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Stock market capitalisation records 26.6% growth, hits N11.533trn •Stakeholders lament CBN’s high interest rate •Say it will affect market performance in 2nd half BY PETER EGWUATU & NKIRUKA NNOROM


he positive sentiment at the Nigerian stock market at the beginning of the year has continued to impact on performance of the market which has recorded a 26 per cent growth in the last eight months. The market indicators, which are the barometer of the health of the financial market, as at the end of third quarter of 2013 showed that share prices of most of the companies listed in the exchange have risen by 26.6







per cent. The average of all the prices gained during the period has caused the value of all shares listed at the stock exchange to hit N11.533 trillion at the end of trading last Thursday, September 12, 2013, compared to the N9.109 trillion it started the year with. Also during the period, the share price of Nestle Nigeria Plc crossed the N1, 000 marks for the first time in the history of Nigerian stock market to close at N1, 088 per share, following high demand by domestic and foreign investors, a mark of the growing confidence by both local and foreign investors in the Nigerian

economy. The Index had opened in the first day of trading in January at 28,078.81 points to close Thursday September 12, 2013 at 36,224.44 points, showing a gain of 29 per cent. Similarly, the market capitalisation rose by 26.6 per cent from N9.109 trillion it opened with in January to N11.533 trillion as at the close of business on Thursday. The stock market ended Thursday with investors trading 150.58 million ordinary shares valued at N1, 732,683. However, the market had reached a new high of above N12 trillion this year before dropping due to the

vagaries of demand and supply of the market. Notwithstanding the positive growth, operators and other stakeholders in the financial market have raised fresh alarm over the continuous retention of Monetary Policy Rate (MPR) at 12 per cent by the Central Bank of Nigeria (CBN), saying it will affect quoted companies’ performance and capital market indices for the remaining part of the year. Analysis of the performance of the capital market showed that the month of August closed at 36,248.53 points, a loss of 151.85 points. Month-to Dateshowed a total loss stands at 2,102 points or 4.40 per cent. Thaddeus Investment Advisors & Research Limited in its opinion of the Nigerian stock market as at August, 2013 said “The top 25 stocks (category A) are institutional interest-driven stocks with minimal retail participation. Category B has a better balance of institutional and retail interest-driven investor participation. We put the ratio at 2:1 with the greater portion going to institutional interest; Category C consists of retail interest-driven stocks Continues on page 22


154.76 245.4184 206.0939 166.6057 1.5552

0.2934 234.4369 25.2908 41.2638 27.6283 235.0804

155.26 246.2113 206.7597 167.1439 1.5602

SELLING 155.76 247.0042 207.4256 167.6822 1.5653



235.1943 25.373 41.3971 27.7176 235.8399

235.9517 25.4551 41.5305 27.8068 236.5994

CBN Exchange rate as at 13/09/2013

*From Left; Alhaji Aliko Dangote, President, Dangote Group, Alhaji Bala Mohammed Getso, Managing Director, Giwa Dynamic Ventures Ltd, as First Distributors of the Year, and Alhaji Sanni Dangote, Vice-President of Dangote Group, during the 2013 Awards Ceremony of Dangote Cement Distributors Night, with the theme; 'Cementing Parternships,' held on Wednesday September 11, at Eko Hotel, Victoria Island Lagos PHOTO; Kehinde Gbadamosi C M Y K

22 — Vanguard, MONDAY, SEPTEMBER 16, 2013

Cover Story

The Basic Guide to Starting your Business Part 2

From left Mr Christopher Leitl, President, Austrian Federal Economic Chamber; Iyalode Alaba Lawson, Deputy President, NACCIMA presenting a gift to Ambassador Joachim Oppinger, Austrian Ambassador to Nigeria during a signing of Memorandum of Understanding at the Austrian-Nigerian Business Forum held in Lagos... recently.

Stock market capitalisation records 26.6% growth, hits N11.533trn Continued from page 21 with minimal institutional participation. For Category A, price performances (Year-toAugust 30th) are better than the Nigerian All-Share Index (29.09 per cent) as market value decreases. Only four stocks in the top 10 most capitalised companies have price performances better than the market, while eight of the last 15 in Category A have price performances better than the overall market. In a nutshell, as market value decreases, price appreciation improves among Nigeria’s 25 most capitalised companies.” It also noted that stocks outside of the top 75 are much less actively traded compared to the top 75 and therefore are largely stagnant in terms of price movement. The average price performance as at reference date of August 30th was six per cent for Category D relative to the overall market at 29 per cent. “Retail investors drive stock volatility and stocks that have a decent level (in excess of 30 per cent),” adding that retail investor participation based on value not volume will on average have a better price performance than stocks that have retail investor interest less than 30 per cent. Retail investors participate more in stocks that are cheap on an absolute basis. This has nothing to do with valuation” it added. Also commenting on the performance of the stock market for the period under review, Tola Odukoya, President, Dunn Loren Merrifield, an independent equity research and analytical company, said; “ Overall, activities in the capital market C M Y K

