS terminals or online. The portion of funds being NHF contributions will however not be available for spending,” he stated.

Ogun slashes housing cost for civil servants

O

gun State government has reviewed downward the prices of housing units being sold by government to the state’s public servants.

Governor Ibikunle Amosun disclosed this in Abeokuta, the state capital, at a meeting to commemorate the Public Service Day. He said rather than making 20 percent initial payment previously required, workers will now pay 10 percent of the total cost of their choice housing units.

Amosun declared that a three-bedroom apartment which initially goes for N6.2 million has been reduced to N5.5 million, two-bedroom from N6 million to N5 million, while and a one-bedroom flat now goes for N4.5 million, from N5.5 million. He said the review was prompted by various complaints by public servants, who said there was no way they could afford the initial prices. He also announced approval of 27.5 percent teachers’ allowance, car and housing loans for the workers, adding that workers will begin to access the loans from October.

NSE moves to curb building collapse

N

igerian Society of Engineers (NSE) has initiated moves aimed at curbing incidences of building collapse in the country.

National President, NSE, Ademola Olurunfemi, who made theremarkinYola,said“theSociety is taking decisive measures to curb the disturbing number of cases of building collapse in the country.”

The NSE president, who was represented by National Vice President of the society, Kunle Mokolo, called on all state branches to partner with their respective state governments, professional bodies and other stakeholders to establish a “Development Control Unit” to eradicate the syndrome.

He said the unit will be responsible for overseeing all building projects in their respective areas. “These include the examination of professional level and ability of the contractors, the building equipment standard, feasibility study, design and up to the finishing level of the project,” he said.

30 — Vanguard, MONDAY, JUNE 30, 2014

C M Y K

Vanguard, MONDAY, JUNE 30, 2014 — 31

E - Commerce

E-commerce, logistics firms to drive growth in Sub-Saharan Africa — Report Stories by JONAH NWOKPOKU

A

recent study conducted by a global logistics and courier services firm, DHL has shown that online retail will continue to gain popularity in both developed and emerging markets over the next ten years and logistics companies will provide solutions that will further influence shopping habits.

Tagged DHL’s‘Global ETailing 2025’ the study analysed the role e-commerce will play in consumers’ lives in the year 2025, and how it will influence consumerism, retailing and logistics.

The study further explored future scen arios with possible alternatives of what ecommerce globally could look like for consumers and businesses in the future.

According to the study, different projections were based on a detailed analysis of the most influential factors effecting economies – from energy and raw material prices to technological, political and social factors, to retail and consumption patterns.

Other possible scenarios included: Hybrid consumer behaviour in convergent worlds of retailing, artificial intelligence in the digital retailing sphere, presentation in virtual communities and collaborative consumption in a regionalised retailing landscape.

Speaking on the report and how it affects Nigeria, DHL’s Country Manager in Nigeria, Mr. Randy Buday said, “The continuous improvement in broadband internet services, growing confidence in online payment and a population of over 160 million people has made Nigeria an already thriving e-commerce market.”

He said that Nigeria is fast

becoming a game-changer in African e-commerce.

“We constantly receive requests with regards to our services in the industry and as result we have been able to partner with companies like Jumia, Konga, 3AL and some other big players in the sector.”

He added that, “Some of the most challenging constraints for business operations in Nigeria are transport and logistics, and our logistics infrastructure now enables ecommerce firms like Jumia and Konga reach all of Nigeria’s thirty-six states.

On his part, Head of Marketing, DHL Express, Sub Saharan Africa, e-tailing, Mr. Sumesh Rahavendra, the sale

of goods and services through the Internet has exploded globally, especially in emerging countries.

He also affirmed that despite the various possible future scenarios, it is clear e-tailing will continue to boom. ”Currently, e-commerce already makes up 8 percent of the overall trading volume in Europe. Depending on the scenario, this share could rise up to 40 percent in developed countries and up to 30 percent in today’s emerging markets.

The factor which all scenarios have in common is that the competition in electronic retail, whether on global, national or regional level, will become more intense,” he said.

*INDUCTION: From left: Pedro Omontuemhen, Partner, PWC representing the Guest Speaker, the 50th President of ICAN, Chidi Ajaegbu and 2nd Deputy Vice President of ICAN, Isma'ila Zakari, at ICAN 40th induction ceremony of the Association of Accounting Technicians of West Africa.

Jovago partners TripAdvisor to facilitate hotel booking

N

igeria’s hotel booker, Jovago.com has entered into partnership with TripAdvisor, another hotel booking portal to make hotel booking easier for travelers.

In a statement, Jovago said,

the new partnership with TripAdvisor will afford travelers visiting the TripAdvisor site the opportunity to gain direct access to Jovago’s diverse selection of hotels in Africa.

It noted that whether

Tradestable unveils new platform to boost commerce

N

He further noted: “We don’t know for certain what the world will look like in 2025, but the study ’s various scenarios show how rapid the global retail sector, both online and offline, is changing and that logistics will be a focal point of these change processes.

He added: ”While etailing can facilitate the transaction of the changing consumer trends, the delivery of the product needs to be considered.

Many retailers put significant focus to attract customers, but more effort needs to be paid to facilitating flawless delivery to customers.

igeria’s classified ads platform, Tradestable.com.ng, has unveiled a new platform to boost the growth of commerce and trade in Nigeria. Tradestable said it undertook series of usability tests in order to release a platform that would truly serve the needs of both interested buyers and sellers, one of the first to be carried out by any online company in Nigeria.

“We wanted to make the site more intuitive and feel more modern. We listened to our users, and then decided to redesign based on their feedback. We want to provide the easiest way for anyone to buy and sell any kind of item,” said Tradestable’s Country Ambassad in Nigeria, Mr. Onyeka Akumah. The usability

test which was undertaken at Yaba College of Technology, Alaba International market and other key areas in Nigeria helped in the development of an intuitive platform which embodies feedback received from the different test subjects.

Users were asked many questions relating to the layout, navigation and overall feel of the website. They were also given several tasks to complete, such as posting a free ad, all the while giving feedback for improvements.

Akuma said the move became imperative for Tradestable because, “Nigerians are natural lovers of trade and commerce and Tradestable wants to support and set the pace for this drive through its easy-to-use platform, price

travelers are planning in advance from home or are looking to book hotels while already at the destination, TripAdvisor users will be able to book immediately exclusive deals on hotels on Jovago.com.

It said that users can now click directly on the hotel search result link of their choice to make their bookings easily, while also checking out the reviews made by other travelers.

