Issuu

JUNE 8, 2015

N20.9bn agric fund for farmers in Nigeria, 11 other nations BY OMOH GABRIEL, Business Editor

igerian small-holder farmers and those from 11 other Africa countries are to benefit from the Global Environment Facility, an innovative N20.975 billion ($106.5 million) pilot programme for fostering sustainability and food security in Sub-Saharan Africa. The twelve African dry-land countries are Nigeria, Burkina Faso, Burundi, Ethiopia, Ghana, Malawi, Niger, Kenya, Senegal, Swaziland,

Tanzania, and Uganda. According to GEF, these dry-land regions face the greatest threat of environmental degradation in smallholder farms, and are therefore well placed to harness good practices for sustainability and resilience such as soil and water conservation, diversification of farmlands, and integrated management of crops and livestock. GEF financing for the programme will be driven by the priorities of participating countries, primarily in the context of baseline investments

addressing the needs of small-holder farmers. The programme, it was further learnt, will enable creation or strengthening of institutional frameworks to promote integrated

approaches in small holding agriculture; promote scaling-up of interventions for sustainability and resilience; and ensure effective monitoring of ecosystem services and global environmental benefits through application of innovative tools and practices. Mr. Richard Lerisien Lesiyampe, GEF council member from Kenya in endorsing GEF’s integrated programmatic approach said: “The whole world must develop a framework for food security; this working programme is so significant it will go into the annals of the GEF.” The Global Environment Facility Continues on page 22

Banks shun loan proposals for vessel acquisition BY GODWIN ORITSE

CEREMONY - From left: Funke Aiyepola, Managing Director, Union Trustees Limited; Binta Max-Gbinije, Secretary General, Association of Corporate Trustees (ACT); Funmilayo Ekundayo, President of ACT, Abdulkadir Abbas, Deputy Director, Securities Offering, Securities and Exchange Commission, Nigeria; and Tokunbo Ajayi, during the Association’s 1st Quarter Training Programme, held at UBA House, Lagos.

HE crisis presently rocking the Nigerian Ship-owners Association, (NISA) last week, took a new dimension as banks participating in the ship acquisition scheme have shunned and stopped processing loan applications for vessel acquisition by local ship operators planning to acquire ships to boost their fleet. The move by banks to stop processing loan applications for Nigerian ship-owners is due to the fact that the banks are confused as to what group in the now factionalised body, are they to deal with in processing loan applications. The banks need a corporate guarantee for each application which the association is supposed to provide for its members. Disclosing this development last week in Lagos, Secretary General of the break away faction of the Association, Mr. Tunji Brown said that the banks are now very skeptical of dealing with any of the groups as the banks claim they do not know which of the factions is the genuine umbrella body of shipContinues on page 22 C M Y K

22 — Vanguard, MONDAY, JUNE 8, 2015

Economy FAO Food Price Index falls to its lowest value since September 2009 BY JIMOH BABATUNDE

VISIT: From left, Mr. Oze K. Oze, Head, Corporate Publications & Conferences, First Bank of Nigeria Ltd, Mrs. Bukie Oluyadi, Head, Brand Management, First Bank of Nigeria Ltd, Mrs. Folake Ani-Mumuney, Group Head, Marketing & Corporate Communications, First Bank of Nigeria Ltd, Yomi Badejo-Okusanya, Secretary-General, African Public Relations Association (APRA) and Kayode Yeku, APRA Coordinator during a Thank You visit by APRA to First Bank Corporate Headquarters, Marina Lagos.

N20.9bn agric fund for farmers in Nigeria, 11 other nations Continued from page 21 said the innovative $106.5 million pilot programme for fostering sustainability and food security in Sub-Saharan Africa is in response to the growing pressure to transform African agriculture through intensification with high inputs and high yielding varieties that will likely undermine sustainability of the natural capital. According to the body, “By integrating environmental priorities at scale, the programme, entitled Fostering Sustainability and Resilience for Food Security in Sub-Saharan Africa will enable smallholder farmers in the dry-land regions of SubSaharan Africa ensure the sustainability and resilience of production systems”. Naoko Ishii, CEO and Chairperson of GEF said: “Sustainability of the natural capital — land, water, soil, trees, and genetic resources — that underpin food and nutrition security, must be ensured by bridging the gap between traditional and modern farming practices. Smallholder agriculture, which accounts for more than 70 percent of agricultural production in Sub-Saharan Africa, can benefit from a holistic approach to management of natural capital.” It was learnt that the total GEF financing of $106.5 million will be supplemented by $805.36 million cofinanced from the C M Y K

governments, development agencies, foundations, international organizations, and the private sector. IFAD is the lead GEF agency for the programme, and seven

other GEF agencies — CI, FAO, IFAD, UNDP, UNEP, UNIDO, and the World Bank — will support the individual country projects.

Banks shun loan proposals for vessel acquisition Continued from page 21 owners in Nigeria. According to Brown, the need to reconcile the various groups with a view to working together for the common good of the association cannot be emphasized. He blamed the President, Captain Niyi Labinjo for the crisis rocking the association. Brown refused to disclose full details of the reason why Captain Labijo was being asked to step aside. He said that until the matter was resolved and the authorities cleared Labinjo of any wrong doing, the elected President remains suspended. Brown who spoke at a purported Annual General Meeting of the association held at the Federal Palace Hotel in Lagos said that effort to get Labinjo to see reason for his suspension was futile as Labinjo is insisting that a private business deal with partners should not be the business of the association. The NISA scribe said the association would not have intervened in the failed business deal because it was a private business but the fact

that the company petitioned the association, the Federal Ministry of Transport, and the EFCC got them involved. He also said the botched deal has taken its toll on NISA members as banks were skeptical in doing business with them. Speaking on the development, Mr. Eddy Idigo of Fidelity Bank told Vanguard that the banks are very much concerned about the crisis in the association. Idigo said that it will not be proper to give money to a group who cannot provide corporate guarantee for such loan applications, adding that the banks are being careful as to whom to disburse monies to. The annual Nigerian Maritime Exposition otherwise known as NIMAREX which is an initiatitive of the Labinjo led group, has also been affected as two planning Committees working with separate members have been constituted. He said: “NISA is divided into two and that is affecting Continues on page 23

ajor food commodity p r i c e s declined again in May, hitting an almost six-year low as cereal prices fell substantially amid a favourable outlook for this year’s harvests. The FAO Food Price Index averaged 166.8 points in May, down 1.4 percent from April and as much as 20.7 percent from a year earlier. FAO has also upgraded its May 2015 forecast for global production of wheat, coarse grains and rice, anticipating bigger maize harvests in China and Mexico as well as more abundant wheat harvests in Africa and North America. The Organization’s latest Cereal Supply and Demand Brief released on Friday also predicts that global rice output will grow by 1.3 percent from last year mainly thanks to increases across Asia. However, the forecast is still subject to much uncertainty, as the outcome of the season will very much depend on the unfolding of the season in the next few months. The Food Price Index is a

trade-weighted index that tracks prices on international markets of five major food commodity groups: cereals, meat, dairy products, vegetable oils and sugar. In May, the Index reached its lowest level since September 2009. The May decline was driven by a 3.8 percent monthly drop in the cereal price index, a 2.9 percent drop in the dairy price index and a one percent drop in the meat price index. The sugar price index rose 2.0 percent, due to temporary delays in Brazil’s crushing season despite abundant supplies. The vegetable oil price index rose 2.6 percent, partly driven by concerns that the strengthening of El Niño conditions may affect production in Southeast Asia. On the latest upgraded forecasts, global cereal production in 2015 will be 2.524 billion tonnes, only one percent below last year ’s record. While some inventories will be drawn down, the world cereal stockto-use ratio is projected to dip marginally, “reinforcing the view of generally stable cereal markets”, according to FAO.

Kenya’s president nominates IMF adviser as central bank chief

enya’s president has picked an IMF adviser, Patrick Ngugi Njoroge, as the next central bank governor, pending approval by parliament, his spokesman said on Tuesday. Njoroge is an adviser to a deputy managing director at the Washington-based International Monetary Fund, has been named to lead the bank at a time when the shilling has come under heavy pressure because of the global strength of the dollar, falling foreign exchange revenues and a widening current account deficit. Manoah Esipisu, the

president’s spokesman, said Njoroge’s name was being put forward by President Uhuru Kenyatta for “vetting and approval” by parliament. The president had been given a shortlist of three names after official interviews by the Public Service Commission, in charge of recruiting government staff. His choice is expected to be approved by parliament, in which Kenyatta’s Jubilee coalition has a majority. Njoroge, who has a PhD in Economics from Yale University, would replace Njuguna Ndung’u whose term ended in March.

Financial experts call for harmonisation of economic policies

ome financial experts have urged the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) to initiate friendly policies and laws to boost the nation’s investment climate. They said in Lagos that the market regulators must ensure proper implementation of policies and laws to enhance economic growth and development. Mazi Okechukwu Unegbu, a former President, Chartered Institute of Bankers of Nigeria (CIBN), said that unfriendly policies of government agencies were affecting small businesses and investment in the nation’s bourse. Unegbu said that regulators should understand the peculiarity of the country before initiating any policy, adding that regulators had exhibited impunity in implementation of policies.

Vanguard, MONDAY, JUNE 8, 2015 — 23

CBN needs out-of-the-box thinking to control informal sector, banks

ormer military President, General Ibrahim Babangida was once quoted at a meeting with the organized private sector during the Structural Adjustment Programme SAP, as saying that he did not know why the Nigerian economy had not collapsed. He was reacting to the inability of government to develop policies and strategies to deal with the economy. Over the years, successive administrations have made futile efforts at diversifying the Nigerian economy. What many of Nigerian policy-makers have failed to take into calculation in developing their economic models is the huge potential of the informal sector. Nigeria over the years, has failed to give the sector attention and take its potential into consideration in policy formulation. The result of this neglect has resulted in policy failures. In other countries, the small and medium enterprises are regarded as the engine of economic growth and appropriate policy measures are taken to grow the sector. In some of these countries, no entrepreneur can even operate a trade in a kiosk without registration with the appropriate authorities. The Nigerian informal sector is so huge and has long been left alone. Government officials do not know the strength of the sector. This neglect has caused policy failures and pain in the neck of fiscal and monetary policy-makers. In the informal sector, there is a lot of money circulating in the system that may never get to

the banking system. N i g e r i a n businessmen in the informal sector have developed a unique African banking system where money is collected on daily basis and given to one participant in the scheme. Traders in most markets across the country do this on daily, weekly and monthly basis. Apart from market places, rural dwellers have been known to practice this traditional mode of savings for long. Workers have keyed into this model and

•Emefiele, CBN Governor

have helped to keep substantial part of the money in circulation outside the banking system in the hands of operators in the informal sector to the detriment of CBN's monetary policy. While the CBN targets money in the banking system to curb perceived liquidity, it is not able to do anything about the money outside the banking system. As money is withdrawn from banks, almost an equivalent returns through the back door from the informal sector. The need to permanently address this structural liquidity in the economy calls for a rethink of the nation’s monetary policy,and improving the efficacy of the apex bank monetary policy ratios. The second issue that the CBN is yet to find a solution to is the sharp practices in banks. At the moment there is the pressing

need to address currency substitution from public sector deposit to private sector deposit by banks which is assuming a dangerous dimension. Nigerian banks as it is with others globally, are fond of cutting corners. They have not focused on core financial

While the CBN targets money in the banking system to curb perceived liquidity, it is unable to do anything about money outside the banking system

intermediation but have been manipulating the cash reserve ratio to their advantage. Indications are that when the CBN increased the cash reserve ratio requirement of public sector funds to 75 per cent, banks immediately were substituting public sector deposit with private deposit by reclassification of public sector deposit as private deposit. This behaviour of banks is seen as a product of market and state failures that led to the paradox of substantial government deposits in banks and high government borrowing from the same banks. The banks cashing on public sector deposit with them, lend the same money to federal and state governments that have penchant for borrowing. CBN records showed that as at June 13, 2013, the three tiers of government had N2.384 trillion in the various Nigerian banks out of which about 90 per cent are in zero interestbearing Current Accounts. For the CBN to mop up the liquidity at 14 per cent interest cost the apex bank N301.33 billion which is more than the annual budgets of most states in the country. Clearly, governments are overborrowing from the banks where bulk of the money is government deposit. This has shown that governments at various levels in the country are not prudent with public funds and are wasteful in the management of public resources. In addition, this act of banks certainly undermines and corrupts the public sector and makes public resources to generate inefficient outputs and ineffective outcomes.

Improving the market and the state demands the correction of the causes of distortions. CBN data shows significant changes in the ownership and instrument structure of the deposits of banks in favour of growth in government deposit and a more efficient use of financial instruments by the government when the cash reserve ratio was retained at 50 per cent. CBN data equally showed that between June and August 2013 for which data are available, the Federal Government's naira deposit with banks rose by almost N1.5 trillion. By corollary, private deposits declined by N1.077 trillion. As a result, total public sector naira deposit rose to N3.73 trillion in August 2013 from N2.384 trillion in June 2013 while private sector naira deposits fell to N8.7 trillion from N9.78 trillion in the same period. In addition, a significant part of the increase in the Federal Government's naira deposit (81%) was held in Time Deposit in August 2013. But when it was raised to 75 per cent last year, the reverse was noticed as banks were immediately substituting public sector deposit with private sector. This would imply that the banks are always a step ahead of monetary policy and work towards making it ineffective. The CBN has been collaborating with the Bureau of Statistics to undertake surveys and studies of the Nigerian economy. So far, they have not done any outstanding research on the causes and failure of monetary policies in Nigeria. Now is the time to do so.

Cover Ethiopia topples Nigeria on foreign investment destination list in Africa By JONAH NWOKPOKU

igeria may be in for tougher times as foreign investors are beginning to shift their attention to Ethiopia as a preferred investment decision.