during the review period was lifted by secondary market activities in equities with a few primary issues. He explained that companies’ results were also encouraging, especially for banks, “although this may not be sustained for the rest of the year based on new guidelines and regulations from the CBN. He stated that the slowdown in activities in the bond market persisted following the federal government’s shift to the international financial market for its borrowing, whilst the monetary and interest rate environment continued to deter states and corporate organisations from raising funds in the market. Also speaking, Mr. David Adonri, Managing Director/ CEO, Lambeth Trust & Investment Company Limited, noted that year-todate, the equities market appreciated by 29.10 per cent, led by the industrial goods sector, which rose by 54.69 per cent. He stated that the only sector that declined within the period was the Alternative Securities Market, ASeM, which lost 1.92 per cent, while saying that the recently reactivated platform for retail bond trade had been very active. However, the equities market is not expected to be upbeat for the remaining part of the year. It may momentarily firm up when quarter three financial results are released, but the usual season trend would prevail thereafter, he affirmed. Also, in its review of the economy and capital market performance for the first half of the year, titled, Nigeria Strategy Report, ARM

Research noted that Nigeria had a difficult second half, 2013, with the strains which showed up simultaneously in both asset market and currency performance pointing clearly to the source of ongoing pressures on both fronts just like other emerging markets. “Remarkably, as we had anticipated, a surge in domestic interest, which put the spotlight on the less fancied market segments helped limit the damage on overall equity indices, though a harried defense of the Naira put up by the CBN in the wake of surge in portfolio outflows may not have had the commensurate impact on bond prices despite substantial recovery in reserves across the period. However, there were positive developments on many fronts, the most important being the emergence of a robust recovery in the banking sector and a sustained run of single digit inflation, which we believe signals the onset of a much more stable backdrop for policy and market outlook. The Nigerian stock market ended the first half of the year on a positive note, returning 28.8 per cent gain in overall market performance as the All Share Index (ASI) closed at 36,164.31 points. It is about 80 per cent higher than the previous year’s level. The index also had crossed the 40,000 points mark before retreating to close last week Thursday at 36,476.30 points. Market value as at the end of the half year peaked at N12.84 trillion, surpassing the previous year before also retreating to N11.61 trillion at Continues on page 23

a)What is not business? One might wonder the importance of knowing what is not business, but this is necessary because you need to know the kind of business you should not go into, and businesses that are prohibited by law. Not every business is a genuine one and I will be taking you through a list of businesses you must not be found doing. b)The mentality of a businessman: There’s a saying in the good book which reads thus “by their fruits you shall know them”. The same applies to businessmen; they possess certain qualities and mind sets that make them stand out. Consequently, before you start a business, you need to be adequately sure that you possess the die-hard mentality of an entrepreneur to withstand the challenges that will arise. c)Who is an entrepreneur? Over time, various definitions have been given to the term, but I will be teaching you the difference between an entrepreneur and a businessman, the boundless and countless opportunities open to an entrepreneur, the traits and characteristics of a successful entrepreneur. In short, everything you need to know if you want to be not just a businessman but also an entrepreneur. d)Your readiness to be your own boss: A lot of people embark on a journey without fully preparing for it, and as such, they are knocked off balance by the slightest wind that blows. No warrior goes to war without his arms and it’s only a stupid farmer that goes to farm without his hoe. At the end of this topic, you would know if you are ready to start a business and peradventure you are not, you would be taught steps that will help you to be both mentally and financially ready. e)The basic steps: In this part, I will be taking you through the steps that you cannot overlook, if you want to have a successful business. These include: conceiving an idea, planning, funding, structuring, location, training and so much more. I am of the sincere opinion

that this would be more than just a book for you and your loved ones; it will be a compass that will guide you on your journey into the world of entrepreneurs. There is no better time to start your own business than now. These same steps have worked for me and I dare say are still working for me, and I am confident they will work for you and everyone that reads this book. WHAT IS BUSINESS? Before you start a business, it is very important to understand what a business is in order to avoid making mistakes that can be very detrimental. The term business is very broad and can be vague; for some it is any activity or trade with the sole aim of making profits. On the one hand, it can be said to be the occupation, work or trade in which a person is engaged in. On the other hand, a business can be defined as “an organisation that provides goods and services to people who want or need them”. When many people think of business careers, they often think of jobs in large wealthy corporations, but for the entrepreneur, a business is any activity aimed at creating and keeping customers. There are basically two ways to carry out a business: 1.Sell goods (physical things like books, toys, cars, houses, etc). 2.Sell services (intangible things like nursery education, legal services, health care, insurance, etc). Many business-related careers though, exist in small businesses, non-profit organisations, government agencies, and educational settings. Conversely, your business may consist of selling both goods and services. For example, if you are a computer dealer, you may sell goods (hardware and software) and services ( m a i n t e n a n c e , troubleshooting, or consulting). While it is very important to get a degree or some level of academic qualification, you can still go into business if you do not have one. Starting and growing your business is very much like having a baby and bringing up the child.