Speaking on the partnership, TripAdvisor’s Senior Account Manager for Europe, Middle East and Africa, Adrian Hands said, “TripAdvisor is delighted to partner with Jovago to offer travelers a diverse selection of hotels across Africa.The partnership helps make booking these hotels as easy as clicking a button, whether travelers are on their desktop or mobile.”

StarTimes rewards customers, eyes digital TV penetration

S

tarTimes has reiterated its determination to further deepen the penetration of digital television in Nigeria, making it affordable to a vast majority of Nigerians in the next couple of months.

In furtherance of this aim, the company has undertaken the second draw of its Extra Time Promotion, with another 50 individuals winning 32 inch LED TV, while one customer, Mr. Emeka Collins, won the star prize of a brand new Toyota Yaris 2014 car.

The star prize winner for the June edition, Emeka Collins told the audience at the draw via telephone, that he joined the StarTimes network about a week ago and was attracted to the network because of the content. Speaking at the draw, Mr. Ayokunle Idowu, Branch Strategist, NTA-Star TV Network Limited, said the promotion is an avenue to enable every home enjoy digital television at an affordable rate, while also using it as an opportunity to give back to its customers and appreciate them for being on its platform.

Yahoo to buy YouTube content provider for $250 million

I

nternet giant, Yahoo has put in a bid of around $250 million to buy Fullscreen, a company which creates content for YouTube channels.

Yahoo is looking to expand its reach to young consumers through the acquisition of the company, which generates more than 3 billion monthly views on Google Inc’s YouTube.

Yahoo faces competition from private investment firm Chernin for control of the California-based company.

Chernin is already a shareholder in Fullscreen, having bought a stake in June last year along with the world’s largest advertising group, WPP and Comcast Ventures.

Chernin, owned by former News Corp executive Peter Chernin, is understood to have the right to buy Fullscreen at a previously-agreed price if other bidders do not offer at least $300 million.

Fullscreen was founded in 2011 by George Strompolos, a former Google executive.

C M Y K

32 — Vanguard, MONDAY, JUNE 30, 2014

C M Y K

Vanguard, MONDAY, JUNE 30, 2014 — 33

The story, written by Mr Udeme Ekwere, went on to inform Nigerians that “Notwithstanding the huge sum of money expended on the remodelling of the nation’s 22 airports, feelers are that none of them has met the minimum standard for certification by the regulator.”

Last year, on my SUNDAY VANGUARD page, I had published an article titled AVIATION MINISTER: TIME TO GO. Prior to that, I had also carpeted the former minister for incompetence – among other failures. The first article received a rejoinder from her Senior Personal Assistant, Mr Joel Obi. As usual, Joel Obi, disregarded the point of the article and went on to do what spokespersons for government officials do best – present half truths and outright falsehood as facts. I allowed Obi to expose himself and the Minister on my page because there was no doubt in my mind that truth will prevail. I knew that Ms Oduah would never last the distance as minister and that she would be out of office soon.

Despite the reluctance of President Jonathan to part with Oduah and the attempt to provide her with facesaving exit from office, the overwhelming truth remains unshakeable – her tenure of office had been characterised by profligacy and cheap propaganda. At least, Nigerians, except the people of her small village and the traditional rulers can now understand that all the former Minister had

Aviation ministry and the mess Oduah left behind achieved was a colossal waste of over N150 billion remodelling airports, without touching on the core need of safety.

Yet, safety, not remodeling was what was primarily required. Given the choice between safe or aesthetically appealing airports, there is no doubt in my mind that most of us travelling by air would rather land and take off safely than be buried in the most beautiful airports.

Furthermore, part of the N150 billion was spent without approval by the National Assembly (NASS), sometimes involving loans taken, again without approval from anyone. And, most of the work was so shoddily executed that observers and other experts believe they might not last more than a few years.

One expert quoted in the report had this to say: “The remodelling project has not in any way moved us forward from where we were before its commencement. The remodelling only focused on building terminal buildings.

Air safety, as far as airports are concerned, goes beyond that.” It is quite possible that Oduah knew this but she was also probably more interested in the political capital that could accrue from cosmetic “improvements” which could be used to deceive the gullible. It was not surprising therefore when, after the deal involving the two bullet proof cars blew open, her “defenders” were quick to

point to the 22 airports remodelled without reference to the fact that it was probably one of the most expensive wastes of public funds ever undertaken by a public official acting in contravention of our laws.

But, like all lies, those pertaining to the airports and her so called achievements have now been revealed to be just what they were – lies.

Many aviation experts point

,

“Airports may not be certified despite the N150 bn remodeling.” PUNCH, June 23, 2014.

The remodelling project has not in any way moved us forward from where we were before its commencement

,

to the need to resurface runways on which aircraft land and take off and which should receive more attention than landscaping of airports. But, like most Ministers, whose orientation is towards awarding contracts, however worthless the value to airport stakeholders, she had gone ahead to award contracts – just to claim she was working.

Two incidents of people walking unto the tarmac to stow away on aircraft from Nigeria point to the dangers inherent in not installing adequately secured perimeter fencing in all our airports. Admittedly, that is

not as glamorous as installing fancy restaurants or well lit advertising panels.

But, nobody, except kids on excursion, goes to an airport to see adverts – however ingenious. Travellers want to fly; aircraft operators want the planes to take off and land without problems and relatives, as well as coworkers, want their people back home after flying. A competent Aviation Minister must operate with one principle – SAFETY FIRST; EVERYTHING ELSE IS SECONDARY. What we now have are 22 airports where safety had been compromised for aesthetics; function had given way to features and the nation is standing still instead of moving forward – even if the décor had been altered for the better.

But, the matter now goes beyond the exposure of an under performed former Minister, it has revealed to the entire nation the need to go and find new funds in order to address the safety issues which the former Minister had ignored.

Furthermore, one of those airports, the former GATT Aviation airport is the subject of litigation which might result in the Federal Government losing the structure on account of breach of contract. When that happens, all the billions spent on remodelling the structure would have gone down the drain.

Let me end this article by recalling for our readers

what was written in April last year, about Ms Oduah. They, governments and their appointees, that is, never listen. Presidents and governors don’t know when to discharge; ministers and commissioners don’t know when to quit.

If you think aviation matters are unimportant, just remember that the attack on the World Trade Centre in New York in 2001 has opened the eyes of all right thinking people to the fact that those things flying over our heads are bombs.

And if that is not enough, DANA Airlines crash should serve a permanent notice that those in the plane and those below are perpetually imperiled each time an aircraft flies overhead. It is for these reasons that sane societies enact stringent regulations, to be implemented fully, before anyone can take a plane up.