This was indicated by the buzz at the just concluded World Economic Forum on Africa, an annual summit of the continent’s rich and powerful, which was all about Ethiopia, where the economy is flourishing and the

government is embracing select foreign capital. Executives from General Electric Co., Dow Chemical Co., Standard Bank Group Ltd. and MasterCard Inc. attending the gathering in Cape Town were reported to have all

singled out the East African nation as a market with strong potential. Ethiopia was Africa’s eighthlargest recipient of foreign direct investment last year, up from 14th position in 2013, a report released by accounting

Banks shun loan proposals for vessels acquisition Continued from page 22 NIMAREX. Banks are calling; sponsors of the event are calling to know what is happening in the association.” Speaking on the development, Mr. Greg Ogbeifun called on the

warring parties to shield their sword and give peace a chance to move the association forward. A member of the association who was also in attendance at the meeting , Mr. Ayorinde Adedoyin told Vanguard that

some of the banks are members of the association and they have a way of passing information to each other. Adedoyin also said that there are members who have new contracts but the banks are not willing to fund such contracts

as a result of the current crisis. In his reaction, President of the NISA, Capt Niyi Labinjo said that the idea that banks are shunning loan applications is the figment of the imagination of the break away group.

firm, Ernst & Young showed. The number of projects in Ethiopia surged 88 percent, the most of all countries ranked, while those in Nigeria slumped 17 percent. “It’s got a government that is managing economic development in a very deliberate, cautious manner. It’s the second-most populous country in Africa. It hasn’t urbanized like other African countries, but it’s going to. It’s a very exciting place,” Ross McLean, Dow’s president for sub-Saharan Africa, told the media in an interview last week.

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24 — Vanguard, MONDAY, JUNE 8, 2015

Business & Economy

26 ships laden with petrol, diesel, food items, expected in Lagos

By FAVOUR NNABUGWU

‘NIRP Managers Capacity Building Programme on Investment Project Appraisal’, said that the NIRP, being one of the fruits of the partnership between UNIDO and Nigeria, should be sustained in spite of the change in leadership. Ezedinma affirmed that UNIDO has been partnering with the Nigerian Government, especially in the area of industrialisation. “It is not a plan that should be phased out or abandoned in the face of a change in

government because industrial revolution is for economic

wenty-six ships laden with petroleum products, food items and other commodities are expected to arrive at Lagos ports from June 3 to June 20. This is contained in a publication, Daily Shipping Position, made available by the Nigerian Ports Authority (NPA) to newsmen on Wednesday in Lagos. The document noted that the expected ships contained petrol, kerosene, diesel, containers, general cargo, fish, bulk gypsum and bulk wheat. It said that 11 other ships laden with petrol, diesel, base oil, bulk rice and fresh fish had arrived at the ports, awaiting discharge of their contents. The publication stated that 26 other ships containing petrol, diesel, bulk gas, aviation fuel, rice, crude palm oil, bulk wheat were discharging at the ports. Other ships in the ports are discharging general cargo, trucks, etc.

he United Nations I n d u s t r i a l Development Organisation (UNIDO) has called on the new administration of President Muhammadu Buhari to intensify efforts at sustaining the Nigerian Industrial Revolution Plan (NIRP). Officer-In-Charge of UNIDO in Nigeria, Mr Chima Ezedinma at the opening ceremony of the workshop on

S.Africa’s Liberty looking for acquisitions in Nigeria

CONFERENCE - From right: National President, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Chief Bassey Edem; Cross River State Deputy Governor, Prof. Ivara Esu; Permanent Secretary, Federal Ministry of Mines and Steel Development (Rep of President Muhammadu Buhari), Alhaji Baba Umar Farouk and 1st Deputy National President of NACCIMA, Iyalode Alaba Lawson at the association's 55th Annual Conference held in Calabar, Cross River State.

iberty Holdings, South Africa’s fourth largest insurer, is looking at acquisitions in Nigeria to establish a strong regional presence in West Africa, its chief executive said. The Johannesburg-based firm, which is majority owned by Africa’s biggest lender Standard Bank, has an asset management outfit in Ghana and a regional health insurance business in Nigeria but seeks to expand its footprint, CEO Thabo Dloti said. “Clearly the big area where we are looking to establish ourselves is Nigeria, both in insurance and asset management,” Dloti told Reuters on the sidelines of the World Economic Forum Africa in Cape Town. “It’s a journey we’ve travelled for the last year or so, looking for the right opportunity and finding the right partner.” Liberty reported a 3 percent decline in full-year profit in February, reflecting a contraction in earnings from its shareholder investment portfolio. In all, Liberty has a presence in 16 countries in Africa. It has around 650 billion rand ($53 billion) of assets under management.

C M Y K

UNIDO calls on new administration to sustain NIRP NIRP was proactively designed to salvage Nigeria’s economy from its monolithic trend

CEOs concerned over fiscal deficits T

here is a call on government to apply a renewed focus to strike a fiscal balance and sustainability in order to reduce the cost of delivery. In the same fold, governments should boost agility of public sector organisations to cope with changes in the future. These were just two findings from the PricewaterhouseCooper (PwC) th 18 Annual Global CEO Survey. There were 1322 responses from business leaders in 77 countries worldwide being added to valuable insights from 50 governments’ representatives and state-backed CEOs. Kalani Rampai, leader of local government at PwC Southern Africa, said it has become more important than ever for government to be affordable especially in light of recurrent budget cuts to reduce fiscal deficits in many countries. “This means doing better for less - meeting rising expectations by doing things differently to deliver services more effectively and efficiently and prioritising the public services that matter most to citizens, as well as to business,” said Rampai. At the top of the CEO’s wish list for governments’ attention was: an internationally competitive and efficient tax system, a skilled and adaptable and workforce and adequate physical infrastructure. A notable 78 per cent of South African CEO’s feel that it’s the government’s responsibility to create a

skilled workforce. Following this survey, PwC’s public sector released a report titled, ‘Government & the Global CEO: Delivering outcomes, creating value’, which calls for government and public sectors to respond in five key ways. Firstly, deal with fiscal deficits and make government affordable. Seventy-two per cent of CEO’s surveyed are “somewhat” or “extremely” concerned about this threat. Secondly, rise to the digital challenges. With affordable government facilities tackling the new reality, digital technology has the potential to be a key enabler, offering the scope to deliver higher productivity and better outcomes while also reducing costs. Thirdly, invest in growth. “This requires public leadership to facilitate a more demand-driven skills system, meeting employer needs, as well as developing a workforce comprising people from different backgrounds who are adaptable and able to think and work in diverse ways,” said Rampai. Fourthly to collaborate with business to deliver societal outcomes and lastly, to tackle the burden of regulation and tax. “There is an important agenda for public leaders to deliver on all these five areas. Delivering on business priorities, alongside societal outcomes, requires real leadership and trust between citizens and the state for each to do the right thing.”

good, not political. He decried high unemployment and low contribution of the manufacturing sector to the growth of the economy saying there is need to take non-oil sector more seriously. “UNIDO is worried about some pressing issues such as massive unemployment and the low contribution of manufacturing to the growth of the economy. "Former President Goodluck Jonathan launched NIRP in February as a roadmap to industrial revolution and promotion of local manufacturing." Ezedinma asserted that the workshop is the first formal training under the UNIDO implemented programme, which objective is to develop the capabilities in the NIRP implementation teams to be able to distinguish between the profitability of an industrial project for the investor and the benefits of the same project can have on the economy. Furthermore, he averred that the trainees numbering about 60 from different institutions across the nation, would learn the skills to measure and assess both the private and social costs and benefits of investment projects. “This is an important capability for the NIRP teams to acquire because the process of implementing the NIRP is one in which decisions need to be made about how to select and promote industrial projects.” In an interview with Vanguard, Engr. Omotanwa Awobokun of the Federal Ministry of Industry, Trade and Investment said NIRP was proactively designed to salvage Nigeria’s economy from its monolithic trend. The NIRP, Awobokun said, is a game changer for Nigeria to further deepen the promotion of diversification through effective exploitation of resources where the country has competitive and comparative advantage. She added that the NIRP was tagged the most ambitious and c o m p r e h e n s i v e industrialisation programme because it is based on the areas where Nigeria has competitive and comparative advantage such as automotive, garment, among others. Those sub-sectors, she noted, have been identified as areas where Nigeria can be number one in Africa and top 10 globally.

Vanguard, MONDAY, JUNE 8, 2015 — 25

Interview The advertiser then gets the feedback and alert that the advert has been accepted. So Vanguard’s job is to check that it conforms to its requirement

BY EBELE ORAKPO AND ROSEMARY ONUOHA

r. Kayode Shobajo is the Chief Executive Officer/Chief Technopreneur of Adplus Software Company Limited, a subsidiary of HIIT Plc. In this chat with Financial Vanguard, he talks about Adplus360, an online advert placement portal and how advert agents stand to benefit from the portal. Excerpts What is the portal all about? Adplus Software Company Limited is a subsidiary of HIIT and we have Adplus360 portal to which Vanguard has signed on. We recently trained Vanguard freelance advert agents on how to use the portal and we are happy with Vanguard. The Adplus360 portal enables all advertisers using IT via the internet to advertise in media houses that have signed up on Adplus portal. The adverts are prepaid and that’s crucial for media houses because of credit issue. As it is, we have trained all other relevant staff of Vanguard. Right now, Vanguard is running live on Adplus360. We have made several commercial adverts on banks through Adplus360. The freelancers are relevant because they are like agents to Adplus, meaning that in addition to using Adplus to advertise in Vanguard, they can equally advertise in other newspapers without going to their offices. It is not limited to freelancers alone, we have graduates who wish to do same. All they need do is go to www.adplus.ng/adp to register and they will become members after meeting the requirements. Then they can start operating despite the fact that they are not freelancers or agents to any newspaper. How long have you been in operation? Vanguard signed on late last year and we started commercially two months ago. Adplus360 is our own innovation and we own the patent. We have invested a lot of time and resources over the last six months, waiting for the environment to be right. It’s an ICT product and before now, people were not very comfortable with doing things online and payment solutions were not as friendly as they are today. So we had to wait for the buy-in of the society to attain the level it is right now. So, people are getting comfortable with digital ways of doing things. What challenges relating to advertising are you trying to address?

•Kayode Shobajo

Adplus360 will benefit advert agents more – Shobajo Before Adplus360 came on board, whoever wanted to advertise will have to call the Advert department of any media house, follow through with the people and look for how to pay. The client could possibly visit the office and all the physical movement associated with advertising in a media house. But as it is now, from your computer through Adplus360 portal, you can do all that. In as little as three to five minutes, you are done with your advert, pay the media house and they have accepted your advert as good to go. As soon as the media house accepts that the advert is good to go, the money moves to the media house and that’s why it’s prepayment. Otherwise if they owe me and I am sending advert to Vanguard, even Vanguard will not like it. What will be Vanguard’s gain? So now, without knowing Vanguard’s Advert manager for instance, I can go to

Adplus360 portal and send my advert from there. Let’s say that I am in Abuja or outside the country, and I go to Adplus portal to advertise and follow the process, in maximum of five minutes, I am done and Vanguard has its money. Let me give a simple scenario of the convenience that Adplus360 provides for people. For instance, if I want to do a change of name as a woman, I don’t have to call anybody. I will just go to Adsplus360, follow the process and it is done. I don’t even have to become an Adpluspreneur, which means an agent of Adplus360. So the problem we have solved is the clumsiness that was associated with the physical flow of things in advertising and people that want to put public notices in the papers getting to the media houses. Adplus360 serves all categories such as self- service users, our own agents whom we call Adpluspreneurs and

advert agencies including media houses. They can use the convenience of Adplus360 to get to media houses that have signed up with Adplus360. But right now, the significant media house that has signed up is Vanguard which is why we are bonding with Vanguard to say ‘Take advantage of this opportunity before others sign up.’ Vanguard has an advantage in Adplus360. All over the country and beyond, anybody that has access to the internet can go to www.adplus.ng and advertise in the paper. Vanguard by this very act, has offices anywhere there is internet access so the paper can advertise that it has offices all over the world now because internet is global and intensive. You may not be able to imagine the quantum of commercial activities Vanguard is going to have when that information goes public. Vanguard has now taken ownership. However, people are still looking and saying, ‘Adplus360, what will it do? Will it take our jobs? And so on.’ That is why we had to come and encourage the freelancers. We told them that it’s a change which time has come and they must just become part of it intelligently as against sitting on the wall and watching before other media houses sign up. We have limited number of targets, it is not as if it is open ended and everybody can become an agent of Adplus360 at anytime. We have a ceiling because we want it to be rewarding to those who joined first. We want them to know that they cannot wake up from their slumber at anytime and just join saying that after all, there are no closing barriers. How are adverts censored against libelous materials? Adplus360 does not take away the duty of Vanguard from Vanguard. Vanguard still accepts all its adverts. The way the technology is

designed is this, when I place my advert, the advert manager or the assistant gets an alert that somebody has placed an advert. They go to the portal themselves, either on their smart phones or their desktop, open and accept it. The advertiser then gets the feedback and alert that the advert has been accepted. So Vanguard’s job is to check that it conforms to its requirement. If it is an advert that needs certification, the person must equally upload such certificate which the advert manager or whoever is delegated to check and confirm that it is certified. So it is the job of Vanguard to accept. What the portal does is to process. If Vanguard does not accept, there is option to reject. So when you reject, you have to reject with a comment because if the advert gets back to me and there is no comment, I will think that it is a mistake. Until Vanguard accepts, the money will not digitally switch to Vanguard because they have not transacted any business. In cases where adverts or public notices could be libelous, Vanguard can allow us to activate her lawyer’s number in an email in a manner that he can open it and clear before advert people accept but that is subject to Vanguard policy. What they are doing right now is that they download it, consult the lawyer for his opinion before accepting it. We have a functionality to even let the lawyer see it first. If a public notice is of this nature, the first person that clears it will be the lawyer and then the advert manager does the general check. Won’t Adplus360 take away business from advert agents? Let’s understand the flow for adverts. There are three channels. Channel one is as a self- service, just like I am paying for my DSTV. I just go to a DSTV website and pull down the bouquet I want and off I go. But DSTV too still has agents and offices where I can go and pay if I choose. Now the freelancers are relevant to our second channel which is the window we opened for agents. Instead of making them lose their jobs, we are expanding their opportunities because they don’t need to be agents or freelancers of Vanguard alone, they can be that of other newspapers when the media houses sign up. The advantage is that they don’t have to be coming to Vanguard office everyday because once you get the job, you log into the portal and process it and you pay the money upfront. And Vanguard gets her money and you get yours. Some of the concerns of advert agents are about instances where advert clients won’t pay upfront.

