MARCH 16, 2015
Bank customers use payment cards to bypass forex laws By BABAJIDE KOMOLAFE
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ank customers have resorted to using electronic payment cards such as MasterCard and Visa card to circumvent foreign exchange regulations. Banks can issue Naira or Dollar denominated debit or credit cards to customers and such cards could be linked to the current or savings account of the customer with the bank. The purpose of these cards is to allow the customers spend from their Naira account whenever they travel abroad. The Central Bank of Nigeria (CBN) however, stipulates a maximum limit of $150,000 per year for each card holder. Financial Vanguard investigations, however, revealed that bank customers are now using multiple accounts either in the same bank or in different banks to circumvent this limit. Investigations reveal that bank customers now obtain a naira MasterCard or Visa card linked to different accounts so as to be able to access dollars above the $150,000 limit. Further investigations also revealed that banks are not only aware of this practice but encourage it. A top foreign exchange dealer who spoke to Financial Vanguard on condition of anonymity said the banks encourage it because it enables them make more money through the charges deducted when customers use such cards for dollar-denominated transactions or withdraw dollars while outside the country. The dealer also told Financial Vanguard that the practice is prevalent among banks in the country. Though the CBN Director of Corporate Communications, Ibrahim Mu'azu did not respond to enquiries on the response of the apex bank to this malpractice, a top management staff of the bank, however, confirmed C M Y K
CLOSING - President Goodluck Jonathan closing market at the Nigerian Stock Exchange (NSE), flanked by Minister of State for Finance, Bashir Yuguda; NSE Chairman, Mr. Aigboje Aig-Imoukhuede (r); Chief Executive Officer, NSE, Pascal Onyema (l) and; Minister of Trade & Investment, Mr. Olusegun Aganga, at the NSE trading floor. to Vanguard that the apex bank was indeed aware of this malpractice. Speaking under condition of strict anonymity, he said: “We are aware of
it and I can tell you it is a breach of regulation. But we are not doing anything about it for now because of the challenge of
tracing individuals with multiple bank accounts in the industry. But I can Continues on page 22
How Nigeria lost 10m tonnes of transit cargo By GODWIN ORITSE
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S Nigeria makes move to reclaim over 10 million metric tonnes of lost transit cargoes, the factors that initially led to the loss of this category of the country’s trade to neighbouring countries are still very much present in the Nigerian ports. The 10 million metric tonnes of transit cargoes are from Niger alone and have been distributed amongst four neighbouring countries namely: Ghana, Togo, Republic of Benin, and Ivory Coast.
The issue of port has also been given as the major factor militating against the return of these cargoes to Nigerian ports. In an exclusive interview with Vanguard, the country representative of the Niger Council of Public Transport Users, NCPTU, Alhaji Idi Homissou told Vanguard that high duty rate and other associated port costs actually drove Nigerien importers to port of neighbouring countries. Homissou said that while 4.3 million metric tonnes of the 10 million metric tonnes of transit cargo has Continues on page 23
18 — Vanguard, MONDAY, MARCH 16, 2015
Cover Story
Vocation and technical education – A key to improving Nigeria’s development
*COLLOQUIUM - From left: Emeka Oparah, Director, Corporate Communications & CSR, Airtel Nigeria; celebrant, Dr Wole Adamolekun and his wife, Mrs Bisi Adamolekun with VC, Elizade University, Prof. Valentine Aletor at the colloquium themed: 'Africa Trending: Contemporary Challenges, Opportunities in Reputation and Crisis Management' held at the Elizade University, Ondo State.
Bank customers use payment cards to bypass forex laws Continues from page 21 assure you this is one of the problems that would be addressed with the Biometric Verification Number (BVN). Once we complete the project and every bank customer has a BVN, it would be easy to trace those who have multiple accounts and also monitor what they are using the accounts to do.”
The driving factors
Vanguard investigation revealed that this malpractice is being fuelled by a number of factors chiefly the increasing difficulty to access dollars due to increased restrictions on foreign exchange by the CBN as well as dearth of supply of dollars in the interbank and parallel market. For example, it is easier to access dollars from your naira debit card - be it MasterCard or Visa while outside the country, than to source the dollars from banks or the parallel market for the purposes of travelling with physical cash. Furthermore, some of the bank customers engaged in the malpractice do so because the dollar requirement for their business is well above the maximum prescribed by the apex bank, or because their business does not qualify or cannot meet the documentation required to access foreign exchange from the interbank market. Investigations, however, also revealed that some customers that engage in this C M Y K
malpractice do so for the purpose of round tripping i.e. withdrawing dollars abroad, and bringing it into Nigeria to sell in the parallel market. Given that the exchange rate applied for dollar withdrawal through the cards is usually lower than what obtains in the local parallel market, the customers enjoy a margin of N15 to N20 on each dollar imported into the country through this malpractice.
What the law says
The CBN guidelines for card issuance and usage in Nigeria states that, “Cards may be issued in Nigerian Naira or in any other convertible currency. The international usage
Once we complete the project and every bank customer has a BVN, it would be easy to trace those who have multiple accounts
limits and frequencies for Naira denominated cards shall be defined by each participating bank. However, these limits shall not exceed the total combined amount of foreign currency that each individual can access via Business Travel Allowance (BTA) and Personal Travel Allowance (PTA) per annum - which is currently $150,000 per annum. Issuers shall give customers the opportunity to request for cards within the range of the bank’s card products. For instance, if an issuer offers brand of cards such as Verve, Visa, MasterCard, Union Pay, etc, customers shall be free to choose any brand of cards issued. The available cards provided by the issuer must be explicitly stated on the card request form (physical or electronic) so that the customer can make an informed choice. Issuers shall also provide customers with a choice to specify limits for the volume and value of transactions that they would perform; such limits cannot be higher than the maximum limits, as specified in this Guideline. Issuers shall provide customers with the ability to specify when their cards should work abroad, and when it should not, as well as which countries they would like their cards to work in, at any particular time. It is the responsibility of the issuing bank to work with the card schemes in providing the settlement and clearing facility for cards used outside Nigeria.”
As the Roman Historian, Plutarch (AD 46-120?) had noted “The mind is not a vessel to be filled but a fire to be kindled.” Given their corrupt and greedy lifestyles Nigeria’s leaders do not seem to care about integrity or moral values. They are good at predicting the future without creating it. As Peter Drucker has observed “If you want to predict the future, create it.” In Nigeria, the growing problem of unemployment in the country has contributed largely to the worsening problem of poverty among the populace. Unemployment according to Olaitan (1996) leads to frustration and disillusionment which may result in crime or drug abuse in a futile attempt to escape from and forget the pains and humiliation of poverty and lack. The problem of unemployment, he further stated, has worsened as millions of school leavers and graduates of tertiary institutions have not secured gainful employment over the years. Unemployment has posed a serious problem not only to the welfare of individuals but also to that of their families.
It cannot be overemphasized that technical education is the engine for economic growth Many able bodied and highly qualified persons who could not secure gainful employment have remained economically dependent on their parents. This is because they lack the necessary occupational skills to be self employed and to effectively function in today’s world of work. These occupational skills can be provided by technical and vocational education. According to Abdulahi (1994) technical education is that aspect of education that involves the acquisition of techniques and application of the knowledge of the science for the improvement of man’s surrounding. Technical and vocational education prepares one for the world of work with which the individual become reliant and can make contributions to the development of the society. As employers look for new talents
every year from new graduates, it is important to not only have a solid education but graduates that have features that stand out from the rest of the graduating students. With the economy being more globalized than ever, it is important to have a background and a skill set that allows graduates to become immersed in the global economy right from graduation (Cote, 2007). It is important for these students or graduates to have skills in innovation in technology education and entrepreneurship to be ready to fit into the global market place on which today’s economy depends on. Entrepreneurial Skills Needed by Technical and Vocational Education. Leadership is not a major cause of Nigeria’s under-developed status. Nigeria can become an economic power-house (and realize its visions) only if proper attention is given to education and technological development and promotes and rewards creativity, and channel its material and human resources to productive use. The leaders must recognize the relevance of technical and vocational education in national development and adopt and adapt what works in developed nations. The resources being wasted in the on-going false rebranding campaign should have been used to re-brand the nation’s education sector. No amount of rhetoric (or fanciful slogan) would solve Nigeria’s socio-political and economic problems. The leaders could salvage Nigeria’s image by rebranding their mentality and doing the right thing: tackle corruption, reform the electoral system and fix the dilapidated institutions. Thus, without a fundamental shift in values, beliefs and thinking, and without technological capability, Nigeria will continue to dream of becoming a ‘Great Nation’. It cannot be overemphasized that technical education is the engine for economic growth. No nation can fight a war without an army. In the same token Nigeria cannot develop without well-equipped technical and vocational institutions. In fact, it is the missing link in Nigeria’s development policies. Because of poor training and ineffective institutions Nigeria suffers from low productivity. But the progress of any society lies in the productivity of its citizens.
Vanguard, MONDAY, MARCH 16, 2015 — 19
D
uring the student union election in 1979/80 at the University of Benin, Mr. S.A. Tella, now a professor of Economic and Statistics department taught the university community how sacred facts and effective statistics can be used for electioneering campaign. Tella entered the race for the student union election to the office of Student welfare two weeks to the election. When he announced his candidacy to the class, he was taken as a joker. He neither printed posters nor e m b a r k ed o n e l a b o r a t e campaign like others. He simply went to the library and took stock of the seats available in the library. He did the same for Hostel a c c o m m o d a t i o n a n d t h e politicians are not making p o l i t i c a l p a r t i e s d o n o t cafeteria. What he did next any measurable promise to understand the depth of the w a s t o a s k f r o m t h e the electorate. They are just economic problem facing the authorities the number of dancing naked to amuse the country. They both have no students in the school and electorate. credible agenda to deal with what was the ideal facilities Each time they mount the the issues, especially within the students were supposed rostrum, they speak vague the context of the evolving to have in the various places and foul language devoid of g l o b a l economy and named above. He got the facts and figures. There is no N i g e r i a ’ s b r o k e n p u b l i c data and was armed for the new idea of how to deal with finance. manifesto night. the economic and social A look at what happens in When it was his turn to problems that have plagued other parts of democratic speak, Tella just told the the nation. "I will deal with world, party and leaders who student body the number of corruption." What is the level do their home work usually seats in the library and how of corruption you plan to c o m e u p w i t h p o l i c y many were supposed to be deal with? In what sector or f r a m e w o r k where there, he said the same of the arm of government do you programmes and policies hostel accommodation, the h a v e t h i s h i g h l e v e l o f they intend to pursue ie c a f e t e r i a a n d w h a t t h e corruption? How much is students were missing by the Nigeria losing per year due university not providing to corruption? The parties adequate facilities for them have not conducted any to study without tears. Before study, they have no idea how he finished, the man who much is being lost and how nobody gave a chance, was to block the loopholes. What endorsed by all the students are the new plans to deal with the chant, "Tella, you with corruption? Nigerians have won, Tella you have are not being told; yet we won." clap our hands for vague I decided to reflect on this speeches made on soap box. experience in my student Nigerians know that the days based on the hollow m a j o r development nature of the electioneering c h a l l e n g e s f a c i n g t h e campaigns going on in the c o u n t r y today are 2015 bid for the various corruption, insecurity, the elective posts. Nigeria n economy - unemployment/ politicians have left the p o v e r t y, p o w e r, substance and are chasing infrastructure, health and shadows while our country education etc. The ongoing men watch helplessly. These campaign shows that the two
PDP, APC: Your promises are vague
These politicians should stop lying to Nigerians and tell the nation how both parties would fund their programmes
Party manifesto, are fully costed and strategies to finance and implement them are spelt out. Neither APC nor PDP can make such claim. To any economist, any plan without the cost outlay is nothing but a wish-list. They are not telling us how much each of their promises will cost and where they will get the money to run them. None talks about the broken or near bankrupt public finance and the strategy to fix it. Each talks about agricultural revolution, what type of agriculture are we planning to implement? What are the value chains the agric policy will pursue? What light industries are coming on stream and where are they to be located? How are they to be financed? What is the cost estimate for such projects? How many jobs are to be created from the sector per annum? These are questions that they are not ready to answer. What is the export strategy for the surplus that will be created from investment in agriculture? Which market is Nigeria targeting for export? And what plans are in their manifesto to free Nigeria from dependence on import especially petroleum imports
in order to save the naira from continued devaluation? In response to the question of where the money will come from, some Nigerians, journalists inclusive, are quick to say that the problem of Nigeria is not money but the management of resources. This is far from t h e t r u t h . To d e l i v e r a n efficient national transport infrastructure alone a c c o r d i n g to a v a i l a b l e estimate, will cost $3.05 trillion in the next 30 years, about $25 billion per annum even by corruption-free, cost-effective means estimated by National Economic Council. These politicians should stop lying to Nigerians and tell the nation how both parties would fund their programmes. This crop of politicians should learn a lesson from Chief Obafemi Awolowo who was asked in 1 9 7 8 /7 9 e l e c t i o n e e r i n g campaign about his promises of free education and free medical services. He, Awolowo reeled out figures about the amounts he would save from various ‘ waste’ including the tea/coffee served in government offices. The issue here is that he would always do his homework before making any pronouncement. Evidently, from what the two major political parties are offering, it does not seem that they are offering Nigerians any serious deal.