Vanguard, MONDAY, SEPTEMBER 16, 2013 — 23


ast week, I wrote on this column that Nigerians' penchant for foreign goods has continued to put pressure on the nation’s external reserves and the exchange rate. In the article, I asked for how long the CBN will continue to defend the naira. Some readers wrote in to say that the article was more of a question and did not suggest solution. I said that between the month of April and August 2013, a total of $14.95billion left the shores of Nigeria as payments made by the Central Bank of Nigeria on behalf of the public. Of this amount, cash sales to Bureaux de Change, where those who purchase foreign exchange in small quantity buy from, amounted to $2.2 billion while letters of credit for direct importation amounted to $157.5million. Direct remittances were

Let every company source its own foreign exchange


put at $983.7 million and sales to banks through the wholesale Dutch auction amounted to $11.5 billion. Debt service/payment during the period took the sum of $93.62 million out of the external reserves of the country. Ironically, Bureau de change is where the informal sector operators buy foreign exchange. The over $2.2 billion from the source went mainly to those who are now having a field day in the importation of either substandard products or contrabands. “These payments are made for purchases of goods and services that are non-essential to the economy. Nigerians import toothpicks, rice, second-hand cars and virtually anything under the sun. Nigeria since the discovery of oil, has become an import-dependent economy. It is not producing goods and services for export. The only commodity that Nigeria depends on for foreign exchange earnings is crude oil. Imagine if the over one billion dollars that flow out of the country on weekly basis is invested in local production; the multiplier effect on the economy will be tremendous. Besides, Nigeria monetises its foreign exchange earnings from oil through constitutional requirement that the nation’s revenue go into one account for the three arms of government to share. The act of sharing revenue from oil has made the economy unproductive as every arm of government depends on monthly federal allocation. Nigeria’s earnings from oil which is monetised monthly and shared among the three

Ironically, Bureau de change is where the informal sector operators buy foreign exchange; the over $2.2 billion from the source went mainly to those who are now having a field day in the importation of either substandard products or contrabands


tiers of government now becomes the property of the CBN. It has been shared among the three tiers of government and cannot be spent the send time except those who want to import that will now buy back the dollar with naira. This is not the practice in other economies. Manufacturing companies and other economic agents earn foreign exchange and use it to further their production. Most of their earnings are either reinvested within the economy or distributed as income to investors. Such earnings aid companies to expand their production, create new jobs and ensure real economic growth. The reverse is the case with Nigeria. Nigeria is not

manufacturing locally. It has to import virtually everything it needs. As a result, for every naira spent in the country, about 90 kobo goes out for importation, meaning that only about 10 kobo is spent locally as it is significantly import-dependent. The CBN is involved in the foreign exchange market because it has purchased close to 95 per cent of Nigeria’s foreign exchange earnings in naira. CBN is currently defending the naira through its regular auction sale in the foreign exchange market out of fear that any currency depreciation could have adverse effect on the cost of goods and services in Nigeria that could trigger another banking crisis. The CBN's fear also is that if it allows the naira to depreciate massively, the

economy will be in trauma which could worsen the unemployment situation in the country. Central bank's fears are genuine hence it is more focused on price stability and financial system stability despite its avowed commitment to developing the real sector of the economy. The truth is that the CBN should not be the major supplier of foreign exchange to the market. Nigeria as a country, should stop deceiving itself by continuing to own oil blocks. Oil blocks should be owned and developed by individuals who in turn should pay tax to government. Governments around the world are run on taxes not on free money from oil wells. It is the desire to get a share of the free money that has made Nigerians mentally lazy. Gover nment functionaries have long stopped thinking, all because of the belief that Nigeria will sell oil and share. The fight between the seven aggrieved PDP governors and the presidency is not about any policy disagreement, it is about access to free money. If Nigerians collectively decide to save all earnings from oil today or invest it in infrastructure and every state and local government agree to source funds inwardly to finance its recurrent expenditure, the fight among

