Issuu

FEBRUARY 1, 2016

FORUM: From left, Abdu Mukhtar, Group Chief Strategy Officer, Dangote Industries, Godman Akinlabi, Lead Pastor,Elevation Church, Bola Akinlabi, Associate Pastor, Elevation Church; Ibukun Awosika, Chairman, First Bank; and Dr. Ayo Teriba, CEO, Economist Associates during the third edition of Vantage Forum for 2016 Business Outlook in Lagos.

Cargo tracking levy must go, MAN insists  Increases port charges, cost of doing business — MAN  Blocks revenue leakages — NSC It'll enhance efficiency and security of port operations — NAGAFF By FRANKLIN ALLI

HE Manufacturers Association of Nigeria (MAN) has insisted that the International Cargo Tracking Note (ICTN) levy being reintroduced by the Nigerian Shippers’ Council, NSC, be scrapped. Cargo tracking is a global initiative put in place to monitor and verify cargoes on transit. It is mandatory for all International Maritime Organisation member-countries. In US, it is called 24-hour rule; in Europe it is known as EU Advanced Cargo Declaration; China, 24-hour Advanced

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Manifest Regulation, etc. Investigations by Financial Vanguard reveals that the policy was first

When I said we are negotiating with them, I do not mean we are negotiating to lower the levy, rather, we want them to kill the policy permanently

introduced in Nigeria in 2010 and implemented through the Nigeria Ports Authority, NPA. However, it was discarded by the Federal Government in 2013 on the request of the operators in the manufacturing sector due to additional cost to cargo clearances at the ports. Last year, it was reintroduced and given to NSC for implementation on behalf of the Federal Government via a letter reference no. T.0160/S.30 T4C dated 14th May 2015. President Muhammadu Buhari approved its take-off from November, 3, 2015 at the nation’s ports. Following this, a period of one month starting,

from November 3rd to December 3rd, was given to all maritime stakeholders to comply with full registration. Financial Vanguard learnt that MAN had earlier opposed the bid to reintroduce the Cargo Tracking Note, asserting that the CTN now christened ICTN, if reintroduced, will drive up the cost of cargo clearance at the ports and have a negative trickle-down effect on businesses. Dr. Frank Jacobs, President of MAN, while giving an update on the contentious issue during MAN annual media luncheon held in Lagos, said NSC should stop pushing the policy. "They opposed the policy in the last administration, why are they pushing for it to be reintroduced again? We are currently negotiating with the Shippers Council and clearing agents and other organisations that are associated with the maritime sector with a view to coming up with a decision that will be acceptable to everyone. When I said we are negotiating with them, I do not mean we are negotiating to lower the levy, rather, we want them to kill the policy permanently,” he said. According to him, as a result of MAN’s protest, government discarded the policy in 2013. “ Now people went through the back door and try to do the same thing again this time, but we kicked, now we are discussing with them; they said it is going to be of no cost to manufacturers but in the course of discussion, shippers said they won’t bear the cost burden, that it is the customers such as MAN that will bear the cost; so we are still negotiating,” he declared. Remi Ogunmefun, MAN's Director General, also emphasised that manufacturers in the country are against reintroduction of the CTN as currently crafted until the issue of where the cost burden lies in its implementation is addressed. According to him, despite weighty reservations expressed by manufacturers at different fora, NSC is bent on reintroducing the CTN. “This position was reached based on observed limitations, and others yet to be addressed observed lapses that motivated the call for its cancellation few years ago. “The rationale for our dissatisfaction was expressed at a special meeting with

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18 — Vanguard, MONDAY, FEBRUARY 1, 2016

Cover

Entrepreneurial Education Revolution:

An Imperative for Sustainable Development in Nigeria (2)

BRIEFING - From left: Ayodeji Tinubu, SA to the Lagos State Governor on Sports; Oyinade Adegite, Senior Manager, Corporate Communication and External Affairs, GTBank; Mrs Omobola Babs-Akinyeye, Director, Co-Curricular Services, Lagos State Ministry of Education and Tolulope Onipede, Project Manager, CSR, GTBank at the press briefing on GTBank/Lagos State Principals Cup 2016 Season 7 held in Lagos.

Cargo tracking levy must go, MAN insists Continues from page 17 the management and Governing Board of NSC and a follow-up technical review session on August 11 and 20, 2015. Deliberations from the aforementioned meetings were formally communicated in writing to the Executive Secretary of the Nigerian Shippers Council on September 15, 2015. Consequently, he said that manufacturers recommended that NSC should convene a broader stakeholders’ forum that will afford all operators on the maritime value chain, especially those that would carry the cost burden of CTN to technically x-ray its proposal to re-introduce CTN and agree on a mutually beneficial implementation guideline. However, for avoidance of doubt, it is expedient to restate the position of MAN National Council as follows: *That the limitations and technical lapses that rendered the CTN unacceptable to Maritime stakeholders and Real sector operators that led to its previous rejection are very much present in the Advanced Cargo Tracking Notes, ACTN. *That the ACTN implementation comes with associated cost that will further increase burden of exorbitant cost of doing business for manufacturers who rely on imports for raw materials and machines. This will automatically add to the already suffocating cost structure and renders locally made goods uncompetitive.” However, Mr. Hassan Bello, the Executive Secretary, NSC, C M Y K

disclosed that before approving the ICTN, the Federal Government had seen the enormous revenue leakages that were going on, both in the importation of dry cargoes and the exportation of wet cargoes. Bello said that, apart from blocking revenue leakages, the ICTN is also needed for security reasons. Bello said that the ICTN does not come with additional cost to importers or exporters, rather the administrative cost is to be paid by the shipping lines, whom he said had for long inputted the cost in the bills they give to consignees in Nigeria.

Here in Nigeria, we are charging $25 per container, which is less than a quarter of the 65 Euros charged by other countries, but they are not worried about that because they know that Nigeria controls 75 per cent of the cargoes

“The shipping lines have been billing importers and exporters for it, and they do not want to let go, they have been hiding such cost on the final bills given to Nigeria importers to pay”, he added. The ICTN, Bello said is already part of payments that are already being made by importers to the shipping lines or the carrier. “Whether the Shippers’ Council introduces cargo tracking note or not, shipping companies will continue to collect this taxation, the $25 per container and all the other listings are expected to come from the already existing freight taxation collected by the shipping lines on Nigerian freight. The ICTN comes out of payments that are already collected or payable per consignment, it is already included as part of the consignee’s payments,” he said. According to him, the administrative cost of implementing the ICTN in Nigeria is very low compared to what is paid in other West and Central African countries. He disclosed that, in some West and Central African nation, they collect as much as 65 Euros per TEU, while the lowest cost is 35Euros. “The ICTN in Nigeria is different from those being implemented in West and Central Africa, ours is Advance Cargo Declaration that gives you a column where you must put the BAF (Bunker Adjustment Factor) CAF (Currency Adjustment Factor) you must tell us what the surcharge is -whether it

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igeria faces a number of challenges that can only be met if it has innovative, well-educated, and entrepreneurial citizens who, whatever their walk of life, have the spirit and inquisitiveness to think in new ways, and the courage to meet and adapt to the challenges facing them. Moreover, a dynamic economy, which is innovative and able to create the jobs that are needed, will require a greater number of young people who are willing and able to become entrepreneurs, young people who will launch and successfully develop their own commercial or social ventures, or who will become innovators in the wider organisations in which they work. Because education is the key to shaping young people’s attitudes, skills and culture, it is vital that entrepreneurship education is addressed from an early age. Entrepreneurship education is essential not only to shape the mindsets of young people but also to provide the skills and knowledge that are central to developing an entrepreneurial culture. It is important we embrace this ‘global age’ paradigm in our education system as it has been done in China, India, Australia, Europe, U.S.A and of lately the Asian tigers (Malaysia, Singapore, Taiwan and the Koreas).The most advanced form of this new model is what is referred to as ‘TEACHERPRENEUR’, Which Bill Gates was referring to in 2010 when he said ‘five years from now on the web, you will be able to find the best lectures in the world and it will be better than any single university’. This involves embedding entrepreneurial education into education and training right from the primary school to secondary school and tertiary institution. The essence of this is because education is key to shaping young people’s attitudes, skills and culture, it is vital that entrepreneurial education is addressed from an early age, besides, age is no barrier to entrepreneurship as Tony Hsieh of Zappos started selling worms from raw mud when he was 9 years old, Steve Job, Richard Branson and Mark Zuckerberg of the Facebook fame all started off as young

entrepreneurs. The time is ripe for us as a country to stop celebrating mere certificates and dormancy, while primacy and recognition should be given to creativity, skills and enterprising spirit. The present times have shown over time that the global arena is blind to your credentials but is a wealth creating slave to your skills and abilities. Anyway, it is not your credentials that guarantees success in the global/ information age but rather your problem solving abilities, critical thinking ability that can discern ‘fact from fiction’, your ability to adapt (un-learn & relearn), your creative and innovative abilities and your life-long love of learning. If your ‘piece of paper’ failed to deliver these then whilst it may have successfully prepared you for the industrialized 20th century economy but it has certainly failed you in the globalized 21st. As Alvin Toffler puts it, ‘The illiterates of the 21st century will not be those who cannot read and write, but those who cannot learn unlearn and re-learn’. It is the acceptance of this open secret that should make policy makers and the general populace to shift attention from the conventional way of thinking that you must be a graduate before achieving success. Some of the inventors such as Bill Gates, and Mark Zuckerberg dropped out of school to make it in life because of their innovative, creative and enterprising spirit and not necessarily because of certificate. Also, individuals with creative skills and innovative minds in our society should be encouraged irrespective of their academic qualifications as it has been proved that only a few percentage of entrepreneurs believed that higher education played a role in their mindset while 61% credited their innate drive. Furthermore, we must begin to create conducive atmosphere for entrepreneurship to thrive in our society if this revolution must not die on paper, government should as a matter of policy single out innovative and creative minds for honours to serve as encouragement to others, Entrepreneurship, skills