Cover Continues from page 21 been taken to Togo, Nigerien importers have also moved 2.5 mliion metric tonnes of their transit cargo to Togo. For Ghana and Ivory Coast,1.8 million metric tonnes and 400,000 metric tonnes were taken over respectively, while Nigeria is left with a paltry 200,000 metric tonnes of transit cargoes from Niger. “The issue of port cost is the major challenge importers from Niger are facing in Nigeria, even though we see some level of efficiency," he said "The high duty rate is still an issue that must be looked into,” he added. He explained that Nigeria and Niger used to be a single country until the Europeans
How Nigeria lost 10m tonnes of transit cargoes came and separated them and carved Niger out of Nigeria. The Nigerien representative in Nigeria said that Nigerian ports are nearer to Jibiya (a border town between both countries) than Togo or Ghana. He further said that Ghana to Niger is about 3,400 kilometers as against 1,300 kilometers from Lagos to Jibiya in Niger. He disclosed that transit cargo from Niger was lost to other countries long before the ports were concessioned adding that the seeming efficient services currently being experienced at the port is what is attracting importers
from Niger. Homissou also said that the issue of safe passage of their goods has been a source of concern until the leadership of
While other countries collect payment per convoy, in Nigeria, we pay per container
the Nigeria Customs Service assured them of safe passage of transit cargoes. “Naturally, Nigeria is the nearest country to Niger and it makes sense for us to move our cargoes through Nigeria but if the Customs duty is as high as it is now, then we may have to look elsewhere for us to transit our cargoes. Even what we pay to Nigerian Customs officials to escort our goods to the border is very exorbitant when compared to what other countries collect from us. “While other countries collect payment per convoy, in Nigeria, we pay per
container,” he said. He also disclosed that there have been situations where the Nigerian Shippers’ Council has to come to the rescue of a vessel that almost got stranded with Nigerien transit cargoes on board. He commended the effort of the management of the Nigerian Shippers’ Council for trying to woo Nigerien importers back to Nigeria. Homissou also told Vanguard that the Comptroller-General of the Nigeria Customs Service has visited importers in Niger and assured them of quick passage of their cargoes through the Nigerian port system. C M Y K
20 — Vanguard, MONDAY, MARCH 16, 2015
C M Y K
Vanguard, MONDAY, MARCH 16, 2015 — 21
Business & Economy
Increase Nigeria’s capacity to generate employment, NIM tells FG BY MICHAEL EBOH
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he Nigerian Institute of Management, NIM, has emphasised the need for the Federal Government, as well as other policy makers to focus on increasing the capacity of the Nigerian economy in generating employment while also repositioning the country’s educational system in line with the demands of growth and development. In his presentation at the National Institute of Policy and Strategic Studies, NIPSS, Senior Executive Course, Mr. Nelson Uwaga, President and Chairman of Council, NIM, said, “The world around us is changing, changing fast. The fundamental shifts in business and the workplace, and skill requirements for personal excellence, all demand that we change the way the students of tomorrow are trained and educated.” Uwaga was speaking on a paper titled, ‘Fundamental Principles of Management on Repositioning Nigeria’s Educational System for Global Competitiveness.” He said the country must ensure that its educational system raise a generation of men and women that think critically, solve complex multidisciplinary and open-ended problems, create and innovate, and communicate and collaborate. “The challenge before
Nigeria’s policy makers is how to increase the employment generation capacity of the economy, while repositioning the educational system to produce graduates worthy enough to chart the nation’s course into the future,” he added. Uwaga further stated that a real search has commenced for a new mindset in both education and management, adding that the challenge is how to develop forward-looking options for all students, with a view to raising individuals who can work collaboratively with others, think critically and
creatively, and solve complex problems. He maintained that it is not enough to spot the talent, or induct him into the organization, adding that there may be a need to fasttrack deserving talent, offer challenging career paths, provide cross-functional exposure, and arrange secondments that may draw out the best in them. According to him, in addition to a transformed educational system, there is also a need for a redefinition of management — attracting talented people, nurturing
them, developing them and giving them space. He said, “In other words, the key emphasis is on empowerment, rather than micro-managing. Empowerment is the devolution of authority to individuals to decide and act, and effect, thereby a measure of self management. “Empowerment is a tool for talent development — improving productivity and enhancing customer service. It frees people to innovate in the marketplace and to find more efficient ways of performing their work.
O
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he Nigerian National Petroleum Corporation (NNPC) has announced the renewal and extension of the pipeline protection contract to some of its host communities. This is contained in a statement issued in Abuja by the Group General Manager, Group Public Affairs Department, NNPC, Mr Ohi Alegbe. The statement said the measure was to effectively combat the growing scourge of pipeline sabotage that had impacted negatively on the corporation’s operations. It stated that the contracts did not in any way undermine the responsibility of the police and other security agencies to protect the pipelines but rather to complement it. It explained that the first community-based contract which was awarded in 2011 expired in 2012. The statement stated that there had, however, been a noticeable increase in the spate of attacks on crude oil, products, and gas pipelines since the expiration of the contract.
13 ships laden with petrol, rice arrive Lagos PRESENTATION - Deputy President, Lagos Chambers of Commerce and Industry, Chief Mrs. Nike Akande Presenting an award to Mr Taofio Ajibade Tijani, Lagos State Commissioner of Ministry of Energy and Mineral Resources at the major distribution of Eko Gas Cylinder held at LTV Blue Roof
IEA sees renewed pressure on oil prices as glut worsens
il prices might have stabilized only temporarily because the global oil glut is worsening and U.S. production shows no sign of slowing, the International Energy Agency said on Friday. The West’s energy watchdog said the United States may soon run out of spare capacity to store crude, which would put additional downward pressure on prices. That process would last at least until the second half of 2015, when growth in U.S. oil production is expected to start abating. Combined with an increase in global demand, the expected U.S. production slowdown would give some support to oil prices and respite to oil producers’ group OPEC, the IEA said. “On the face of it, the oil price appears to be stabilizing. What a precarious
NNPC renews, extends pipeline protection contract to communities
balance it is, however,” the Paris-based IEA said in its monthly report. Behind the façade of stability, the rebalancing triggered by the price collapse has yet to run its course, and it might be overly optimistic to expect it to proceed smoothly.” The IEA said steep drops in the U.S. rig count have been a key driver of the recent price rebound, which saw Brent crude rising to $60 per barrel after falling as low as $46 in January from last year’s peaks of $115. “Yet U.S. supply so far shows precious little sign of slowing down. Quite to the contrary, it continues to defy expectations,” the IEA said. In February, non-OPEC production is estimated to have risen by about 270,000 barrels per day (bpd) on a month-onmonth basis to 57.3 million bpd, led by higher output in North America.
Global supply rose by 1.3 million bpd year-on-year to an estimated 94 million bpd in February, led by a 1.4-millionbpd gain for non-OPEC producers. U.S. crude inventories soared due to output growth and plunging crude refinery throughput, with seasonal and unplanned refinery outages, weak margins and high gasoline stock builds. At last count, U.S. crude stocks stood at a record 468 million barrels, the IEA said. “U.S. stocks may soon test storage capacity limits. That would inevitably lead to renewed price weakness, which in turn could trigger the supply cuts that have so far remained elusive,” the IEA said. While the U.S. supply response to lower prices might take longer to kick in than expected, it might also prove more abrupt,” it said, adding
that growth would abate in the second half of 2015. The IEA’s conclusions will disappoint OPEC, which kept its output steady at the group’s last meeting in November to protect market share and stifle U.S. oil output growth. In the second quarter of 2015, when demand is at its weakest due to global refinery maintenance, the need for OPEC crude will be 28.5 million bpd, the IEA said - compared to the group’s current output of 30.22 million bpd in February. The IEA raised its demand forecast for the second half of 2015, which in turn led to a higher call on OPEC crude of 30.3 million bpd in the same period - closer to the group’s real production levels and the official target of 30 million bpd.
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hirteen ships laden with petroleum products and bulk rice have sailed into Lagos ports, waiting to berth. The Nigerian Ports Authority (NPA) stated this in its daily publication – ‘Shipping Position’- made available to newsmen on Thursday in Lagos. NPA indicated in the publication that seven of the ships contained petrol while two others had diesel and base oil. The document noted that the remaining four ships, waiting to berth, were laden with bulk rice. It further indicated that 38 other ships were expected in the ports from March 12 to March 25, same as 38 ships expected as at Wednesday. The document also stated that 16 of the expected ships would sail in with containers, 22 others with bulk rice, tug boat, buck wheat, fresh fish, bulk malt, used vehicles, steel products and bulk fertiliser. The rest of the commodities to be brought in by the ships are: soya beans, buckwheat, bulk sugar, bulk salt, base oil and general cargo, crude palm oil and petroleum products. 22 ships are pesently in the ports, discharging, buckwheat, containers, fresh fish, bulk rice, general cargo, bulk fertiliser, bulk gypsum, palm oil, kerosene, aviation fuel and petrol.
22 — Vanguard, MONDAY, MARCH 16, 2015
Business & Economy
Quality infrastructure critical to economic diversification — UNIDO
T
he United Nations Industrial Development Organisation (UNIDO) on Thursday in Abuja said the National Quality Infrastructure Project (NQIP) would assist Nigeria to diversify its economy to non-oil sector. Mr Charles Malata, the Project Coordinator with UNIDO, told the News Agency of Nigeria (NAN) that the project would be useful to Nigeria as it had several commodities across the country. He said the four years NQIP signed in 2013 had begun operation in May 2014 and was being sponsored by EU with 12 million Euros committed to cover its five components. Malata said the components included development of functional and internationally recognised National Accreditation Body (NAB). Others are National Metrological Institute (NMI), National Quality Policy (NQP), consumer protection and creating linkages for private sector. He said once the avenue for the products to get to international market opened up with all the resources in the country, it would enable it to compete and become economically viable, compared
BOA grants collateralfree loans to youths
M
anager, Bank of Agriculture (BOA), Afolabi Lagos Branch, Mrs Tokunbo has urged the youths to take advantage of the collateral-free funding opportunities provided by the bank, to empower themselves. She made the call while speaking at the Nigerian Association of Small and Medium Enterprises (NASME) 2015 General Meeting in Lagos. According to her, youths between the ages of 18 and 35 years, who engage in agribusiness, can access up to N1 million loans, without collateral. “The loan is dedicated solely to the youths, in partnership with the Federal Government’s ‘You Win’ programme. “The loan is granted to youths for start-ups or expansion of agribusiness,” Afolabi said. She, however, added that youths applying for the loan must provide two acceptable guarantors, one of which must be a civil servant. Afolabi also said that micro, small and medium enterprises (SMEs) could access up to N250,000 by opening and running a Micro Enterprises
PRESENTATION - Group Head, Strategy & Communications, Sterling Bank Plc, Mr. Shina Atilola; Principal, Methodist Girls’ High School, Mrs. Elizabeth Nkanta and Head, Retail & Consumer Banking, South South, Sterling Bank Plc, Mrs. Nneka Enang at the presentation of books on Financial Literacy published by the Bank to the School over the weekend
Contributor y pension fund hits N4.7 trillion BY EMMA UJAH, ABUJA BUREAU CHIEF
T
he
nation’s Contributory Pension fund has hit a N4.7 trillion mark which have now provided Money Deposit banks with stable deposits with which they can to lend on long-term basis. Currently, over 6.5 million people are contributors from 180,586 employers that have registered with the scheme, the Director-General of Bureau of Public Enterprises, BPE, Mr. Benjamin Ezra Dikki has revealed. He told a delegation led by the Ambassador of the European Union, EU, to Nigeria and Economic Community of West African States, ECOWAS, Mr. Michel Arrion in his office in Abuja that the pension reform was one of the bureau’s success stories. A statement by the BPE spokesman, Mr. Chigbo Anichebe, quoted Mr. Dikki as saying, “the Pension Reform initiated and implemented by the BPE has impacted positively on the Nigerian economy”. Under the scheme, he noted, 20 Pension Fund Administrators, PFAs, seven Closed Pension Fund Administrators, CPFAs and four Pension Fund Custodians, PFCs, were established, in the last 11 years. He said the various reforms carried out by the Bureau had impacted positively on the Nigerian economy and that the over-riding objective of
the reforms was to create an enabling environment for private sector investments though: institution of sound sector policies; Liberalization of the sectors by abrogating monopoly laws; Delineation of the roles of policy formulation
from regulation and operations; Establishment of appropriate legal and regulatory framework; Setting up of independent regulators; and mitigation of risks to encourage private sector investments.