the geo-political zones of who becomes the president of Nigeria will fade away. Crude oil is the bane; foreign exchange earned from it is squandered because it is free money. In other parts of the world, the central banks enter the foreign exchange market either to buy or sell just like any other economic agent. Companies that earn foreign exchange keep them. Instead of defending the naira, federal, state and local governments should encourage commercial farmers to grow rice; resuscitate existing industries to produce goods at affordable prices, patronise locally made goods. Nigerians should buy locally made goods, eat our home grown food. Aso Rock and hotels in the country should lead by example and must begin to serve food made out of cassava, yam, coconut and groundnut. Corporate institutions should collaborate with research institutions and universities to develop new products as investment in such products will bring about economic expansion, increased production and Gross Domestic Product (GDP), and create employment in the country. Rather than do this, Nigerians continue to export jobs to other countries by importing what can easily be produced locally. The few companies operating in the country have stock of finished inventories in their warehouses because Nigerians do not patronise locally made goods. CBN should stop being the sole supplier of foreign exchange to the market. Companies and individuals should source their foreign exchange.

Cover Stock market capitalisation records 26.6% growth, hits N11.533trn Continued from page 22 the close of trading on Thursday. This was attributed to profit takers. Operators and other stakeholders in the market have appreciated the level of performance when they considered the 2012 performance under review. Market value was singularly enhanced by the listing of Dangote Cement which accounts for 25 per cent of total market capitalisation. Analysis shows that average daily transaction in the half year is 475 million shares; this is higher than 360 million shares average daily transaction recorded in the entire 2012 period.

Sectoral review revealed that the Banking sub-sector remained the most active as it witnessed a lot of activity both in the first and second quarter of 2013. The NSE Insurance Index led the sectoral indices with a return of 30.4 per cent, followed by NSE Oil and Gas with 28.61 per cent return. Expectations were high that insurance stocks will rally as earnings of the insurance companies begin to pour in the second half of the year. Insurance stocks were worst hit by the price correction. Consequently, the Insurance Index ended the quarter with a negative return of 10.36 per cent, while the Oil and Gas Index took the lead amongst losers with a drop of

13.45 per cent. Meanwhile, in reaction to the MPR, the CBN had explained that its monetary policy committee was faced with three choices, namely, increase in interest rates in response to the ‘upward trend’ in headline and food inflation; a reduction in interest rates in view of declining core inflation and Gross Domestic Growth, and retaining current monetary policy stance in view of conflicting price signals and global uncertainties. The committee apparently rejected option one, as being “potentially pro-cyclical, considering the structural nature of recent inflationary pressures”. Option two was equally rejected on the

grounds that it was “likely to send wrong signals of a premature termination of an ‘appropriately’ tight monetary stance. The committee had, therefore, resolved to retain the MPR, which determines the rate at which banks lend to their customers at 12 percent. Speaking to Vanguard while assessing the performance of the stock market for the first half of the year, Mr. Adebayo Adeleke, a Director of May & Baker Plc and National Secretary of Independent Shareholders Association of Nigeria (ISAN), said; “The first half of the year is good for the stock market. The results from the companies so far released are good,

showing improved liquidity. However, going forward, the policy thrust of the CBN on MPR is going to adversely affect the capital market at the end of the second half. In the third quarter, if this MPR remains unchanged, the effect might not show significantly. The reason is that interest payable and other expenses will be on the rise and this will affect the bottom line of these companies quoted on the NSE.” Continuing, he said, “How can companies survive with high lending rate of 20 and 25 per cent from the banks. We are likely to see companies take precautionary measures from borrowing because the cost of goods will be high and consumers demand would definitely drop. C M Y K

24 — Vanguard, MONDAY, SEPTEMBER 16, 2013


Vanguard, MONDAY, SEPTEMBER 16, 2013 — 25

Business & Economy BRIEFS


ore entrepreneurs h a v e lauded Alhaji Aliko Dangote, President of the Dangote Group of Companies, for siting a refinery at Olokola in Ondo State. They said in Lagos that the penetration of the business mogul into the project that is expected to mitigate the importation of petroleum products was commendable. Mr Boniface Okezie, President, Progressive Shareholders Association of Nigeria, urged other indigenous entrepreneurs to emulate Dangote, who invests at home. Okezie hailed Dangote as a good risk taker in business, adding that the venture would generate employment for many in the state and beyond. “ Every entrepreneur needs to see risk-taking in business as one of the processes that they will encounter before they break even. Risk-taking shows clearly that against all odds, one can achieve a feat and this demonstrates clearly the difference in the class of entrepreneurs in the country,” he said. Mr. Nnaemeka Obiaraeri, Managing Director, Taurus Capital and Advisory Ltd., Lagos, described Dangote as a shrewd entrepreneur. According to Obiaraeri, Dangote is a focused businessman who has nurtured his businesses over the years. “Time is required in nurturing a business, as it is often not possible to get to the zenith in one day. With patience and commitment, in a given time, one’s dreams will be achieved,” obiaraeri added. Mr Gbenro Adetunji, an entrepreneur, said that all organisations managed by Dangote were successful because he had adopted the entity concept. “By this, I mean that Dangote, as the chief