26 — Vanguard, MONDAY, JUNE 8, 2015

Banking & Finance By YINKA KOLAWOLE

hen Mr. Godwin Emefiele became the Governor of the Central Bank of Nigeria (CBN) on June 3, 2014, there was visible pressure on the Naira as well as a decline in the country’s foreign reserves. Vision n assumption of office, Emefiele unveiled his vision for the Nigerian financial sector. This include: Pursuing gradual reduction in key interest rates, and include unemployment rate in monetary policy decisions; maintain exchange rate stability and aggressively shore up foreign exchange reserves; and building sector-specific expertise in banking supervision to reflect loan concentration of the banking industry. Others are: Abolishing fees associated with limits on deposits and reconsider ongoing practice in which all fees associated with limits on withdrawals accrue to banks alone; introducing a broad spectrum of financial instruments to boost specific enterprise areas in agriculture, manufacturing, health, and oil and gas.

Achievements n spite of the challenges, chief of which has been the fall in the global price of crude oil, Emefiele and his team at the CBN, within the past 12 months, have recorded notable milestones.

Financial System Stability: Within the past one year, CBN has regulated operations of Bureaux de Change (BDCs) to check rent-seeking among operators, depletion of the nation’s foreign reserves, unauthorized financial transactions, and dollarizing the economy, among others. For instance, out of 130 BDCs sampled based on volume of purchase from banks, as at the time of the reforms, the Bank found 121 BDCs, representing 93 percent, to be in breach of the objectives and provisions of its guidelines. Bank Supervision: owards achieving the mandate of ensuring safety and soundness of the financial system, CBN conducted a Risk-Based examination of all banks with High and Above Average Composite Risk Rating in June 2014 and those with Moderate and Low Composite Risk Rating in

Emefiele, one year in the CBN saddle September 2014. It also carried out the Foreign Exchange Examination of all banks in September 2014 as well as the routine examination of all discount houses and financial holding companies in October 2014. In January 2015, it carried out the Risk Asset Examination of 24 banks as at December 31, 2014. Within the period, CBN commenced the implementation of the BASEL II Accord aimed at promoting financial system stability by ensuring that banks are adequately capitalized and have enhanced risk management systems.

Consumer Protection: he bank has within the period facilitated the refund of more than N4.01 billion to bank customers based on complaints resolved and directives communicated to them following the Consumer Compliance Examinations and a spotcheck conducted on the banks. It concluded full deployment of the Consumer Complaint Management System (CCMS) with the migration of all banks to the live platform of the system.

of beneficiaries being women, while N30.31 million has been accessed by 292 People Living with Disabilities (PLWD) Banking and Payments System n conjunction with the office of the Accountant General of the Federation (OAGF), ecollection element of the Treasury Single Account (TSA) took off on March 1, 2015. This ensures real time remittance of government receipts directly into the Consolidated Revenue Fund Account (CRF) to enthrone transparency and accountability in management of government receivables, and promotes effective monetary policy and reduces cost of liquidity management borne by the bank. Removal of charges on cash deposits was also introduced to encourage flow of deposits to DMBs.

Other Financial Institutions: he reform of the BDC segment of the Foreign Exchange Market was concluded on 31st July, 2014, resulting in 2,501 BDCs with caution deposits and capital base of N35 million each. The bank issued a final licence to the National Mortgage and Re-financing Company (NMRC) to commence operation in 2015 under the Housing Fund Programme (NHFP). It carried out further reforms of Primary Mortgage Banks (PMBs), with 32 PMBs fully capitalized as at June 30, 2014 while 10 were in the category given up to December 31, 2014. Licences of 21 PMBs which failed to recapitalize or had remained technically insolvent were revoked. It also partnered with the Federal Government and Development Partners to midwife the Development Bank of Nigeria that is envisaged to address the paucity of low interest and long-term funding for MSMEs in Nigeria.

Godwin Emefiele, CBN Governor

developmental financing initiatives of the bank. New schemes and interventions

Development Financing n his maiden remarks, the CBN Governor pledged to reposition the

CBN has within the period facilitated the refund of more than N4.01 billion to bank customers based on complaints resolved

introduced to complement the existing ones include: N300 billion Real Sector Support Fund (RSSF) established to help unlock the potential of the real sector to engender output growth, value added productivity and job creation. N152 billion has been approved for five projects under RSSF; N213 billion Nigerian Electricity Market Stabilisation Facility (NEMSF) aimed at settling certain outstanding debts in the Nigerian Electricity Supply Industry (NESI). N56.68 billion has been disbursed to five generating and five distribution companies under the scheme. Under existing schemes and intervention programmes, the Commercial Agricultural Credit Scheme (CACS) guidelines were reviewed to enable DMBs assess the fund at 2 percent from CBN and lend at an all-inclusive interest rate of 9 percent with a spread of 7 percent. Expiration of the scheme has been extended from 2016 to 2025. Also, disbursement of funds under the Micro, Small and Medium Enterprises Development Fund (MSMEDF was formally flagged-off in 2014. N43.57 billion has so far been disbursed, with 61.6 percent

Reserve Management ollowing the sharp decline in global oil prices and the resultant fall in the country ’s foreign exchange earnings, there was a widening margin between the rates in the interbank and the rDAS window, thus engendering undesirable practices including roundtripping, speculative demand, rent-seeking, spurious demand, and inefficient use of scarce foreign exchange resources by economic agents. CBN closed the rDAS/wDAS foreign exchange window at the bank in order to check further pressure on the country’s foreign exchange, avert the emergence of a multiple exchange rate regime and preserve the country’s foreign exchange reserves.

Looking Ahead summary of Emefiele’s performance in the past one year indicates that he and his team have ensured stability in the sector, in spite of global and domestic challenges. Analysts agree that the bank under his watch is on the right track to guaranteeing the soundness and stability of the Nigerian financial system. Going forward, it is hoped that, working closely with the fiscal authorities, CBN under Emefiele will continue to achieve its mandate.

Vanguard, MONDAY, JUNE 8, 2015 — 27

28 — Vanguard, MONDAY, JUNE 8, 2015

Corporate Finance

SEC approves par value rule for stock to trade at 1 kobo

he Securities and Exchange Commission, SEC has approved the revision of the minimum price (Price floor) for any given stock traded on the floor of the Nigerian Stock Exchange, NSE. Vanguard, gathered that the commission has on 2 June 2015, approved the Par Value Rule submitted to it by the National Council of The Nigerian Stock Exchange (NSE) on 5 March 2015. This is sequel to the draft Rule submitted (for stakeholders’ comment) by the Rules and Adjudication Committee of Council of the NSE on 21 October 2014. The Rule states that “notwithstanding its par value, the price of every share listed on the exchange shall be determined by the market, save that no share shall trade below a price floor of one Kobo per unit (N0.01)”.

Ecobank Rapid Transfer declared ‘Best Remittance Product' in Africa BY JONAH NWOKPOKU

cobank Rapid Transfer has been named the winner of the Best Remittance Product in Africa at The Asian Banker’s 2nd Annual Middle East and Africa Awards held at the Ritz Carlton, DIFC, Dubai, United Arab Emirates (UAE). The Asian Banker provides information for the financial services industry in the form of publications, online materials such as enewsletters, research, and conventions, and other industry gatherings. It is regarded as one of the Asian region’s leading consultancies in financial services research, benchmarking and intelligence. Kingsley Umadia, Executive Director, South South/South East, Ecobank Nigeria, said the award was well deserved, as Ecobank has taken remittance business to higher level on the continent. “As a Bank, We are proud to offer the best in remittance product on the continent. We will continue to strive to remain the best and surpass customers’ expectations at all times.”He explained that the Rapid Transfer, one of Ecobank’s Remittance products has achieved tremendous success.

Unilever set to raise equity stake as offer extends to June 25 the topline as prices have been kept relatively flattish year-on-year (y/y),” Olajumoke Okeowo and Uwadiae Osadiaye, both analysts at Lagos-based FBN Capital Limited, said in their first reaction to Unilever Nigeria Q1’15 numbers. According to the Analysts “Unabated insecurity challenges in the North and increased competition in the calmer southern markets mean that consumer good companies cannot readily pass on higher costs to consumers for fear of loss of market share. However, we await management’s comments on this.”

Stories by PETER EGWUATU

nilever Overseas Holdings B.V. has indicated interest in increasing its equity stake in Unilever Nigeria Plc from 50.04 per cent up to a maximum of 75 per cent and has made a tender offer to individual shareholders of Unilever Nigeria. Vanguard gathered that the offer initially scheduled to close June 10, 2015 has been extended to June 25, 2015 to enable more shareholders take effective decision that would see the company expands its operations. Under the terms of the offer, it was gathered that Unilever Overseas is seeking to acquire up to 942,215,930 shares in the company at ¦ 45.50 per share in cash (the “offer price”). “This is not a mandatory takeover bid as shareholders who are willing to sell can voluntarily do so” Unilever noted. The offer price represents a premium of 33.8 per cent to the company’s closing share price on 23 March 2015, the day prior to Unilever Overseas announcing its intention to make the Offer, and a premium of 33.2 per cent to the 3 month Volume Weighted Average share price as at the same date. The total value of the transaction at the intended Offer Price is approximately ¦ 42.871 billion (€192.6 million at prevailing exchange rates).

Regulatory and Advisers approvals The Directors of Unilever Nigeria, who have been advised by FBN Capital Limited, consider the terms of the Offer to be fair and reasonable from a financial point of view, to the other shareholders of Unilever Nigeria Plc. The offer was approved by the Securities and Exchange Commission and the Nigerian Stock Exchange and is subject to the conditions and other terms set out in the announcement and to the full terms and conditions which was set out in the formal Offer document. Citigroup Global Markets Limited and Chapel Hill Advisory Partners Limited are acting as financial advisers to Unilever Overseas. The proposed move will see Unilever Overseas up its equity stake in the Nigeria business from 50.04 per cent up to a maximum of 75 per cent, with the aim to continue

MD, Unilever Nigeria, Mr. Yaw Nsarkoh, to maintain the company’s listing on the Nigerian Stock Exchange as well. If accepted at the maximum level, the value of the deal could reach €200 million (based on prevailing foreign exchange rates). Bruno Witvoet, Executive Vice President of Unilever Africa said: “This Proposal demonstrates our commitment to the Unilever Nigeria business and confidence in the long-term growth prospects of the company and consumer goods sector in Nigeria.” Meanwhile, ass the closing date of the offer draws nearer, market analysts are of the view that Nigerian shareholders are likely to part with some volume of their shares to benefit from the offer and take advantage of the liquidity opportunity it portends to them. Analysts have also said that the Offer would provide shareholders who wish to sell some or all of their shares in Unilever Nigeria the opportunity to do so. Unilever is one of the world’s leading manufacturers of Food, Home and Personal Care products with sales in over 190 countries. Unilever products are present in 7 out of 10 homes globally and are used by over 2 billion people on a daily basis. Unilever employs 171,000 people around the world and generate annual sales of over €50 billion. Over half of the company’s footprints are in the fast growing developing and emerging markets (56% in 2011). Company’s portfolio includes some of the world’s best known brands such as Knorr, Persil , Dove, Hellmann’s, TRESemmé, Lipton, Sure, Wall’s and Lynx.

Unilever has stated that it will grow its business in Nigeria and continue its long term commitment in African markets. Unilever Overseas has no intention of delisting from the Nigerian Stock Exchange.

Financial performance both full year and first quarter Unilever Nigeria reported 21 percent decline in first quarter (Q1) 2015 Profit Before Tax (PBT) to N864.742 million from N1.089 billion in Q1, 2014. Also, Profit After Tax (PAT) declined by 21 percent to N590.448 million from N750.629 million in the corresponding quarter of 2014. “The sales growth is the first time in five quarters Unilever’s topline has shown any meaningful growth. We believe unit volume growth was the principal driver for

This is not a mandatory takeover bid as shareholders who are willing to sell can voluntarily do so

S h a r e h o l d e r s endorsement of dividend Meanwhile, shareholders of Unilever Nigeria recently unanimously approved the 10 kobo dividend per share proposed by its Board of Directors, even as they lament over high cost of borrowing from the banks. The shareholders at the 90th Annual General Meeting, AGM approved a total payout of N378.3 million dividend for the financial year ended December 31, 2014. Speaking at the AGM, shareholders commended the company for declaring divided, even as they seek for higher dividends in the next financial year. According to them “We really pity the manufacturing industry for the turbulent business environment they operate upon. Nevertheless, we advise the Board to reduce the high cost of carrying out its business. Expenses like marketing, administrative etc should be reduced. We are not happy that the company is spending so much servicing loans from the banks. Instead of borrowing from banks at high interest rate the company can seek fresh funds from the existing shareholders.” In his remarks at the meeting, Managing Director, Unilever Nigeria Plc, Mr. Yaw Nsarkoh said “We really appreciate the contribution of the shareholders and are doing everything possible to reduce cost. It is evident that the business environment will be more daunting in 2015, but we will remain focused on our priorities to satisfy our consumers. We are committed to stay and invest in Nigeria. Our ambition is to continue to deliver value to all our stakeholders and positively affect our communities by leveraging on the Unilever Sustainable Living Plan.”