The DG told the delegation that to sustain the gains of reforms; the Bureau had initiated eight more Bills which were recently transmitted to the National Assembly by the Federal Executive Council for enactment. They included: Railway Bill, Inland Waterways Bill, Ports and Harbour Bill, Federal Roads Authority Bill, National Roads Fund Bill, National Transport Commission Bill, Competition and Consumer Protection Bill and Postal Sector Reform Bill. Dikki listed Housing, National Parks, Partial Privatization/Restructuring of the two Nigeria’s Development Finance Institutions (DFIs)-Bank of Industry and Bank of Agriculture, Privatization of the Nigerian Commodity Exchange and Restructuring/ Commercialization of the Federal Mortgage Bank of Nigeria as some of the other initiatives the Bureau is currently prosecuting. In his remarks, Amb. Arrion pledged to partner with the BPE in its reform programme with a view to facilitating regional integration. He pledged that his office would adequately sensitise European investors that Nigeria is safe for business and indeed Africa’s investment destination.
Afreximbank supports factoring activities in African firms with $48 million
T
he African Export-Import Bank (Afrex imbank) says it has provided lines of credit amounting to $48 million to African factoring companies in the last two years. This is contained in a statement credited to Dr Benedict Oramah, Afreximbank’s Executive Vice President in charge of Business Development and Corporate Banking, in Lagos. Factoring is not a loan but a cash-management tool of choice for many companies, and is one of the oldest forms of business financing. Oramah, who spoke at a symposium on Factoring in Africa in Cairo, was quoted as saying that the support was to give liquidity and payment risk protection in the companies' factoring activities. The two-day symposium was organised by the Egyptian Factoring Association, the Financial Services Institute and the International Factors Group. According to him, the amount comprised $23 million granted to factors located in Mauritania and $25 million to several others based in Senegal. He announced that Afreximbank currently had factoring lines totalling $50 million under assessment for institutions in Burkina Faso, Kenya, Egypt, Botswana, Rwanda, and Zimbabwe. Oramah said that Afreximbank had supported the development of factoring in Africa through educational events and fostering the
creation of facilitative infrastructure. He said that Afreximbank would soon introduce a co-branded factoring development product called AfriFactor, to reduce costs incurred by African factors in setting up factoring business platforms. "Besides, AfriFactor will address challenges around the lack of expertise in backoffice and receivables management. It will provide advisory services to African financial institutions seeking to commence or enhance their factoring businesses, and provide support in such areas as establishing factoring businesses, information technology and operations platforms,” he said. Oramah added that Afreximbank was also working with the African Development Bank’s Thematic Fund for Private Sector Assistance (FAPA) to support factoring companies in Africa. According to him, the partnership uses FAPA grants that target innovative programmes for small and micro-scale enterprises. He said that a grant has been pre-approved for technical capacity building, drafting of a model law, and for advocacy, including training, workshops and conferences. Oramah reiterated that Afreximbank had organised seminars, trainings and workshops across Africa, targeting bank officials, lawmakers and regulators, to encourage interest in factoring as an alternative trade finance instrument for companies. Afreximbank is a foremost Pan-African multilateral financial institution devoted to financing and promoting intra-and extraAfrican trade.
Vanguard, MONDAY, MARCH 16, 2015 — 23
Banking & Finance
NDIC NDIC:: An amendment in the int erest of bank interest deposit or depositor orss By BABAJIDE KOMOLAFE
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ohn Bull had to wait for six years before he could get N50, 000 of his money trapped in the defunct Fortune International Bank. He had over N300, 000 in his current account with the bank before the Central Bank of Nigeria (CBN) revoked its operating license, with that of 13 other banks that could not meet the December 31 st 2005 recapitalisation deadline. As the organisation established to insure bank deposits, the Nigeria Deposit Insurance Corporation (NDIC) should have immediately paid John Bull and other customers of Fortune Bank N50,000 of their money trapped in the banks being the maximum insured deposit as at then, or transferred their deposits to other banks as was the case for the individual customers of the defunct Allstates Trust Bank, Assurance Bank, Lead Bank and Trade Bank. But this could not happen, as the owners of Fortune Bank as well as two other banks instituted court actions to challenge the revocation of their operating license. As a result, John Bull and other customers had to wait and suffer the agony of not having access to their money. The NDIC however wants to ensure that customers of closed banks are not subjected to such suffering again. To achieve this, the Corporation is seeking a series of amendment to its enabling Act, which among other things would allowed it to minimise the risk of bank failure, and also to be able to pay customers of failed banks promptly, without legal hindrance. Learning from the past Speaking at the Senate Hearing on the proposed NDIC Act 2014, which is an amendment of the NDIC Act 2006, Managing Director/ Chief Executive of the Corporation, Alhaji Umaru Ibrahim, stated that the proposed amendments are based on lessons learnt from past and recent experiences of the Corporation in the supervision of banks and protection of bank deposits. “If
FCMB advocates savings culture among students
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passed into law, the amendments would address the constraints and challenges facing the Corporation, given the observed inadequacies in the existing law. It would also enable the Corporation to be more effective and efficient in carrying out its mandate of promoting safe and sound banking practices, protecting depositors through effective supervision of insured financial institutions, prompt payment of guaranteed sums and orderly resolution of failed institutions and thus engender public confidence in the banking system”, he said. Minimise occurrences of bank failures As part of the mandate of insuring bank deposits, the NDIC has the responsibility to reduce the risk of bank failures. This is in deference to the adage that says, “Prevention is better than cure”. It is better to prevent bank failures than allow banks to fail and subject depositors to untold hardship, and the system to huge expenses needed to settle the depositors. Thus from inception, the NDIC had been empowered through its enabling laws to supervise the activities of banks and make recommendations to address observed lapses that could lead to distress. While the Corporation has been doing this effectively in collaboration with the CBN, it is however seeking amendments to strengthen its supervision of banks. For example, the Corporation among other things is seeking an amendment that would
Inability to refund depositors' funds was not because there was no money to pay but because owners of closed banks had instituted endless litigations
Umaru Ibrahim, NDIC MD empower it to supervise related entities (holding company or subsidiary) of insured institutions namely commercial banks, mortgage banks and microfinance banks. This is to prevent businesses related to insured institutions from being used as vehicles through which depositors funds are dissipated. It would be recalled that this practice led to the distress of some of the banks affected by the recent global financial crises, and which also resulted to the introduction of a new banking model by the CBN. The amendments also introduces additional measures for ensuring that board of insured institutions implements the C o r p o r a t i o n ’ s recommendations in Examination’s Report. This is to prevent such institutions from becoming distressed as a result of the findings of the examination exercise. In this regard, the Corporation is seeking amendment to empower it, in consultation with the CBN, to stop insuring the deposit of any institution, when found to have grievously violated its obligations under the NDIC Act Prompt Payment of insured deposits It is the responsibility of NDIC to ensure that depositors of failed banks have prompt access to their money (the insured deposit). However the Corporation has
been severally frustrated from performing this responsibility. “The greatest significance is the experience from recent bank closures where the Corporation was unable to refund depositors fund trapped in some closed banks. The inability to refund depositors funds was not because there was no money to pay but because the owners of the closed banks had instituted endless litigations against regulatory authorities”, lamented Ibrahim at the Senate Hearing. To address this frustration, the Corporation is seeking amendments that would empower it to pay insured depositors of failed insured institutions even in the face of litigation challenging the revocation of the operating license of the institutions. This is to ensure depositors do not suffer due to inability to access their money trapped in such institutions. In addition, NDIC is also seeking powers to be able to pay insured depositors whenever an institution becomes insolvent and has suspended payment to depositors. This means that when an insured institution becomes distressed and cannot pay depositors their money, but its license is yet to be revoked by the CBN, the NDIC can step in and pay the depositors their insured deposit, thus minimising their suffering as a result of the insolvency of the insured institution.
irst City Monument Bank (FCMB) Limited has again demonstrated its commitment towards youth empowerment and development by organising a fully interactive session on Financial Literacy for students of Government Girls College, Dala and the unbanked in Kano state. This, according to the Bank, is part of its contributions towards securing the future of youths, through the adoption of savings and investment culture, by expanding their knowledge base on financial literacy and its principles. The mentoring session, which was anchored by the Executive Director, Abuja/North of the Bank, Mr. Adam Nuru, took place at the school on March 12, 2015 as part of activities to commemorate the 2015 Global Money Week and Financial Literacy Day celebration. An initiative of the Bankers Committee in collaboration with the CBN, the financial literacy programme is focused on educating the Nigeria’s youth on the economic environment, impressing upon them the importance of saving, entrepreneurship and financial creation with a view to empowering the next generation to be self-reliant and money savvy global citizens.
Global Money Week: FirstBank promotes financial literacy
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irst Bank of Nigeria Limited, a subsidiary of FBN Holdings Plc, is collaborating with the rest of the world in celebrating the Global Money Week to engage children in the rudiments of financial literacy. The Bank under its Corporate Responsibility and Sustainability scheme initiated the Future First Programme to impart financial independence into young people through the acquisition of the right financial knowledge. The Future First programme is designed to empower secondary school students between 12 to 17 years to build fulfilling careers and be better equipped with tools and knowledge for long term financial independence. The Bank has to date covered over 40 secondary schools across the country, impacting over 20,000 students. In commemoration of the CBN Financial Literacy Day, and in continuation of the Bank’s drive for financial literacy,
24 — Vanguard, MONDAY, MARCH 16, 2015
Banking & Finance
BY JONAH NWOKPOKU
Union Bank adopts school to mark Global Money Week
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nion Bank of Nigeria Plc has adopted Uyo High School, Oron Road, Uyo as part of activities marking this year ’s Global Money Week and Financial Literacy Day. The adoption is in furtherance of a wider Bankers’ Committee initiative to promote Financial Inclusion in Nigeria by providing financial education to schools across the country. “Union Bank remains firmly committed to the achievement of Financial Inclusion in Nigeria and we recognize that Financial Literacy is a key step in achieving this,” said Emeka Emuwa, Group Managing Director of Union Bank and Chairman of the Financial Literacy and Public Enlightenment SubCommittee of the Bankers’ Committee. “In addition, we believe in making investments that empower, build and support the development of Nigeria’s large youth population. Providing our young ones with a proper financial education will enable them to make sound financial decisions and become good stewards of resources in the future”. During the visit, Mr. Emuwa taught a number of the students a lesson on “Growing Your Money “. The lesson was taken from a special Financial Literacy Curriculum developed by Junior Achievement Nigeria – a non-profit organization focused on educating children about their economic environment – and covered topics on savings, investments and protecting one’s money. Global Money Week is a worldwide money awareness celebration from Monday, March 9, to Tuesday, March 17, 2015. The initiative is aimed at globally engaging children on aspects of financial education. The Bankers’ Committee in Nigeria designated Thursday 12th March as Financial Literacy Day 2015. The day is being marked to focus attention on children and youth in primary and secondary schools nationwide and to empower them by enhancing their financial knowledge and planning skills.