CBN earmarks N220bn for SMEs, says Controller


*From left: Aggrey Maposa, Regional Director, TNS Connect, Africa and Middle East, TNS; Adeola Tejumola, XEO, West, East and Central Africa, TNS RMS; Eddington Danda, MD, TNS RMS; Dayo Elegbe, CEO, Sponge Ltd and Mayor Esiaba, Consumer Engagement Manager, West Aftica, Nokia at the launch of Mobile Life 2013. Photo by Lamidi Bamidele.

Entrepreneurs laud Dangote for siting refinery at Olokola executive of an organisation, is a different personality from the business,” he said. Another entrepreneur, Mrs Precious Aremu, said the business mogul was able to diversify into the petroleum



sector because of his access to large funds. Aremu, Chief Executive Officer of Precious Cakes and Confectionery, Lagos, said that access to funds was a challenge to many indigenous

businessmen and women. “Most of the banks do not grant loans to entrepreneurs, except the entrepreneur is in the class of Dangote,” she noted.

Operators blame TICT for low scanning of containers BY GODFREY BIVBERE perators have blamed the management of the Tin-can Island Container Terminal (TICT) for the low volume of containers scanned


Minister to meet airline operators in Ghana over threats to stop operations oyce BawaMogtari, Ghana’s Deputy Transport Minister, says the ministry will soon meet with officials of the two airlines operating in the country, which threatened to pull out of its aviation industry. Antrak and Starbow airlines have threatened to pull out of Ghana following what they described as unfavourable market conditions. The airlines had raised issues such as poor infrastructure in the sector and the high cost of aviation fuel in the country when compared to their counterparts operating in other countries in the region, as issues which must be addressed by the authorities. NAN reports that the airlines had also urged the

he Central Bank of Nigeria (CBN ) said it has earmarked N220 billion for disbursement to operators of Small and Medium Enterprises (SMEs) in the country. The Controller of the bank in Sokoto State, Mr Mohammed Idris, said this at the inauguration of the state chapter of the National Association of Small and Medium Scale Enterprises. Idris, who was represented by Alhaji Mainasara Mohammed, the Head, Debt Unit of the bank, said 60 per cent of the funds had been dedicated to women and the the remaining 40 per cent to other interested persons. “CBN is ready to collaborate with other entrepreneurs and cooperatives across Nigeria through various financing schemes such as Agricultural Credit Guarantee Schemes. These are part of efforts to further boost the socio-economic development of Nigeria and curb the menace of poverty and unemployment.”

government to reduce the rate at which it issues licences to domestic airlines. According to them, the issuance of more licences has affected the business of the existing airlines. An online statement issued by the minister said the meeting would be used to address the grievances of the airlines. It quoted Bawa-Mogtari as saying that though the government was not officially informed about the issues being raised, it was aware of the threats to pull out.“If they are considering pulling out, the question to ask is, have they officially brought the issue to us or the officials concerned? We have only heard about all these from the media, we have not received any of these complaints formally."

daily at the terminal. The operators stated that the company’s inability to provide trucks to convey containers to the scanning site is responsible for low level of scanned boxes at the terminal. Investigation revealed that the service provider had asked for scanning to be done two weeks ago, which resulted in an experimental scanning work and a total of 275 boxes were scanned. The amount is about four times the number of containers scanned by the service provider on daily basis before the weekend experimental work. A clearing agent at the terminal, Mr Aboduran Oluwatobi, said that TICT has about five trucks dedicated to movement of containers for scanning thereby restricting the number of containers provided by the TICT management. He explained that the situation has made the Customs resort to providing 100 per cent examination of containers that have been hitherto earmarked for scanning. Vanguard gathered that a meeting between officials of the TICT management, Nigeria Customs Service (NCS) and Cotecna, service providers in charge of the terminal, was held early last

week to proffer solution to low container scanning at the terminal. At the said meeting, Customs officials were said to have complained about the building congestion following the transfer of containers meant for scanning to physical examination. A source at the meeting told Vanguard that both the Customs and the service provider stressed the need for the terminal operator to increase the number of trucks dedicated for movement of containers. The source said that officials of the terminal operator had complained that should they deploy more trucks for movement of containers for scanning, other aspect of their operation such as discharging and stacking of containers will suffer. The source further disclosed that personnel of the ter minal operator, however promised to deploy about 10 to 15 trucks more for that purpose. Despite that promise, however, Vanguard gathered that as at Wednesday last week, they were yet to deploy more trucks, leading to less than 60 containers scanned as at 3pm.