Vanguard, MONDAY, FEBRUARY 1, 2016 — 19

n this column we raised the access to foreign exchange issue. There has been several informed reactions to the issue. Here is one of such reactions. Whereas the Nigerian monetary authorities fixed the official exchange rate at N196 to a dollar, there is today a near 50% differential in the parallel market rate to the official rate. The fact that the exchange rate is not market determined, that the price of the dollar is not determined by the equilibrium of demand and supply means significantly that the dollar is officially priced far below its true market value. The incentive for rent seeking and price arbitrage, given the increasing differential has uncertainty have not helped never been stronger. We are By OLU AKANMU investor confidence. The back in the days of essential negative trajectory of the commodity or import licence President Buhari would have growth of our foreign reserves where you don’t need to work hard anymore to make huge wished, that even those who now at USD28billion, its onfortunes. All you need is to get the dollar at N196, if they going rapid erosion due to really do any attempts by the reserve bank have the connection to be ever manufacturing or trading, are to artificially defend the naira allocated dollars in the guise of a legitimate transaction. A not pricing their inputs and at its overpriced value further manufacturer can potentially final products at N196 to a erode investor confidence and make a quick 30% return in one dollar. Every business is increases uncertainty concerns month on her dollar allocation pricing their input at close to of investors who will either and do not then need to go parallel market rates to wait for the dark clouds to through the trouble and risk of determine their final shelf and settle or fly with their capital. It should be emphasized that running a factory, importing market price. Imported inflation is investors are less concerned raw materials, producing and distributing her goods, all skyrocketing and may about exchange rate or value which will give her a 15% profit continue to do so in than with the uncertainty of margin at best in one year. accelerated fashion. In where the exchange rate will the Federal be tomorrow. No-one does Meanwhile, factories are essence, closing down, as genuine Government's good intention anything when everyone is businesses who need the forex of taming imported inflation by uncertain. The economy slows cannot get dollars and the legislating an exchange rate down and unemployment lucky ones who get forex has not materialised. Our accelerates. Meanwhile, allocation are quietly current fixed exchange rate speculators continue to bet changing their business model policy is therefore like an against the currency of a from manufacturing to round- ostrich that buries its head in country with eroding trajectory tripping their dollar the sand or can be described of reserves, front loading and as an attempt to hide behind a amplifying demand for forex allocations. The net effect is that the finger. The ostrich that buries and further driving up economy has slowed down and its head in the sand does differential between the official nearly grinding to a halt. nothing really to manage its Companies are retrenching danger but engages in a selfstaff as they cannot produce. delusion that it is doing so. The indices of the test of the Unemployment and social It is current policy are clear. It is not misery is rapidly important to compounding and will working. Output is down, compound in an accelerated inflation is rising and stress that fashion if the current policy is unemployment is beginning to there is no not reviewed. Unlike the good accelerate as companies close or rationalize intention professed by the down painless Investment President, Nigerians are not operations. monetary the ones benefiting from this confidence has been eroded policy option current fixed exchange rate leading to massive capital policy but few Nigerians who flights. In a country that need on the table are privileged to allocate or get foreign direct investment to for Nigeria at dollars at official rate who are support its low capital formation and national making huge fortunes on current low dollar price arbitrage. It should savings, current monetary oil prices flip-flops and be emphasized that unlike policy

Nigeria’s fixed exchange rate policy:

Like an Ostrich that buries its head in sand and the parallel market. A floating market determined naira-dollar rate that ensures that “anyone who can pay will get” will eliminate speculation and front-loading. A floating exchange rate policy will also mitigate significantly the uncertainty concerns of investors reversing current capital flight while stemming the erosion of foreign reserves. The national treasury will also be boosted by a dollar that is priced at its true market value to the naira. The rent seeking and arbitrage margins on the dollar sold through official market will be eliminated as this arbitrage differentials comes directly into the national treasury boosting government revenue at this critical time of fiscal constrain. A floating exchange rate policy will improve output and get more people back into jobs. A floating exchange rate policy supported by prudent fiscal management including the privatization of refineries to bring investors who along with the Dangote refinery in the pipeline, will produce petroleum products locally, will eliminate the huge pressure on the dollar by petroleum importers, which could even strengthen the naira. What are the downsides of a floating exchange rate? A floating exchange rate policy may imply that the naira to the dollar rate will become significantly higher than the current N196 in the near term. The fact, however, is that only few privileged elites and their businesses get the dollar at

current official rate. Most Nigerians buy and price their production input at parallel market rate. The Nigerian economy cannot lose what it does not presently have in real terms in a strong naira. A floating naira with exchange controls that mitigate against short-term arbitrage incentives, where speculation and front-loading are eliminated may actually settle at a rate better than current parallel market prices. The choices before us are simple. An illusory strong naira that only few privileged Nigerians get at official rate with declining output and rising unemployment or a naira priced at its relative real value with increasing output, investment and rising employment. It is important to stress that there is no painless monetary policy option on the table for Nigeria at current low oil prices, especially for a country that has squandered its previous oil windfall savings. This patriotism and good intentions must be situated within the way economics works. This government or its ruling party has only a twoyear window to fix the economy and present its economic management credentials to Nigerians as it seeks re-election in the last two years of its administration. It risks boxing itself into a corner as current monetary policies are largely palliative, attempting to provide symptomatic relief for a patient whose fundamental underlying condition is rapidly deteriorating. The patient does not have to get into intensive care before the right medicine is administered. It may be too late. There is a “fierce urgency of now ” to act with more flexible economic policies. We wish President Buhari well.

•Olu Akanmu, who writes on Strategy and Public Policy, is based in Lagos

Cover Continued from page 18 is GRI (General Rate Increase) which shipping companies do from time to time and they hide it, when you go for a shipping invoice they will give you a lump sum, it doesn’t tell you what the GRI or what the basic freight is.” “Here in Nigeria, we are charging $25 per TEU, which is less than a quarter of the 65Euros charged by other C M Y K

Cargo tracking levy must go, MAN insists countries, but they are not worried about that because they know that Nigeria controls 75 per cent of the cargoes”, he stated. According to the Council, under the ICTN, containers attract a fee of $25 per unit, Roro vehicles, $10 per unit, break bulk cargoes attract $0.2 per unit, while

conventional/groupage cargo attracts a fee of $1 per freight ton. Similarly, while crude oil export attracts $0.1 per ton, both empty containers and non-crude oil exports attract no fee. In his own reaction, the National Association of Government Approved Freight Forwarders

(NAGAFF) applauded the reintroduction of the CTN platform, saying it would enhance the efficiency and security of port operations. Dr. Boniface Aniebonam, the founder of NAGAFF, said “the good thing about CTN now is that it attracts no cost. CTN is a global initiative put in place

to monitor and verify cargoes on transit. And the initiative has the blessings of the IMO and the World Customs Organisation (WCO), which Nigeria is a member. It has a lot of security and safety values for shippers and other agencies of the government.”

20 — Vanguard, MONDAY, FEBRUARY 1, 2016

Corporate Report

PETROLEUM SECTOR: Revenue losses lower profit M expectations for 2015

MRS Oil

etroleum marketers faced the challenges of inability to grow sales revenue in 2015 and delays in payment of subsidies by government. The upstream companies were under pressure from the drop in crude oil prices in the international market. For most companies, sales revenues have fallen below the levels attained before the last adjustment of pump prices, which indicates the extent of the difficulties facing the business. The results of these challenges are high dependence on bank borrowing, resulting in high finance charges and declining profit margin. In the midst of declining sales, petroleum marketers were unable to cut costs, mainly interest expenses. Bank borrowings have become a critical element of the operations in the sector and with declining revenue, companies have to devote increased proportions of revenue to interest expenses. This led to a general decline in profit margin in the petroleum sector in 2015 as per the interim results.

Conoil

onoil has not been able to grow sales revenue since 2012 and a sharp drop looks very likely for the oil marketer for the second year in 2015. It recorded the highest drop of 42.3% in turnover year-on-year among the petroleum companies at the end of the third quarter. The full year outlook indicates the company will close year with the lowest sales revenue in several years. A drop of 19.5% in turnover in 2014 had brought its sales revenue to the lowest figure in four years. The company’s profit records have followed a pattern of rise and fall over the past five years. In 2014, there was a big fall of 73% from the five-year peak and a rise is expected in 2015. Despite a drop of 16.1% on year-on-year basis in the third quarter, after tax profit was already standing more than 44% above the full year figure in 2014. This is explained by the fact that the company’s full year profit in 2014 was a significant drop from the third quarter figure. If the third quarter growth rate is maintained to full year, after tax profit is expected to rebound to the tune of 120% for Conoil at the end of 2015. The strength for a profit rebound

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after a big drop in the preceding year is provided by a surge of over 1,518% in other operating income and a slight moderation in cost of sales. Profit margin has advanced from 0.6% at the end of 2014 to 2.0% at the end of the third quarter.

Forte Oil

Forte Oil’s full year earnings report shows a drop of 26.7% in sales revenue but a growth of about 30% in after tax profit. This in line with our expectation that the company’s turnover will drop to the lowest figure in three years but a new peak in profit should be expected. The company returned to profit in 2012 and a strong growth followed in 2013. It however failed to sustain the recovery move in 2014 but a new strength in profit performance has been demonstrated in 2015. The ability to grow profit from a drop in sales revenue came from significant cost moderation during the year. Cost of sales dropped ahead of turnover at 30%, which enabled the company to defend gross profit margin at 14.7%. Another major positive impact on the bottom line came from a drop of 42.8% in net finance expenses in the year. The biggest boost to profit performance is a upsurge of 190% in other income. A drop in non-controlling interest lifted earnings per share from N2.20 in the prior year t N4.11 in 2015.