Vanguard, MONDAY, JUNE 8, 2015 — 29

Corporate Finance

Value of govt bonds drops by 60.2% By PETER EGWUATU

he value of government’s traded bonds at the secondary market on the Nigerian Stock Exchange, NSE declined by 60.2 per cent, indicating lower patronage when compared to the equity transactions. Specifically, a total of 14,817 units of Federal Government Bonds valued at N17.586 million were traded last week in 5 deals compared with a total of 64,465 units of Federal and State Government Bonds valued at N69.372 million traded in 7 deals penultimate week. The NSE All-Share Index and market capitalization depreciated by 1.88 per cent and 1.44 per cent to close last Friday at 33,664.91 points and N11.491 trillion respectively. Similarly, four indices finished lower during the week under review, while NSE Consumer Goods, NSE Lotus II, NSE Industrial Goods Indices closed higher by 0.08 per cent , 0.37 per cent , and 0.16 per cent

respectively. However, the NSE ASeM index closed flat. A turnover of 1.221 billion shares worth N16.964 billion in 19,847 deals were traded last week by investors on the floor of the exchange in contrast to a total of 1.799 billion shares valued at N22.105 billion that exchanged hands penultimate week in 17,337 deals. The Financial Services Industry (measured by

volume) led the activity chart with 935.233 million shares valued at N9.258 billion traded in 11,066 deals; thus contributing 76.58 per cent and 54.58 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with a turnover of 77.298 million shares worth N5.048 billion in 3,144 deals. The third place was occupied by the Conglomerates Industry with 47.348 million

shares worth N228.761 million in 1,182 deals. Trading in the Top Three Equities namely – Zenith International Bank Plc, Diamond Bank Plc and United Bank for Africa Plc., (measured by volume) accounted for 357.004 million shares worth N4.033 billion in 3,021 deals, contributing 29.23% and 23.77 per cent to the total equity turnover volume and value respectively.

AGM - From left: Director, Propertygate Development and Investment Plc, Mr. Wole Ogungbola; Managing Director and Chief Executive Officer, Mr. Adetokunbo Ajayi and Company Secretary, Mrs. Tosin Aarinola, during the company’s 6th Annual General Meeting in Lagos

Lafarge Africa wins CAC compliance award

afarge Africa Plc has been awarded the Best Complying Company of the Year 2014 by the Corporate Affairs Commission.. The award, which has to do with the extensive compliance requirements of the Companies and Allied matters Act and industry regulations by the commission, and is in recognition of the company’s commitment to operating with the highest ethical standards on consistent basis was presented at the Commission’s annual corporate citizens’ award held in Abuja recently. According to the Chairman, CAC Board of Directors, Mr. Funso Lawal, the rationale for the award is to recognize performance and reward corporate excellence among companies operating in Nigeria, with the ultimate goal of improving the country’s rating in the global competitiveness index.To be eligible for consideration, companies must have complied with the requirements of the Companies and Allied Matters Act and respective industry statutes and regulations. In addition, the companies must impact on their respective industries positively through credible performance in corporate social responsibility.

Fidelity Bank pledges commitment to efficient trade transactions By JONAH NWOKPOKU

anaging Director/Chief Executive Officer, Fidelity Bank Plc, Nnamdi Okonkwo, has reiterated the bank’s commitment to efficient processing of trade transactions. He made the pledge during the presentation of the 2014 Straight Through Processing, STP award to the bank by Deutsche Bank, where the bank emerged the second runner up in the STP category. Commenting on the award, he said: “This is an award for efficient processing of transactions. It is just a testament of the improvement fidelity bank has been making concerning how we process our trade transactions. This is the fifth time that we will be coming up here for this award and we are very pleased that each year we get nominated and we either win or come second. We will continue to do even better to delight our customers. We have won it a few times and next year we believe we will again. What this means

to us is that somebody is recognising the efficiency in our processing of trade transactions in Fidelity bank. “ Also speaking, Executive Director, Shared Services, Fidelity Bank, Ugochukwu Chijioke said: “We are very happy to feature in this edition of the award. It means a great deal to us at Fidelity bank. To work hard and do well is one thing but to be internationally recognised is a different ball game entirely. This is like the Olympics of recognition in STP awards and Fidelity is always on top of it.” Earlier in a welcome address, Deputy Country Head, Deutsche Bank AG Lagos, Mrs. Adeola Azeez said noted that 2014 was a tough year for most financial institutions and that it is in the midst of such challenges that the Bank is recognising the achievements of the correspondent banking space despite the challenges. She said: “We celebrate our partners for achieving the STP rates between 97 and 100 per cent. You have all achieved over 99 per cent STP rate.” C M Y K

30 — Vanguard, MONDAY, JUNE 8, 2015

Homes & Housing

Two mortgage banks conclude merger deal Lagos HOMS: 42 new homeowners emerge

ourty-two new h o m e o w n e r s emerged in the May edition of the Lagos State Home Ownership Mortgage Scheme (Lagos HOMS). Mr. Akinola Kojo-Sagoe, Chief Executive Officer of Lagos Mortgage Board (LMB), organisers of the monthly draw, said since the scheme began in March 2014, more than 400 winners who have completed the necessary documentation, had received the keys to their apartments across the state. Kojo-Sagoe noted that 80 applications were received for the May draw, 60 people were pre-qualified and 20 applications were declined due to improper documentation; while 12 housing schemes were available for the draw. The schemes are Alhaja Adetoun Mustapha and Olaitan Mustapha estates in Ojokoro; Sotonwa and Oba Adeboruwa estates in Ikorodu; Sir Michael Otedola Estate in Epe; Chief Anthony Enahoro Estate, SchemesI and II in Ogba; Igando Gardens in Alimosho; Chios Gardens in Lekki-Ajah; Mushin Scheme and Sangotedo Scheme in Ajah.

Police to build 6000 houses for junior officers

he Inspector-General of Police (IGP), Mr Solomon Arase, has mandated the Police Works Department of the Force to build 6000 units of modern houses for the rank and file personnel. Arase gave the mandate at a one-day workshop held for officers of the department in Abuja, noting however, that corrupt officers would not benefit from the project. The IGP said 500 units of the houses should be located in each of the 12 Police Zonal Commands across the nation. He mandated the department to complete the houses in six months, adding that it was part of efforts to improve the welfare of junior officers He decried shoddy projects carried out in the past for the force by some building developers at high costs, adding that the new initiative should be driven by the relevant professional expertise in the force. “Upon completion, a unit of two bedroom flat will be delivered to officers at a cost not above N4 million as materials will be sourced directly from manufacturers. C M Y K

Stories by YINKA KOLAWOLE, with agency report

n line with ongoing reforms in the mortgage sector which pegged minimum capital requirement for state operations at N2.5 billion, Spring Mortgage Plc and United Mortgage Limited have concluded agreements to merge. The merger deal was disclosed at a court-ordered meeting with stakeholders held in Lagos recently. Managing Director/CEO, United Mortgage, Mr. Walter

Akpani, remarked at the meeting that the merger will enable both firms to meet the stipulated capital requirement by the Central Bank of Nigeria (CBN). The two firms had on April 24, 2014, signed a Memorandum of Understanding in relation to the merger scheme. The scheme which had been cleared by the Approval-InPrinciple received from the SEC was presented for consideration and approval of shareholders at the CourtOrdered Meeting on May 21, 2015. Shareholders of both companies voted to support to support the merger. The new

entity, after regulatory approvals of the CBN and the Securities Exchange Commission (SEC) will be renamed United Mortgage Bank Plc and would result in merging of both business into one. Akpani noted that the merger would also lead to creating a bigger firm that will be able to compete effectively within the mortgage industry, improve operational efficiencies as a result of cost savings and improve capital base among other reasons. “The merger will provide a strong financial muscle to the post-merger United Mortgage

•High-end housing estate

in executing bigger mandates. It is worth mentioning that United Mortgage currently owns 47.87 per cent in Spring Mortgage Plc. It is against this background that the proposed merger is conceived, with the aim of consolidating the mortgage business of both firms. The Directors of both companies are of the opinion that this merger will improve the business of the postmerger United Mortgage and create additional value for the shareholders of the postmerger bank. The Scheme is set to be achieved by the transfer of the assets, liabilities and undertakings of Spring Mortgage to United Mortgage, in exchange for which ordinary shares of United Mortgage will be issued to the other shareholders of Spring Mortgage in the agreed manner,” he stated It would be recalled that the CBN had in a circular stated that 10 primary mortgage banks (PMBs) had met the N5 billion requirement to operate as national mortgage banks while 26 met the N2.5 billion mark for state mortgage banks. The apex however noted that four out of the 26 PMBs had properties held for sale, which they were yet to fully dispose off or create mortgages for. It further disclosed that about four PMBs were still in different stages of merger arrangements.

Avoiding scams in real estate transactions

eal estate transactions involve the leasing, renting, buying or selling of property and is viewed as a very profitable venture. Unfortunately, scams and frauds are a common feature within the sector. This is largely due to the fact that most people are not knowledgeable or versatile about real estate transactions and often require the help of a third party. They trust the third party to do justice to their investment and fail to conduct proper and adequate due diligence themselves. Also, another reason people get conned is when they want to cash in on an ‘opportunity of a lifetime’ and are quick to invest in what is probably a hoax which once again pinpoints the fact that due diligence is important. Although circumstances surrounding every transaction can be different, there are red flags you should watch out for to ensure you

are making the right investment and not being duped. Lamudi Nigeria, a real estate market place that offers online property listings, listed the following as some of the red flags to watch out for in real estate transactions. Pressure for quick payment Be wary when agents or sellers tell you the property will be out of the market if you don’t pay up immediately. They make you believe other buyers are interested and put you under unnecessary pressure, cajoling you to pay so as to take possession of the property before other people do. What this does is that it doesn’t give you time to investigate the property properly and ensure it is genuine. Whoever else might be interested in the property, don’t be in a rush. Insistence on cash payment When an agent or seller insists you pay in cash, there may be trouble. Most fraudulent sellers take this

route to avoid being traced. Whether the person is a friend, family or acquaintance, insist on doing the transaction through a reputable bank for record purposes. This gives you leverage in case there are problems later and can be used as evidence in court. For no reason should you pay an agent in cash, whether partial instalment or the full amount. You might end up not seeing your money as well as your property. Inability to view document If you are unable to view the documents of the property, don’t go ahead. Take a pause and hold off the purchase. It is possible the person selling to you isn’t the owner so insist on seeing all the necessary documents before cash exchange hands. Even when you have been shown the documents, it is in your best interest to verify them and be sure they are genuine before making any

commitment. No independent scrutiny An agent or seller that refuses to allow you bring in your own experts to survey the property is up to no good. It is in your best interest not to progress with the purchase of such a property until you get your way. Don’t be fooled if the agent tells you he is a surveyor or can give you a proper assessment of the property. There is no way you can verify the authenticity of the person so it’s better to be on a safe side and bring in someone neutral, preferably, someone you know and can verify his or her integrity. Fenced property Check and double check again when you are being sold a property, especially a landed property, which is already fenced. Don’t be over excited that you don’t have to pay for the cost of fencing and quickly pay up.

Vanguard, MONDAY, JUNE 8, 2015 — 31

Insurance

Value added tax (VAT) in Nigeria (II) directly for resale and good which form the stock-in trade used for direct production of any new product on which the output tax is charged.

PRESENTATION - Acting Executive Chairman, Federal Inland Revenue Service, Mr. Samuel Ogungbesan presenting an FIRS Tax information pack to Mr. Chidi Ajaegbu, ICAN President during his visit to FIRS recently in Abuja.

ll goods and services are ‘VATable’, except those that are exempted under schedule 1 of the Act. These are: Goods Exempted All medical and pharmaceutical products, Basic food items, Books and educational materials, Baby products, Fertilizer, locally produced agricultural and veterinary medicine, farming machinery, and farming transportation equipment All exports Plant and machinery imported for use in the Export Processing Zone Plant, machinery and equipment purchased for utilisation of gas in downstream petroleum operations. Tractors, ploughs, and agricultural equipment and implements purchased for agricultural purposes Services Exempted Medical services, Services rendered by community banks, People’s Bank and mortgage institutions, Plays and performances conducted by educational institutions as part of learning. All export services. Note also: Exports are zero rated. VAT is leviable at the time of supply of goods and services. VAT paid on inputs are creditable against output tax.Tax returns are to be submitted on monthly basis. Administration of VAT The tax shall be administered and managed by the Federal Board of Inland Revenue (in this Act, referred to as “the Board”) Registration A taxable person shall

within six (6) months of commencement of this Act or within six (6) months of commencement of business, whichever is earlier register with the Board for the purpose of this Act Registration by government ministries, etc as agents of the Board Every government ministry statutory body and other agency of government shall register as agent of the Board for purpose of collection of tax under this Act. Every contractor transacting business with a government ministry, statutory body and other agency of federal state or local government shall produce evidence of registration with the Board as a condition for obtaining a contract. Registration by nonresident companies A non-resident company that carries on business in Nigeria shall register for the tax with the Board using the address of the person with whom it has a subsisting contract as its address for purposes of correspondence relating to the tax. Records and Accounts A registered person under shall keep such records and books of all transactions, operations imports and other activities relating to taxable goods and services as are sufficient to determine the correct amount of tax due under the Act. Offences by law

Furnishing false documents, Evasion of tax, Failure to make attribution Failure to notify change of address, Failure to issue tax invoice, Resisting authorised officers, Issuing tax invoice by unauthorized person, Failure to register, Failure to keep proper books and accounts Failure to collect tax, Failure to submit returns, Aiding and abetting commission of offence Offences by body corporate. Explanation of Some Terms in VAT Taxable Goods and Services The Act says the tax shall be charged and payable on the supply of all goods and services (in this Act referred to as “taxable goods and services”) other than those goods and services listed in the First schedule to this Act. Allowable Input Tax The input tax to be allowed as deductions from the output tax shall be limited to the tax on goods purchased or imported

You don't register for VAT or reclaim the VAT on your purchases if you sell only exempt goods or services

This means input tax on: Any overhead, service and general administration cannot be charged as input tax but expended through the profit and loss account On capital item and asset too should be capitalized along with the cost of the item and asset. Distribution of Revenue: 15% Federal Government. 50% States Government & FCT, Abuja. 35% Local Governments. Input Tax: Tax charged on purchases made Output Tax: Tax charged on sales made Taxable Person Means a person who independently carries out in any place any economic activity as a producer, wholesale trader, supplier of goods, supplier of services or person exploiting tangible or intangible property for the purpose of obtaining income therefrom by way of trade or business and includes a person and an agency of government acting in that capacity. Zero rated goods If you sell zero-rated goods or services, they count as taxable supplies, but you don’t add any VAT to your selling price because the VAT rate is 0 per cent. Thus while no VAT is charged on providing goods and services taxable at zero-rate of VAT, you are still able to deduct VAT on costs and expenses you incur in making zero-rated supplies. Examples are (1) all non-oil exports (2) goods and services purchased by diplomats (3) goods and services purchased for use in humanitarian donor funded projects Exempted Goods/Services If you sell goods or services that are exempt, you don’t charge any VAT and they are not taxable supplies. This means that you won’t normally be able to reclaim any of the VAT on your expenses. Generally, you don’t register for VAT or reclaim the VAT on your purchases if you sell only exempt goods or services. In this case you may not be able to reclaim the VAT on all your purchases

Resort designs account to help young employees

esort Savings and Loans Plc has designed an account for young Nigerians who have just secured employment to help them secure their future housing needs called Resort Early Home Owners account, the organization in a statement by its Head of Business Development Mr. Yemi Popoola said the product will assist in bridging the housing deficit in Nigeria. To benefit from this new product; customers of the bank should be between the ages of 25 and 40 who have had a banking relationship of six months with the bank and who has a minimum balance of N50,000. Beneficiaries of the loan under this platform according to the statement are entitled to a mortgage loan amount with the equity contribution of N30 percent depending on the loan being sought for. The loan tenor is put at 10 years. The statement reads further that the product is specifically designed to help those who are just starting off in a salary job so as to help them with a future plan to have their own accommodation. ”What we have found out is that many young people don’t plan for their housing needs and they end up being thrown out from their residence because of their inability to pay."