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igerian banks lost a total of N199 billion to electronic related fraud between 2000 and 2014, mostly due to inappropriate and reckless management of customers’ data. Executive Director Operations, First City Monument Bank, FCMB, Mr. Nath Ude, disclosed this while presenting a keynote address at the Nigeria Electronic Fraud Forum in Lagos. Ude said incidence of fraud has become very rampant and presents serious consequences for the financial industry in Nigeria. Speaking on ‘e-fraud and insider abuse’ Ude noted that these frauds result most times from inappropriate or reckless handling of customers’ data. According to him, “Banking is built on trust. Customers’ data is an asset to banks and to retain the customers’ trust, banks need to protect these assets. Fraudsters are succeeding because banks have not paid enough attention to strategies that could minimise these incidents.” He added that most electronic fraud is from insiders even from unexpected sources
LECTURE - Chief Compliance Officer, Fidelity Bank Plc, Boye Ogunmolade (r) delivering a lecture at the Day Waterman College, Abeokuta to mark this year’s Financial Literacy Day
How banks lost N199bn to e-fraud in 13yrs including dedicated employees. He said banks could curb insider abuse by watching out for warning signs like employees living above their means, frequent manipulation of data by
employees and continuous, excessive use and abuse of privileged and systems account. In this way, he explained, “banks will be able to combat electronic fraud by filtering out predatory employees,
Ho wB VN enr olment will help How BVN enrolment you access bank loans
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he ongoing bank verification number (BVN) enrolment will help customers to have access to bank loans by enhancing their credit score, said the Group Managing Director/Chief Executive Officer of Fidelity Bank Plc, Mr. Nnamdi Okonkwo. The BVN is a number that enables a bank customer to have a single identity in the banking system. It basically ensures that a customer’s identity is not stolen. A credit score is primarily based on credit report information typically sourced from credit bureaus. Lenders use credit scores to determine who qualifies for a loan, among others. Okonkwo, while speaking to journalists recently, also said the BVN would enhance access to credit to small and medium scale enterprises (SMEs). There are about 17 million registered SMEs in Nigeria today. In most countries, SMEs account for up to 70 per cent or more of businesses, yet in developing economies like Nigeria, SMEs suffer from lack of access to finance. Thus, the Fidelity Bank boss explained: “In more developed parts of the world, they have credit rating systems and social identification system. For example, if I am Nnamdi Okonkwo, there might be other 1,000 Nnamdi Okonkwos, but each Nnamdi Okonkwo has a unique number assigned by his country such that whenever you put that number in, everything about that person comes out. We are gradually getting to that. “Until we get there, credit scoring system is
still a challenge. Therefore, it is possible that this same Nnamdi Okonkwo can go to a bank, take a loan and default, move to another bank, still take a loan and default and nobody sees that his credit history is bad. But with what the CBN has done with the BVN, that will be taken care of. That is why I am advising everybody to go and register and get your BVN. “When each of us have our BVN, which is tied to our thumb, if I need to lend money to you, I can check. If the person is a notorious debtor in other banks, then he doesn’t get a loan from me and that protects all of us because the bank does not own all the money. Most of the monies that banks use to do business belong to depositors. So, whatever initiative the CBN is taking, is to protect depositors and the larger economy. “The BVN is a unique number that every account holder in Nigeria should have, going forward. So, with your thumb registered, wherever you go, you can confirm that it is you. It is for security, it is for KYC. Like you know, for you to borrow from any bank now, you must have your BVN. It helps our credit scoring system. “The compliance level has been growing. At Fidelity Bank, we first made sure every staff member was registered because you can’t sell what you don’t understand. So that when you are explaining to your customer, you can as well show him or her the BVN.”
reviewing upwards, the required reliability status for all staff who need privileged roles to work as well as deploying appropriate prevention and detection technologies like CCTV monitoring and access cards with authorisations.” In his own presentation, Head, Information Systems Security, Nigeria Interbank Settlement Scheme, NIBSS, Olufemi Fadairo presented a statistics revealing the prevalent of electronic related fraud in Nigeria’s financial system. Fadairo said financial fraudsters are increasingly adopting sophisticated techniques in the approach and that stakeholders in the industry have to collaborate more and think ahead and creatively if e-fraud must be successfully tackled. He said that a total of 1,461 cases of fraud were reported in 2014. Out of these, attempted fraud estimated at N7 billion was recorded which led to actual loss value of over N6 billion. He also disclosed that internet and ATMs remain the most popular channels for e-fraud while Point of Sales, PoS ter minals has been discovered to be the preferred channel of cash out for fraudsters. Fadairo also disclosed that out of the reported cases, only 41 perpetrators were apprehended while 1, 420 perpetrators eluded the authorities. In all, he said, the fraud rate rose to 80 per cent in 2014 from 3 per cent in 2013.
Vanguard, MONDAY, MARCH 16, 2015 — 25
Corporate Finance
Quoted companies pay N1trn in taxes —Aig-Imoukhuede By PETER EGWUATU
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he President of Nigerian Stock Exchange, NSE , Mr. Aigboje AigImoukhuede, has disclosed that quoted companies on the Exchange pay not less than N1 trillion as taxes to the government. He stated this when President Goodluck Ebele Janathan visited the Lagos floor of the NSE to commission the NSE X- Gen Trading Platform, saying “As you know capital market is the heartbeat of the economy, quoted companies pay N1 trillion in taxes. Aig-Imoukhuede, commended the President for visiting the Exchange and
assured that the market will continue to play its role of enhancing transparency of market transactions and providing liquidity to both private and public sectors. Meanwhile, Jonathan had said that the federal government will come up with guidelines and incentives that will encourage major companies in the oil/gas, telecommunications and power sectors to list on the Nigerian Stock Exchange(NSE), adding that a substantive Director General , DG of the Securities and Exchange Commission, SEC will be named next month Speaking at a meeting with
the NSE in Lagos, President Jonathan said the federal government attaches much importance to the capital market as it reflects significant performance of the nation’s economy and would do everything economically possible to make the market attractive to investors and issuers. According to the President “As the biggest economy in Africa, the nation’s capital market ought to equally be the largest, so the only thing to do to achieve this is to ensure that big companies operating in the economy and are benefiting make their shares available for Nigerians to invest in and benefit.” He said before now he has had discussions with MTN during one of his visits to
PROMO - From Left:Mr Dapo Akinola, Country Manager Eddington; Mr Abayomi Ajao, Marketing Manager, Brian Munro Ltd; Mr Ifeanyi Ijeotor, Promo winner; Mr Suraj, Floor Manager SPAR Mall; and Mr Olugbemi Olajide, Brand Manager, Famous Grouse Whisky, during the presentation of a car to the winner of the Famous Grouse2014 Famous Shoppers Promo in Port Harcourt, On Friday 13-3-2015.
South Africa on the need to list their shares. “When I met with MTN in South Africa, we discussed the need for them to list. We are working hard to make sure that companies that are supposed to list do so. That is the only way the Nigerian capital market and economy can grow so that Nigerians can participate. Definitely if you take the power companies, as they grow bigger they will list” Jonathan said The President added that after a proper study of the situation, the government would come up with the guidelines for the listing, disclosing that listing of companies would be one of the incentives. “We will certainly come up with guidelines in that regard. It is only proper we study the situation and meet with technical experts before coming out with the final pronouncement on it . But we will definitely encourage most of these companies to list and make it a condition for them to benefit from government in some areas. You must do certain things properly. So I believe we will give you what you want” he said. Jonathan assured the stockbrokers and executives of listed companies that the government would continue to partner the private sector and hands off the management of business in order to solely face the provision of an enabling environment for businesses to thrive.”We will continue to partner the private sector. We are moving away from where government used to be the best manager of companies, best investors, to area where the government will create the enabling environment for the private sector to manage the economy” he said.
Sterling Bank rewards customers with UK trip T
he six winners of the Sterling Bank Gunners Promo who emerged at the fourth Gunners Promo held at the weekend will have the opportunity of an all-expense paid trip to watch the home match involving Arsenal Football Club and Chelsea on April 26, 2015. Disclosing this to newsmen after the fourth draw of the promo held over the weekend at the Bank’s corporate head office, Sterling Towers, the Bank’s Group Head, Strategy & Communications, Mr. Shina Atilola said this was in line with the promise made by the Bank at the commencement of the Promo last year. According to Mr. Atilola, this brings to 24, the number of lucky winners that have emerged in the four draws held. The next draw holding in April will produce another set of six winners bringing the total number of winners to 30 adding that the Bank came up with the promo to reward customers for their loyalty, and encourage other football lovers to share the one-customer experience. The Bank’s spokesperson explained that the promo, which kicked off in September 2014 would run till May 2015, and winners would emerge based on monthly draws to be held during the duration of the promo. The promo, he said, is
designed to reward customers for their patronage and loyalty to the brand over the years in keeping with the Brand’s promise of putting customers first The six lucky winners are Kehinde Abdullahi Ademola, Sakariyau Adeleke Mustapha, Ignatius Peace Nnah and Adeleke Zainab Idowu. Others are Chinyere Okechukwu and Eludinni Taiwo Kemi. An elated Kehinde who spoke with the “Femi & The Gang” crew that covered the event live for Nigerian Info commended the Bank for keeping to its promise. Her words: “I’ve heard that Sterling Bank has been taking the winners of the promo to the Emirates Stadium to watch live matches between Arsenal and other teams, but I had never seen myself being a winner because l know the Bank has a data base of customers running into millions to pick from. But when l was called on phone by a staff of the Bank that l was picked, l was a little bit worried until the caller mentioned my branch and advised that l go to my branch and confirm on Monday. This was the longest weekend l have ever had in my life and l thank God that it was eventually confirmed when l visited the branch today (on Monday)”.
US stocks nosedives as dollar threatens to erode multinationals profits
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.S. stocks slumped on Friday, putting the S&P 500 on track for its third straight weekly decline, as a robust dollar threatened to erode the profits of multinationals and tumbling crude oil prices pressured energy shares. Crude oil CLc1 fell 4 percent to $45.15 a barrel, extending its losses throughout the morning, after the International Energy Agency said a global oil glut continued to build and U.S. oil production showed no signs of slowing. The commodity has fallen in six of the past seven sessions and is down almost 60 percent from a peak reached in June. The S&P energy index .SPNY fell 1.4 percent, among the biggest decliners of the 10 primary S&P 500 sectors. Chevron Corp (CVX.N) fell 1.4 percent to $101.03 while Noble Corp (NE.N) sank 5.3 percent to $13.46. “It’s a bit of a surprise that the U.S. continues to produce at such a high level, and that amount of oil surplus continues to push the commodity lower,” said Michael Arone, chief investment strategist for State Street Global Advisors’ U.S. Intermediary Business in Boston.
Weak profit margins dampen U.S. producer inflation
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.S. producer prices fell in February for a fourth straight month, pointing to tame inflation that could argue against an anticipated June interest rate hike from the Federal Reserve. Other data on Friday showed a decline in consumer sentiment in early March, as harsh winter weather left households with high utility bills and disrupted shopping and general business activity. The Labor Department said its producer price index for final demand declined 0.5 percent as profit margins in the services sector, especially gasoline stations, were squeezed, and transportation and warehousing costs fell.