Mobil Oil Nigeria

obil Oil Nigeria has not been able to improve sales revenue for the preceding two years and that weakness intensified in 2015. The company experienced a big windfall in 2014 that led to a rise of 83.6% in after tax profit and obscured the problem of non-growing sales. In 2015, the effect of worsening revenue weakness registered directly on

the bottom line. Sales revenue dropped by 25.3% year-on-year at the end of the third quarter and with that, the company is headed for the lowest sales revenue figure in four years. Turnover is likely to go down to as far as the N62 billion the company earned in 2011. After tax profit dropped well ahead of revenue at 39.1% yearon-year at the end of the third quarter due to the effect of the windfall that happened in the preceding year. Two favourable developments however helped the bottom line performance as per the interim reports. One is an 82% advance in other income in the third quarter, which pushed that income line above the full year figure in 2014. The other is a moderation of cost of sales, which raised gross profit margin from 13.9% in the same period in 2014 to 18.1% at the end of the third quarter. The company retains good net profit margin at 8.1% - the highest among petroleum markers. Its after tax profit is likely to drop in 2015 from the 2014 peak though the margin is expected to narrow down to about 20%.

The petroleum drilling and exporting company has come under pressure from the drop in crude oil prices as well as rising cost, which have set profit crashing

RS Oil maintained a three-year trend of growing sales revenue to 2014 but that trend is likely to be broken in 2015. Turnover went down by 6.7% year-on-year in the third quarter and that is likely to bring the full year figure down from the 2014 high. The company shows less volatility in revenue and it is expected to sustain profit recovery for the third year running in 2015. MRS Oil still has a long way to travel on the road to profit recovery after falling in 2011 from its all time profit high of N1.85 billion in 2010. Progress is however being made with two years of recovery moving into a third. A year-on-year growth of 26.6% in after tax profit is an outstanding record in the petroleum marketing sector. This is expected to accelerate to about 40% growth at the end of the year. A gain in profit margin is the spur for the outstanding profit growth seen in the third quarter. Net profit margin improved from 0.8% in the third quarter of 2014 to 1.1% in 2015. This follows an increase of 18% in other income and a moderation in cost of sales during the review period. The full year profit outlook is subject to an unexpected rise in finance charges in the final quarter, as happened in the preceding year.

Seplat Petroleum Development Company

eplat Petroleum Develop-ment Company ’s third quarter operations ended with drops in both revenue and profit. The full year outlook indicates the company is headed for accelerated drops in revenue and profit in 2015 after losing more than one-half of its preceding year’s profit in 2014. The petroleum drilling and exporting company has come under pressure from the drop in crude oil prices as well as rising cost, which have set profit crashing. Sales revenue dropped by 29.1% year-on-year in dollar terms in the third quarter, which moderated to a decline of 9.8% in naira due to the impact of the local currency depreciation. The full year projection indicates the margin

of decline at the end of the third quarter is likely to be maintained at the end of 2015. It will be a sustaining drop from the company’s three-year peak sales revenue of N136.66 billion in 2013. A sustaining favourable trend for the company is the increasing contribution of gas sales to revenue, which is mildly moderating the decline in crude oil sales. After tax profit dropped by 61.6% year-on-year at the end of the third quarter, as profit capacity was undermined by a rise of 20.6% in cost of sales and finance charges soared by 135%. The full year outlook indicates after tax profit may drop by as much as 54% from the profit figure of N40.48 billion the company reported in 2014. The profit figure in 2014 was again a fall of 52.6% from the company ’s peak profit figure of N85.43 billion in 2013. The cost-income ratio continues to increase, resulting in a sustaining decline in profit margin. Net profit margin continues to drop rapidly from 62.5% at the end of 2013 to 32.5% in 2014 and further to 16.4% at the end of the third quarter of last year.

Total Nigeria

otal Nigeria recorded a major slowdown in sales revenue in 2014 when only a marginal improvement was recorded and profit dropped to the lowest figure in three years. The revenue constraint intensified in 2015 and the company is likely to move from slowdown to a drop in sales revenue. The company’s turnover dropped by 10.4% year-on-year in the third quarter to N159.30 billion and could drop to the 2012 level in 2015. Profit fell ahead of revenue in the third quarter and may hit the lowest record in many years at the end of 2015. Increase in operating costs against a decline in sales revenue undermined the company’s profit margin during the period. After tax profit dropped by 19.5% year-on-year in the third quarter. Increases in two major cost areas, administrative cost and selling/distribution expenses accounted for the drop in profit during the period. The company’s profit is projected to drop by close to 30% at the end of 2015. This will be an accelerated drop compared with the 17% fall the company reported in 2014. Two major favourable developments in the company’s income statement are an exceptional growth in finance income and a drop in finance costs. These developments enabled the company to make a shift from net finance cost to net finance income, which prevented a more rapid decline in profit during the period.

Vanguard, MONDAY, FEBRUARY 1, 2016 — 21

Corporate Report

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22 — Vanguard, MONDAY, FEBRUARY 1, 2016

Banking & Finance

FirstBank promotes financial literacy programme

irst Bank of Nigeria Limited has reiterated its commitment to drive financial literacy among the youth and unbank ed segment of the economy. As part of the activities to empower the Nigerian child with a sound financial education, the bank has established the FutureFirst initiative aimed at empowering secondary school students between the ages of 12 and 17years old with the tools and knowledge for long-term financial independence. FirstBank’s Financial Literacy Programme aims to provide an experiential supplement to the business education of high school students in Nigeria and empower them with financial knowledge through training on running a business and the basics of money to promote a savings culture amongst them. To this end, the bank would visit Meadow Hall School, Oba Elegushi road, Ajah on Friday, January 29, 2016 to take the students through the concepts of financial literacy while letting them know that their capacity to imbibe this principles will enable them build a prosperous future.

Sterling Bank commended for support to economic growth

T Limited, a growing player in the

he Chairman and Chief Executive of The Bazaar

retail outlet and food chain business in Nigeria, Mr. Rajesh Mehta, has commended Sterling Bank Plc for its contribution to the economic growth of the country through the provision of adequate capital for its customers across the value chain in all the sectors of the economy. Mr. Mehta who made this remark at the opening of The Bazaar Retail Store outlet in Ogba at the weekend, indicated that the provision of capital and other advisory services by the Bank has boosted the growth of his business. His words: “Sterling Bank is indeed a bank of choice. We have been banking with the Bank for the past 20 years. We started with one of its legacy institutions- Magnum Trust Bank and we have come this far because of the quality of banking services we enjoy from the Bank. Apart from the provision of capital, the advisory services provided by the Bank stand out in the industry and their staffs are adequately trained to support the business growth of their customers. According to the Euromonitor International, a leading independent provider of strategic market research globally, Nigeria’s retail business has become more organized in recent years. C M Y K

N331bn inflow from matured Treasury Bills rescues interbank market By BABAJIDE KOMOLAFE

he interbank money market experienced huge outflows of cash last week leading to scarcity of funds which was halted by N331 billion inflows from payment of matured treasury bills. Vanguard investigations revealed that the amount of idle cash in the market fell from N633 billion on Monday to zero at the end of business on

Tuesday as banks diverted the idle cash to participate in foreign exchange sales by the Central bank of Nigeria (CBN). The ensuing scarcity of funds caused cost of funds to rise sharply from Tuesday to Wednesday. Data from Financial Market Dealers Quote (FMDQ) show that cost of unsecured lending rose from 0.67 percent on Monday to 7.17 percent on Tuesday and further to 8.61 percent on Wednesday. Similarly, cost of Over-night lending rose from 1.08 percent

on Monday to 8.08 percent on Tuesday and further to 9.25 percent on Wednesday. This trend was however reversed on Thursday when the market experienced inflow of N331 billion from payment of matured treasury bills. As a result, amount of idle cash in the market rose and closed the week at N462 billion. Consequently, cost of unsecured lending and Overnight lending fell sharply on Thursday and closed the week at 0.71 percent and 1.08

VISIT: From left:, Ernesto Franco Temple, Trade & Competitiveness, World Bank; Marie-Lily Delion, Operations Analyst, Doing Business Unit, World Bank; Prince Rotimi Ogunleye, Lagos State Commissioner for Commerce, Industry & Cooperatives; Ashani Alles, Operations Officer, Trade & Competitiveness, World Bank; and Mr. Olalekan Akodu, Permanent Secretary, Lagos Ministry of Commerce, Industry & Cooperatives, during a courtesy visit of the World Bank team to the ministry.

percent respectively. Reflecting the improved liquidity (cash) in the market, treasury bills auction held on Friday recorded 400 percent oversubscription. Though the CBN offered N50 billion worth of secondary market bills (OMO), investors however demanded for N233.428 billion at interest rates (bid rates) ranging from 7.5 percent to 10 percent. The CBN accommodated N131.523 billion stopping at 7.6 percent. Meanwhile the naira held firm at N305 per dollar in the parallel market from Wednesday to Friday. On Monday the naira had depreciated in the parallel market by N8 from N295 to N303 per dollar, and further to N305 on Wednesday due to scarcity of dollars as well as expectation that the Monetary Policy Committee (MPC) of the CBN will devalue the naira during its meeting held from Monday to Tuesday. Bureaux De Change (BDC) operators told Vanguard that there is acute scarcity of dollar in the market, with little or no hope of supply from anywhere. Prior to last week, there was expectation that the CBN would come out modalities for BDCs to source autonomous dollars from oil firms. However, a meeting between the CBN and executives of Association of Bureaux De Change Operators of Nigeria (ABCON) scheduled to discuss the modalities, failed to hold last week, prompting pessimism about the fate of the naira in the parallel market.