The Joint Committee of the House has just told Nigerians, in that reported statement, that the Minister of Aviation had been allowing several bombs to fly over our heads with expired permit. Irrespective of whether it was inadvertent error or deliberate relaxation of the regulations, the Minister stands accused of risking the lives of millions of Nigerians. This is unpardonable.

At the moment, we don’t know how many planes are in that condition. But, even if it is only one, the Aviation Ministry has failed to discharge its primary responsibility to Nigerians and it is not a recent occurrence.

Visit: www.delesobowale.com or www.facebook.com/ Visit: biolasobowale

Cover Story Continues from page 19 Nigerian economy if things continue the way it is, including being unable to attract foreign investment that Nigeria currently craves.

He said, “One of the implications for the Nigerian economy is that the investors we are trying to attract will not be attracted. This is because business is done on trust and once the trust is not there from the beginning, things will not work out properly. So the investors we are trying to attract may not rally come.

“Also, money that should be generated and channeled to infrastructural development will not come.

For example, if operators are supposed to register like ten companies in a month but because of this delay of

,

CAC’s 24hrs business registration collapses availability not out in two weeks or four weeks, and we register one out of the ten companies that we are supposed to register, tell me how the operators or CAC themselves can make more money?

This is because the more companies that are registered

by CAC, the more they are better off financially. On the other hand, supposing you give me a name today, and by tomorrow the result is out showing that the name is not available, there are chances that you will initiate another search, thus paying another fee, meaning that they have generated income from availability twice in one week but if there is a delay in availability search, income generation will be sparse on

the part of both the operators and CAC and the Nigerian economy will not attract investors as it should. It also discourages more people from coming forward to register.”

CAC should apologise to Nigerians

Oladiran said given the fact that CAC was unable to keep their promise of 24 hours business registration, it should have come out to say so and seek help but instead they let people suffer unnecessary inconveniences.

He said as a result, CAC should tender unreserved apology to the general public.

“This idea of advertising twenty four hours and not

being able to meet up with it is pesky and frustrating. In fact, what I expect CAC to do is to apologise to the general public. If you have a problem and you come out and say so, people who have the solution will come out to help.”

However, when contacted, the Head Public Affairs of the commission, Mr. Williams Churchill who initially declined to comment, denied that the Commission was having challenges with its server and that the 24 hours registration was still effective.

When asked about the notice posted at the Lagos office of the Commission at Alausa, Ikeja apologising to customers for the Commission’s inability to continue with the 24 hours

registration due to server problem, he denied knowledge of such statement insisting that the Commission still offers 24 hours service.

According to him, “I can tell you that the 24 hours registration is still working.

There may be technical issues sometimes but that doesn’t mean that the 24 hours registration is not working. As for the statement apologising for inability of the Commission to continue with 24 hours registration, he said, “I am not aware of such notice.”

Asked if that does not imply a kind of disconnect between the headquarters and the zonal office, he declined to comment and then hung up the phone. Further attempt to contact him proved abortive.

C M Y K

34 — Vanguard, MONDAY, JUNE 30, 2014

Tax Matters he organizations making the payments are required to withhold tax from such payments and pay over the withheld amounts to their respective relevant Tax Authorities within 30days of receipt of payment or credit by the person or entity suffering the Tax. The relevant tax authorities to receive the WHT tax transactions made by companies is FIRS and for individuals and unincorporated bodies subject to Rules of Residence is SIRS or FIRS. PERSON LIABLE TO DEDUCT WITHHOLDING TAX The payer of withholding tax in respect of any of the activities covered under the withholding tax regime shall include company (Corporate or non-corporate), Government Ministries and Department, Parastatals, Statutory bodies, Institutions and other established organization approved for the operations of Pay As you Earn System.

WHO IS TAXABLE *All Persons, Companies etc. who’s Incomes are liable to income tax, are subject to Withholding Tax. * However, exempt entities like Educational Institutions, Government Ministries, Parastatals and other Agencies of Government, are Agents for the collection of WHT. They are required to deduct WHT on any payment made to a taxable body and remit same to the relevant tax authority.

WITHHOLDING TAX IMPLICATION ON F O R E I G N TRANSACTIONS Non Resident Companies/ Enterprises The Revenue practice is that non-resident companies are not empowered to deduct anytype of WHT. These categories of enterprises are practically outside the regulatory monitoring and control of the FIRS. It will be impracticable for Revenue office to inspect the accounting books of these companies in order to confirm due deduction and remittance of WHT. Double Taxation Agreement (DTA) Transactions that are ordinarily not liable to tax in Nigeria are not liable to WHT in Nigeria. Thus contracts and supplies of goods and services performed entirely outside Nigeria by nonresident individuals are not liable to WHT. Nigeria has treaty agreements with about eight (8) countries and these countries are granted a C M Y K

ADMINISTRATION OF WITHHOLDING TAX (2) reduced rate of WHT deduction, usually at 75% of the generally applicable WHT rate. 7.5%. These countries include UK, Northern Ireland, Canada, France, Belgium, the Netherlands, Pakistan, and Romania.

P E R M A N E N T ESTABLISHMENT (PE) PRINCIPLE EXISTS UNDER NIGERIA TAXATION The rules construe a PE where: * The company has a ‘‘fixed base’’ in Nigeria. * The company operates in Nigeria through a dependent agent authorized to conclude contracts or deliver goods on its behalf, * The company is executing a turnkey project in Nigeria, or * The operation between the company and its Nigeria affiliate does not appear to be at arm’s length. * ‘‘Fixed base’’ implies some degree of permanence and will include: * Facilities, such as a factory, office, branch, mine, oil or gas well * Activities, such as building, construction, assembly or installation * Provision of services in connection with the activities listed above.

,

T

construction, assembly or installation Provision of services in connection with the activities listed above.

OTHER TYPES OF INCOME NOT LIABLE TO WHT * Companies operating within the Free Trade Zones/ Export Processing Zones * Insurance premium * Turnover/Income from Dealership or Distributive trade * Telephone Bills are not subject to WHT

APPLICATION OF WITHHOLDING TAX Sections of CITA and PITA that provides for the deduction of withholding tax at the applicable rates below.

Types of payment Applicable rates Companies Individual Dividends, Interest, Rent 10% 10% Directors Fees 10% 10% Royalties 15% 15% Commission, Consultation, 10% 5% Technical, Service Fees Management fees 10% 5% Construction/Building Contracts 5% 5% Contracts, other than outright sales and purchase of goods in the ordinary course of business 5% 5%

Returns & Remittance Tax Returns are filed monthly with evidence of remittance and a detailed schedule of taxable transactions.