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26 — Vanguard, MONDAY, MARCH 16, 2015
People in Business
Government is punishing employers with taxes EURIEL CHUKWUDUM By EBELE ORAKPO
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hief Euriel Chukwuka Chukwudum is the Chairman/Chief Executive Officer of Denis Hotel, Ltd., Abuja. The native of Azia, Anambra State, speaks to Financial Vanguard on why he got into the hospitality industr y, the challenges of doing business in Nigeria and appeals to government to look into the issue of multiple taxation. Excerpts: Early Y ears: Years: According to Chukwudum who shares the same birthday with Nigeria, he attended Santa Maria Primary School in Port Harcourt and Aba and had his secondary education at St. Anthony Secondary School, Azia. Thereafter, due to circumstances beyond his control, he could not further his education and so veered into business. He did not allow this situation to stop him from being his best. Going into business: “On October 1, 1979, I went into business. The grace of God was with me and I was able to achieve so much first as a trader and then in the hospitality industry. That was April 1, 2005. I chose the hospitality business because I wanted to create jobs for people. As a trader, I discovered that my capital could only give me an employment capacity of not more than 10 but the same amount created jobs for almost 200 people in the hospitality industry. I can now see the difference. I found out that the hospitality business has a better future than trading. But what interested me most was not the money but my ability to create jobs for humanity, not just for Nigerians alone. C M Y K
Expansion and Challenges: “We started with 84 rooms and very soon, we are going to have additional 300 rooms and that will create jobs for about 500 people or more and with that, we are helping to grow the economy. "In any business, there are drawbacks. Definitely, Nigeria is a virgin country for anybody to come and do business; at the same time, it has the capacity for patronage due to our population, but like I said, the drawbacks are enormous because government is not helping matters. The hospitality industry is service based and it is all about functionality. You need certain things to be in place to be able to do the business. Electricity: "Electricity is essential. You need to be serviced with electricity 24 hours, seven days a week, pipe-borne water and access roads, communications etc. Unfortunately, we suffer most with electricity because most of the money we make is ploughed back into the system for power generation. We generate power ourselves and it costs a lot. In fact, if you don’t do your calculation very well, you will lose because to burn diesel for 12 or 24 hours every day is a lot and before you know it, depending on the capacity of the generator, you will be spending nothing less than N4 million - N5 million monthly on diesel. But if government has done its duty of providing power, at least we will be spending less than N2 million if we have regular power supply, even though we are worse off with privatisation of power
•Chief Euriel Chukwuka Chukwudum where we pay almost thrice as before with less power. Exploitation: "In fact, my understanding of the privatisation of the power sector is not what we are getting; they are exploiting us and giving us less. The exploitation is so much that people are complaining, especially those of us in the hospitality industry. I have not seen any positive difference since the privatisation. So government should look into it and see if they should review the policy. Ours is a service industry and you have no excuse to give to your guests for not providing
It seems it is a crime for employers of labour to create jobs for people because it really exposes them to government’s exploitation
those services. Also, we generate our water from boreholes and installed treatment plants so with all these, there is no way you will get the best out of the business. But with the transformation going on, we believe that sooner or later, things will be okay and it will create a very good platform for Nigerians to do better business. Multiple T axation: Taxation: "I don’t know if it is a crime for some entrepreneurs to create jobs. Government is punishing employers of labour with lots of taxes, rent charges and fees. A lot of exploitation is going on in the system. We are not saying we will not pay tax as good citizens but government should provide us with the services the taxes are meant for. If any Nigerian refuses to pay tax, he can be justified because what the money is meant for, government is not giving to us so government is as guilty as tax defaulters. The multiple taxation such as local government levies, the municipal, Environment charges, educational tax, industrial training fund, VAT, income tax, over 15 direct and indirect taxes imposed
on businesses, should stop and be streamlined to one or two. "It seems it is a crime for employers of labour to create jobs for people because it really exposes them to government’s exploitation. With all these taxes, how do you survive? And knowing the Nigerian environment, each of them must have its own complications. So in a situation in which you find yourself being hammered with uncoordinated taxation, what do you do? "Government should do something to ensure they coordinate taxation in Nigeria especially as it affects businesses so that we will not fall prey to tax agencies. They should make policies that would encourage people to be in business and create jobs. When you look at it, you find out that you either bend or break. The way it is now, we are being taxed for everything, even those things that government is supposed to provide are not done. Unique Selling Point: I was a trader for almost 30 years, and for you to be a successful trader, you must be a tactician and strategist, otherwise, you will not be able to thrive in that sector. I know there were many hotels in Abuja before our entrance. As a trader, it is the difference that you create that gives you the edge. So when we came in, I looked round to see where I could make a difference. I felt we could make a difference in the area of security which we did because security is very paramount to guests. The security agents were very impressed with us and ICT was very rare then and we were the first hotel to introduce ICT in Abuja in 2005 for our guests’ premium comfort. Again, the one that gave us an award from Akwaaba is our initiative of having a 24bed drivers’ lodge for our premium guests’ drivers and aides. We found out that when most car owners travel, they go with their drivers. Unfortunately, they check into comfortable
Vanguard, MONDAY, MARCH 16, 2015 — 27
Micro-Finance Youth entrepreneurship key to our policy — Honeywell Stories by PROVIDENCE OBUH
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oneywell Flour i l l s Plc has said that youth entrepreneurship is a key to its policy, reiterating readiness to continue inspiring youth by engaging them in activities that will explore and expose their inert and creative talents. Speaking at a meeting to flag off the Child Live Painting and Literary Arts Competition, titled "The Road to Sambisa" Executive Director, Marketing, Mr. Benson Evbuomwan, said that the company will continue to support initiatives and programmes that will impact positively in the lives of the youth. Evbuomwan said: "We got the proposal to sponsor the competition and we were excited about it. So, every opportunity to interact with little children, any opportunity we also have to also encourage children to express the gift that is inside of them we always like to take advantage of such M
opportunities, because as a company that is what we stand for. "People have talents which they don’t even know about until you give them the opportunity to showcase those talents. Some people need to be helped, some need to be given the opportunity to showcase their talents, so we believe that we all are provided the opportunity to really express our talents so that we can make our world better,” he said. He explained that the company has rewards for the children who will come tops in individuals categories, saying, "So we believe that these children need to be supported, they need to be encouraged so as to serve as a motivation for many other children. He described the children as future leaders, saying "they are going to change our future so we need to begin to develop them today, we need to give them the opportunity to be able to change the future that we desire and the future we also want them to have".
Capacity building: Accenture engages women
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n order to build capacity, Accenture Nigeria, engaged its female employees and client executives to help women explore their full potential at workplace and their personal lives as part of International Women Day celebration. Speaking at a sermina titled: "Listen, Learn, Lead" Managing Director Energy and Utilities, Mrs. Abayomi Olarinmoye said that learning and leading are complementary skills which are vital for women interested in having successful careers. “If you listen well, chances are that you will be a good learner and when you listen and learn, you have the right capabilities to be a good leader. Serminars as this will add value to every participant and improve on the way work is done at Accenture. In her keynote address, Managing Director, Shell Nigeria Closed Pension Fund, Mrs. Yemisi Ayeni, said •glistening is an acquired habit which provides learning opportunities for individuals. The modus operandi for any effective leader should be; listen, learn, so you can lead well." A participant at the event who identified herself as Ms. Bolade, said "I have learnt a lot from this seminar and am now better equipped to take on a management role." She added that the theme is a global topic for accenture as a leading management consulting firm. "Surveys show that the most critical skills needed to succeed in the workplace are listening and learning, as well as the ability to lead,"she added.
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28 — Vanguard, MONDAY, MARCH 16, 2015
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Vanguard, MONDAY, MARCH 16, 2015 — 29
Homes & Housing Stories by YINKA KOLAWOLE, with agency report
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agos State Governor, Mr. Babatunde Fashola, said home ownership through mortgage was the only effective way to bridge housing deficit in the country. Fashola spoke at the inauguration of Chois Estate, a housing estate in Lekki area of the state. The 420-unit estate of bungalows and duplexes was delivered by the state government in partnership with a property development company, First Communities Limited. The governor said that the major barrier to home ownership was affordability, saying it would extremely be difficult for people to own homes if they were asked to pay outright for it. He said the state government was building homes and allocating them on mortgage to residents, to ensure convenient home ownership. “Mortgages remain the only way to reduce housing deficit and ensure convenient home ownership. That is how it is done all over the world. That is what we are doing with our homes. We allocate them to our people and ask them to
Resort Savings begins housing project in Ogun
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•Low-cost housing development
“Only mortgages can bridge housing deficit” pay the equity contributions and spread the remaining payments over a minimum of 10 years,” he asserted. Fashola said the delivery of the estate was in fulfilment of his electoral promise to deliver democratic dividends to residents of the state. He said
a similar estate had been delivered in Agbowa area of the state and10, 000 homes would be delivered at the conclusion of the project phase under the government’s partnership with First Communities. Also speaking at the
occasion, Mr Bosun Jeje, Lagos State Commissioner for Housing, said the government was irrevocably committed to delivery of quality housing. He said a number of projects were on-going and their eventual delivery would reduce the housing deficit in the state.
What to do when dealing with estate agents
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gent fraud has become a major concern in the real estate industry. With the level of reported fraudulent practices, it is important that potential tenants are educated about such situations. Lamudi.com.ng has put together a couple of do’s and don’ts for you to consider while dealing with a real estate agent. Background check Background checks are essential before doing business with a real estate agent. Apart from checking online or asking for references, Lamudi.com.ng, a real estate portal, has gone an
extra mile to provide property seekers with over 309 trusted sellers on its platform. This will ensure that you are dealing with credible, reputable, and honest agents. Avoid upfront payment - You are advised not to deposit, transfer or pay any money upfront to an agent before confirming that the agent is genuine and before seeing the property that you are interested in. Top agents do not usually request for an inspection fees before viewing a property. Do an interview - Interview the agent whom you have chosen before making any final decisions. Make sure that
Background checks are essential before doing business with a real estate agent the agent is a licensed agent with a good amount of experience that caters to what
you need. Before you meet the agent, list down a few questions to find out if they match your preferences. This helps give you a clearer picture of who you are dealing with. Meet in a public place When meeting with an agent, make sure that you are meeting in a safe and public place or with a companion. Never meet an agent that you have not been acquainted with in a quiet or secluded area. Make sure that a family member or friend knows about your appointment.
FG reiterates commitment to affordable housing By NKIRUKA NNOROM
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inister of Lands, Housing and Urban Development, Mrs. Akon Eyakenyi, has reiterated the commitment of the federal government to the provision of affordable housing in the country. She gave the commendation at the commissioning of the 102 units ministerial pilot housing scheme in Suleja Niger State, which was fully funded by the Federal Mortgage Bank of Nigeria (FMBN). Eyakenyi said the commissioning of the housing is a demonstration of government’s efforts to bring affordable houses to the doorsteps of the citizens, particularly low income earners. “This pilot ministerial housing scheme which is being carried out in all six geo political zones of the country C M Y K
is expected to deliver about 2600 houses when completed and this effort also demonstrates that with prudent management, a great deal can be achieved within the shortest possible time. This is one way of achieving affordability for the low income people,” she said. In his speech, Managing Director, FMBN, Gimba Ya’u Kumo, said the collaboration has been successfully implemented in the six geo political zones of the country for the benefit of Nigerians, especially contributors to the National Housing Scheme. He said under the arrangement, government provides construction financing and in most cases, unencumbered land for housing development. He said the 102 housing units is made up of 32 units of one bedroom bungalow, 40 units of two bedroom bungalows, and 30 units of three bedroom bungalows all delivered at affordable prices for off-takers.
esort Savings and Loans Plc has commenced a building project in Ogun State as part of plans to help meet the housing needs of its customers. The project is located a l o n g Pa p a l a n t o – Sagamu Road, OmuPe n p e , Ofada, and consists of of 300 units of 3 bedroom semi-detached bungalows and 150 units of 2 bedroom terrace bungalows. According to a statement by Head of Treasury Department, Victory Olumuyiwa, the project lies on 100 acres of land. According to her, the land is to be developed into site and services plots with provision of infrastructures such as road network, drainage, central for water supply system. She said the project will also take into consideration provision of transformers and electric poles for power distribution, waste management and other needs of a modern community. “The approved layout for the project has been obtained while the beaconing and erection of pillars have been completed. The provision of infrastructural services and construction of prototype housing units are to commence as soon as possible,” the statement said. Olumuyiwa added that the project is within the proposed Gateway Mega City project by the Ogun State government and is about 30 minutes drive from Ikeja, the capital of Lagos State. According to her, a two bedroom bungalow will go for about N4.5 million while three bedroom bungalows will be sold for about N6.5 million each. She said the primary beneficiaries will be those who maintain account with the bank, noting that the property for whoever subscribes to it would also be used as collateral for those who collect loans from the bank to purchase it. “It is our top priority to drive the mortgage sub-sector to new heights and make a mark in the delivery of quality and affordable housing to Nigerians,” she added.
30 —Vanguard, MONDAY, MARCH 16, 2015
Trade & Investment BY OMOH GABRIEL, BUSINESS EDITOR
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he perennial crash of crude oil prices and the exposure of the Nigerian economy to financial crisis has pushed stakeholders and policy makers attention to non oil revenue generation. One sustainable source of foreign exchange generation is export of manufactures, solid minerals, and agricultural output with value addition. The Nigerian Export Import Bank is fast becoming the center of attraction to government and exporters to push the non oil foreign exchange earning drive through trade financing and productive efforts of exportable products from Nigeria According to government official documents, in no other sector is the role of NEXIM in driving the foreign exchange revenue drive of the present administration more pronounced than in encouraging the manufacturing, mining and the agric sectors in producing non-oil goods for export. This way, the government reasons that the volume of external trade is being gradually shifted away from crude oil on which the nation largely depends, to non-oil items that are abundant and widespread in the country, but which have largely suffered neglect due to a multiplicity of factors, chief of which is funding. The new focus is intended to permeate a wide spectrum of the nation’s everyday life, ranging from housing, industry, energy, entertainment and the whole gamut of every facet of our social life with the simple message: 'export and earn foreign exchange for Nigeria.' The Managing Director/ CEO, Nigerian ExportImport Bank, Robert Orya, explaining the success so far recorded in the new government export drive, of which NEXIM Bank has played a pivotal role said, “It is evident that the important story of Nigeria’s advancement from where we are would not be told by earnings from our hydrocarbon reserves (although we have one of the world’s largest). Our success would be driven by a robust manufacturing industry; selfsufficiency in agriculture for food and processing so that excess yields could tap export markets; world-class service sector to serve domestic industries, global outsourcing and export markets, and commercial access to wider range of mineral deposits that dot every nook and cranny of our country.”