Compliance officers should focus on corporate governance issues — BALOGUN

OMPLIANCE Officers of banks should focus on critical corporate governance issues of immense benefits to the banking industry. Group Managing Director/ Chief Executive Officer of First City Monument Bank (FCMB) Limited, Mr. Ladi Balogun gave this advise while speaking at the January 2016 general meeting of the Committee of Chief Compliance Officers of Banks in Nigeria (CCCOBIN) held in Lagos. He called on banks and other financial institutions in the country to constantly adhere to compliance principles in line with global best practices, adding this will enable the banking industry to remain sustainable and overcome the continued threats posed by money laundering, terrorists/ terrorism financing and other

challenges in the society. Balogun pointed out that maintaining a sound culture of compliance remains the primary foundation upon which any sustainable compliance effort and programme rests, adding that, ‘’we must all build and sustain an organisational culture that promotes and supports compliance in the daily operations of our financial institutions”. He noted that actions within the regulatory and law enforcement agencies have made it abundantly clear that Boards of Directors and officers of financial institutions need to take governance, risk and compliance responsibilities more seriously in order to avoid serious compliance and reputational issues from crystallizing. Mr. Balogun therefore urged CCCOBIN to focus more on critical corporate governance issues

that are of immense importance to the banking industry. Balogun listed some of these areas to include; customer due diligence, suspicious transactions, excellent record keeping as well as whistle blowing. He added, ‘’to ensure that the business of banking is conducted in a responsible and transparent manner, it is imperative that we operate under full and complete compliance within all applicable laws, rules, regulations, policies, and best practices”. While commending financial institutions for adopting and implementing the sanctions screening services, as advised by the Central Bank of Nigeria, he stressed that, ‘’we must however remain vigilant and ensure that we do not violate sanctions directives as issued by the Nigerian Financial Intelligence Unit (NFIU) and

other relevant international bodies. It is important to avoid dealing with individuals and entities that are subject to local and international sanctions, especially in our cross-border transactions (transfers and trade)”. He also commended CCCOBIN for all its efforts towards building a transparent, strong and viable banking industry, particularly the establishment of the Compliance Institute, to advance professionalism and deepening of knowledge in compliance standards. ‘’In FCMB, we will continue to support your Committee to ensure that it makes proportionate investments in capacity development initiatives, information sharing and collaborative efforts to combat the threats posed to our businesses in these areas”, Mr. Balogun assured.

Vanguard, MONDAY, FEBRUARY 1, 2016 — 23

Corporate Finance

Stanbic IBTC deploys digital solutions to deliver on SME needs

s part of efforts to ensure a strong and viable small and medium scale enterprises sector, Stanbic IBTC Bank has said it would continue to provide digital banking support for SMEs in the country. The bank said it has developed a unique value proposition to support SMEs with transactional products; savings and investment solutions; lending products; payment solutions and wealth protection solutions underpinned by an investment in technology, which is designed to make banking easier for its SME clients. Apart from deploying best-inclass SMEs payment solutions such as bulk payments, the bank recently launched an internet banking offering specifically for SMEs as well as SME BizDirect, a personalized digital banking platform.

Vetiva Trustee commend Foundation over scholarship

etiva Trutees Limited has commended Charles Bebeye Ndiomu Foundation for sustaining its scholarship gesture for the past three years. The Foundation joined the Federal Government and the Nigerian Armed Forces community in Lagos in commemorating this year’s Armed Forces Remembrance Day, with an award ceremony for the third edition of its Armed Forces Remembrance Day Scholarship Scheme, at which it gave out scholarships to children of some of the deceased rank and file of the Nigerian Armed Forces. The presentation of the awards was attended by the family, led by a son of the deceased General, Mr. Patrick Ndiomu, representatives of the Foundation’s Trustee Manager, Vetiva Trustees Limited, led by its Managing Director, Mrs. Ifeoma Udom and members of the delegation of the Nigerian Army Education Corps, led by the director of Command School Services of the Corps, Brig. Gen. B.S. Ipinyomi.

FORUM - From left: Alhaji Garuba Abubakar, Regional Manager, Medview Airlines; Mr Olusola Afolabi, Marketing/Corporate Sales Manager; Salihu Butu, MD, Butu Travels and Tours Ltd; Zannah Ali Ibrahim, MD/CEO, AZIMAD Travels; Alhaji Ishaq Na’Allah, Executive Director, Business Development and Abdul Jabbar Ali, Manager, Raudah Travels and Tours at the Med-View Airlines Abuja Agency Forum in Abuja. Photo Lamidi Bamidele.

NSE pledges to dialogue with FG to list public enterprises By PETER EGWUATU The Nigerian Stock Exchange, NSE has said that there will be no relenting on efforts this year to dialogue with the Federal Government

to bring public enterprises on the stock exchange so that Nigerians could benefit from it. Chief Executive Officer of the NSE, Mr. Oscar Onyema, while reacting to questions from the media during its

briefing on the performance of the market in 2015 and outlook for the year said “the NSE will continue to dialogue with the FGN to ensure that state-owned enterprises are listed in the capital market to unlock the government

Vitafoam, Vono merger to boost stakeholders’value By PETER EGWUATU

itafoam Nigeria Plc has disclosed that it proposed merger with Vono Products Plc will result to economies of scale and in turn benefit stakeholders in the long run. Vitafoam Nigeria Plc’s Group Managing Director, Mr. Taiwo Adeniyi, while briefing newsmen in Lagos, expressed optimism that the merger of Vono Products Nigeria Plc with Vitafoam Nogeria Plc would translate into higher earnings and enhanced shareholder value. Adeniyi who reviewed the current operating environment appealed to the federal government to create enabling environment for manufacturers in view of the effects of high exchange rate of the Naira on importation of raw materials. He explained that the shareholders of both companies overwhelmingly endorsed the merger at the recent Extra Ordinary General Meeting, EGM . According to him, the

shareholders appreciated the potential benefits of the merger such as economies of scale, cost savings and improved operational and administrative efficiencies among others. Adeniyi noted that the enlarged company would enhance growth in size. In his words “ I can assure you that we at Vitafoam have always been thinking ahead. The issue of merger started about five years ago. Vitafoam is not just about mattresses only. We have many products for human comfort. As you all know, Vono is also a brand. “If we produce foam and Vono produces furniture, they are complementary. It is a strategic decision for Vitafoam to have Vono as a subsidiary. As you are aware, we have other subsidiaries such as Vitabloom, Vitagreen and Vitapur. Each of them produces distinct products. But they have something in common and this defines the unity of purpose. “ We are truly a national company. We have a full fledged factory in Ikeja, Kano, Aba and Jos. We also have

factories off shore. We operate at Sierra Leone and Ghana strategically to position the Centre for inflow of Dollar in the long term because these are dollar based business environment. They may not be generating expected profit for now but they have high prospect .The key issue is that Vitafoam as a group has a very bright future and the shareholder value would be greatly enhanced. As a mark of competence. Vitafoam is ISO certified”, Adeniyi said. Corroborating him, Vitafoam’s Group Executive Director, Corporate Services, Mr. Olatunji Anjorin described the merger as a vertical one as the furniture produced by Vono Products would complement Vitafoam’s foams. Anjorin explained that the consummated merger would put an end to past encumbrances militating against Vono’s growth, bring about more efficient expertise, shared value and improved technology.

potentials.” He said the recent pronunciation by the Minister of State for Petroleum, Mr. Ibe Kachukwu, that NNPC is looking at raising Initial Public Offer (IPO) is encouraging. Onyema disclosed that the stock market lost about $30 billion in market capitalisation from 2014 to date due to the fall in oil price. He said the downturn from 2015, has already continued into the new year. According to him “We anticipate 2016 to be a challenging year for the capital market and the domestic economy. We intend to continue our collaborative efforts with the new administration and other private sector players to create a framework for financing the nation’s infrastructure and capital requirements. “Additionally, we plan to work with the FGN to ensure that the appropriate message is conveyed to the investor community. “The current state of the market creates both challenges and opportunities for investors. We believe that taking a portfolio approach to investing provides the best risk adjusted alternative for participating in the capital market. As such, we want to ensure that the NSE provides a repertoire of products that will allow investors to create well diversified portfolios of uncorrelated asset classes,” he said. He affirmed the ability of the capital market to finance the federal government’s proposed budget deficit for 2016. Speaking at the NSE 2015 Market Recap and Outlook for 2016 yesterday in Lagos, Onyema said with greater clarity on policy direction, the exchange anticipates the return of investors who had remained on the sidelines throughout 2015. He stated that the return of investors is predicated upon return of their (investors) confidence as a result of effective implementation and communication of the government’s economic blueprint; credibility in monetary policy stance; relative stability in the macro economy (oil price stability above benchmark targets), increase in tax collection to GDP ratio and improved security, among others.