All Persons, Companies etc. who’s Incomes are liable to income tax, are subject to Withholding Tax

PRINCIPLES OF P E R M A N E N T ESTABLISHMENT * The rules construe a Permanent Establishment where: * The company has a ‘‘fixed base’’ in Nigeria. * The company operate in Nigeria through a dependent agent authorized to conclude contracts or deliver goods on its behalf, * The company is executing a turnkey project in Nigeria, or * The operation between the company and its Nigeria affiliate does not appear to be at arm’s length. ‘‘Fixed base’’ implies some degree of permanence and will include: Facilities, such as a factory, office, branch, mine, oil or gas well Activities, such as building,

Following payment and filing of returns, the revenue processes credit notes for the suppliers on whose income tax was deducted. · Credit notes can be used in applying for tax credit against current and future tax liabilities (i.e. where it is not final tax) · Remittances are due to either federal or state tax authorities.

Remittances due to Federal Inland Revenue Service (FIRS):

,

Submitted schedule should show the following details: Name of supplier Address Nature of Invoice payment Amount Rate @ Y% Tax

Service Date Date ·Returns for corporate suppliers should be filed within 21 days from end of month of transactions. · Returns for non –corporate suppliers should be filed within 30 days from end of month of transaction. ·In practice, tax returns are filed in the same month they occur. · Tax deducted should be remitted to the revenue in exchange for a receipt of payment. · Tax is payable in the currency of the qualifying transaction.

· Corporate entities, · Nonresident individuals, · Members of the armed forces and police, · Resident of Abuja, · Foreign officers.

Remittances due to state internal revenue service (SIRS): · All other individuals / partnerships resident in the state. · PAYMENT ON CURRENCY Section 64B of CITA empowers the tax authority that withheld tax must be remitted to the tax authority in the currency in which the deduction was made. This means that transactions made in foreign currency are to be remitted in the same currency and that the tax so withheld is to be remitted in the same currency. Simultaneously penalty for default would also be calculated in the same currency. · HOW TO CLAIM WITHHOLDING TAX CREDIT (CREDIT NOTES) A taxpayer from whom tax has been withheld is expected to gain withholding tax credit notes from the relevant tax authority via the deducting organization. All withheld taxes are forwarded to the tax authority, which in turn records the credit against the tax payer’s account, with a schedule containing details of the contract or service, on which basis the tax authority

issues a credit note. Assessed tax and related charges are usually entered as debits in the taxpayer’s tax account, while he is expected to pay only the difference between his assessed tax and withholding tax credit at the time of filing their own returns. · It is this credit note that a taxpayer uses as a set off against tax assessed within that year or if unutilized within that year can be applied based on the taxpayer request to transfer the credit balance in that year to offset or reduce debit balance of another year. · In cases where there is an excess charge of WHT on a taxpayer, the 2007 amendments to CITA (Section 63 (7)) have even further empowered FIRS to refund proven excess withholding tax to any taxpayer within 90 days of filing a claim.

OFFENCES AND PENALTIES OFFENCES Ø Failure to withhold tax or Ø Failure to remit or late remittance of the tax withheld Ø Non remittance of the tax withheld within the time limit stipulated by the Revenue.

PENALTIES a.

For Companies A fine of 200 percent of the tax not withheld or withheld but not remitted, plus interest at the prevailing commercial rate. b.

For Individuals & other Organizations A fine of the higher of N5,000 or 10% of the amount of tax due, plus the amount of tax deductible , or withheld but not remitted, plus interest at the prevailing commercial rate.

• Interest on Savings Account of less than N50, 000 paid by a Bank, is not subject to WHT. The WHT system has come to stay since it is a veritable source of revenue to Government. It enhances the collection efforts of Tax Authorities and it ensures that revenue is generated in advance. It is therefore imperative that the system should continue to be improved upon in the light of modern tax administration procedure. Usually an advance payment of tax provides information that an income source has been identified through a third party. Such information being provided by the payer should be readily available for use in accessing a potential taxpayer. Field officers should always be ready to follow up on such information.

Vanguard, MONDAY, JUNE 30, 2014 — 35

36 — Vanguard, MONDAY, JUNE 30, 2014

Appointment vicahiyoung@yahoo.com 08033348923

Sterling Bank appoints new directors

career with NBM Bank where he worked from 1987 till 2005.

During this period, he excelled in various marketing roles and was subsequently appointed as the bank’s Treasurer.

Following the consolidation exercise and the emergence of Sterling Bank in 2006, he was again assigned to Marketing, to head various regions in Lagos, a testament to the confidence placed in his abilities on the field.

S

TERLING Bank has announced the appointment of six persons including women into its Board, in a renewed effort to strengthen the Board in line with its corporate governance and sustainability culture.

The bank said the inclusion of women is in line with the gender ratio requirement of the Central Bank of Nigeria (CBN).

The new board members whose appointments have been approved by the Central Bank of Nigeria (CBN) include: Ms. Tamarakare Yekwe, Dr. (Mrs.) Omolara Akanji, Ighodalo, Raghavan Karthikeyan, Mr. Kayode Lawal (Executive Director) and Mr. Abubakar Suleiman (Executive Director) The Bank in a statement said that the appointment of the seasoned professionals with diverse experience in the private and public sectors would further enhance the capacity of the Board to deliver on its corporate goals.

The Bank’s Chief Executive Officer, Mr. Yemi Adeola expressed his optimism that the Bank would benefit immensely from the wealth of experience of the six directors as their appointments were carried out on the basis of skills, rich professional experience and corporate governance best practice.

Tamarakare Yekwe, the current Principal Partner, ‘KareYekwe& Co. (Legal Practitioners & Consultants) was a member of the Governing Council, Nigerian Institute of International Affairs (NIIA) and the Presidential Technical Committee on Housing and Urban Development.

She was the pioneer Attorney General and Commissioner for Justice, Bayelsa State; and has also served as a Director in a number of institutions including the Federal Savings Bank of Nigeria, Continental Merchant Bank of Nigeria Plc, International Merchant Bank Plc and the Federal Mortgage Bank of Nigeria.

She holds a Bachelor of Laws (LL.B) degree from the University of Lagos and was called to the Nigerian Bar in 1981.

Omolara Akanji, a member of the Petroleum Revenue Special Task Force, started her career with the CBN in 1978 as an Assistant Economist.