Oil prices rise after OPEC keeps low output target

il prices rose on Friday, breaking a two-day losing streak, after OPEC ministers kept their existing oil production target for another six months at a level below current output. The12-member group agreed on the deal at OPEC’s biannual ministerial meeting in Vienna. Saudi Arabia’s oil minister Ali al-Naimi said the 12-member group had agreed to maintain their production target at 30 million barrels per day (bpd). The Organisation of the Petroleum Exporting Countries (OPEC) had rolled over its target, he said. OPEC has been pumping over 31.2 million bpd in recent weeks. Brent crude oil for July LCOc1 rose 80 cents to a high of $62.83 before easing back to around $62.40 while U.S. crude futures CLc1 were up 30 cents at $58.30. C M Y K

32 — Vanguard, MONDAY, JUNE 8, 2015

Interview

80% of online jobs in Nigeria are frauds – NIYI T

ope Niyi is the Head of Marketing and Products Development of Nigeria’s online job portal, Careers24. In this exclusive interview with JONAH NWOKPOKU, he argues that most of the online jobs in Nigeria are from scammers looking to exploit desperate job seekers. He also spoke on Careers24's growth, market strategies and how job seekers can successfully explore the online job market to boost chances of employment. Excerpts Careers24 has been in Nigeria’s online job market for the past one year, what has your experience been and what is your general assessment of the online job market in Nigeria? Our experience for the past one year has been a good one. We have seen a growth in our business and for a business that is still very young; the growth has been encouraging to our investors. When we came on board, our job stock was standing at about a thousand jobs, and we were projecting five thousand available vacancies which seemed an impossible task at the time but today we average about 11, 000 vacancies. In terms of visit also, we have noticed that over the past few months the number of people applying for jobs through our platform has increased to about 1,500 a day. That is huge growth for us, seeing that applications have gone up and that people are really applying for jobs. The number of our job stock has gone up which are good indicators of growth for us but these are still early days but we are seeing the kind of growth which we want to see at this stage. What we have seen is that there are a lot of people looking for jobs. We have also found out that the jobs that are available in the market are jobs that require certain expertise or years of experience. We do not get to see a lot of jobs for entry levels. And if you look at the job pool, there is h i g h number of people leaving school every day, millions of t h e m , w h o cannot seem to find that first job that will enable them to get the required experience and then apply for t h o s e experienced jobs. We

We have found out that the jobs that are available in the market are jobs that require certain expertise or years of experience

have also found that maybe it is also about the young graduates coming out of school, and then have too high expectations about the job market. There are people who just finished school and expect C M Y K

to start earning big money. They want the best jobs. The oil companies cannot employ everybody. The banking sector is not what it used to be in terms of employment. So you find these high

•Tope Niyi expectations and the reality is that the people that hire the largest numbers of entry level employees are the small and medium enterprises, SMEs and they cannot afford to pay the huge salaries that big and multinational corporations can afford to pay. With the goal of beating the main player in the job market in Nigeria, have you made any significant progress in this direction? To be honest, we are still a long way from getting there in terms of brand recognition. This year we ran a major campaign on television and radio. This has really helped to boost our image and brand equity in the marketplace. If you remember, Jobberman has over five years’ head start. It is going to take time to catch up with Jobberman. But for us, beyond catching up with competition, one of the most important things for us and the reason why we are doing what we are doing is that we want to give recruiters and job seekers value. That is really important to us. Its always a game of numbers. In

a marketplace, there is always going to be a number one and number two. Our job is going to be to increase the number of people who are using our platform and increase the kind of value satisfaction they get while using the platform. In what significant ways has your entry into the online job market affected the online job space in Nigeria? With our entry, people now have more than one option to search for jobs. Secondly it has helped to shine some lights about the opportunities in the space for other interested investors. For instance, Rocket Internet is looking to launch a job portal in Cameroun, which we know will eventually be in Nigeria because of their heavy presence in the country already. Are there any new innovations you have brought to the table besides posting jobs online as everyone else is doing? For us as Careers24, the way we look at this business is that we believe, as reflected in our name, in the careers of

individuals who subscribe to our platforms. We believe that we want to be able to hold your hands through your career growth. We believe that an entry level worker would not always be entry level. So we believe that if we are able to assist you grow in your career growth, you would always come to us first. So one of the key things we are saying is, what kind of value can we give you in this timeline that you have, from the beginning to the end of your career? How can Careers24 come in? One of the major things that we are doing now is that we are also providing career advice, at whatever level that you find yourself. So there is advice for graduates, engineers, finance, technology, managers, and entrepreneurs on our website. For usability, we have also divided the site into verticals. Currently we have six verticals. These include: Graduates, Engineering, Finance, Tech, Office, so that when one visits the site, it will take you the page for the advice most

Vanguard, MONDAY, JUNE 8, 2015 — 33

Interview suitable to one’s needs. These pieces of advice revolve around what you need to do if you have just gotten a job, what to do on the job and how to grow your career on the job. So, there are lots of resources currently on the site because we believe that career portals shouldn’t just be a place where people apply for jobs only. It should be a place where people get useful career advice as well, no matter the circumstances one finds oneself in a current work life. The online job space has become an attractive platform for fraudsters, what has been your experience and what have you done to combat the challenge? At the time that Careers24 launched, it was being handled from South Africa. So what the team in South Africa did was to Google the email addresses of those recruiters who want to recruit through the platform. But when we came on board, we realised that a lot of those recruiters were actually fraudulent recruiters. I can tell you that out of a hundred jobs that are sent to us by recruiters in a day, about 80 per cent of that are fraudulent jobs. So what we did was to build a system where every job that comes on our site goes through a fraud proof registration process. This gives us access to the details of our potential recruiters so that we can verify that the job is genuine. For example, someone says Shell is recruiting, and says send your CV to Shell@gmail.com. Immediately you see that, you

Online solution providers should be able to deploy tighter measures to reduce the incidents of fraud

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will realise it is a scam because a company like Shell should probably have emails like HR@shell.com. Generally we have little tolerance for scam, so even if it looks right, you still have to prove to us that it is right. Apart from that, we have a way of taking it further. We said because it is Nigeria and there is this problem of scam, we are going to ensure that we call every recruiter that puts a job on the site. This is possible since the job doesn’t go live once it is submitted for posting on our site. So the team at the backend that sees the job before it goes live calls the recruiter to actually verify the submission. Can you share any instance where you successfully detected and pulled down fraudulent job scam? There are lot of things that help us to detect scam. First is salary, because as a recruiter, you are meant to put the salary range of how much you are meant to pay. So as SME, a company that we have never heard before, you would naturally put a salary range that is low, maybe less than N100, 000 a month. But there was this instance when all of a sudden we began to see a salary range of up to N900, 000 and for a business one has never heard before. So we flagged that and then Googled their email to see if they have put their jobs on other websites, and they had done that. So we looked at the salary range which they have put there and they were all different for that same job. On one job portal, it was N1.5m and on another portal, it was N900, 000 and then on another, it was N600, 000. Immediately we saw that, we called the company and they argued that it was genuine and that it was a mistake from the person who inputted the data. But we also noticed that the company does not even have a website for us to see that it is a company that can afford to pay that kind of salary. So at the end of the day, we took off the job completely from our site because they did not prove beyond reasonable doubt that the job was not a fraud. But why do you not go further by reporting these cases to the police? To be honest with you, we have not started doing that. We have not gone to the authorities because we do not allow the fraud to be perpetrated. We try to shut them down in the process because we believe that if we can reduce those kinds of people that come to our

platform, we can protect job seekers from falling prey to such schemes. I am sure that getting the police involved is something that we will look into. Also we also have scam alert mechanism on our website. It is a spam flag, that our users are expected to click on when they encounter suspicious job post. This is for cases where fraudulent jobs are able to pull through without it being detected by our team. This helps us to follow up on the company and verify the authenticity of their posts. And then in cases where the company has made a fraudulent post, we blacklist the company. What can be done about the impact of fraud on the growth of the online job space in Nigeria? I think the onus is on us the players in this market to educate the job seekers. I believe that a lot of times, these frauds occur because of the desperation on the part of the job seekers. For example, there is this popular scam that happens all the time with the oil companies where applicants are told to pay some money to somebody that will get them into the test room for maybe Shell or Chevron. But the truth is that applicants must never pay for a job. They should never pay for either the test or the j o b i n t e r v i e w. There are a l w a y s processes for h i r i n g especially when it comes to big companies. And there is no big company that will ask you to pay money to write a test or to come for an i n t e r v i e w. The other one is that the moment anyone tells you to send y o u r information via SMS, you should know it is a fraud. Any genuine recruiter will ask for your CV. He will not ask you to send your n a m e ,

The moment anyone tells you to send your information via SMS, you should know it is a fraud...genuine recruiter will ask for your CV

height, address and qualifications via SMS. These are the things that job seekers need to know because the truth remains that job scammers will always remain because the people they are scamming are gullible. For us as a business in a country like Nigeria where there is always fear of insecurity, the truth is that as long as there is unemployment, and people are looking to get rich quick, people will always try to undermine the online sector through fraud. What the online operators needs to do is to continue to educate their target audience. Online solution providers also need to protect their consumers so that even if they can’t protect themselves, they should be able to deploy tighter

measures to reduce the incidents of fraud. Every classified site in this country should take that into consideration so that if as a scammer, I go to this platform and my scam doesn’t go through and I go to another and another without success, I will probably pack my load and go to the social media. From the regulatory point of view, do you think anything can be done? If we can make scapegoats of few scammers, that can be a deterrent to many would-be scammers. The truth is that now, there is no one catching them. As an operator, you can stop them from coming to your website, but you can’t stop them from going to Facebook or other avenues they can explore to get to people. I think there should be some kind of legislations stipulating the punishment for this kind of fraud. What we are used to is the ‘Yahoo Yahoo’ kind of fraud but this one is more of a crisis. I think the way the security agencies rose to the challenge of ‘Yahoo’ scam to reduce it to the barest minimum, I think they can apply the same strategies to deal with this new kind of fraud. Many people have been applying for jobs online without success, what must such job seekers do to become successful? First, they cannot be lazy and they cannot have high expectations. They need to be prepared to work anywhere that fits into their career, probably at less pay. This might be painful but it will help them grow and exercise their talents. They have to prove that they are valuable and they have to show their achievements. If you have no achievements, it would be difficult to get employees to consider you. This is because employers are looking for achievers. They are looking for top talents. I also think that the mindsets of job seekers about instant success also have to change, especially for the graduate job seekers. They must manage their expectations and look towards developing themselves first.