24 — Vanguard, MONDAY, FEBRUARY 1, 2016

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Vanguard, MONDAY, FEBRUARY 1, 2016 — 25

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26 — Vanguard, MONDAY, FEBRUARY 1, 2016

Homes &Housing Finance Stories by YINKA KOLAWOLE

HE Federal Government plans to train 370,000 artisans this year to boost skills development and employment generation. Mr Afolabi Imoukhuede, Senior Special Assistant to the Vice President on Job Creation and Youth Employment, disclosed this last week, at the flag-off of the Construction Skills Training and Empowerment Programme (CSTEmp), in Abuja. “The Federal Government has plans to train 370,000 artisans this year...It has already been decided. We have had a fruitful discussion on it with the Vice

Enforce compulsory insurance on public buildings, FG urged Nigeria Insurers Association (NIA) has reiterated the need for government to enforce compulsory insurance policy in major markets and public buildings across the country. Director-General of NIA, Mr Sunday Thomas, stressed the need for government to enforce the policy against the backdrop of the rising incidence of fire outbreaks in markets and public buildings nationwide. Thomas noted that properties worth millions of naira had been lost to fire outbreaks across the country recently, while speaking with the News Agency of Nigeria (NAN). He asserted that these losses would have been recovered if the properties were insured. According to him, about 30 major markets, nationwide, were gutted by fire between 2015 and January with huge resources lost to these unexpected outbreaks. “It is worthy of note that the ugly incidents coupled with lack of penchant for mitigation through insurance have continued to deplete the nation’s wealth. Most of the victims are in the entrepreneurial class who are great contributors to the nation’s Gross Domestic Product (GDP). So, it would be wrong to continue to watch without mitigation in terms of insurance cover for property within the major markets. The federal and state governments should enforce compulsory insurance for major markets and public buildings across the country as enshrined in the legal provision under Insurance Act 2003,” Thomas stated.

FG to train 370, 000 artisans in 2016 President and relevant ministers and we are looking forward to working with the CSTEmp to achieve the goal,” Imoukhuede stated. C-STEmp, an initiative of J.Hausen Ltd, a construction management consultancy firm is an accelerated skills development project to prepare eligible beneficiaries for employment as Artisans in construction industry. In his message, Mr Babatunde Fashola, Minister of Power, Works and Housing reiterated the Federal Government’s promise to act promptly to address shortage of skilled Nigerian artisans. He recalled that President Muhammadu Buhari recently decried the influx of foreign building trade workers in the country. According to Fashola, the training would be of benefit

to the ministry since it already has vocational training centres for artisans and craftsmen in Yaba and Onikan in Lagos state and Ikeduru in Imo state. He commended the skills empowerment project and urged that the training should be focused to achieve its intended purpose in order to supply skilled manpower in

Nigeria’s construction industry is amongst the world’s most enticing. It is the country’s second largest employer

housing and construction industry. Meanwhile, the Nigerian Institute of Building (NIOB) in collaboration with Council of Registered Builders of Nigeria (CORBON) is set to train and certify 200,000 artisans this year. NIOB President said the empowerment programme was aimed at developing a pool of well trained and qualified manpower for the housing and construction industry. He added that two million artisans would be trained in the next five years. “NIOB is ready to commence training, assessment and certification of the Building Craftsmen and Artisans in collaboration with CORBON and the DFID sponsored CSTEmp. We have developed and validated a National Occupational Standards for the

key building construction trades, Masonry, Carpentry, Plumbing, Electrical installation, Painting and Decoration among others,” he said. Shuaib said a good number of Assessors and Verifiers were also being trained with the assistance of the National Board for Technical Education (NBTE) with the training of mater trainers starting immediately. He said the skill gap in the Nigerian construction sector and poor quality project delivery has become a trend in Nigeria which is of great concern for NIOB and CORBON. He added that the need to relieve the project sites of unskilled, inefficient and dissatisfied workers engaged in building trades necessitated the partnership with the NBTE.

•Three bedroom bungalow

16 countries set for Nigeria's maiden international building exhibition A BOUT 91 exhibitors from 16 countries around the world are set to participate in Nigeria’s first international trade exhibition dedicated to the construction and building industry which will take place th th on 16 to 18 February, 2016 in Lagos. AfricaBuild Lagos will bring together Africa’s key building and interiors professionals alongside international manufacturers and suppliers from around the world. It is the premier international construction event in West Africa. The exhibition will represent the following industry sectors: Construction Machinery & Technology; Building Equipment & Tools; Building Materials and; Interior

Finishing Materials. Nigeria’s construction industry is currently worth around $69 billion and employs 5 percent of Nigeria’s 170 million population. Along with a growing economy, new government policies and an expanding middle class this has led to massive investments in the industry. Currently in its infant stage the market remains relatively unsaturated by international suppliers and despite the push for the full spectrum of infrastructure, commercial, industrial and residential structures there is a lack of local machinery and equipment to meet demand, providing significant opportunities for international suppliers looking to corner the market.

Exhibitors at the event are expected to display all of the latest in construction machinery and technology, building equipment and tools, building materials and interior finishing materials at the event. The event is holding against the backdrop of huge investments into megaprojects and a strong demand for affordable housing in Nigeria. Selling points Event organisers, the German trade show specialists, fairtrade and the UK-based experts in building and interiors shows, ITE Build & Interiors, noted that Nigeria’s booming economy and its ever growing construction market are major attractions for international suppliers. ‘The

2016 launch of AfricaBuild Lagos is intended to stimulate international investment into Nigerian construction and

capitalise on the lack of international players in this unsaturated, growing market’ outlines Darryl Pawsey, Regional Industry Director, ITE Build & Interiors Division. It is incredibly exciting that for a launch event we have secured such a high number and diverse selection of international brands which indicates a positive outlook for the future of the show. 9 1 exhibitors from 16 countries will display all of the latest in construction machinery and technology, building equipment and tools, building materials and interior finishing materials. The exhibitors come from Austria, China, France, Germany, Ghana, Italy, Lebanon, Nigeria, Poland, Spain, South Africa, Turkey, United Kingdom and United Arab Emirates.”

Vanguard, MONDAY, FEBRUARY 1, 2016 — 27 “The most obstinate illusions are ultimately broken by facts.” Trevor-Roper. VANGUARD BOOK OF QUOTATIONS p100. “Cash crunch: Nigerians to pay more tax.” PUNCH, January 24, 2016.

odwin Emefiele, the Governor of Central Bank of Nigeria, CBN, is one official who has my total sympathy. He is the victim of economic circumstances absolutely beyond his control, yet, he is looked upon to provide solutions to problems well outside the mandate of the CBN. Unjustifiably, he had become the target of attack from all sides – manufacturers, importers, exporters, BDCs, domiciliary account holders, banks, oil companies, Nigerian Labor Congress, media commentators etc – who hold him responsible for whatever predicament they face at the moment. This is a classic case of blaming the victim. The problems Nigeria is experiencing now started long before Emefiele and will remain, in one form or another, long after he had turned 80 or more. They will remain, that is, if we fail to accept reality, take the painful economic medicines we must, like any sick nation or person, and learn from the mistakes of the past. One horrible mistake we have made since 1999 is related to the absence of a comprehensive and sustained fiscal policy by every government since the return to civil rule. As the price of crude oil went on an upward-bound elevator – going from $20 per barrel to, at one time $145 per barrel, Obasanjo, Yar ’Adua and Jonathan, as well as their Finance Ministers dispensed with the need to take the tough measures which would have saved our foreign reserves, earned mostly from crude oil, and position the economy to be

Finally, FG addresses fiscal policy less dependent on crude exports. Even World Bank Managing Director, Dr Ngozi Okonjo-Iweala, who had made statements in that regard failed to push the governments she served to avoid the consequences of resource curse which now stares the country in the face. Diversification of the economy to reduce dependence on crude was written into every budget, routinely, promotion of medium and small scale enterprises was also mentioned frequently; banks were expected to provide credit for SMEs and agriculture and tourism was touted as a major foreign exchange earner. All the right noises were made but there was no articulated policy; neither was there any plan of action. Banks annually fail to provide the credits expected to agriculture and SMEs and there were no sanctions for their failure to do so. Like all entities (human, organisation or nations) which fail woefully, we failed to plan and to act. For almost fifteen years crude oil stood like the Rock of Gibraltar,

against which our economy could lean – indefinitely. That was the most unfortunate aspect of the current debacle in which we find ourselves. “Those who do not remember the past are condemned to repeat it”, said George Santayana, 1863-1952. Less than twenty years after we experienced the OIL DOOM, which lasted from 1983 to 1997, we were again mesmerized by the rising price of crude and failed to implement all the fiscal

The problems Nigeria is experiencing now started long before Emefiele and will remain, in one form or another, long after he had turned 80 or more

policy measures which were outlined during the Structural Adjustment Programme, SAP, introduced by President Babangida, IBB. That government had laid out a comprehensive agenda aimed at ensuring that fiscal policy was complementary to monetary policy. The Executive branch is always responsible for fiscal policy; while the semiautonomous CBN handled monetary policy. No economy can long operate with either fiscal or monetary policy alone. Unfortunately, this is what has happened in Nigeria and is still happening now. We have no fiscal policy in place. That has put all the pressure for economic stability and GDP growth on the CBN. It won’t get us anywhere because crude prices are unlikely to reach $110 again in at least ten years from now. It is for that reason that the recent announcement by the Vice-President, Professor Yemi Osinbajo, is most welcome. According to the VP the Federal Government is looking towards changes in the tax regime as an option to shore up dwindling

revenue. It is an indispensable option for the simple reason that previous Nigerian governments had treated tax collection or legislation as a nuisance they would rather not touch – as long as crude dollars keep flowing into our accounts. Taxes have now taken centre stage as the illusion of perpetual high inflow of crude revenue fades and Nigeria must face reality. However, identifying increased tax collection as a viable option is one thing determining what and who to tax is a different thing because tax regimes that are not properly articulated can do as much damage as good. Furthermore, without the iron will to ensure that the taxes are collected, the entire effort can end up as a paper exercise. Nigeria is a large country and the mechanisms for tax collection have not reached every part of the country. Thus, a lot of transactions which should be taxed escape the tax net. Take Value Added Tax, VAT, for example. Introduced since the middle 1980s by IBB administration, VAT is still not collected by all the economic units which should collect and not all the collectors remit the taxes collected on behalf of government…