She rose through the ranks, retiring in December 2007 as the Director, Trade and Exchange Department and also served as a Consultant to the CBN between 2008 and 2011.

She holds a B.Sc. in Agricultural Economics from

NB Golden pen award holds July 3 •Abubakar the University of Ibadan, an M.Sc. in Agricultural Economics from the University of Reading, a Diploma in Statistics from the University of Kent, Mathematical Institute, and a PhD. Finance from the European-American University, Commonwealth of Dominica.

Asue Ighodalo is a Partner in Banwo& Ighodalo, a leading corporate and commercial law firm in Nigeria, which he founded in partnership in 1991.

His core practice areas are corporate finance, capital markets, mergers and acquisitions, banking & securities, foreign investments & divestments, energy & natural resources, privatization and project finance.

A product of the prestigious Kings College, Asue obtained a Bachelor of Science Degree (BSc) in Economics from University of Ibadan in 1971, a LL.B in 1984 from London School of Economics and a BL in 1985 from the Nigerian Law

•Akanji

•Karthikeyan

•Lawal

•Yekwe

School. A member of several professional associations, Asue sits on the Board of several public and private companies.

Raghavan Karthikeyan replaces Mr. Rajiv Pal Singh who completed his tenure as a representative of State Bank of India (SBI) last year.

He is presently the Chief General Manager, International Banking in State

N

Bank of India (SBI) Mumbai and a Certified Associate of the Indian Institute of Bankers (CAIIB). Raghavan joined SBI in 1980 and has worked in various capacities across several aspects of banking. He holds a Bachelor of Arts from St. John’s College, Tirunelveli, India and a Master of Arts from Madurai University, India.

Kayode Lawal started his

IGERIAN Breweries Plc has announced that its 6th Golden Pen Award ceremony has been rescheduled to hold on Thursday, July 3, 2014.

But the venue remains the Lantana Hall of the Eko Hotel, Victoria Island, Lagos.

The ceremony was moved to Thursday July 3, 2014 from the earlier planned date of Monday, June 30, 2014 due to unforeseen circumstances.

The award will reward journalists who submitted outstanding reports on Education and Youth Empowerment in 2013. A total of 102 entries were received when submission closed for the award.

The award, which is the 6th in the series will reward ‘The NB Golden Pen Reporter of the Year’ with a special statuette and N1, 000, 000 (One million Naira), the ‘First runner up in the NB Golden Pen Reporter of the Year ’ category with a Special statuette and N300, 000 while the ‘Second runner up NB Golden Pen Reporter of the Year ’ will get a Special statuette and N200, 000.

Lambeth Trust appoints Lemo, Lawson Board members

L

ambeth Trust and Investment Company Limited, has appointed Mr. Tunde Lemo, former Deputy Governor of the Central Bank of Nigeria, CBN, and Mr. Mr. Kehinde Lawanson, a former Executive Director of First Bank of Nigeria Plc, to its Board of Directors. The company has also appointed Mr. Benjamin

Oladapo as the new General Manager for the company.

According to a statement by the company, its shareholders’ funds is set to increase to N500 million when the current deposit for shares is capitalized, giving its future repositioning efforts a boost.

With this feat, the statement said the company’s fund would

exceed the minimum stipulated regulatory capital of N300 million ahead of the deadline of December 2014.

It noted that the new appointments to its Board and management had been approved by the Nigerian Stock Exchange (NSE). According to the statement “Mr. Tunde Lemo, a two-time Deputy Governor of

Central Bank of Nigeria (CBN) and former Managing Director, Wema Bank Plc has over 29 years working experience that cut across Banking, Consulting and Conglomerates. had served on many corporations’ boards and currently sits on the board of Africa Finance Corporation (AFC) among others.

Olaosebikan, KOFSOL Group MD,gets NISSGA award

M

•Lemo

ANAGING Director of Kofsol Group, Mrs. Kofo Olaosebikan, has been honoured with the Nigerian Selfless Gold Service Award, NISSGA, in the Business Category. Olaosebikan who received the award at a ceremony at the National Merit Award House, Abuja, was commended for an acknowledged track record of excellence and high performance in the business sector which has seen the KOFSOL Group evolved from modest beginning to becoming one of the leading companies in the print branding and

general services sector in Nigeria.

An alumnus of the University of Ibadan, Pan Atlantic University and the Redeemed Bible College of the RCCG, Olaosebikan started her working career with the Federal Government where she worked at the FDA, now NAFDAC before opting for an early retirement to become an entrepreneur in 1984.

She thereafter founded KOFSOL Group which also has subsidiary companies such as Precise Cleaning Services, Hanes ’n’ Dave and Daily Fashions Limited.

Vanguard, MONDAY, JUNE 30, 2014 — 37

C M Y K

38 — Vanguard, MONDAY, JUNE 30, 2014

Aviation

Stakeholders seek employment opportunities for jobless pilots

By DANIEL ETEGHE

S

takeholders in the aviation industry have called on the Federal Government to assist pilots to be gainfully employed as there are many pilots and engineers who are roaming the airports without jobs.

The stakeholders made this appeal during an award ceremony in honour of Princes Stella Oduah at Oriental Hotel, Lagos. Chairman of the occasion, former Minister of Aviation, Hon. Felix Hyat also called for the completion of the remodeling project in order to avoid projects being littered all over the airports in the country, abandoned.

Speaking at the event, Chief Executive Officer of Finum Aviation Services, Engineer Sheri Kyari said that there were a lot of aviation industry pilots and engineers who are unemployed pointing out that unemployment was one of the major challenges in the aviation sector just as he advised airline operators to work together in finding solutions to the numerous problems bedeviling the industry.

He however noted that the main reason for the occasion was to celebrate the Former Minister of Aviation, Princes Stella Oduah whose giant strides in the aviation sector has brought a lot of development to the country.

According to him, Princes Odauh was the minister who convinced the Federal Government to release funds for the remodeling of the twenty two airports across the country noting that “during the tenure of Princes Stella Oduah, that has been the only period that we have seen massive development in the aviation industry since the past forty years.

*TOUR - From Left: Engr. Ibrahim Abdulsalam, Managing Director, Nigerian Airspace Management Agency, NAMA; Dr Samuel Ortom, Supervising Minister of Avation; Engr.