Police mortgage bank to provide housing loans for officers he rank and file of the Nigeria Police Force will soon begin to enjoy personal housing loans of up to N15 million, with a maximum repayable period of 30 years. DSP Olabisi Clet-Ilobanafor, the Police Public Relations Officer (PPRO) in Oyo State, disclosed this in Ogbomoso, while addressing the officers of the Ogbomoso Area Command. She was briefing the officers about the current efforts of the Police headquarters to provide the housing needs of police officers and men. Clet-Ilobanafor stressed that the police force, under the leadership of the Inspector-General of Police, Muhammed Abubakar, was set to improve the welfare of its men, particularly by tackling their housing challenges. “This is the first IG who wants us to access the housing fund because he believes every police officer needs and deserves, not just temporary shelter, but a modest home of his or her own."


26 — Vanguard, MONDAY, SEPTEMBER 16, 2013


FP Advert

, ,


Vanguard, MONDAY, SEPTEMBER 16, 2013 — 27

Banking & Finance

CBN disburses N217.4bn to 19 banks for Agric sector in Q2 By PETER EGWUATU


he Central Bank of Nigeria, CBN said at end of June 2013 , the total amount released under the Commercial Agriculture Credit Scheme (CACS) to the 19 participating banks for disbursement to agriculture sector stood at N217.4 billion (for 288 projects). The beneficiaries included 30 state governments. Available data from CBN’s second quarter indicated that the second quarter of 2013 experienced increase and widespread rainfall in most parts of the country. This led to increased level of agricultural activities, especially cultivation and harvesting of crops such as maize and vegetables. In the livestock sub- sector, farmers concentrated on sanitising poultry houses and their surroundings to avoid exposure to livestock-related diseases. The apex bank stated that a total of N932.6 million was guaranteed to 7,591 farmers under the Agricultural Credit Guarantee Scheme (ACGS) in the second quarter of 2013. This represented a decline of 50.7 and 41.4 per cent below the levels in the preceding quarter and the corresponding quarter of 2012 respectively. A sub -sectoral analysis of the loans guaranteed indicated that the food crops sub-sector received the largest share of N 601.8 million (64.5 per cent) for 6,014 beneficiaries, while the livestock sub-sector got

N241.6 million ( 26.0 per cent) for 1,056 beneficiaries. Fisheries sub -sector obtained N60.7 million (6.5 per cent) for 348 beneficiaries; while cash crop sub-sector received N11.6 million (1.2 per cent) guaranteed to 101 beneficiaries. Mixed crops obtained N10.6 million (1.1 per cent) for 40 beneficiaries, while other sub-sectors obtained N6.3 million (0.7per cent) guaranteed to 32 beneficiaries. Further analysis showed that 30 states benefited from the scheme during the quarter, with the highest and

lowest sums of N137.3 million (14.7 per cent) and N0.2 million (0.02 per cent) guaranteed to farmers in Edo and Borno states, respectively. However, on the industrial production sector, the CBN revealed that industrial activities during the second quarter of 2013 indicated an improved performance relative to the level in the preceding quarter. According to CBN, “At 13,869, the estimated index of industrial production rose by 1.7 and 1.8 per cent above the levels in the preceding quarter and the

corresponding period of 2 0 1 2 , r e s p e c t i v e l y. T h e development was attributed to the improvement in activities in the electricity and manufacturing sub-sectors.” The estimated index of manufacturing production, at 110.56, rose by 3.9 per cent above the levels in the preceding quarter and the corresponding period of 20 12 r e s p e c t i v e l y. The estimated capacity utilisation also rose marginally by 0.6 percentage point (57.99 per cent). The development was attributed to the improved electricity generation within the quarter.

*From left; Ambassador Musiliu Obanikoro, Chairman, Board of ITF, Hon. Minister of Industry, Trade and Investment, Olusegun Aganga, Deputy Governor, Cross River State, Mr. Efiok Cobham and President of the Manufacturers Association of Nigeria (MAN), Chief Kolawole B. Jamodu at the 19th Biennial National Training Conference held at the Tinapa Business & Leisure Resort, Calabar.