Micro-Finance

Letshego MfB encourages saving with MDS award By PROVIDENCE OBUH

ustomers of Letshego Microfinance Bank, penultimate week, went home with various kinds of gifts in form of reward for participating in the “My Daily Savings” MDS promotion. The initiative which allow customers to save without withdrawal for 12 calender months is tailored towards encouraging savings among customer’s of the bank, just as interested participants are expected to contribute daily saving of either N1000, N500 or N200 as the case may be. Successful participants were rewarded after a raffle draw where a star prize winner of Kia Picanto emerged. Tricycle popularly known as Keke marwa, Deeep Freezer; Micro wave oven; Blenders, among others were given to winners during the bank’s annual Customer’s Forum to reward the winners for participating. Speaking at the forum, MD/ CEO FBN Microfinance Bank, Mrs. Pauline Nsa, encouraged its customers to ignore insinuations that they will lose their money in the bank while officially announcing the sale

of the bank. She said that the sale was not informed by bad management of the bank executives but as a result of divestment plan by the parent company, FBN Holdings Plc. She hinted that about 18 companies including

herself showed interest in the acquisition but fortunately enough only the Botswana financial institution, Letshego, who was able to meet requirement. According to her, “I am proud

because I started the bank and we were doing well until the decision to sell. I am assuring you that we will change the brand soonest, paper work has changed and money has changed hand but the staff

remain, we will continue to sustain our business,” she said. On the other hand, GMD, Letshego MfB Mr. Chris Low, said that its entry into Nigeria marks it business debut in West Africa, revealing that it has looked forward to doing business in the country over the year.

Viber Apps deepen live public chats experience in Nigeria, Africa

IBER, one of the leading messaging and calling apps with more than 664 million unique users worldwide have opened its latest social channel ‘Public Chats’ to partners in Africa and the Middle East. In a statement, CMO, Viber, Mr. Mark Hardy, said that the Middle East and Africa are important markets for Viber, stressing that he is pleased to welcome local influence and brands to the Public Chats platform According to him, “We are sure they will enjoy chatting, commenting and debating live on this active social channel whilst sharing tips, news, and local content to our constantly connected mobile audience across the region.” Hardy observed that selected partners in Africa, at Pan-

African level and in key markets such as Nigeria, Ghana, Senegal, Ivory Coast, South Africa, Kenya, and Egypt, have joined Public Chats for this regional launch in a bid to be the first players to offer local conversations on Viber. African users can now start to follow them from the Viber Public Chats explore page. “Brands, organisations, celebrities, public figures and social influencers from these countries can now join Viber’s global platform to reach a local and regional audience”. He said. Jumia, the leading ecommerce platform in Africa, recently opened Public Chats in Egypt and Nigeria and were one of the first partners to join this new social channel in the Middle East and Africa. Viber

users can expect more Jumia Public Chats to open in the African continent in the coming months. “We are really excited with this partnership,” stated Jeremy Doutte, CEO of Jumia. “As new African customers discover the Internet first through their mobile, we want to address them wherever they are. Viber is a mobile first company with an outstanding reach in Africa. Jumia is also a mobile first company and the first online shopping destination in Africa. Joining forces will enable both Viber and Jumia to deliver quality content and good vibes to our users.” Other partners in Nigeria include The Future Project, an organisation designed to empower citizens across Africa; Naij.com, leading online news

platform; YNaija, the internet newspaper for young Nigerians; BellaNaija, Nigeria’s premiere online lifestyle magazine; 360nobs, the number 1 media platform for music and celebrity news in Nigeria; Style Me Africa, Nigerian-based platform for African designers; Style Vitae, Nigeria’s online media dedicated to fashion, style and beauty; Giditraffic, Nigeria’s urban network & no.1 source for real-time traffic updates; George Okoro, renowned photographer capturing the best of Nigerian celebrity & luxury weddings; Uzo Orimalade, CEO of Uzo’s Food Lab, a budding food and home entertainment blog and IT Talk Africa, an informative and resourceful tech hub for Africans, powered by Future Soft.

28 — Vanguard, MONDAY, FEBRUARY 1, 2016

People in Business

I never thought I'd be employing anybody — NGOZI AZUBUIKE By EBELE ORAKPO

rs Ngozi Azubuike is the Managing Director/Chief Executive Officer of Glitters Integrated Services Nigeria Limited, an events planning/events services outfit with offices in Abuja and Enugu. In this interview with Financial Vanguard in Abuja, the Public Administration graduate from the Enugu State University of Science and Technology speaks on why she ventured into cakemaking and events planning, the challenges and says it has been a win-win situation. Excerpts:

pon completion of her one year compulsory service to fatherland, Mrs Azubuike, like every other Nigerian youth, went into the labour market in search of the elusive white-collar job. Unable to get one, she decided to live her passion. Passion: “It is quite clear that I am not doing what I studied but it is more about empowering myself and others around me. One cannot just sit and keep waiting for a job to come by when you can do something for yourself. I did not learn catering in school. In fact, I never saw myself as one who will do anything like that in the university; I had more passion for decorating so all I wanted was to do people’s weddings, birthdays and events generally. I wanted my sister to do the catering part but when we relocated, I found myself having to do it so I had to learn." Crash program: "I first did a five-day training course. It was a crash programme but I am very fast in learning so all I needed to do was see a little bit of this and that and I was okay. I started playing and practising on my own. I found that my flair for decorating manifested even in the cake business. It really helped me because I began to do things that I didn’t think were possible and when people saw a bit of my creativity, they began to challenge me even more, sending me more technical designs to do. So far, we have been able to pull them off and that created a lot more trust in the customers. "I am glad I was able to find C M Y K

something I could do that people would appreciate me for. I started this business in 2006 in Enugu and later relocated to Abuja,” she said. Starting afresh: “When we relocated to Abuja, it was like starting afresh because we had to create new clientele. The business sold itself basically because when one person sees our products, he says ‘oh who did that for you?’ and he gets our contact and like that, we kept rising and rising. I appreciate God for that. Although it has not been easy, we have persevered and by God’s grace, we are growing.” Challenges: Speaking on the challenges, Azubuike noted that every business has its challenges but the most important thing is to satisfy the customers. She said: “It has not been very easy meeting people exactly the way they want certain things but so far, we have really not had much complaints from customers, rather, it has been more of appraisals of what we are doing. Sometimes, communication is a problem. Some people don’t really express themselves well so from experiences I have had, I make sure I repeat myself over and over again at the risk of sounding like a broken record. I do that so there won’t be any misunderstanding so as to give them exactly what they want. “The major challenge is on delivery of our cakes. It is one thing to do a very beautiful job and then on your way to deliver it, it gets destroyed due to bad roads. You may have a very good vehicle but what about the roads? That is one thing that is beyond me but we find ways of resolving the issue. So instead of

•Ngozi Azubuike....Whatever you start, keep persevering and one day, you will get there

Some people don’t really express themselves well so from experience, I make sure I repeat myself over and over again …so there won’t be any misunderstanding

stacking the cakes, we separate them until we get to our destination before we put them back together. “Then sometimes there is fuel scarcity and you are expected to deliver but you can’t get fuel for the vehicle. So far, we have been coping very well. It has been win-win all the way.” Start-up capital: "I did not have to go borrowing. My husband helped me at the time. I started with about N1 million but that was for the decoration part. The cake part was a bit less because I did not buy everything at once. So people should not get scared because of the money involved, you can buy things bit by bit as you go on and before you know it, you would have acquired a lot more than you can imagine. "Initially for the cake, I don’t think I had more than N200,000. In fact, I don’t even think I had it together at any point in time; I was just doing things as the money came and as the business grew, I was buying things."

•Some of the cakes made by Glitters Integrated Services Limited

Staff: “When we started, I never thought I would be employing anybody. In fact, I was looking for a job myself, taking my certificate everywhere I went but today, I am an employer of labour no matter how little. For now, we are three, going on four. It is still a small business but growing. Sometimes people do not believe that all the things we have done so far came out of this small space. It is a good thing that we are doing what people recognise. In fact, we send cakes to different destinations because people see our jobs online and patronize us. It is not as if there are no good bakers and events planners in those places but they appreciate what we do. They call us to do decorations all over the country. It is by the grace of God we are here today." Creativity: Asked if the creative aspect is the edge they have over others, Azubuike said: "I wouldn’t really say I have any edge per se because I don’t want to give myself any glory. But then, people allude to our crativity and the neatness of the job, the finishing, the inside. We try to give our clients a total package, not when people taste your cake, they say it’s not that good though the outside is beautiful. "We want to give you everything so people can say 'oh, we enjoyed the cake; it tasted so good and it looked fantastic.' Sometimes people who have not even tasted our cakes, order. Some would say 'we have seen the picture of your cake and hope it will taste just as good as it looks.' You know they are already drawn to the look of the cake, they are just waiting to taste it and eventually, they give us feedback saying it was fantastic. We have never really gotten any ill message. "The ability to give our customers total package is what I think draws them back to us. When you do something good for somebody and there are no complaints, they will surely come back. Advice: "Whatever you start, keep persevering and one day, you will get there."