Saleh Dunoma, Managing Director, Federal Airports Authority of Nigeria, FAAN; and Engr. Benedict Adeyileka, Director-General, Nigerian Civil Aviation Authority, NCAA, during the Minister's inspection tour of ongoing work at Murtala Mohammed International Airport on Wednesday. PHOTO: Kehinde Gbadamosi

Minister directs FAAN to re-absorb retired firemen

By LAWANI MIKAIRU & DANIEL ETEGHE

T

he Supervising Aviation Minister, Dr Samuel Ortom has directed Federal Airport Authority of Nigeria, FAAN, fire department to re-absorb the retired fire servicemen who retired from the services of the agency to address the lack of manpower and human capacity building challenge raised by the Acting General Manager, Fire Service, FAAN, Mr Rindap Domtur.

The Minister gave this directives at the international wing of the Murtala Muhammed Airport, MMA, Lagos shortly after a tour/ inspection of the ongoing remodeling exercise .

rdfloor Limited, a digital marketing consultancy firm has officially opened shop to corporate Nigeria. 3rdFloor limited specialises in utilizing a range of digital assets to aid and improve the business performance of brands and organisations with the aim of creating a unique user experience and optimizing the overall digital engagement with brands.

According to Mr. Princewill Omorogiuwa, Chief Digital

,which according to him is far below what the International Civil Aviation Organisation (ICAO) approved for such category.

He added that for the past two years none of the fire staff has gone for recurrency training to revalidate their certificate, adding that ICAO requires each staff to revalidate his licence every two years.

Speaking also at the inspection, FAAN Managing Director , Engr Saleh Dunoma confirmed that the major challenge that FAAN fire has is in the area of staff.

According to him, “ We will

Missing US plane: We've handed it over to Cameroon airspace, says Abdulsalam

By LAWANI MIKAIRU & DANIEL ETEGHE

3rd Floor opens shop officially

3

Ortom, also said the ministry would take steps to address human capacity and upgrading of the department, adding that FAAN has been directed to employ more of the fire staff that had retired.

Acting General Manager, Fire Service, FAAN, Mr Rindap Domtur said the authority has a total of 600 fire staff across airport in the country and that the agency would require 1,500 personnel for effective performance.

Domtur also said the Murtala Muhammed Airport,MMA, Lagos, which is in Category 9 has 160

Enabler, 3rdFloor Limited, said after observing the recent trend of brand misrepresentation online, and the lack of strategic approach to digital marketing in the region, it became imperative for us to elevate the game by introducing 3rdFloor”. 3rdFloor is a sistercompany of Simon Page Business School – a leading provider of marketing, marketing communications and digital marketing training solutions in Africa.

take due process to temporarily re-absorb some FAAN Fire Service retirees across the country to occupy some post.

In aviation, we take issue of safety and security as priority .”

On the contractor in charge of cleaning the departure area, who the minister said was not cleaning the area properly ,the minister directed FAAN to ask the contractor to improve on the cleaning or else risk termination of the contract. The minister also said the Federal Government would not embark on new project in the aviation industry until the ongoing ones initiated by former Aviation Minister, Mrs Stella Oduah were completed.

Ortom assured that none of the ongoing projects in the sector would be abandoned, contrary to speculation in some quarters that the Aviation Ministry would abandoned the ongoing projects scattered across airports in the country most especially when about N174 billion has been expended on the projects.

He stated that what the Ministry would do is to prioritize the projects and that already some of the projects are about 70 to 80 per cent completed.

Ortom said that although some projects were recently suspended due to lack of fund, the contractors have resumed work since the Federal Government had signed the 2014 budget into law. “We have to prioritise our work here, we have been operating through Internal Generated Revenue (IGR) and we will continue to operate with it. We have done a lot.

During this cause of inspection, we have identified some works we have to tidy up.

We intend not to go on any new project until we tidy up these ones,’’ he said.

M

anaging Director of the Nigerian Airspace Management Agency, NAMA, Engineer Ibrahim Abdulsalam has said that the US plane which was reported missing on Tuesday, last week by PANA had been officially handed over to Cameroon airspace.

The Four-seater plane, owned by a U.S. company, Global Aviation, took off from Kano in Nigeria at 1800 hours on Monday en route Libreville in Gabon, where it was scheduled to arrive at 2300 hours, after a stopover in Douala, Cameroon.

Engr. Abdulsalam told aviation reporters that the Nigerian Airspace Management Agency could not partake

in the search of the missing plane stressing that once an aircraft has left a country’s airspace there was nothing that country could do in case of any incident.

According to him,” the plane has gone out of Nigeria, we have handed it over to the Cameroon airspace. It is their own score since it didn’t happen in Nigeria airspace”.

However, the Cameroon Airspace station said the plane, with only the American pilot on board, did not make it to Douala.

It said the last contact the plane had with the control tower took place in Mongo, which is two hours flight from the Cameroonian economic capital.

Report says that search and rescue operations led by Cameroon’s civil aviation authorities have not yielded any positive results.

Vanguard, MONDAY, JUNE 30, 2014 — 39

Advertising, Media & Marketing Stories by PRINCEWILL EKWUJURU

A

midst battle for market space amongst various wine brands, Chapeau, a South African wine, marketed by Intercontinental Distillers Limited, IDL, has made an entry into the Nigerian market, penultimate week.

The Managing Director of IDL, Engr. Patrick Anegbe, said he was delighted the company has been able to come up with a natural wine to tell Nigerians what a good natural wine should be, as against other wines in the market which are synthetic.

Describing Chapeau as one of the best in Nigeria, Anegbe said the wine comes in three variants –Merlot, Cabernet sauvignon, all red wine, and Rose-”is made from well fermented fresh grapes to get the natural red wine, is different from what is find in the market, which are made of additives, sugar, alcohol and flavours.”

Chapeau, a French word, means hat, which is the insignia a short way of saying ‘I doff my hat,’ and this according to the Managing Director, is a befitting image for the product going by its quality.

Overtime, brands like Bordeaux, Beaujolau, Malbec, Chianti among others have been ruling the wine market but from indication and testimonies of those who sampled the wine agreed that the entrant of wine will expand competition in the winery market, said some consumers.

Winning through Customer Insight

S

*PRESENTATION - From left: John Esoimeme, Head of Sales, MultiChoice Nigeria; Adesoye Adeyinka of Y2K Plus a GOtv vendor and winner of Plasma TV and Engr. Sarumi Balarabi, MultiChoice Super Dealer during the GOtv Vendors Forum and Prize Presentation held in Lagos recently.

IDL unveils Chapeau wine O

n the unique selling point, the Brand Manager, Chapeau Wines of IDL, Chioma Alonge, said there are wines in Nigeria that are synthetic. For Chapeau, “it is 100 percent natural wine, with wholesome goodness, refreshing, nourishing, “consumers should just go for it.” She remarked.