34 —Vanguard, MONDAY, JUNE 8, 2015

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“

t was beautiful and simple; as all truly great swindles are.” O. Henry, 1862-1910. (VANGUARD BOOK OF QUOTATIONS p 239). America is sometimes called “Uncle Sam” or “God’s own country”. Perhaps Nigeria’s nickname should be “Fraud’s Own Country ”. Literally hundreds of thousands of scams are perpetrated in this nation 24/7 as to make a reasonable man wonder if we have any other job – fake drugs, fake spare parts, fake drivers’ and vehicles’ licence, fake currency notes, illegal universities 9even medical schools), pirated Nollywood films, free bail for which the police demand money at all Police Stations, free medical while patients pay for blood, etc. Unbelievable as it is, governments are involved in an astonishing percentage of the scams. Take electricity bills for instance. Every bill carries an entry saying Fixed Charges N750 per month. That charge, annualized, totals N9000 per annum and in twenty years will amount to N180, 000. That is about thirty times the cost of stringing a line to a new building in Ibadan twenty years ago. For more than ten years there had been no power supply to the house involved. Yet, the monthly bill arrives for N750. If that is not fraud, tell me what is. Power Holding Company of Nigeria, PHCN

Attack on DISCOs – Blaming victims of FG scam (Problem Has Changed Name), handed that scam to the DISCOs, who courtesy of the Regulatory body, NERC, accepted the “stolen” funds. However, before you shake your head, and start shouting for the Police to arrest the DISCOS, better read the rest of the article. But, let me start at the conclusion. DISCOS are not our problem. In fact, the DISCOS are the most unhappy victims of the swindle which privatization has become on account of abysmally low power supply by the power providers. Let me tell you a true story about the power sector to illustrate the point. A wealthy friend of mine and his group were interested in acquiring one of the units and they put in a bid – before it came to my knowledge. Before the bids were opened, I told them to pray that they did not win. They thought I was crazy despite the explanations given to them – the reasons were based on my travels throughout Nigeria. My declarative statement was this. “I would not accept any of the units if given to me free.” They laughed at me then; they lost the bid and “cried”. Today, they are laughing again – at the winners; who would be too glad

to be rid of the damn distribution companies. Why? All the Distribution Companies had fallen prey to the lies told to them by the Federal Government of Nigeria, through the former Minister of Power, Professor Nebo regarding power supply from the time of acquisition. THE ROAD MAP TO POWER published in 2013 promised them 14,100MW by December 2013. Till today we have not reached 5000MW. Investors in DISCOS were deceived and they are stuck. Most of us, as consumers, including people highly educated and who read papers every day, still operate with

For more than ten years there had been no power supply to the house ...Yet, the monthly bill arrives for N750

false notions about what DISCOS stand for and what they can do. Yet, unlike the past, prior to privatisation, the same government was responsible for power generation and supply; DISCOS are powerless to increase supply. Since privatisation, the DISCOS can only distribute whatever the generating and transmitting units provide for them. They cannot supply more; and it is not in their interest to supply less than they receive because, apart from fixed charges, they can only make money by supply maximum power to consumers. Unfortunately the DISCOS are squeezed between the generating and transmitting units, which have consistently provided less than 4500MW and consumers who want up to 10,000MW. DISCOS receive the maledictions of consumers and their staff are the target of physical attacks when indeed they are victims like us – the consumers. A top bank official, whose bank financed the acquisition of one of the DISCOS while revealing to me the predicament of investors in DISCOS and their banks, wondered how many Nigerians are aware of the

situation. He mentioned the matter while other Club members were up in arms against DISCOS which they want disbanded and for government to take over the distribution once again. To me, reversing the privatisation of PHCN, even if there was inequity as alleged, will be disastrous for Nigeria. Punishing DISCOS for no wrong doing on their part will amount to blaming another victim because we, the consumers, are suffering the negative impact of poor and unstable generation and supply. There is no doubt in my mind that if the nation can generate 20,000MW and deliver to the DISCOS, they will pass every single megawatt to us. They are in business to make money, which they are not making at the moment. They will gladly make more of more power is made available to them. Instead of attacking DISCOS and asking for privatization to be reversed, we should pressurize government to drastically increase power generation and the DISCOS will respond appropriately. It has been necessary to make this point because among the mountains of advice President Buhari has been receiving; reversing power sector deregulation is one of them. It will constitute several steps backwards if it occurs. At any rate DISCOS cannot give what they don’t have.

Aviation ICAO commences security audit of Nigerian civil aviation By LAWANI MIKAIRU & DANIEL ETEGHE

he International Civil A v i a t i o n Organisation, ICAO, has commenced its ICAO Universal Security Audit Programme of Nigerian civil aviation . Briefing aviation reporters at a joint news conference with the ICAO Official at the Murtala Muhammed International Airport, Lagos, the Director General of the Nigerian Civil Aviation Authority ,NCAA, Capt. Muhtar Usman said the objective of the USAP – CMA programme is to promote global aviation security through continuous auditing and monitoring of member – states’ aviation security performance. According to Usman, while in Nigeria, the team of Auditors from ICAO

comprising of Messrs Karen Zadoyan, Steven Neu, Nuno Miguel Silva Ferreira Fortes and Wendy Mueller would observe and assess Nigeria’s adherence to “associated security procedures in addition to the guidance materials and security related practices.”

He added that the move would enhance states’ security compliance and oversight capabilities by determining the extent of compliance of the state in implementing Annex 17 standards and related provisions of Annex 9. “Furthermore, ICAO will

similarly determine the sustainability and effectiveness of the states’ implementation of a security system through the establishment of legislation, programmes, regulations and a security authority with control and enforcement capacity ” Captain Usman

said. The NCAA DG also pointed out that at the end of the audit, recommendations and time windows would be provided for the “closure of the open items” and ensure compliance stressing that Nigeria was fully prepared to succeed in the audit as she did in 2008 when the country performed impressively.

FAAN par tner o launc h Wi-Fi at all ir por ts partner tnerss Globacom tto launch irpor ports

he Federal Airports Authority of Nigeria, FAAN, has partnered Nigeria’s multinational telecommunications company, Globacom Ltd, to launch a nationwide Wireless Fidelity (Wi-Fi) facility across all the airports in the country. The facility will enable passengers waiting at airports and other airport users to connect to the internet through their smart phones, tablets, laptops and other smart devices. At the launch of the facility at the international wing of the Murtala Muhammed Airport, Lagos, the Managing Director of FAAN, Mr. Saleh Dunoma, said the launch was a realization of the Aviation Ministry’s commitment to improve passenger experience in the country. He said one of the numerous complaints the authority had encountered was lack of internet connectivity at the airports and urged Globacom to extend the Wi-Fi coverage of to the

new buildings under construction at the airport any time they are ready. In his remarks, Glo’s coordinator, business solutions, Mr. Ike Oraekwuotu, expressed the company’s delight to “bring Nigeria up to speed with one of the best trends in the aviation industry worldwide by introducing ultra high speed Wi-Fi data experience for travellers and other users of our airports, beginning with Nigeria’s flagship airport.” “Millions of Nigerians who use and international travellers who use the 26 airports operated by FAAN deserve a super fast and reliable internet connectivity to stay in touch with loved ones and transact their businesses even while on transit. That is the state of the aviation industry in many of the advanced countries today. Travellers waiting at airports for their flights are able to hook up to the internet using airport Wi-Fi facilities in order to maintain contact with their loved ones, colleagues, friends and business associates.

36 — Vanguard, MONDAY, JUNE 8, 2015

Agric

ertilizer suppliers who participated in the Federal ministry of Agriculture’s Growth Enhancement Support Scheme (GESS) are begging the government to redeem the N52 billion (Fifty Two Billion Naira) being the subsidy portion they are being owed by both the Federal and State Governments. The Growth Enhancement Support

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GES Scheme: Agro-allied contractors cry out over unpaid N52 billion By JIMOH BABATUNDE Scheme (GESS) is a federal government initiative to actualise the A g r i c u l t u r a l Transformation Agenda (ATA). It is also aimed at subsidising the costs of

major agricultural inputs, such as fertiliser and seedlings for farmers. Based on the GESS policy, the Federal and State Governments equally contribute the balance of 50 per cent being the approved subsidy amount for onward payment to

participating inputs (fertilizer) suppliers. All participating states gave a standard Standing Order for their portion (25%) of the Subsidy amount to be deducted directly from their Statutory Monthly Allocation from the Federation Account as due.

The Federal Ministry of Agriculture & Rural Development (FMARD), as the Agency in-charge of the administration of the program has the responsibility of coordinating, managing and effecting the payment of the subsidy to all participating inputs

supplier companies. GES soon became the flagship of the out-going government as it became the barometer to gauge the policy achievements of the government as the program had within the first two seasons succeeded in deploying a massive fertilizer distribution network which effectively delivered the product to the door steps of Nigerian farmers, irrespective of their location in Nigeria. But, those who contributed to the programme’ s success, Farm Inputs Suppliers Association of Nigeria (FUISAN ), said this is not the best of time for them as their businesses are completely prostrate due to non payment of their outstanding by the government . Speaking on behalf of the group, Bar. Moses Itie Itie said there is no redemption in sight as all entreaties to the relevant authorities for the payment of the government’s portion of the subsidy has fallen on deaf ears. “The Wet season, 2014 GES program ended in August /September & the Dry season, 2014/2015 has ended since January 2015. The amount outstanding to date, being the subsidy portion of Federal and State Governments begging for payment to fertilizer suppliers, is about N52 billion (Fifty Two Billion Naira). “The past 9 months has witnessed a series of meetings and promises to pay by the appropriate officials of the FMARD, ranging from the Hon. Minister of Agriculture, the Permanent Secretary and up to Directors in the Ministry; all to no avail. The harrowing experiences of these fertilizer suppliers in the hands of their financier (bankers) are better imagined and coupled with the devaluation of the Naira.” Itie said that the fertilizer stock inventory for the suppliers is bad as their their lines for importation transactions have been blocked or completely de-listed by their banks. “Our members do not have hope or resources to replenish their stocks of fertilizer for sale to farmers for the 2015

Vanguard, MONDAY, JUNE 8, 2015 — 37

Micro-Finance

Experts harp on corporate governance for MfBs operation By PROVIDENCE OBUH

E xperts have highlighted the cost and consequences associated with bad corporate governance for Microfinance Banks (MfBs) in operations within the country. The experts, Director, Other Financial Institution Supervision Department (OFISD) Central Bank of Nigeria (CBN) Alhaji Ahmed Abdullahi, Managing Director/CEO, Stanbic IBTC Holding, Mrs. Sola DavidBorha and Principal Partner, Kenna Partners and Founder/ Fellow, Society for Corporate Governance Nigeria, Dr. Fabian Ajogwu, gave the highlights at a Microfinance Platform Symposium organised by Lapo Microfinance Bank in partnership with Accion Microfinance Bank Limited and AFOS, with the theme: “The Cost/Consequences of Bad Corporate Governance.” David Borha, said “The microfinance sector occupies a pivotal role in our nations economy, plays an integral intermediary role in the economy and provides financial services to entrepreneurs and small businesses. Corporate governance is important to ensure its sustainability and that of the business it functions. “Bad corporate governance impacts both the good guys and the bad guys, every corporate governance failure is an opportunity to strengthen corporate governance and governance is not an end itself it’s a means to an end.” She listed: Disclosure, Integrity, Responsibility and Treatment of Stakeholders / Balance as elements of corporate governance, explaining that full disclosure in line with best practice even when there is bad news is pivotal to achieving corporate governance goals, she added Investor confidence, Capital, Price / Earnings, Sustainability and Longevity are the main benefits of corporate governance. She said, “The Nigerian Stock Exchange recently launched a Corporate Governance Rating System (“CGRS”) designed to measure corporate governance of listed companies and provide incentive to companies that are committed to good corporate governance. The

'Women empowerment will enhance financial literacy' getting into the financial ecosystem, with that comes the family, household, so focusing on financial literacy for women is important. We have supported that in a number of countries. Am on the advisory board of African Women’s Banking, the pure focus is supporting financial inclusion for women.

By PROVIDENCE OBUH

o enhance financial literacy, it is imperative to assist women get into the financial ecosystem, said General Manager Visa West Africa, Mr. Ade Ashaye, in this interview with FV, stating, “If you are able to facilitate the women in getting into the financial ecosystem, with that comes the family, household, focusing on that is important.” What is Visa’s commitment to financial literacy and is Nigeria in your scheme? If we look at the level of financial literacy and development of the financial ecosystem, particularly for consumers,’ we are still at the early stages of the electronic ecosystem, and there has been a good deal of progress, with that progress there is a need for financial literacy as part of that progress. Our commitment is to focus on financial literacy, provide and teach individuals systems that help them to learn how to spend, save and budget properly. If you have the basic understanding everyone will learn from it and that is one of the purposes of the progress. We have been doing our programmes for decades in Visa and we have had programmes localised in about 30 countries, our initial commitment was to take 20 million people through our financial literacy programmes by 2013 and we have achieved that a year early and to date we are approaching 30 million people who have done visa financial literacy programmes. You launched financial literacy apps over a year ago, what progress have you made so far? That was a network localisation and one of the different network localisation that we do. Different things happen in different market, example: because South Africa is culturally a story telling culture, we localised our financial literacy activity to work in the form of industrial theatre, with the great adoption of technology in Nigeria we decided to localise our financial literacy activity working with Cocreation hub in Yaba to create a competition that had Nigerians who understand the issues and challenges better than anybody to create apps and games that help drive financial literacy and also help teach people some of the basics around financial literacy and that was last year. Three winners emerged from that competition, the response has been very positive and they will continue to develop the apps because the development of apps is an ongoing development. We plan to have another event in the next couple

Ade Ashaye, GM, Visa West Africa of months to get more publicly on the apps and work with stakeholders to look at the best ways of putting those apps out into the wider market. How you see the Nigerian market in terms of financial literacy and card usage I have been within the visa system for about 20 years, I have worked in different countries but what makes Nigeria different is the fact that so many stakeholders are pushing in the same direction. Everybody is pushing to improve transparency, convenience and security, for me, that is why if you look at where we are in Nigeria, say seven years ago and where we are today, compare that to any other market I have worked in my several years in electronic market, I have not seen any market that has made such advancement so quickly and it is so because everybody is pushing in the same direction and I must tell you, there is room to grow further. Looking at the microfinance sub sector, how does financial literacy come to play? If you accept that we have moved very quickly, that means that everybody needs to catch up, when we say financial literacy, it means different things to different stakeholders, from a merchant

There is a need to increase financial literacy in all the different sectors of the economy

perspective, I need to understand fully the value of acceptance of electronic payment over cash, that is different from a consumer perspective, where I need to understand the benefit of saving and budgeting appropriately and controlling my finances. There is a need to increase financial literacy in all different sectors of the economy and ensure that the knowledge and capabilities benefit in there are shared. I look at micro financing entities as financial institutions similar to our client banks that focus on how to service different sub sector customers who have slightly different needs. The trick is how do we help specifically take the message to ensure that their customers are able to benefit from what we are talking about. In the financial literacy space, it is the men who are usually excluded from the formal financial environment where you have the greatest needs. What product does Visa have for microfinance banks in the country? If you look at the plans that we have in place around making better use of technology to avail financial services, when you are in a better position to make use of financial technology with that comes the efficiencies, cost, convenience, which means that more people can be included. If your only tool is a tool which has certain characteristics, as you provide more tools perhaps, you suit it to bring in more people into the ecosystem and serve in that direction. Financial literacy programmes for women, especially the rural woman? There are a number of research programmes in a number of countries that would tell you, if you are able to facilitate the women

Future plan Number one plan for me is to build an office here, increase the number of Nigerians who are focused within Visa on supporting Nigeria. There are a number of product and services which are in the pipeline and would help provide that choice. Really the story is if you can provide choice, then you are in a position that the consumer and other merchant/ stakeholders can find something that works for them. We will certainly provide education on the differences between prepared, debit and credit cards, the different between the two means you are paying for your goods and services upfront or you are paying from your bank account or you are effectively gaining from a line of credit. Plans to grow the debit market Debit is fundamental in Nigeria because from payment perspective, what you see is that people are used to the idea of spending the money they have, debit is a fundamental tool that enable people to get the convenience and the security of visa payment system from their debit cards. Nigeria’s financial literacy landscape In retail space that we have been involved to date, there has been significant progress over the short period of time and there is scope for continued progress. Other stakeholders particularly the CBN are pushing in that direction that landscape is in health free space with regards to opportunity to move forward. Scorecard for micro financing in Nigeria I think it will be unfair of me to give a scorecard without having to look at the microfinance sub sector. Where you have an industry that is trying to service customers need and customers that have choice, I think the customers would be able to hold cards. So I think if the customers are there and they are making use of the industry, is a scorecard. When you have entities like ours who have the knowledge, capabilities and the tools to support and assist, will score the changes over time.