BRIEFS Standard Chartered foresees strong Africa retail prospects


tandard Chartered Plc, the U.K. bank that earns most of its profit in Asia, expects to open 100 new branches in Africa by 2016 to benefit from the continent’s $1 trillion of annual retail spending. The lender opened 27 new outlets last year and will also “invest heavily ” in digital technology over the next four years, Raheel Ahmed, Dubai-based head of consumer banking for the Middle East, Africa and Pakistan, said in e-mailed comments yesterday. The bank will focus on small and medium-sized companies and private banking, he said. “There is so much growth potential, particularly where economies are growing rapidly,” Ahmed said. “In Nigeria, only 14 or 15 per cent of the people have bank accounts,” he said. Standard Chartered’s operating revenue at its Africa consumer banking unit rose 9.4 per cent in the first half to $257 million. Economic growth in SubSaharan Africa will accelerate to 5.1 per cent this year and 5.9 per cent next year from 4.9 per cent in 2012, according to the International Monetary Fund.

Africa's robust economic growth raises hopes


Wema Bank wins best customers experience website banking award


he corporate web site of Wema Bank Plc, a premier Nigerian financial institution has been adjudged the “Best Nigerian Bank Website in Customer Experience” at the 2013 WebJurist 11.0 Awards held at the Eko Hotels and Suites, Lagos. The Web-Jurist Awards, which is in its 11th edition, is organised by Phillips Consulting and has become the standard for ranking website effectiveness for the Banking, Insurance and

Telecoms industries in Nigeria. Speaking on Wema Bank’s performance in the 2013 WebJurist, Kemi Aina, Head of Brand & Marketing Communications at Wema Bank, attributed the award to a dedicated focus on ensuring an immersive user experience and relevant content delivery across all service touch-points – whether physical or virtual. She further stated that in addition to the bank’s team of

u s e r - e x p e r i e n c e designers,the development of the bank’s service touchpoints are backed by thorough research, extensive consultation and relying on end-user feedback in order to ensure customers have a delightful service experience with Wema Bank at all times. The Web-Jurist ranking is the result of research conducted into website best practices and effectiveness. It is aimed at identifying the strengths and weaknesses of websites as a business

platform in the digital world and determines the extent to which a website is successful in achieving the essence of its e-business strategy. Established in 1945, Wema Bank boasts of a robust digital financial services strategy across various alternative channels and platforms enabling the provision of cutting-edge, value-adding transactional and nontransactional services in the most simple, effective manner to its discerning customers.

frica’s robust economic growth over the past decade has raised hopes the world’s poorest continent can reduce reliance on aid. The problem with this scenario is its failure to consider the role aid may be playing in the “Africa Rising” narrative. Looking for a link between aid and growth, an unmistakable pattern emerges from the numbers. World Bank data shows foreign donor aid to Africa from the OECD group of wealthy countries was just under $13 billion in 2000 and soared to $41 billion in 2006, and then slipped, before rebounding and hitting over $46 billion in 2011.

28 — Vanguard, MONDAY, SEPTEMBER 16, 2013

Corporate Finance BRIEFS GTBank gets 2013 best banking group

Quoted companies: NSE bars market makers from exercising voting rights BY NKIRUKA NNOROM


uaranty Trust Bank Plc has once again led the way by winning the ‘2013 Best Banking Group – Nigeria’ in the 2013 Annual World Finance Banking Awards in an announcement made on Friday, 13th September, 2013. Also, the Bank’s Managing Director/CEO , Segun Agbaje was named the 2013 Banker of the Year . The World Finance Banker of the Year - Africa Award is conferred on outstanding bankers who have achieved the most with regards to innovation, profitability and sustainability of their organisation. The award also takes into recognition an individual that has been an influential and inspirational leader, has overseen strong financial performance for his organisation and has successfully guided his institution to new heights in its industry. Outlining the rationale for GTBank winning the ‘2013 Best Banking Group – Nigeria award’, judges commented that the bank scored high marks in innovation and product offering in the financial services industry, regional reach to cover high growth. markets, significant proof of continuous development, good corporate governance and corporate social responsibility.

US stocks fluctuate as investors weigh Fed plans, Syria .S. stocks fluctuated, following a seven-day win streak for the Standard & Poor ’s 500 Index, as materials producers plunged while investors weighed the prospects for Federal Reserve stimulus cuts and watched developments on Syria. Barrick Gold Corp. dropped 4.5 per cent as the precious metal slumped the most in nine weeks. Newmont Mining Corp. (NEM), the largest U.S. gold producer, lost 3.5 percent. Lululemon Athletica Inc. (LULU) tumbled 3.4 per cent after cutting its earnings forecast. Walt Disney Co. rallied 2.9 percent after saying it would buy back as much as $8 billion in shares. Pandora Media Inc. jumped 13 percent after naming digital-advertising veteran Brian McAndrews as its new chief executive officer.