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How NEXIM is helping to diversify Nigerian economy from oil
*A manufacturing facility financed by NEXIM Since the introduction of the Structural Adjustment Programme SAP in 1986, Nigeria has been trying to diversify the economy away from oil with little success. So it is not for lack of ideas that the export of non-oil goods has remained at infancy, the problem, amongst others, has to do largely with the will and commitment to focus and redirect resources to the nonoil sectors and take cognitive action to actualise what is largely recognised as a cash cow. Although NEXIM was established to play this role, the current administration’s determination to focus on these sectors in the bid to improve on the nation’s revenue profile outside crude oil sales and create employment, played a key role. “What the Administration of President
Goodluck Jonathan has done, perhaps more than any previous regime, is combine commitment with practical actions in diversifying the Nigerian economy away from sole reliance on crude oil for external revenue,” Orya said. The inhibition standing in the way of operators in the identified sectors from accessing finance has to be addressed. NEXIM Bank, having identified the drawbacks, intervened to set the ball rolling in a manner that ensured the delivery of the intended benefits. As the NEXIM Bank boss puts it: “Development Finance Institutions are bearers of risks which commercial lenders would term excessive, and therefore avoid. “ New industries, new initiatives, people without financial collaterals, projects
which cannot pay commercial cost of finance, etc have been beneficiaries of funding by DFIs. This way, business formation can continue, people can continue to innovate, bias against social and reputational collaterals are reduced, and projects can be incubated and nurtured to when they can attract lending from commercial banks,” he said, adding that NEXIM Bank has assumed this critical role in Nigeria where banking penetration is less than 15 per cent of the population, commercial lending rates are prohibitive, land titles are not even available to owner occupiers, but where innovators are born daily, and where we have to eradicate poverty. He said as a DFI, NEXIM Bank has to assume its natural function in driving the Transformation Agenda of the government, by supporting the export-prone sectors, increase foreign exchange earnings and create employment, so as to free government to focus on the provision and delivery of n e c e s s a r y infrastructural projects to aid implementation of programmes under the plan of structural transformation of the Nigerian economy that cannot be delivered by commercial lending. Orya, explained that NEXIM Bank is the official and sole Trade Policy Bank of the Federal Government.
In this regard, providing financing, risk-bearing facilities, market information and value-added advisory services to businesses towards deepening export-oriented investments in the country’s non-oil sectors of manufacturing, agroprocessing, solid minerals and services, for job creation and economic growth. He said the bank has provided N12 billion in lending to Nigerian export manufacturers over the fouryear period from August 2009 to April 2013, adding that it has funded agro-processing export businesses, to the tune of N6.6 billion over the same period. Onya speaking to journalist said “ From the institutional viewpoint of Nexim Bank, I am excited at the prospects of playing a role in diversifying the Nigerian economy and harnessing the immense potentials of the sectors which had, hitherto, been neglected. Indeed, the role Nexim Bank is playing is unique as a development finance institution (DFI)”. Accordingly, in the solid mineral sector, NEXIM Bank is working in partnership with industry stakeholders to take formal mining off the ground again, Orya said, adding that Nexim Bank has so far provided over N2 billion in early funding to help some commercial miners to develop their site in order to start operation and invite further funding from other sources apart from the long-term commitment of Nexim Bank to the nascent industry. In pursuit of its drive to impact on other segments of the economy as part of the Transformation Agenda, the bank has taken on the management of the Nigerian Creative and Entertainment Industry Stimulation Loan Scheme (NCEILS). The fund which is lent at below commercial rate is meant to fund businesses across the entertainment value-chain, including filming production, cinema operation, music recording, and intellectual property development and recording studios, as a revolving fund with repayment terms. He said to date; Nexim Bank has disbursed over N1.4 billion for the Fund, adding that Entertainment industry project proposals under review exceed N5 billion in value. Overall, disbursements to the creative and entertainment industry, including the services sector is about N8.5 billion, covering support to transportation and hospitality industries.
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Tax Matters
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s a follow up to last week’s publication, below is a continuation of the article that highlights the requirements for filing returns, due dates and penalties for late filing of returns as it pertains to various tax types. Last week’s edition focused on Company Income Tax (CIT), Education Tax (EDT), National Information and Technology Development Levy (NITDL), Estimated Petroleum Profit Tax (PPT), Final PPT, Personal Income Tax (PIT). This week’s edition wraps up the article as it centres on Annual Pay as You Earn (PAYE), Monthly Pay as You Earn (PAYE), Withholding Tax (WHT) and Transfer Pricing (TP). 7. Requirements for filing annual returns of Pay-As-YouEarn (PAYE) (by employers) Section 81 (2) of PITA (as amended) and Regulation 10 of the Operation of PAYE Regulations provide that an employer shall render to the relevant tax authority a return on each employee showing total emoluments of each employee during the year, the tax relief, if any, and the total tax deducted from the employee. This is to be done on a Form H1 or such other form as may be approved or prescribed by the relevant tax authority. Due Date Annual PAYE returns should be filed not later than 31st of January in respect of all employees of the employer in the preceding year. Penalties for late filing of annual returns of PAYE (by employers) Section 81 (3) of PITA stipulates a penalty of N500,000.00 for corporate bodies and N50,000.00 for individuals upon conviction. 8. Requirements for filing monthly PAYE returns (by employers) The schedule to be attached to the payment and evidence of remittance should contain the following information: a) Taxpayer information (employer): Taxpayer/agent name and address Taxpayer/agent TIN Transaction amount Transaction date b) Employees’ information: Staff TIN Staff name Basic salary Allowances Transaction date (DD/MM/ YY) Tax amount Period covered Due Date Evidence of remittance should be filed not later than 10th of every month Penalties for late filing of C M Y K
Penalties for late filers, ABC of tax returns (2)
monthly PAYE returns (by employers) Penalty for non-deduction and failure/late remittance under Section 40 of the Federal Inland Revenue Service (Establishment) Act 2007 applies. Upon conviction, the penalty is at 10% per annum of the tax not remitted and interest at the prevailing Central Bank of Nigeria rediscount rate and imprisonment for period of not more than three (3) years. 9. Requirements for filing Withholding Tax (WHT) returns Regulation 4 of the Companies Income Tax (rates, etc. of tax deducted at source (WHT)) regulations as well as Regulation 3 of PIT (rates, etc. of tax deducted at source (WHT)) regulations provide that a person who deducts tax from a payment shall, when the payment is credited or paid, whichever is earlier, submit, to the relevant office of FIRS, the evidence of remittance made to the designated bank of the tax deducted. The submission shall be accompanied with a statement containing the following information: The name and address as well as the TIN of the person from whom the tax was deducted. The nature of activity or service in respect of which the payment was made. The gross amount paid or payable. The amount of tax deducted. The period to which the payment relates. Similar provisions can be
found in Sections 78, 79 & 80 of CITA as well as Sections 69, 70, 71 & 73 of PITA. Due Date Evidence of remittance should be filed not later than thirty (30) days from the date the tax was deducted or the time the duty to deduct the tax arose. Penalty for late filing of Withholding Tax (WHT) returns WHT only has penalties for non-deduction and failure/ late remittance of deduction. Upon conviction, the
Global insured losses from flooding over the last ten years average approximately $9 billion per year
penalty is 10% per annum of the tax not remitted and interest at the prevailing Central Bank of Nigeria rediscount rate and imprisonment for period of not more than three (3) years (Section 40 of the Federal Inland Revenue Service (Establishment) Act 2007). 10. Requirements for filing Value Added Tax (VAT)
returns Section 15 of the VAT Act (VATA) Cap. V1 LFN 2004 (as amended) requires taxable persons to render returns of all taxable goods and services purchased or supplied by him during the preceding month to FIRS. The Service has prescribed the use of VAT Form 002 for filing the monthly VAT returns. Due Date Returns should be filed not later than 21 st day of the month following that in which the purchase or supply was made. Penalty for late filing of Value Added Tax (VAT) returns Section 35 of VATA stipulates a penalty of N5,000.00 for every month in which the failure to make returns continues. 11. Requirements for filing Transfer Pricing returns Regulation 6 of the Income Tax (Transfer Pricing) Regulations No.1, 2012 provide for the filing of Transfer Pricing returns and the documents required to be filed. The provisions under the regulations refer to companies which have relationship with any other company (i.e.) through control, management or ownership. The following are the content of Transfer Pricing returns: TP Declaration Form (required only in the first year but must be updated should there be material changes in the information provided)
Economic cost of flooding could hit $500b by 2030
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esearch suggests that flooding poses a threat to roughly 21 million people across the world every year, costing the global economy roughly $90.65 billion, with the potential for an estimated six-fold increase over the next 15 years. Data provided in connection with the launch of a new flood mitigation platform, the Aqueduct Global Flood Analyzer tool, co-developed by the World Resource Institute (WRI), Deltares, the Institute for Environmental Studies of the VU University Amsterdam, Utrecht University and PBL Netherlands Environmental Assessment Agency, highlights the economic severity of global flooding and its potential rise. The research, conducted by the co-developers of the tool found that by the year 2030 a startling 54 million people will be exposed to flooding, causing the annual global economic cost to hike significantly, from the $90 billion seen today to around $513 billion per-year. With this in mind, Aon Benfield’s catastrophe modelling division, Impact Forecasting states that global insured losses from flooding over the last ten years average approximately $9 billion peryear. So a near six-fold increase could take average annual global insured losses from flooding to a staggering $54 billion, or greater, by 2030. Hessel Winsemius, a researcher at Deltares and Philip Ward, a senior researcher at the Institute for Environmental Studies of the VU University Amsterdam, discussed the new tool and global flood resilience in a recent blog. Part of which read; “It will take decades and many billions of dollars to protect the tens of millions of people at risk from river floods and coastal storm surges. But starting now and following the direction of tools like the Global Flood Analyzer will help decision makers in international relief organisations, reinsurance companies, multinational company and many others build advanced protection systems to protect people and infrastructure.” The WRI describes the new tool as aiming to “raise the awareness of flood risks and climate change impacts by providing open access to global flood risk data free of charge.”
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E-Commerce
Shoptomydoor brings free international shipping to Nigeria Stories by JONAH NWOKPOKU
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igeria’s online shopping mall, Shotpomydoor has announced free ingternational shipping services for customers shopping from the United States of America. The free shipping promo, according to Shoptomydoor, will apply to customers who purchase virtually anything from the USA with the exclusion of cars, heavy industrial machineries and a few other items, and will run for purchases made from the 12th to 30th of March, 2015. The promo is open to both individuals and companies who make purchases online using their Visa, MasterCard or PayPal on any US store and delivers it straight to their free USA warehouse. Speaking on what motivated the promo, the President/CEO, Nduka Udeh said: “The recent economic trends that has resulted in a close to 30 per cent loss in the value of the Naira has seriously hit the average hard working Nigerian with people now finding it hard to meet daily needs. Some Nigerians are now resulting to the use of poor and substandard products in meeting everyday needs."
Etisalat begins hunt for 20 millionaires
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tisalat Nigeria has launched the second edition of its Easybusiness millionaire hunt targeted at empowering Small and Medium Enterprises, SMEs in Nigeria. Recall that in the first edition of the millionaire challenge held in 2014, ten entrepreneurs with the best business ideas were given N20 million grant, N2 million each, to grow their businesses. At the unveiling in Lagos, Thursday, Head of Business Segment, Etisalat Nigeria, Mr. Lucas Dada told journalists that “the scheme is the flagship product for SMEs in the country,” adding that “it’s about encouraging entrepreneurs and empowering SMEs.” Speaking on the criteria for participating in the challenge, Head of Marketing, Etisalat Nigeria, Bidemi Oladipo, said, to participate: “Subscribers must be on an easybusiness line package. C M Y K
Fast, timely deliveries are backbone of e-commerce Wiles E
vangeline Wiles is the Managing Director of Nigeria’s pioneer online marketplace, Kaymu.com.ng. By January, 2015, the marketplace marked two years anniversary in Nigeria, celebrating their successes in pulling over 20, 000 SMEs to their platform and expanding to five other cities across the country. In this Interview with JONAH NWOKPOKU, she argues that efficient delivery system remains the backbone of e-commerce. She also speaks on how the marketplace navigated successfully Nigeria’s SME sector and how small businesses can explore the fledgling e-commerce sector and become more successful. Excerpts Kaymu has just marked two years anniversary, how have you fared in your quest to bring SMEs in Nigeria online? Since inception in January 2013, Kaymu has been at the forefront of driving entrepreneurship in Nigeria by providing a safe platform for SMEs to conduct business online. The growth in our seller base didn’t happen overnight, it’s been a journey that has seen us grow from 50, to 1,000 and now over 20,000 sellers all over Nigeria. Our goal is to make it simple and easy for anyone to have an online store and join in the e-commerce revolution. Most SME operators in Nigeria are people, whose businesses belong to the informal sector, what strategy has helped you navigate successfully in this sector? Across Nigeria, we have field agents that go to major informal markets as well as major malls to tell sellers about the benefits of selling online. We believe this is an incredible opportunity to move these markets online and provide sellers with a platform to market their goods to anyone across Nigeria. Our success is based on the simple fact – all business people are looking for ways to grow their business and an online shop is an easy, convenient and cost effective way to do that.