38 — Vanguard, MONDAY, JUNE 8, 2015

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40 — Vanguard, MONDAY, JUNE 8, 2015

People in Business because supermarkets in those days do not owe. You supply them and in 30 days, you get your money. Some even pay you immediately, some after seven or 14 days. There was no stress, once your invoice was with them, you would be sure of your money but that is not the story today. Things have really changed. Patronage: Awojuyigbe who has a certificate in Entrepreneurial Management from Pan-African University, noted that "patronage has been great but in January this year, I reduced production because of the economy. People were owing and unwilling to pay. Big supermarkets were owing , not that they were not selling. There are a lot of things that still need to be put in place in Nigeria. We need a government that will be very strict with small businesses because if you get angry with a supermarket today and go and withdraw your products, by the time you go back there, somebody else would have supplied them that same product, telling them not to mind you. We need a unified voice because most supermarkets in Nigeria are owned by expatriates and they treat us anyhow and nobody is bothered about it, nobody is complaining. Even the way they treat their workers is horrible."

I want to fill the gap in food processing industry — GBONJU AWOJUYIGBE By EBELE ORAKPO

s. Gbonju Awojuyigbe is the Managing Director/Chief Executive Officer of Lagos-based Wandy Foods Limited, a food processing outfit. The 1992 law graduate from the Nigerian Law School, an alumnus of Fate Foundation and a 2005 Fate Foundation Alumnus Award winner, first worked with First African Trust Bank before going fully into business. In this chat with Financial Vanguard, the Goldman Sachs scholar tells the story of how she left the banking industry for food processing business and the challenges involved. Excerpts: Why I went into agribusiness: “I left the bank in 1997 because I felt I was not fulfilled. I had this desire to fill the gap in the food processing industry. My grandparents were big time farmers and one thing I noticed was that none of the children or grandchildren took to farming apart from me. My maternal grandfather had 65 children with many wives and concubines. He was a court clerk so all the places they posted him, he acquired a wife. So C M Y K

nobody is tending my grandfather’s cocoa farm as at today. That was what interested me. I began to ask myself why people were running away from farming and production. Why people run from production: “I have seen first-hand why people are not going into production. It is so frustrating for a manufacturer in Nigeria. Sometimes I wonder who led me into this business. I sometimes feel it must be the devil because production is so bad in Nigeria; that is the humble truth. You do everything by yourself; you are virtually all alone. That is one thing I pray that the new administration will look into. Initially, it was so interesting when I started about 17 years ago. It was fun getting grains and at the end of the day, you have flour. Then I would buy wheat and make wheat flour and wheat cookies. I would browse the internet, get some stuff and I would experiment. We were selling but right now, it is so frustrating." Going into business: I started in January 1998 in my house with just one reluctant staff because I was still in paid employment. My carpenter came in one day and

*Gbonju Awojuyigbe...It is not trying at all that is failure said his niece should help me. I said help me to do what? He said, ‘just take her’. I said how much will I pay her, he said don’t worry. That was how she resumed on Monday and I went to work. By the time I returned, I noticed that she had done one or two things that impressed me. I had buckets containing milled grains which I kept in a room. I noticed that she had

Most supermarkets in Nigeria are owned by expatriates and they treat us anyhow

sealed all the things in the bucket and I asked who taught her and she said she taught herself. She showed me all the cellophane paper she used to teach herself to seal and that was it! I employed her. She is now late. "What happened was that I was working in the bank and then I got attracted to production, I told my late grandmother that I wanted to try one or two things and she told me to try plantain flour because not many people knew its health benefits. I started with rice flour, later added plantain flour, bean flour and chili pepper. I am also a bee keeper and I bottle and sell honey. My colleagues were my customers, they were buying everything I produced and that encouraged me to supply supermarkets, starting with Value Mart next to our bank and later started supplying other supermarkets." Why I chose supermarkets: "I decided that my niche would be supermarkets

Challenges: She named power, funding and marketing as the major challenges. "You are competing with big companies who go to the market and tell marketers not to accept your products. You know, before you can sell in any Lagos market, you must know the Iyaloja and Babaloja. The knowing is not just ordinary knowing, you will hold something like a party for them, spend a lot of money. So it is so expensive marketing your goods and that is why selling in the open market is like a clique." Coming to TIC: "I had money at a point and instead of just spending the money on myself, I bought a warehouse in Maryland but when NAFDAC came for inspection, they said it was too small, I couldn’t partition it. So with some help, I got this place at the Technology Incubation Centre (TIC), Lagos under the National Board for Technology Incubation. We do not pay rent but they accommodate us for a given period. Although I need to move out, there is no cash right now. In fact, I have just two staff now as I had to lay off some. I am just doing the little I can, hoping that God will answer my prayers because they say it is not trying at all that is failure. If you try and fail, posterity will record that you tried."

Vanguard, MONDAY, JUNE 8, 2015 — 41

Economy

Bond market brushes aside economy policy waiting game Stories by EMEKA ANAETO, Economy Editor

s most operators in the economy continue to wait for government policy pronouncements before making major business and investment moves bond market appears to be an exception in the game. The market, measured by Financial Markets Derivatives Quote (FMDQ) total market index, has returned 7.9 per cent YearTo-Date last week though recent trading momentum remains subdued. This generally bullish performance continued till the third trading day of the first business week in the life of the new government in Nigeria. Dealers said the increase can be related to improved optimism in the new government though investors seem to be awaiting the policy direction of the new administration to charge-up their decision making. On account of the perceived silence in the first week after inauguration, yields on fixed income instruments across all tenors traded sideways in the last three days of the week. Average yields declined 8 basis points on Friday while Week-on-Week analysis of the sovereign yield curve shows divergence at the lower end signifying increased investor appetite for treasury bills. According to analysts at Afrinvest Group, political risk, credit risk, re-investment risk,

interest rate risk and exchange rate risk are the main factors that continue to define investors’ actions. In their report last weekend they stated that the recent considerations by the United States of America to raise interest rates may divert funds from the Nigerian capital market, hence a likely reduction in the rate of foreign participation in the bond market, adding however, that ‘’we expect the bond market this week to ride on any possible economic pronouncement by the new government”. A week after the inauguration of Nigeria’s new president, Muhammadu Buhari, the financial market

•Emefiele, CBN Governor has sustained a calm momentum on the back of the

Some economy analysts believe the President must set the tone for the market by making a clear pronouncement on critical concerns in the economy

new president’s silence on his blueprint for the economy. The Nigerian Stock Exchange All Share Index (NSE-ASI) tumbled 1.9 per cent Week-onWeek as uncertainties bordering on key macroeconomic policy direction of the new government drag the index lower. Additionally, foreign portfolio investors whose participation in the Nigerian market accounted for over 55 per cent from 2011 to 2014 appear to have remained on the side line amid uncertainties on

exchange rate and economic reforms. In a related development, fuel scarcity continues to bite as long queues are seemingly becoming the new normal across the states. This appears expected given some marketers’ apparent reluctance to sell at regulated prices amid fears of importing at a loss should subsidy payment be officially removed. Some observers, however, believe the unsettling scenario in the downstream sector remained largely hinged on the President Buhari’s muted unfavourable disposition towards subsidy payment on imported fuel. With five days since his ascendency, the only noteworthy action taken by the president relates to insecurity and ending insurgency in the country. Some economy analysts believe the President must set the tone for the market by making a clear pronouncement on critical concerns in the economy. Chief among these include the oil and gas sector and subsidy removal, exchange rate and the framework for monetary policy, addressing the power sector crisis and the future of infrastructure in Nigeria.

GE still positioning for Nigeria with USD10b investment

eneral Electric (GE), a 123-year old American Conglomerate with operations in 130 countries around the world, is gearing up to further exploit the economic potentials inherent in sub-Saharan African markets, especially Nigeria and Ethiopia. At the ongoing World Economic Forum (WEF) on Africa, GE said it would increase its capital outlay to US$10 billion over the next five years. The conglomerate will target power, health and locomotive opportunities in several African countries. Nigeria, its prime target, offers a ready market with the numerous gaps in

infrastructure and a new government looking to drive “change.” According to a report by Ventures Africa, GE’s Transport Leader incharge of Africa, Mr Thomas Konditi, said “We’re bullish on Nigeria. We met with a couple of the incoming leadership and they’ve put rail right behind power. They don’t have mines as much, so you’re going to look for more general freight” . According to Konditi, Nigeria transports only 0.1 percent of its freight by rail and could boost the number of locomotives to 500, a 1900 percent increase over the current 25 engines in the country. GE plans

to reinitiate talks with the new Nigerian government on a previous agreement for 200 locomotives. Over the past decade, GE has invested massively in Nigeria, the most significant being a US$1 billion service and manufacturing facility in the tourist city of Calabar, Cross River State. It has also engaged partnerships with the likes of Dangote to solve the power challenges in the country. Jeff Immelt, GE’s CEO, has identified Africa as one of the company’s most important growth areas, with plans to invest US$2 billion in the region by 2018 as well as double its workforce on the continent.

C M Y K

42 — Vanguard, MONDAY, JUNE 8, 2015

Economy

Our exhibition'll deepen Nigeria-Iran trade relations — KOOZECHI M

r. Saeed Koozechi is the Iranian Ambassador to Nigeria. In this interview with BABAJIDE KOMOLAFE & JONAH NWOPOKU, he spoke on the bilateral trade relations between Nigeria and the Islamic Republic of Iran. He also spoke on how the two countries can explore the opportunities provided by the upcoming first Iranian Solo Exhibition in Nigeria to boost trade ties. Excerpts:

esides oil gas, what are the other economic and trade opportunities in Iran? As you may know, Iran is one of the biggest countries with the highest crude oil and gas reserves in the world. But in spite of that, the Iranian government is gradually reducing its dependence on oil revenue. In the next couple of years, Iran shall be relying more on other sources of revenue. In this current year, our budget is just 30 percent dependent on oil and gas revenue. As a matter of fact, we are actually concentrating on industry and other industryrelated sectors of oil and gas. Take the petrochemical industry for example; this is a very huge and valuable sector for the Iranian economy. Iran produces 60 million tons of petrochemicals annually and we deploy them for the local market and the idea is to support many of the SMEs in the country who use them as raw materials. Of all the petrochemicals produced in Iran, only 25 percent are exported to the international market. Last year, Iranian export of petrochemicals stood at about $15 billion. In the power sector which is one of the most important infrastructures in Iran, we have made good progress and have achieved about 95 percent self sufficiency in this sector including design and manufacture of equipment like turbines, transmission equipment and many others. Last year, Iran exported $1 billion worth of electricity to neighbouring countries. In the steel industry, there is about 17 million tons production annually providing the needed support for the Iranian industry. Many of Iranian cities rely on Iranian-made machines. C M Y K

In this exhibition, there will be fifteen companies showcasing Iranian made machines and products. I think that since Nigeria is going to establish plants for assemblage of cars, it is possible that Iranian companies in the automotive sector will also be thinking about coming over to Nigeria to establish plants as well. In agriculture, we produce about 120 to 130 million tons of produce annually. Iran ranks fourth in the world in fruits production. We rank very high in the production of various kinds of fruits. Fruits are very important in my country. For example, Iran’s export of the Pistachio fruits is valued at $1 billion annually. Health is also a very important sector in my country. Many high tech drugs and pharmaceutical products can be produced in Iran. With regards to nuclear treatment, we can produce radiographic drugs for the treatment of health cases like cancer. As for building materials, there are thousands of Iranian companies that specialise in building materials. For example, Iran ranks fourth in the world below China, Italy and Spain in the manufacture of tiles. What is the purpose of this exhibition? This exhibition is expected to open doors of opportunities for both Iranian and Nigerian companies and businesses. It will help to identify each other’s capacity in order to deepen trade relations between the two countries. Right now, Iranian companies do not know the opportunities available in Nigeria. And Nigeria is a very big market, especially with its big population and resources. This situation also

applies to Nigerian businesses as they also know little about Iranian companies and the huge potential that the Iranian market offers. I believe that through this exhibition, a stronger connection will be fostered among the Iranian and Nigerian businesses. The exhibition will play a very key role in identifying the opportunities on both sides. I hope that as soon as possible we can have another exhibition in northern Nigeria. Why should Nigerians and Nigerian companies come to the exhibition? They should be coming to find business opportunities. I think that many Iranian products can compete favorably in terms of price and quality with other products in the Nigerian market. For instance, there

Iranian companies do not know the opportunities available in Nigeria

are some products that when I compare them with the prices in Iran, it will be three times higher. And then I wonder why the Iranian product is absent in the Nigerian market. For example, in the food industry, the quality of Iranian food is far above international standards. Take dairy products for instance, it is a good area of investment for Iranian companies in Nigeria. The main reason why Nigerian businessmen should come for the exhibition is to find one part of the Iranian capacity for products and other business opportunities. For Nigerian companies that want to travel to Iran and do business with Iranian companies, what is your advice to them? This exhibition provides a window of opportunity for realistic assessment of the capacity of each country. There are many international exhibitions that take place in Iran. Sometimes in one exhibition, there are more than 1,000 companies participating and most of these exhibitions are specialised. For example:

Medicine, building, furniture and industry etc. If Nigerian businessmen visit my country during or after these exhibitions, within three to five days, they will get Iranian companies that are willing to partner with them. And the beginning of this serious relationship will even help to create a cultural balance between t h e t w o countries a s their products cross to the different markets. Y o u know t h a t m a n y tourists, about four to five million, also visit Iran annually and most of them visit as medical tourists. Many of Iran’s neighbours like Afghanistan, Azerbaijan, and Iraq visit my country for medical reasons. This is because Iran can boast of high quality and affordable healthcare but unfortunately many Nigerians do not know this. They believe that Europe offers better healthcare. This is also a good area that the two countries can also explore to build their relationships. Do you have any incentives for Nigerian businesses that want to do business with Iranian companies? Does the government of Iran have any incentives for Nigerian businesses willing to come do business in Iran? Getting a visa to Iran as a business person is not difficult. Nigerian business men who want to travel to Iran for business purpose can travel to Iran easily. Iran is a big country. One can travel there either for business or for holiday. I hope that through this connection we are trying to establish between Iran and Nigeria through this exhibition, more awareness about the benefits of trade relations can be created. Iran is a very important country in the Middle East whereas Nigeria is in the same position in Africa, so I think we can have a good partnership.