Vanguard, MONDAY, FEBRUARY 1, 2016 — 29

Economy

Investment houses raise issues over MPC 2016 By EMEKA ANAETO, Economy Editor

MIDST continued pressure in m a c r o economic indicators financial analysts have been raising issues with the outcome of first 2016 Monetary Policy Committee, MPC of the Central Bank of Nigeria, CBN. MPC is the highest policy making body of the CBN and by extension the monetary policy authority in Nigeria. At the end of its first meeting two days ago members of the committee decided by a unanimous vote to retain the Monetary Policy Rate, MPR, at 11 per cent, with an asymmetric corridor of plus 200 and minus 700 basis points. It also retained the Cash Reserve Requirement, CRR, at 20 per cent and Liquidity Ratio at 30 per cent. The most widely focused expectation in the financial market was its decision on exchange rate and controls to which the committee also left untouched. Reacting to the outcome of the meeting some economists

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in financial institutions expressed disappointment with what they see as uninspiring policy positions of the MPC. According to analysts at WSTC Financial Services Limited, a Lagos based investment house, “the committee obviously failed to address the crucial challenge of the current disequilibrium in the forex market. “In our opinion, the CBN has yet decided to kick the can down the road in a blatant denial of the pressing need to address the misalignment between foreign exchange demand and supply. “We do not expect the Naira to continue to trade at the same peg that was set almost a year ago after which crude oil, the major source of forex supply, has declined in value by about 50 per cent. “Moreover, the nation has arguably become less attractive to foreign capital inflows during this period as a result of policy uncertainty, and more recently lower returns on Nigerian risk-free assets. “Also, it is important to note that the current exchange rate

the necessary adjustments amplifies the adverse fiscal needed to realign the implications of low price of country with the economic crude oil, which is currently realities will continue to trading around a 20 per cent weigh on sentiments about discount to the benchmark price the economy, as well as of US$38 per barrel set in the corporate performance. 2016 Appropriation Bill. It however added that “This will, all other things ‘’the equities market still being equal, widen the presents attractive yields at estimated budget deficit the current valuation and we beyond the N2.2 trillion expect this to spur interest provided for in the Bill or in some stocks ahead of the ultimately affect the earnings season. implementation of the budget”. “We also note that the “We believe that fastrecent sell-off in equities depleting foreign exchange has created investment reserves, which has resulted opportunities in from low oil earnings amid a undervalued assets. Thus, relatively inelastic foreign bearing in mind the spectre exchange demand, will of weak confidence amid continue to impair confidence in the ability of the CBN to continue to support the Naira at current value. “Hence, we expect the downward pressure on the Naira in the inter-bank forex market to persist, reflecting the realities in the macro economy. “We are, however, of the opinion that economic exigencies will eventually trump political considerations. “We believe that the current restrictive measures adopted by the CBN will not be sustainable in the midterm, and as such, retain our expectation of an adjustment of the currency. On the monetary policy impact in the fixed income market WSTC stated, “ we believe the current negative real returns obtainable in the fixed income market is not sustainable in the midterm. “We expect investors’ demand for positive real returns, given expectations of higher inflation, to drive yields higher. “Also, we believe the government’s revenue shortfall and the need to finance the widening budget deficit in the light of lower-thanexpected crude oil prices (considering the budget benchmark price of $38/ barrel) will support high yields in the fixed income market. WSTC also expressed concern on the impact of the monetary policies on the equities market and said ‘’we believe that the overall performance of the equities market will remain subdued in the near term on account of macro concerns. “We reckon that the perceived inertia of fiscal and monetary authorities in instituting

economic realities, we recommend a flight to quality with a medium-to-long term horizon in our investment thesis for equities”. In its own reaction economists at Greenwhich Trust Limited, another Lagos based investment banking outfit, said “in our view, the impact of the dovish stance of the MPC at the November 2015 meeting is yet to trickle down to the real sector as the banks are still unwilling to lend to the real sector. “We expect the regulator to introduce new structural measures at the Inter-bank foreign exchange market as a follow through, in seeking to address the foreign exchange liquidity gap and the arbitrage

30 — Vanguard, MONDAY, FEBRUARY 1, 2016

E-Commerce

iROKO consolidates grip on Africa VoD market with $19m investment Stories by JONAH NWOKPOKU

frican video on demand, VoD pioneer, iROKO has announced multiple deals totaling $19m, both in content development and in capital funding. French media giant CANAL+, which it entered into a deal with recently, together with existing investor Kinnevik AB, are investing in addition to iROKO’s own cash flow to give iROKO the

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platform to scale its operations and expand aggressively across the continent. In a statement, iROKO said it will channel the investment into local content financing and production, as well as its product and engineering teams in Lagos and New York. “The ambition is to produce at least 300 hours of original content in 2016, with the expectation of doubling that by 2018. This will enable the company to build on its

already extensive catalogue, making it arguably one of the largest libraries of local African content,” the statement said. Speaking on the deal, CEO and Co-founder of iROKO, Jason Njoku, said: “With millions more Africans poised to come online via mobile in the coming years, our mission is to lead viewers to content they’ll love.This is something the vast majority of the continent struggles with today.

We hope to bridge that divide, and this additional investment supports such a plan. For us, there is no version of reality where the marriage between Africa’s most powerful communication tool [mobile] and the most prolific and loved entertainment provider [Nollywood] won’t be a joyous union.” On his part, CFO of Canal+ Overseas, Fabrice Faux said: “We congratulate Jason and all the iROKO team and investors for their outstanding achievement so far and we are proud to partner for the scale-up in French-Speaking Africa, with clear ambitions and the means to reach them.”

Venia Group launches co-working space in Lekki Phase 1

eniaGroup has launched its second business hub, a new enabling environment for Lagos’ start-up and SME community at Lekki Phase 1. Venia Business Hub has in the last four years since the launch of the first one been one of the driving forces in jumpstarting both home grown entrepreneurs and foreign businesses coming into Nigeria. Most of the e-commerce companies seen today either started at Venia Hub or worked from there at some point. The new 120-Businesses capacity co-working space is equipped with tastefully furnished offices, fully kitted conference room with video conferencing services, kitchenette/ cafeteria, private meeting rooms, highspeed internet, ample parking space and value-added services like front desk and business advisory services. Beyond being aninfrastructure platform that connects entrepreneurs to office spaces, the Venia model is one that fosters job creation and enterprise building, not only within Nigeria but also across Africa. CEO of VeniaGroup (the parent company of Venia Hub), Kola Oyeneyin said his company is not just providing desk and office spaces but enabling businesses by building a community of collaborators and cocreators. “Our value proposition is simple, to kick start businesses by providing the best platform for growth, collaborations and partnerships. Members of our hub leverage on our affiliations with venture capitalist firms, vendors and network of contingent professionals within and outside the country,” he said.

Vanguard, MONDAY, FEBRUARY 1, 2016 — 31

Insurance

Operators' reserves releases to shrink, threatens earnings– report

eserve releases for property and casualty insurance and reinsurance companies globally are expected

to shrink over the next few years according to Morgan Stanley analysts. The report noted that companies with about 15 per cent of operating income on average could fall to 11 per cent, presenting a real risk to reinsurers and insurer earnings. The report stated that reserves have been seen to boost insurance and reinsurance profitability in recent years, however the contribution that reserve releases make to income and earnings is expected to slow down, with increasing risk seen to companies reserve buffers. Analysts at Morgan Stanley, led by Xinmei Wang and Jon Hocking, suggest that, as underwriting and investment returns remains depressed, a slow down or shrinking of reserve releases could present not just a threat to earnings, but also an additional pressure to re/ insurance company balance

N5.2TRN PENSION FUND: Fashola advocates investment in real sector By FAVOUR NNABUGWU

ederal government efforts at containing the massive corruption embedded in pension fund in time past may have achieve results but not enough to allow the N5.2trillion lay fallow, says the Minister of Power, Works and

Housing, Mr. Babatunde Raji Fashola The Minister at the Nigerian Pension Industry Strategy Implementation Road Map Retreat organised by the National Pension Commission (PenCom) retreat held in Abuja penultimate Friday, advocated proper use of pension fund to build the required

infrastructures for a rapid development for the country. The minister said he could see a future of Africa, where Nigeria is leading in the use of people’s resources to build a future that includes the people. Fashola, in a key note speech said, “I see a future for Africa led by Nigeria, using the WORKSHOP — A cross Section of the Pension Desk Officers including representatives of Nigeria Customs Service; The Nigerian Immigration Service; Nigerian Security and Civil Defence Corps at the Premium Pension sensitisation workshop for pension desk officers in Abuja.

resources of the People to build a future that include the people” In Nigeria alone, he said, “They have $289 million in Dangote Cement , $98million approved but yet to be drawn for Notore Fertilizer, $230million in MTN Nigeria, $270million in Erin Energy (formerly CAMAC) and $150million in Mainstream Energy Solutions (in the power sector of Nigeria). By contrast, the question to ask is what is the home based pension fund doing? If as I have shown, the visiting pension fund from South Africa has a total of $897million in our economy. “The answer is obvious, that is why we are here, that is why my host in their invitation spoke of suitable investible vehicles with low risk profiles and sufficient comfort as the reason that continues to hamper the drive to make visible economic impact.” The minister however, said such investment should be channeled towards building of roads, hospitals, educational facilities, railways, inland water ways with the aim of generating employment for the people, creating wealth for the country and improving the standard of living for all and sundry.