Over the past two years, you have expanded to various cities, from your experience, what has been the rate of uptake? Our expansion has been driven by demand from our sellers. We had sellers in Abuja, Port Harcourt and several other cities before we opened offices there. For us, this was an indication of the significant opportunity across Nigeria, which resulted in the expansion of Kaymu to Abuja, Port Harcourt, Ibadan, Benin and Warri in the past six months. The uptake and reception to online shopping has been very encouraging, especially since we haven’t done a lot of above-the-line advertising efforts in these states yet. What can you say have been the major challenges facing SMEs and how can platform like yours help address these challenges? Research has shown that most SMEs fail within their first five years of existence with only a few surviving to grow into maturity in developing countries like Nigeria. Some of the factors responsible are; inadequate market research, irregular power supply, infrastructure inadequacies, and limited capital, amongst others. E-commerce can address some of these challenges for SMEs. The beauty of a platform like Kaymu is that sellers can open and operate a business with minimal upfront investment – all you need is a smartphone and small amount of capital to buy or make your products.
The importance of sellers migrating from brick-and-mortar retail to clickand-mortar cannot be overemphasized
Evangeline Wiles What makes Kaymu stand out from other e-commerce platforms is our dedication to SMEs. We have a dedicated team to help our sellers manage and grow their businesses. Logistics is one of the challenges impeding the growth of e-commerce in Nigeria, what ideal logistics strategy can help SMEs integrate successfully into ecommerce? Logistics is a field that still requires improvement in Nigeria and it is interesting to see that with the advent of ecommerce, more logistics companies are expanding their capacities to adequately attend to the enormous demand. Fast and timely delivery is one of the most important aspects of e-commerce. Unfortunately, many SMEs do not have the capabilities to achieve this on their own. To help our sellers with logistics, Kaymu has relationships with top logistics companies, such as Fedex and AIG Express. Over the last two years, Kaymu introduced some initiatives, like Kaymu Varsity, SME Saturdays, aimed at encouraging SME growth in Nigeria, what is your assessment of the response so far? And how can such initiatives help drive SME growth in Nigeria? Initiatives like KaymuVarsity and Kaymu Entrepreneurial Workshop are focused on training SMEs how to maximise their sales online through excellent product placement, efficient customer relations and new media marketing strategies. SME Saturdays is an initiative to integrate both the online and offline experience for buyers and sellers. Here, buyers can shop from the Kaymu platform and get their products immediately. All these initiatives are important because they help
entrepreneurs develop the skills and capabilities that are needed to succeed. We’ve gotten great feedback on these programs and we intend to continue to help Nigerian entrepreneurs reach their potential. Listing on Kaymu has remained free over the last two years, what has informed this decision and what direction do you intend to take in terms of monetisation in the future? Our focus in the past two years has been on building a good foundation. We have a commission structure in place and we intend to start applying it once a seller reaches a volume threshold. At the moment, our focus is on growing the community. How imperative is it for SMEs to migrate online visa-vis your vision to be the leading marketplace in Africa? Our vision is to be the foremost online shopping community for buyers and sellers in Africa. The reason is simple, gone are the days where you had to spend hours going to the market, haggle with sellers for the best price before getting a product. Now customers want to be able to shop from the comfort of their homes, at the most competitive prices and have it delivered to them when they need it. All this can be achieved through e-commerce. The importance of sellers migrating from brickand-mortar retail to click-andmortar cannot be overemphasized. They save money which would have been used for rent, staff salary and running of their store and thus can afford to fix competitive prices on their products. With offline stores, sellers only make sales when a buyer walks into their shops, but with online shopping, buyers all over Africa can make purchases at the click of a button.
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Aviation
WMO okays Nigeria’s SRP success for adoption
Stakeholders commend Chidoka, welcome new aviation order
By FAVOUR NNABUGWU
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he World Meteorological Organization, ,WMO, has okayed the Nigerian Meteorological Agency (NiMET)’s Seasonal Rainfall Predictions (SRP) as a successful product that could be adopted by countries around the world This is also as NiMET predicted late rainfall and early cessation for this year’s weather forecast while it foretold that most part of the country will experience warmer-than-normal temperature. WMO’s representative for North and West Africa, Mr Benard Gomez at 2015 SRP in Abuja on Thursday, acknowledged that countries in the world are adopting the success product put forth by NiMET which has recorded huge success. Gomez said that it has always been accepted in most countries of the world that whatever product that succeeds in Nigeria will definitely succeed in any other countries of the world. According to him, “Anything that works in Nigeria always work anywhere in the world and SRP is one product that has been very successful in Nigeria which other countries trust and develop because of its success”. In his speech, the Minister of Aviation, Mr Osita Chidoka said that the importance of NiMet’s predictions can be seen from the damage caused by the 2012 floods that hit most parts of Nigeria. Chidoka represented by the Ministry’s Permanent Secretary, Alhaji Mohammed Abbas, disclosed that the 2012 SRP flood prediction which happened six months after, affected 33 out of the 36 states which caused the federal government to release N17.6 billion to those states while the National Emergency Management Agency (NEMA) released N1.34billion for material relief. He said government took farreaching steps to mitigate the plight of those affected by the 2012 floods including setting up of national Committee on Flood Relief and Rehabilitation and also constitute a Technical Committee to assess the impact and proffer immediate, medium and long-term solutions.
RECEPTION - From right: Minister of Aviation, Chief Osita Chidoka receiving the report of Automation of Revenue Generation from the Committee Chairperson, Mrs. Janet Adepegba with them is Secretary of the Committee, Dr. Ibrahimm Idris held at Nigerian Civil Aviation Authority (NCAA) Annex, Murtala Mohammed International Airport, Ikeja, Lagos. Photo by Lamidi Bamidele By LAWANI MIKAIRU
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viation stakeholders who many feared will not be prepared to embrace the technological change and passengercentred policies the new Aviation Minister, Chief Osita Chidoka introduced to the aviation sector since assuming office last year, have surprised everybody. Stakeholders, especially passengers and airline operators have keyed into the Aviation Passenger’s Service Portal for improved information between passengers, agencies and airlines. Passengers have been able to keep the airlines on their toes by promptly reporting any erring airline to the aviation agencies for appropriate sanctions. It will be recalled that at the launching of the Aviation Passenger Services Portal, APS, on December 6, 2014 and the Aviation Commits Initiative (ACI) on 3 rd February 2015, the minister emphasized the need for automation in the operations of all the Aviation Agencies. The establishment of the APS portal for booking flights, monitoring airline flight performances, obtaining information on local destinations, etc, has in small way assisted passengers to be the “centre” of the concern of all aviation stakeholders. On Monday, last week, at
Nnnamdi Azikiwe International Airport, Abuja, passengers aboard Lagos bound Arik Air flight had their flight delayed for hours. Passengers were able to get across to the management of the airline and relevant aviation authorities and they were immediately compensated and served a light meal while they were waiting. One of the passengers affected, Alhaji Isa Shehu who spoke with Vanguard commended the Aviation Minister for the new aviation policies introduced by him which have made passengers “king” in the new era. Passengers are protected under the new Advocacy and enforcement of Customers Bill of Rights Policy initiatives. This Customers Bill of Rights Policy has further been strengthen by Chidoka with his introduction of performance management systems for monitoring and improving performance of aviation workers. He also launched a sector- wide initiative Aviation Commits where all stakeholders in the industry commit to improve service delivery to the public. At the launch, Chief Executives of all the aviation parastatals and agencies were made to publicly commit to render prompt and reliable services to the public. Speaking about the Aviation Commit initiative, a licensed maintenance engineer with the default Nigeria Airways
Engineer Tunde Ojo said this initiative is one of the best polices so far formulated in the Nigerian aviation sector. He added that if Nigeria Airways management and government had been forced to commit to this kind of policy, the airline would not have been default today. Only last week, the Minister warned that any aviation agency chief executive who fails to comply with the implementation of the Aviation Revenue Automation Project (ARAP) project within 60 days would be sanctioned. This is coming after the minister approved the report. The report is aimed at automating all aviation related activities at the nation’s airports. The minister approved the report and
The automation project is structured and empowered to bring to reality the vision and mission of the aviation industry, which is to make the industry a world Class provider of safe, secure and comfortable transport industry
recommendations of the committee after the submission of the report by the committee chairperson, Mrs. Janet Adepegba, last Monday in Lagos. Chidoka had inaugurated the ARAP committee to “ decide, recommend and conduct analysis meant to make the aviation sector more competitive by reversing the current negative trends in the industry in order to put it in a favourable light in the global world.” The minister said that the ministry has also approved a review in the cost and charges of the automation system. And he has given all agencies one week for the implementation of the project cost and their targets. He said “The project is structured and empowered to bring to reality the vision and mission of the aviation industry, which is to make the industry a world Class provider of safe, secured and comfortable transport industry.” The minister expressed optimism that the implementation of the project will increase the efficiency of Nigerians and other workers in the aviation industry. He added that it will enable agencies in the sector deliver higher quality services to Nigerians “that is selfsustaining and pivotal to social economic growth, and to transform the sector into an efficient, profitable and preferred mode of transportation”. On how far some of these polices have helped in making the aviation sector more efficient, the minister said : “I looked at the performance of Arik on the aviation service passengers portal and found that in January, they only have 20 per cent on-time departures. By February, they have inched up to 42 per cent. I also saw that First Nation Airline is number one in February with 56 per cent coming up from 37per cent in January. “So it gives me some hope that what we are talking about as regards commitment, performance measurement and monitoring is beginning to provide dividends.” To check the high level corruption in the aviation industry, especially the airports across the country, the minister directed the Federal Airports Authority of Nigeria, FAAN, to partner the Economic and Financial Crime Commission, EFCC, to check malpractices in FAAN and enhance the delivery of efficient services. Chief Osita Chidoka gave the directives during his address at the EFCC anti-corruption interactive session, organised for management staff of FAAN at Sheraton Hotel and Towers, Ikeja .
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Advertising & Promotions
Beer brewers divide market with new tactics Stories by PRINCEWILL EKWUJURU
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eer brewers in Nigeria have deployed new marketing tactics that have delineated consumers along brand line as a way of edging out competing brand (s). A report by the brewery companies indicated that the industry recorded a marked decline in growth in the third quarter of 2014, this was attributed to pressures on household income and heightened security concerns which affected consumption pattern. Invariably, the new marketing tactics according to one of the brewers is the recruitment of new consumers due to decline in the number of adult consumers as a result of the current economic realities which has saddled them with additional responsibilities. Another was the decline in beer market consumption which was attributed to the influx of spirit and brandy products into the Nigerian market. In a recent investigation by Vanguard, it was discovered that adult consumers only drink when they feel it is necessary, after settling major family responsibilities, and that been the reason brewers have shifted attention to younger at heart consumers who have no or lesser responsibilities to attend to. That was why also a major player in the industry relied on what it called ‘value products’ to record a marginal market share in 2014. Interestingly, all these have come together to thicken competition in the sector, which thus has led to the partitioning of the market by the three major market leaders; SAB Miller, Guinness Nigeria and Nigerian Breweries, NB Plc. The trio have deployed new
CELEBRATION - From left: Mr. Tam Tamunokonbia,Head Lagos Office Consumer Protection Council; Steve Nwosu,Executive Director,Corporate Service, The Sun Newspaper; Mrs. Bunmi Oke, Chief Executive Officer , 141 Worldwide; Mr. Lanre Adisa, Managing Director, NOAH’S ARK and; Mr. Kayode Olagesin, President, EXMAN at the 2015 Brand Journalist Association of Nigeria World Consumer Day celebration held in Ikeja Lagos. Photo by AKEEM SALAU. strategies to maintain a healthy balance sheet to satisfy their shareholders. For example, “SABMiller, before its entrant into the market, competition was limited to NB and Guinness Nigeria, its entry has not reduced the rivalry between both; rather it has heightened it. Today NB is no longer seeing Guinness as its rival, but SABMiller. Before now the competition
appeared to be restricted to above the table tactics. Aside committing huge resources to advertising spend, NB and Guinness Nigeria have also taken to sponsorship of headline properties in some of the consumers’ identified passion points including sports, entertainment and sponsorship of festivals. Today new dimension has been introduced. Guinness
Frytol hits market, engages consumers via activation
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ilmar Africa, producers of Frytol vegetable oil has entered the Nigerian market with a fully integrated consumer activation. The campaign was to further establish the Frytol product to resonate amongst consumers. The last quarter of 2014 saw producers of the product deliver
an unforgettable experience to market women, with their world class Edwomhemaa activation. To further build on this success additional experiential concepts have been introduced to reach a wider audience. Wilmar’s first activation shall commence this week with a 10 week - 3 part Dumsor campaign.