She went further to say that people really don’t know the

differences in wine, there is limited knowledge about wine, so consumers just perceive everything that is red in a bottle is wine. “You know as doctors will always say, a glass of wine is good for the heart.

Today, we are saying not just any wine, a glass of good wine, a glass of natural wine is good for the heart.

A glass of chapeau natural wine a day is good for the heart.”

Boulos launches juice drinks

B

oulos Foods and Beverages Limited, a subsidiary of the Boulos Group has officially launched its juice drinks, Frootz and Frootzy, into the market; The Managing Director/ CEO, Boulos Boulos, said the company has made substantial investment in the factory to ensure that it delivers products of the highest value and quality. “We have enrolled specialist workers and also recruited the most promising local talents."

While noting that that the emergence of a new spectrum of middle class citizens was responsible for the company to venture into the fruit juice market.

The increasing population of Nigeria has been a major source of attraction of foreign direct investments into the country, an indication of a rising middle class society.

Continuing he stated; “the industry is vast and has arrays of product which are consumed daily. Do we talk of infant, teens and adult alike; this is the only industry that takes care of

the nourishment and well being of individuals from infancy to adulthood.” he said. According to him, the

company also plans to introduce a wide range of products into the Nigerian market before the end of the year.

Why Nigerians need to embrace local brands - Experts

M

arketing experts have said that for Nigerian brands to attain the international brand status, Nigerian consumers will have to demonstrate deeper loyalty towards domestic brands.

They also said that while it is imperative for a developing economy like Nigeria to embrace Foreign Direct Investments, FDI, it is also important to ensure the growth of local brands in a bid to reduce the participation of foreign brands in the market. Speaking at a book presentation: “Kill or Get Killed, the Marketing Killer Instinct, Chief Executive Officer, MarketingMix and Company Nigeria Limited, Mr. Akin Adeoya, urged Nigerians to emulate other African countries like Kenya where citizens demonstrates patriotism by identifying with locally made brands rather than on foreign brands.

Adeoya, who noted that the same cannot be said about Nigerians, noted that an average Nigerian does not sympathize with domestic brands an approach that need be changed if domestic brand will compete favorably with foreign brands. Speaking about the book, Adeoya described it as “The first serious attempt by an African marketing practitioner to pen down real life case studies, a great material, intellectual and nerve racking battles that characterises the rise and fall of brands in the Nigerian, and to an extent, the African theater of war for the consumer’s mind and wallet. He added that it will serve as a good reference point for the student and practitioners of marketing who want to learn more about the strategy and market approach that made top market brands outstanding.

erving customers without knowing them very well is akin to making a dress for a lady without having any idea whatsoever of her vital statistics. And the outcome is very similar. Dissatisfied customers!

A deep knowledge of customers is the foundation of marketing. To achieve excellence in service, we must look beyond the basic demographic variables of age, gender, ethnicity and socio-economic class and dig into the psychological underpinnings of customer needs. We need to understand the unspoken needs behind the expressed ones. We need to even understand the thought patterns of customers.

But we are not talking about an intellectual knowledge of the customer. We are talking about customer insight.

Lisa Fortini-Campbell, in her book Hitting the Sweet Spot, refers to insights as “unique combinations of information that give meaning to the marketplace.” She shows that to get the best out of all the facts about customers within the organisation, such facts must be transformed from mere data to information, then to insight which ultimately becomes an inspiration.

In today’s world, organisations collect so many bits and pieces of information about customers. (It must really be an antediluvian organisation that doesn’t have such information.) Most organisations today have so many methods of understanding customers including surveys (to measure customer satisfaction, service quality, etc), depth interviews, focus group interviews, complaint analysis, experimentation and ethnographic methods.

With advances in information technologies, collecting and analysing customer information have never been easier. Unfortunately, the sheer size of available information has further increased the complexities inherent in producing real customer insight.

In the words of Warren Bennis, “We have more information now than we can use, and less knowledge and understanding than we need. Indeed, we seem to collect information because we have the ability to do so, but we are so busy collecting it that we haven’t devised a means of using it.”

With tons and tons of information at their disposal, organisations may sometimes find it difficult to decide what is relevant and what is not. One distinguishing feature of organisations that have excelled in their chosen fields is that they are able to cut through the clutter and get to the real gems that can make a strategic difference.

Data mining is the fancy word for scouring through customer information in search of insights. It is the process of fishing out the nuggets hidden in the haystack of data. Those organisations that are able to convert customer insights into competitive advantage usually stand out.

When mobile phones first came to Nigeria, I hated the idea of having phones with long aerials. So, for me, cell phones with internal aerial were products of customer insight.

Another product of insight is the dual-SIM phone that allows subscribers have access to two different networks on the same phone. But considering that some Nigerians lug up to four handsets about, cell phone manufacturers are still a few steps short of real customer insight for Nigeria. Quad-SIM phones are what we need here!

The real challenge for most organisations in the modern world is not necessarily the lack of information but the inability to convert available information into insight coupled with the inability to act on the available insight.

At the end of the day, what matters is not really what organisations know but what they do with the knowledge in their possession. If the customer information you have does not help you to serve customers better or give them more valuable products, then you are not better than those who don’t have any information at all. And you cannot gain any competitive advantage with such information.

40 — Vanguard, MONDAY, JUNE 30, 2014

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

The forex market hoax: CBN Vs BDCs from unauthorised forex dealers (black market?) to the official market, (BDCs?), while their interventions have similarly helped to stabilise and minimize opportunities for rent seeking in the market.

Beyond this, the BDC operators also claimed that about 5 million Nigerians would become unemployed to worsen the already grave unemployment situation in the country, if the new guidelines were effected.

The above notwithstanding, , the suspicions of the forex operators were confirmed barely a week later when CBN published new policy guidelines which were totally in consonance with the content of the earlier BDC advertorial.

Worse still, the CBN would now also punish any operator found to have ownership of multiple BDCs. The CBN noted that the new measures became necessary to “halt the depletion of the country ’s foreign reserves and the potential for financing of unauthorized transactions with foreign exchange procured from the CBN window”. Central Bank further alleged that the activities of the BDCs “have led to gradual dollarisation of Nigerian economy with adverse consequences for the successful conduct of monetary policy and the cashless policy initiatives of the monetary authority”.