Media & Advertising

Brandlife and expansion for value creation Stories by PRINCEWILL EKWUJURU

ith each passing day the economy is becoming more competitive, having apt knowledge about the concerns and preferences of your customers has become integral for any business. Market research thus has becomes the best way to increase customer satisfaction, understand the factors that affect client’s business, and to elevate their brand (s) performance. For this reason, with effective market research, companies gain invaluable information about their competitors, economic shifts, demographics, current market trends and the spending traits of firm’s customers. Since all types of businesses require market research, then, the answer is with Brandlife Limited, a marketing services agency, which recently announced the expansion of its corporate headquarters to Kenya in order to accommodate continuous business growth and future market development plans. This extension also includes a new contract with Hewlett Packard

Inc, to provide marketing services in that region. The expansion, which coincides with the company’s 8 th anniversary will also provide capacity for increased marketing and unique activations to varied customers and the HP INC account as Brandlife takes over from the previous marketing services agency, BBDO in Kenya. “Brandlife Limited is

tremendously excited about expanding our business to a region which not only fits our strategic needs, but gives us a fresh, new landscape for building on our years ofexperience and successes,” said Julius Agenmonmen, the Managing Director. “This move is a testament to the growth and success our company has experienced since its founding in 2008, and

PROGRAMME - From left: Eze Geoffrey Okoro, the Oko 1 of Upe Autonomous Community, Owerri North, Imo State, Abdulwahab Umoru, Specialist, Government Relations, Etisalat Nigeria,HRH Raphael Nnana Oparaochaekwe, Eze Ebube Dike of Ulakwo Autonomous Community, Owerri North, Imo State and Chinomso Obi-Peters, CEO, Traffina Foundation for Maternal Health during the Etisalat-Traffina Community Maternal Health Platforms Programme in Ulakwo, Owerri North, Imo State.

marks the beginning of a new chapter in our history of providing world class marketing services in areas of brand activation, field marketing, digital signage and media monitoring in Nigeria and beyond.” “This expansion will help us to adequately service the Hewlett Packard (HP) INC account which Brandlife has worked on for seven years, in that region.As you know, Brandlife is the official marketing services agency for HP INC in Nigeria. And of course, other businesses in that that region will have the opportunity to experience our numerous cutting edge value services.” Interestingly, the company possess the mechanisms for successful market research, which is of two types, primary and secondary required by business to be successful, these include: Primary Research monitors the effectiveness of sales, existing business practices, the quality of services, and the tools used for communication. Additionally, it also assesses the current market competition by evaluating the business plans of competitors.

Harrysong is face of Gala

hare the Gala, share the Blues crooner, Harrysong under the music label of 5 Star Music Group has signed the dotted line as the face of Gala, a product of United African Company Nigeria, UACN. The General Manager Marketing, UACN, Mrs. Joan Ihekwaba, while speaking at the unveiling ceremony of Harrysong alongside KCEE and Skiibii who are under the 5 Star Music label, said the company opted for the 5 Star Music Group, because the group represents the vibrant, entrepreneurial and indomitable Nigerian spirit which aligns with the Gala persona. She stated that the musicians under the group are talented, dedicated and innovative as evidenced by their huge success and acceptance by their fans. Ihekwaba went on to say that the brand’s association with the label will further differentiate Gala from the others and further expand the geographical footprint of the brand.

32 — Vanguard, MONDAY, FEBRUARY 1, 2016

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his column has consistently maintained that the root cause of our economic paradox of increasing income, with unbridled rate of unemployment, and deepening poverty will be found in the conscious but incorrect adoption of a faulty and distortional process for the infusion of our crude export dollar revenue into the economy. Hereafter, we will discuss the related ADVERSE consequences of the Current Payments Model (CPM) against the positive attributes of the Advocated Payments Model (APM) for the allocation, for example, of $1bn export revenue in the following explanatory steps. Thus, in CPM: -1 The CBN unilaterally determines the naira exchange rate and thereafter unconstitutionally captures the distributable $1bn revenue and prints/creates in replacement (read as monetizes) N200bn as statutory allocations, which are then domiciled in the bank accounts of beneficiaries. CPM:-2 If CBN’s mandatory cash reserve ratio for banks is, for example 10%, the N200bn inflow can be leveraged tenfold,to create additional credit and expand consumer spending power which will invariably fuel inflation! The recent establishment of the Treasury Single Account will, regrettably, only temporarily absorb any cash injection, as the N200bn allocation, for example, will ultimately migrate into private sector bank accounts to invariably expand Naira liquidity, credit capacity and consumer demand once MDAs pay salaries and settle outstanding contractors’ bills. CPM:-3 In response to evolving inflationary threats,

Sensible path to stronger Naira, economic prosperity the same CBN, ironically, ‘altruistically’ sells treasury bills and borrows money it does not need, often, at over 10 percent, just to reduce the challenges of systemic excess Naira and excessive consumer demand! Inexplicably, however, despite the crying need of the real sector for cheap funds, thsese CBN borrowings are simply kept as idle funds. CPM:-4 Since such liberal access to subsisting excess cheap funds, would instigate spiraling inflation with adverse economic and social consequences, the CBN would respond by raising its Monetary Policy (Control) Rate (MPR) to force banks to also significantly increase their own lending rates, so that higher cost of funds would restrain the motivation for customers to borrow, and thereby inadvertently also reduce any prospect of industrial growth or the creation of increasing job opportunities. Thus, CBN is actually vicariously liable for the very high cost of funds that cripple the real sector. CPM:-5 Meanwhile, Ministries and State Governments, who require imports to improve their infrastructure, become constrained to buy back their dollars from banks, who have become the prime beneficiaries of CBN’s dollar auctions at a higher regulated rate. Ultimately, naira exchange rate would come under threat as increasingly surplus naira is unleashed by CBN to chase the dollar rations it regularly auctions. Consequently, the market dynamics of demand and supply become

unfavourably skewed against the naira. CPM:-6 The less dollars sold by CBN, the larger would be CBN’s purported reserves, but the weaker also will inexplicably be the naira, as less and less dollars become pitched against the excess naira earlier unleashed by CBN. Ultimately, the gap between official and black market naira rates will increasingly widen. CPM:-7 To reduce the gap between the parallel market and official exchange rates, the CBN commits the unforced error of allocating dollars to Bureau de change who in turn fund the requirements of treasury looters and smugglers of contrabands, not minding the adverse impact of such misguided dollar allocation on the economy (thankfully the CBN terminated this obnoxious strategy of official dollar sales to BDCs in January 2016). CPM:-8 The CBN, ironically continues to maintain its monopoly of the forex market and sits on bountiful naira and dollar reserves, while debt accumulation persists and the banks celebrate another bumper harvest. Conversely the Advocated Payments Model would operate as follows. APM:-1 $1bn distributable government revenue is not substituted with N200bn allocation; instead, constitutional beneficiaries receive dollar certificates equal to their respective allocations, while the actual $1bn remains domiciled with CBN, and the naira exchange

Business & Economy Tomat o past e manufacturer omato paste manufacturerss seek more time for backward integration By NKIRUKA NNOROM

HE Union of Tomato Paste Manufacturers in Nigeria has appealed to the Federal Government to hold back on the CBN forex policy in order to avail them more time for backward integration. Triple concentrate which is the major raw material for the production of packed tomato paste, was listed amongst the 41 items banned from accessing foreign exchange from the official window by the Central Bank of Nigeria. This C M Y K

reduce production cost and also bring down fuel prices and make subsidy totally unnecessary; futhermore a 10% sales tax on cheaper petrol and kerosense could also consolidate over N1000bn annually into the national Treasury.

policy has, made it impossible for firms to import tomato concentrate which in turn is having an adverse effect on the production of the product. Speaking through the Managing Director, Sonia Foods Industries Ltd, Mr. Nnamdi Nnodebe, the manufacturers appealed for more time to further invest in backward integration in the country. “As a group, we are committed to the growth of the Nigerian economy and also wish to boost the GDP of the nation through the production and exportation of tomato paste.

However, we will be pleased if the government can avail us more to time to allow for backward integration just like it applies to some other sectors of the economy.” “We have begun the process of backward integration in some parts of the country, but support for the process is critical to its success. We plead with the relevant government agencies to provide adequate support in terms of easy access to arable land, low interest loans, irrigation facility, technical and also infrastructural support.

rate is conversely determined by competitive free market forces of demand and supply.

APM:-6 CBN’s erstwhile monopoly of dollar supply and the usual regular dollar auctions will cease, as the constitutional beneficiaries directly trade their dollar certificates for existing naira balances with banks before spending, (since the dollar is not legal tender in Nigeria). Nonetheless, the dollars, will however remain domiciled with CBN, irrespective of the ultimate buyer, until the apex bank receives appropriate instruction from respective banks to directly pay the overseas suppliers of goods/ services to their customers, from the dollar balances the banks earlier purchased from MDAs.

APM:-2 With strictly dollar allocations, the $1bn income does not translate to additional FRESH naira inflow into the system; consequently, naira supply remains the same, and cannot therefore further instigate the usual disenabling systemic spectre of surplus cash and fuel inflation. APM:-3 Without systemic naira surplus, CBN has no need to mop up liquidity by borrowing money it does not need, often with interest rates above 10%; consequently, our N12tn ($60bn) oppresive debt and service charges would become reduced; additionally, reduced government borrowing, would also force commercial banks to chase the real sector for business!

APM:-7 In the continuous absence of excess Naira liquidity and dollar surplus; the naira would consequently gradually become perceived as a safer store of value. Furthermore, the black market for the dollar will rapidly contract with little motivation for round tripping, capital flight and speculative dollar purchases. APM:-8 Optimal Naira liquidity will invariably precipitate lower CBN MPR, and therefore promote lower single digit interest and below 3% inflation rates, with positive knock-on impact on consumer demand, industrial consolidation as well as increasing job opportunities, with bourgeoning economic prosperity. A stronger naira will similarly drive down fuel prices and ultimately eliminate oppressive subsidies of about N2tn in favour of a petrol sale tax revenue in excess of N1Tn annually. Clearly our fate as a nation is not in our stars, but obviously in the choices we make!

APM:-4 Futhermore, In the absence of the usual excess naira supply, CBN would reduce its Monetary Policy (control) Rate to international best practice below 3%; commercial banks will also correspondingly drop lending rates to single digit to attract investors. APM:-5 The MDA dollar beneficiaries can exchange for naira, all or portions of their dollar allocations from time to time, directly through COMMERCIAL banks. Thus, in the absence of the usual naira surge when CBN substitutes fresh naira creations for dollar revenue, the market dynamics will consequently change in favour of the naira, with relatively more dollar supply chasing EXISTING NAIRA BALANCES. A stronger Naira will

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