PEP store, MTN in strategic partnership on airtime sale
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EP Stores Nigeria, a retail company specialized in clothing, footwear, as well as other fast moving consumer goods has entered into a strategic business partnership with MTN Nigeria that will see it providing customers opportunity to buy airtime from its store. According to PEP Stores Nigeria, the strategic business partnership deal will add value to the in-store shopping experience of PEP esteemed customers by offering them the unique opportunity to buy MTN Airtime with ease and convenience. Speaking at the official launch of the partnership which was held at the Allen Avenue branch of PEP Stores Nigeria on Thursday March 5, 2015, the General C M Y K
Nigeria is seen in every hotel, relaxation spot in Nigeeria, giving out raffle tickets to consumers, courtesy of its “Guinness Refree promo,” to dish out raffle tickets. However, in 2014 Guinness full year revenue dropped 11 percent, and profit by 19 percent. This it attributed to a couple of things; pricing disadvantage. A mistake that depleted market share.
Manager, PEP Stores Nigeria, Mr. Deon Conradie described the partnership between PEP and MTN as a symbiotic relationship that will create new exciting experience for the customers of the two brands in Nigeria. “We are very proud to sign this very unique partnership with MTN and we are very excited at the value added that this partnership will offer our valued customers by enabling them to buy MTN Airtime at all our existing 27 outlets” he said. Also speaking at the event, the Finance Manager, PEP Stores Nigeria, Mrs. Kofo Awonuga disclosed that the PEP/ MTN relationship started in July 2014 when MTN Airtime was sold at PEP Stores using standalone devices and now with deal,
The first activation within this campaign shall be Tales from Ananse where a branded Frytol truck will drive through local communities engaging citizens with folktales whilst they enjoy kelewele around a fire. The second phase is titled Anopa, Awia ne Enyumre (Morning, Afternoon and Evening) where we shall entertain members of the public via engaging them in an Oware tournament and viewing of one of their favourite Ghanaian movies. Finally, Wilmar Africa shall host ‘Dinner in the Dark’ where 50 members of the public and press shall have the chance to win tickets to dine in the dark at Ghana’s premier 5 star Labadi Beach hotel. ‘Frytol is a brand that is intertwined with our heritage. It reminds us of where we came from and the values that were and continue to be instilled in us to take us forward to the future.
CHINI names Judges for Young Lions competition
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HINI Productions, organizers of the Young Lions Competition have announced the jurors for the various categories of the competition. Speaking on his role as 2015 Young Lions Creative Jury President, Babatunde Sule said: “New kids on the block! Our industry has always belonged to the young at heart. Therefore my expectation as jury chief at this year’s Young Lions Competition is to find a breadth of daring, exciting but relevant ideas that would jolt and perhaps even scare some veteran ad men off their cushy chairs. The revolution starts here – young lions, you can do it!” The Young Lions Competition is part of the Cannes Lions International Festival of Creativity and is open to professionals under 28 years. The first leg of the competition is the national event which takes place in the home countries of the competitors. Winners of the national competitions in each category compete internationally as their countries’ flag bearers in June during the Festival. Nnamdi Ndu, managing director or CHINI Productions said: “we are quite confident that this is going to be a landmark event, more teams
Servair Nigeria wins international catering award
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an African Catering Services FZE- Servair Nigeria has been named one of the winners of the Quality & Safety Alliance Inflight Services Programme, QSAI award of Excellence in Catering Quality. The company was named the 2014 Bronze Winner for Europe, Middle East and Africa EMEA region, in the award designed to recognise the world’s best airline caterers. This will be the first time a West African company will be winning the award. And also the first time any unit of Servair International, the third largest airline catering company in the world, will win the award. Speaking on the development, Patrice Larapidie, General Manager, Servair Nigeria said: “We are thrilled to have won this award. It’s a real boost to Servair Nigeria at a time when we’ve re-focussed our efforts to put the customer at the heart of every meal and cuisine.”
48 — Vanguard, MONDAY, MARCH 16, 2015 Email:lesleba@lesleba.com, lesleba@gmail.com Blog page:www.lesleba.com/blog2 Website: www.lesleba.com Tel:0805 220 1997
Will PDP or APC rescue the economy?
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he 2015 election is barely two weeks away and yet, not even close followers of events in the political space can satisfactorily articulate distinctive differences in the ideology of the two major contestants. Instead, Nigerians have been fêted to a reality edition of an otherwise Nollywood dramatization of a “rofo rofo fight” between two wives in a polygamous setting. Ironically, the protagonists expect the favoured husband to make the louder and less civil combatant his favorite! However, since both wives also carry the same excess baggage of an uncomplimentary heritage, the choice of a favorite wife, who would judiciously manage the family resources for the next 4 years, for the greater good, has become a monumental challenge for the poor electorate. Similarly, judicious management of resources positively transforms economies, whenever such nations adopt economic and political systems, which induce competitive entrepreneurial spirit and also encourage selfreliance. For example, the imposition of ‘unitary federalism’ which predicates our association as a nation, has obviously failed to serve as an engine of inclusive economic growth; sadly, despite the available lean resources before the advent of dictatorship in 1966, the strident economic progress and keenly competitive enterprise of existing Regional Governments, has clearly become unachievable despite the huge leap in revenue under the present arrangement of ‘unitary federalism’. Our stunted federalism will
ultimately sink the liberally patched ship of state to bring untold anguish to millions of our countrymen. Nonetheless, any movement towards the political equity in traditional federalism would clearly reduce the fatal attraction to control the resource rich centre and will ultimately also enthrone an enduring political structure that would bring out the best in us, as in the glorious years of Regional autonomy. However, such positive transformation will not serve the interest of the political class who derive stupendous benefits from the prevailing skewed social contract. Furthermore, the 36/7-state political structure is clearly a great disservice to Nigerians. This selfish contraption has supported incredible duplication of functions and wastage of scarce resources, such that there is a need to borrow to supplement, even consumption expenses, that now account for over 80% of projected total federal spending in 2015. Regrettably, none of the major parties is in any hurry to tell us how they intend to redress expenditure in favor of infrastructure and human capacity building, and no one is demanding to know those specific areas which would suffer revenue cuts from any such fiscal discipline; sadly, in spite of over 100 million Nigerians living in abject poverty, the salaries of our lawmakers is reported to probably be the highest anywhere in the world and over 100 times the national minimum wage. Nonetheless, politicians of all hues whether PDP or APC will certainly reject any attempt to realign their gross emoluments with
reality, even if such alignment will provide economic succour to those impoverished electorates who voted them into office. Furthermore, the accumulated debts politicians incurred during the extended campaign trail have to be repaid, with a handsome profit while successful political officeholders have barely 4 years to acquire enough wealth to last a lifetime. Clearly, neither the ruling
a faltering economy after global oil prices plunged, weakening the naira. Nigeria raised 91 billion naira ($455 million) in bonds this week, with maturities ranging between 5-year and 20-year at higher returns across the board. “Trading is expected to be mixed next week but the market would likely stay above the 16 percent resistance level,” one dealer said. Yields on the 2016 debt closed flat at 16.15 percent compared with 16.16 percent last week, while the 2022 debt note dropped to 16.03 percent
from 16.07 percent previously. The benchmark 2024 debt note however rose sharply to 16.63 percent from 16.13 percent last week. The yields on Kenyan Treasury bills are expected to continue edging lower next week on the back of increased shilling liquidity, traders said. The central bank will auction 91-day, 182-day and 364-day Treasury bills worth a total 8 billion shillings ($87 million). “The general trend downwards should persist ... but not as aggressively,” Mathangani Kariuki, a bond trader at Kestrel Capital, said.
It is foolhardy to continue to accumulate national debt in the belief that the current debt to GDP ratio is within tolerable limits nor the main opposition party has a clear grasp of how an economy works; consequently, they do not quite understand the critical significance of the impact of excessive money supply in an economy. Indeed, with the existing systemic bloated disequilibrium in money supply, any hope or talk of industrial growth, increasing employment opportunities, increasing consumer demand, reduced debt burden, fuel subsidy abolition and new refineries or indeed any promise to diversify the economy would remain just hot air, as already faithfully demonstrated by failed serial attempts by successive administrations to bring about socially and economically
Business & Economy Nigeria bonds to rise on election jitters
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he yields on Nigerian bonds are seen rising next week on uncertainty over a delayed presidential election, while Kenyan Treasury bill yields will ease further on increased liquidity. Nigerian bonds yields will rise as Africa’s biggest economy prepares to hold presidential elections on March 28, while a planned Monetary Policy Committee (MPC) meeting to set rates on March 24 would also unnerve investors, traders added. The continent’s largest oil producer is facing C M Y K
supportive outcomes. Invariably, the success or failure of any economy clearly rests on the best practice management of money supply, such that inflation would remain below 3% to protect mass social welfare and consumer demand which drives industrial growth. Similarly, discipline in the management of money supply will modulate interest rates in line with the aspirations of the needs of an economy, but, clearly no economy can achieve distinctive growth or economic diversification if, in addition to the burden of oppressive energy costs as an abiding albatross against their survival, industrialists, commercialists and other stakeholders in the small and medium Enterprise subsector have to borrow at over 20% to fund their operations. So it is necessary that the APC and PDP should educate the electorate on how, in the face of, systemic excess money supply, they would bring down inflation to below 3% or how, they expect interest rates to fall below 7% across the board to liberalize cheap funding (as opposed to selective preferential sectorial packages) for serious business people to increase production and create more jobs. It is foolhardy to continue to accumulate national debt in the belief that the current debt to GDP ratio is within tolerable limits. Inexplicably, the high cost of funds instigated by CBN’s 13% MPR (in place of less than 2% in successful economies) makes it inevitable that government’s domestic borrowings will also attract abnormally high interest rates, which are clearly inappropriate for such sovereign risk free loans.
Omoh Gabriel Babajide Komolafe Clara Nwachukwu Peter Egwuatu Yinka Kolawole Favour Nnabugwu Godwin Oritse Godfrey Bivbere Michael Eboh Franklin Alli Ifeyinwa Obi Rosemary Onuoha Nkiruka Nnorom CONTRIBUTORS Princewill Ekwujuru Jonah Nwokpoku Naomi Uzor Providence Obuh LAYOUT
Total domestic debts are currently reported to be about $40bn, while external debts is about $10bn; ‘it is not clear if PDP or APC leaders actually understand how these escalating debts come about, nonetheless, future generations will continue to bear the burden of debt service with over 20% of current annual budget (about $5bn) for several decades to come. Conversely, if government reduces the cost of its debts and the rate of debt accumulation, it would most likely work against the interest of the cabal and oligarchs that currently control the commanding heights of our economy. Both the PDP and APC certainly enjoy support from the beneficiaries of such government profligacy and it may be self-destructive, therefore, to promote any transformation that would ultimately jeopardize the interest of major financiers of any ruling party. Similarly, political party finances are handsomely supplemented from the substantial fiscal leakages that fund corruption from the deliberate mismanagement of public funds with slap on the wrist sanctions on discovery. The fraudulent opportunities for corrupt enrichment in the fuel/kerosene subsidy scheme currently cost the federal treasury about N1000bn annually and also falls into the category of leakages that reinforce party strength and solidarity, and so any attempt at fiscal discipline maybe akin to the parties’ cutting their nose to spite their face. Similarly, despite the distortion caused by Naira depreciation, the attendant opportunity for rent seeking will prevent any serious attempt to save the Naira. SAVE THE NAIRA, SAVE NIGERIANS
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