Vanguard, MONDAY, JUNE 8, 2015 — 43

Advertising & Promotions

New govt'll restore confidence in IMC sector – Marketing professionals The indicators that drive the integrated m a r k e t i n g communications industry were completely lagging in quarter one. What will determine the success of business in Q2 is the concern of this report for the 2015 financial year. Princewill Ekwujuru takes a cursory look into Q2. The Q1 of the Integrated Marketing Communications, IMC industry was basically slow and uninspiring despite the volume of political advertising materials churned out by political parties in the 2015 electioneering campaign according to industry professionals. Though the political war has been fought and won, but what becomes of the fate of the IMC industry in Q2.? Analysts had hitherto blamed the lull in Q1 to less focus on business ads even though the quarter had been promising as well as encouraging some new business decisions for quarter two. What the quarter two will look like depends on what the recently sworn in government makes of it. The IMC industry, particularly the Advertising Practitioners Council of Nigeria, APCON are optimistic the administration would appoint an information minister that understands the IMC industry to drive the industry to a greater height. From the information deduced from the annual Mediafacts book published by MediaReach OMD, which

PARLEY - From Left: Head of Government Affairs, West Africa Area, British American Tobacco (BATN), Odiri Erewa-Maggison; Head of Legal and External Affairs, Freddy Messanvi; Area Head of Corporate Affairs, Oluwaseyi Ashade; and Head of Litigation and Regulation, Sola Dosunmu during a media parley in Lagos

indicated that by this time in 2013, the first quarter of Abovethe-Line, ATL advertising expenditure was N26.6billion (26per cent) of the entire ATL advertising expenditure that year. This figure was drive by private sector initiatives. Aside political campaign expenditure analysts said the 2015 ATL ad expenditure in Q2 may rise above what the industry experienced two years ago. There are also indications that radio advertising expenditure trends which was N15.1 billion in 2013 may increase by 26 percent in Q2, because it recorded a steadily growth in 2013, as a result of its wide spread, and preference by advertisers, likewise the TV

which ad expenditure was N47.0 billion in 2013which though declined by 20 percent 28 and 24 percent in the previous quarter of 2013. For the print, Industry analysts say that print advertising

The outdoor industry will be more creative this year to give clients the edge in terms of digital creativity

Appoint professional Information Minister— AAAN t ells FG Stories by PRINCEWILL EKWUJURU

First Bank spends N3bn on CSR in 10 years

he Association of Advertising Agencies of Nigeria, AAAN has urged the new administration of President Muhammadu Buhari to ensure the appointment of a skilled and experienced marketing communication professional as the Minister of Information. The President of the Association, Mr. Kelechi Nwosu, in a press statement said the new role of the Ministry of Information is far beyond the traditional role of acting as a catalyst in disseminating information and management of the information machinery of the government. In view of the strategic importance of the Information Ministry, the ideal Minister, AAAN believes, should have a track record of brand building and executing high impact communication strategies and frameworks in the interest of the nation. The statement, signed by the Publicity Secretary of the Association, Mr Ikechi

Odigbo, said the Minister of Information of the Federal Republic of Nigeria at this stage in the history of the country, should be a thoroughbred professional with relevant experience in integrated marketing communication, information strategy & management and brand building in order to put in place and manage a national communication plan and rebranding process in line with best global practices. “The country has been confronted with several image and brand positioning challenges of recent and critical in complicating the problems has been the absence of brand communication expertise as a strong consideration in the appointment of the heads of the country’s Information Ministry. But we are happy that the new government rode to power, driven by the campaign slogan of Change. For us, this change should be extended to the appointments of professionals to manage relevant strategic offices,” the AAAN President said in the statement.

expenditure will grow due to new publications and increased brand activities on print media, the spends on print media will increase double in Q2. The Outdoor advertising expenditure trends in 2013 was N23.2 billion after a huge dip of-37 percent in 2012. The Outdoor spend following the promise by the President of the Association, Charles Chijide during the press briefing to herald the ninth edition of the Posters Awards seems optimistic. According to him, “the outdoor industry will be more creative this year to give clients the edge in terms of digital creativity to propel and expose client’s products by deploying a legendary OOH platforms.” This statement is an indication that basically OOH spend will definitely increase which may push outdoor ad by 26 percent despite the fact they were the most favoured during the political campaign periods, Chijidu Alakwe, an independent media monitor stated. Mrs. Bunmi Oke, Former President AAAN, said the incoming government has clearly shows that they have understanding of how important communication is towards the selling of its policies. The creative industry wants the government to use marketing communications to bring about better understanding of all government policies. For example, if government is able to explain to Nigerians through marketing communications campaigns the steps which we need to take to build the power sector, whether it is solar power

irst bank said it has spent N3 billion in the last ten years on corporate social responsibility, CSR, initiatives in education, health and empowerment. Group Head, Marketing and Corporate Communications, Mrs. Folake AlliMumuney, disclosed this at an interactive section with reporters in Lagos, where she said that on average over the last ten years, “we have spent in excess of about N1billion to N3billion per-annum on our CSR space , it depends on the project although she stated. According to her we have streamlined our area of invention around education, health and empowerment, and based on that we look at the various opportunities. On the space of education she stated: “we have endowed about 14 Universities, we have the oldest endowment that exists in this country, we have set up endowment across various institutions. Speaking further she said the bank partners junior Achievers of Nigeria to drive financial literacy and decided to kind of streamline to make sure that is

GTB, Etisalat launch GTEasySavers to drive financial inclusion

TBank and Etisalat Nigeria said they are partnering to drive the financial inclusion process with the launch of a savings account: GTEasySavers. According to Managing Director of GTBank, Mr. Segun Agbaje, during the launch of the product in Lagos, said the product was designed to enable the unbanked and under-banked achieve their financial goals while operating a regular bank account via the mobile phones. The Managing Director also stated that the alliance will enhance the service delivery of both brands and offer customers unparalleled lifestyle and loyalty benefits. Agbaje further stated that the passion about driving the CBN’s financial inclusion strategy in ensuring the underbanked and unbanked will begin to find the propositions of banking services more attractive and convenient, and “then take the bold step of patronizing our numerous bank products and offerings, a passion which we fully share with Etisalat Nigeria”. C M Y K

44 — Vanguard, MONDAY, JUNE 8, 2015 Email:lesleba@lesleba.com, lesleba@gmail.com Blog page:www.lesleba.com/blog2 Website: www.lesleba.com Tel:0805 220 1997

ne does not really have to be a medical expert to recognize that the heavy grime and dirt on Nigerian currency notes would also readily serve as vector for the spread of germs and diseases. However, despite commendable progress in the adoption of E-transactions, cash handling, still remains very popular regardless of the quality of the notes and the attendant health hazard. Curiously, however, new currency notes have become easier to obtain at social parties and event centres where they are brazenly hawked with up to 20% discount, even when commercial banks, on the other hand, continue to plead non supply from CBN. Nonetheless, the popular suspicion of ‘under table dealings’ in currency supply were probably validated last week by media reports, such as “EFCC nabs six CBN officials and 16 other bankers over N8bn fraud”, on pg 9 in Vanguard edition of 1/ 6/15. According to this report, the EFCC picked up the suspects for “stealing and putting back into circulation about N8bn stock of defaced and mutilated Nigerian currency notes which were meant for destruction”; the Commission’s investigations had apparently also revealed that in September 2014, “a box that was supposed to contain N5bn in N500 note denominations was discovered to be filled instead with old newspapers” as replacement at the Ibadan branch of the CBN. Clearly, the sum of N8bn in the alleged scam may actually be an understatement, since the EFCC also claims that such escapades had enjoyed considerable mileage over several years. Besides, the N134m credit balance in one

report of the Sun Newspaper edition of 16th April 2013 also carried a story titled “EFCC detains ex Mint MD Okoyomon over N750m polymer scandal!” The story was sequel to allegations that an Australian Newspaper had reported that, SECURENCY (a note printing subsidiary of the Reserve bank of Australia) paid N750m in bribes to some officials of CBN between 20062008 to secure the contract to make polymer notes in Nigeria. According to the report, apart from the former CBN Boss, senior officials of the Finance ministry and a former President were named as beneficiaries of the bribes for polymer notes. While no official of the Central Bank has so far been indicted, the EFCC is presently in court with Ehi Okoyomon, the former Managing Director of the Nigerian Security Printing and Mint Company over a request to extradite him to the UK to face prosecution over some findings related to the bribery allegations for the contract for the N20 polymer note. However, in a curious twist of events, the same CBN which had, earlier zealously promoted the alleged attributes of the polymer notes at great public expense has lately turned around to condemn the adoption of such currency as ill advised because polymer notes were found to rapidly deteriorate in the market place. Nevertheless, it is also alleged that the polymer contract bribes may have also encouraged Securrency to breach the planned establishment of a polymer based mint in Nigeria as part of the principal objectives of transferring technology to developing nations!

Thieves in the treasury of the bank accounts and the value of other listed properties allegedly acquired by a standard six certificate holder, who is, incidentally a junior member of the syndicate, may already exceed N1bn! The whistle blower who uncovered the heist also alleged that the Treasury assistant, and the Coordinator and Head of Security at the Ibadan branch were alerted, but regrettably took no action. Be that as it may, this development probably explains why grimy, dirty notes still form a good proportion of the currency in circulation, despite their potential as vector for transmission of diseases. Nevertheless, according to a report on pg 8 in Punch Newspaper edition of 1/6/15, in addition to the related health issues, the Financial Crimes Agency, also recognized that “the currency fraud is partly to blame for the failure of CBN’s monetary policy over the years, as the currency mop up exercises by the Apex bank failed to check the inflationary pressure on the economy’. Properly translated in plain language, EFCC’s above statement seeks to explain that in order to reduce the threat of perceived inflationary threat of perceived too much Naira in the system; the CBN commits the hari-kari of adopting high monetary policy rates which are antagonistic to economic growth and job creation. Worse still, the CBN becomes forced in response to reduce the available surplus money supply by borrowing hundreds of billions of Naira that it intends to simply keep as idle funds, despite the attendant oppressive interest

rates of up to 15% in order to restrain commercial banks from promoting spending by lending to other customers and fueling inflation. This u n f o r t u n a t e counterproductive and anti people strategy to restrain inflation clearly becomes meaningless, if some CBN staff, in collusion with other commercial bank staff continue to re-inject billions of already discarded/ condemned currency notes back into the system, while the CBN is simultaneously kept

Curiously, the modus operandi of the Ibadan currency theft is awkwardly similar to the process CBN also adopts for its liquidity mop up operations busy mopping up perceived systemic excess Naira supply despite the attendant oppressive debt burden for the nation! Curiously, the modus operandi of the Ibadan currency theft is awkwardly similar to the process CBN also adopts for its liquidity mop up operations. For example, while the Central Bank on one hand pretends to be socially responsible in attempting to stop inflation by reducing Naira surplus and liberal

spending, the same Apex bank also deliberately promotes the liquidity surplus syndrome when it substitutes humongous Naira allocations for the distributable portion of dollar denominated revenue every month!

hus, in the light of the prevailing culture of impunity in governance, it would be a hard sell to convince Nigerians that the Ibadan currency scam is an isolated case; in this event, it would be presumptions to approve a clean bill to the other 36 stations where such CBN cash operations are carried out nationwide. The exposure in Ibadan would obviously have temporarily trigged cover-up strategies in other CBN cash centres. Curiously, however, currency scams involving CBN staff are not unusual; for example, in December 2012, the House of Representatives expressed shock to “hear that N2.1bn of newly printed N1000 notes was missing at the Nigerian Security Printing and Minting Company”, a corporation over which CBN has supervisory role. Media reports suggested then, that in order to facilitate investigations, the Managing Director of the NSPMC, one, Ehi Okoyomon who reportedly enjoyed extravagant lifestyles, and the subsisting Head of security, of the Mint Company were sent on compulsory leave. Sadly, the initial intensity of public attention on this scam has since waned and prosecution may ultimately never be concluded. In another related development, the cover

Business & Economy

Corporations deprive Africa of $11bn taxes yearly M

ultinational companies deprive African governments of 11 billion US dollars in taxes each year, and G7 world leaders should set up a new global body to regulate corporate taxation, Oxfam International said. By shifting profits overseas to lower tax regimes, companies legally avoid paying taxes to the African countries where they generate revenues, depriving governments of money they desperately need for development, the antipoverty group said in a report C M Y K

on Africa. When leaders of the G7 major industrialised countries meet in Germany on June 7-8 to discuss how to support economic growth in Africa, a vital component of their talks should be comprehensive reform of the global tax system, Oxfam said. “It’s absurd that there are international organisations for trade, health and football but not for tax,” Oxfam International executive director Winnie Byanyima said. An international body similar to the World Trade

Organisation could represent all countries’ interests and mediate disputes among taxation regimes, Oxfam said. Oxfam based its calculation of the tax revenue Africa loses on a United Nations-backed study released in April that estimated $50 billion in illicit funds flow out of the continent each year, much of it through corporate trade mispricing to avoid taxes or in transfers of money obtained corruptly. This is almost double the official development aid Africa receives each year.

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