The critical question, however, must be who in fact is damaging the Nigerian economy, the BDCs or Central Bank’s policies? Indeed, we have maintained in several articles in this column that

successful and focused economies do not liberally allocate official forex to Bureau De Change, as the forex income of BDCs in such countries, is normally derived from tourists and business travellers with modest forex requirements. The regular detection of millions of hard dollar cash at our border posts on several airline passengers to Europe, Dubai and

,

A

Trade Group under the umbrella of Concerned Bureau de change operators recently published a full page advert titled “Appeal against Ploy to decimate BDCs and Destabilise the Forex Market”; the advert claimed that the Central Bank was planning to reduce the number of BDCs in Nigeria, despite their contribution to the economy.

The association asserted that “there was no justification for the alleged plan to increase the mandatory caution deposit from $20,000 to the dollar equivalent of N35 million, with licensing fees also increasing from N100,000 to N1million”.

The BDC operators were concerned that more than 90 percent of the existing 3,000 members would be unable to increase their capital base from N10m to N35m as proposed in the alleged intended CBN plan.

The BDCs, consequently, foresee that the resultant restricted forex market would be exploited by the alleged sponsors of the proposed CBN guidelines to make quick money, with the usual adverse collaterals of currency round tripping, smuggling, capital flight and other sharp practices.

The BDC operators, therefore, argue that the proposed measures were misguided as their members could not be blamed for the heavy demand pressure in the foreign exchange market since CBN’s official statistics clearly show that out of the $14.8 billion sold by the apex bank in the first quarter of 2014, only $1.7 billion or 11.4 percent was directly sold to BDCs while the remaining 88.6 percent was sold to commercial banks.

Nonetheless, the association claimed that their presence in the market had in fact reduced the gap between the official and the parallel market exchange rates by diverting patronage

CBN has no business selling official dollars to BDCs, but the apex bank has regrettably found itself promoting this odious role because of its own selfish reluctance to release its obnoxious stranglehold monopoly on the foreign exchange market

,

elsewhere would not have been sold to BDCs by the Central Banks in any responsible economy.

Curiously, Nigeria’s official forex revenue which is denied as direct dollar allocation to the true beneficiaries, (i.e., the three arms of government and related agencies) become ironically available to BDCs for funding the activities of smugglers of those goods that flood our markets and destabilize the survival of our local industries. It is also presumptuous for the CBN to believe that the use of BDC forex sales can be sanitised by mere reduction in the number

of BDC operators. In reality, in spite of the new guidelines, the average forex allocation to BDCs which was reported to be about $1.7 billion in the first quarter of 2014 may simply become consolidated and made available to the market through a reduced number of outlets, thus facilitating a cartel, which will ultimately selfishly control the market to produce wide disparity between official and black market rates. onetheless, the concerned BDC operators’ claim of providing 5million job opportunities must be taken cautiously; in reality, the characteristic staff strength in most BDCs rarely exceeds 5 persons. Thus, 3,000 Bureau De Change operators may only actually create at best about 20,000 jobs despite their liberal access to possibly over $7bn of official foreign exchange annually.

Consequently, CBN’s new guidelines will not blow down the walls of corruption and rent seeking in the forex market.

Furthermore, the CBN seems to have also misguidedly blamed the activities of BDCs for the failure of its monetary strategy. Indeed, the CBN has no business selling official dollars to BDCs, but the apex bank has regrettably found itself promoting this odious role because of its own selfish reluctance to release its obnoxious stranglehold monopoly on the foreign exchange market. The CBN currently has a total monopoly of Naira supply, while also accounting for about 80 percent of Dollar sales in the market.

Curiously, the CBN in a

N

poisonous collaboration with its ‘Frankenstein’ BDCs and predatory commercial banks ‘altruistically ’ pretends to defend the Naira by regularly selling small rations of the federation’s dollars that it impounded after printing and substituting fresh supplies of Naira as monthly allocations of forex revenue to the three tiers of government.

Nonetheless, the CBN remains in denial that capital flight and a weaker Naira are equally induced by the excess Naira supply that it deliberately instigates in the money market with this subtle sleight of hand, which serially increases CBN’s so called “own reserves” as poverty depends nationwide.

Incidentally, the same excess Naira supply consciously induced by CBN also promotes a trail of adverse economic consequences, such as, inflation, high cost of funds, a weaker Naira and the collateral of increasing fuel prices and subsidy payments in excess of $12 billion annually! Indeed, the CBN cannot also deny that its self-inflicted burden of excess liquidity also forces government to disparately place it deposits at zero percent only to return and borrow from the same banks at double digit interest rates and thereafter warehouse these loans as idle funds.

The National Assembly cannot also deny knowledge of the wide advert impact of CBN’s obtuse and anti-social monetary strategy; consequently, Nigerians will not be surprised if the legislators insisted on the existing system where BDCs continue to have liberal access to foreign exchange allocations from the CBN window for liberal sale to customers.

SAVE THE NAIRA, SAVE NIGERIANS!!

Business & Economy

Firms bid for 500MW Sapele power plant N

igeria Bulk Electricity Trading Plc (NBET) has received from Nigerian Electricity Regulatory Commission (NERC), the names of Proton Energy amongst others, who have applied for power licenses for consideration for power purchasing agreement.

This is part of the processes stipulated in the award of licence and operation in the power sector for gencos.

This development, supports an endorsement of processes so far undertaken by Proton Energy in its bid for a licence to set up and operate a 500 megawat gas-powered plant in Sapele, Delta State.

Sam Amadi, chairman, NERC hinted on this, and noted that the commission now expects the company to complete all that is required of it in the entire process for a power licence.

“We expect that the company will expedite actions to ensure that all mandatory requirements is met and we expect correspondences from other bodies involved to confirm that Proton have met every requirements”.

To get tbe licence however, Proton will have to show evidences of satisfying the requirements of bodies like Transmission Company of Nigeria TCN, NBET and other

companies that are critical to the award of a power licence.

Managing Director, NBET, Rumundanka Wonodi confirmed that Proton Energy is on the list of power licence prospectors that have advanced in the processes and have been issued with the Power purchase agreement draft to kickstart negotiation.

“We got a list from NERC about those that have applied for licence and who we can consider for PPA. Proton Energy is on the list”.

Wonodi said the next stage for companies like Proton is to send a PPA draft to the prospectors to which responses are expected.

“We have sent a PPA draft and the first schedule to Proton to get it to understand the process and what is

required of it. What we expect from the company now, are list of issues and those that it had complied with” said Wonodi.

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

-

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

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

-

Media/Marketing Capital Market E-Commerce Industry Micro Finance Graphics Department