he Nigerian Stock Exchange, NSE, has warned Market Makers against exercising voting right in companies in whose securities they make market in, saying that severe sanctions will be meted out to offenders. The NSE also warned the Market Makers against exerting any form of influence on the management of the companies concerned or exert any influence on them to buy back their shares or back the share price. In a circular to the Dealing member firms, signed by Olufemi Sobanjo, Head, Broker/ Dealer Regulation, the NSE stated that the purpose of the circular was to provide market participants with a brief guide on acceptable conduct in relation to Short Selling, Market Making and Securities L e n d i n g . It further stated that Market Makers are required to disclose any corporate involvement such as directorships or substantial shareholding, above five percent, in companies in whose securities they engage in market making activities, adding, “Market Makers are required to establish, maintain and enforce written policies and procedures reasonably designed, taking into consideration the nature of market making business to prevent the misuse of material non-public i n f o r m a t i o n . ” Setting out additional rules on Short Selling, the Exchange said, “Naked short selling - the practise of selling a security that one does not own and has not borrowed- is strictly prohibited. No Dealing Member other than a Market Maker may execute a short sale transaction on the basis of a bona- fide arrangement to borrow the securities.” “All Market Makers may execute a short sale transaction provided that they have borrowed the securities or have entered into a bona-fide arrangement to borrow the securities which will be available on the date of delivery. All other Dealing Members must have borrowed the securities before executing a short sale transaction,” the Exchange added. The NSE further stated

in the circular, that only Securities Lending Agents (SLAs) duly registered by the Securities and Exchange Commission, SEC, are permitted to engage in securities lending, saying that during the roll out period, only the securities of Qualified Institutional Investors (QII) could be made available for borrowing pursuant to appropriate agreements with SLAs. It added, “Dealing Members must not borrow or

make arrangements to borrow securities directly from investors without the intermediation of SLAs.” It will be recalled that already, there are 13 existing Primary Market Makers and another 13 Supplemental Market Makers in the Nigerian capital market, whose role it is to create liquidity in the stocks they make market in. For each stock in the portfolio of market makers, two PMMs and additional two

SMMs were appointed. Under extant law of market making, the market makers are required to stabilise the market by ensuring continuous liquidity and synchronising buy and sell transactions; must have the capacity for continuous twoway quotes in the relevant stocks throughout the trading session in a minimum quote size to be specified by the NSE with the approval of SEC.

*From Left: Chief Education Officer, Guardian and Counseling, Lagos State Ministry of Education District II Headquarters, Mrs. Oluwatoyin Abosede Williams; Executive Director, Corporate Services, UAC of Nigeria (UACN) Plc , Mr. Joseph I. Dada; Principal, Lanre Awolokun High School, Mrs. Adams Ibironke, and Corporate Marketing Services Manager, UACN Plc, Mr. Olaseni Fawehinmi, at the closing ceremony of the 2013 UACN Goodness League free weekend classes, as part of UAC’s Corporate Social Responsibility (CSR) activities,held at Gbagada Senior Grammar School, Gbagada, Lagos…at the weekend. PHOTO; Kehinde Gbadamosi

POWER: Flour Mills awaits FG’s approval to sell electricity BY MICHAEL EBOH and WILLIAM JIMOH lour Mills of Nigeria Plc has stated that it is awaiting the approval of the Federal Government to enable it deliver a portion of its 50 mega watts of electricity to businesses around Apapa and also to the national grid. Mr. Paul Gbededo, Group Managing Director, Flour Mills Nigeria, who disclosed this at a press conference in Lagos, said the 50 megawatts currently generated by its gas and diesel power generators is in excess of its 32 mega watts requirements and it intends to sell the excess capacity to its neighbours around Apapa, while the others will be supplied to the national grid. He said, “If we get the approval from the Federal Government, we will supply


to our environment and if there is excess, we will deliver it to the national grid.” He further stated that the company plans to increase its earning capacity in the years ahead with continuous investment in new milling technology and new acquisitions. According to him, the company is determined to ensure that its agro-allied strategy provides sustainable returns on capital invested by maximising local content in group products. He stated that the company intends to produce its raw materials locally to ensure that high quality products are developed through the food supply chain. He said, “We will leverage on the unassailable quality of our flagship product, Golden Penny Flour; the growing popularity and market acceptability of our sugar brand; our continuous

investment in new milling technology; our major investment in a greenfield pasta factory at Agbara; synergies arising from recent group restructuring and new acquisitions; development and introduction of new products in response to evolving consumer expectations; and our strengthened pan Nigeria products distribution network to generate improved earnings and deliver superior shareholder value.” Gbededo said the company ’s US$65 million (N10.4 billion) milling complex, named West Mills’ has helped increase its milling production by over 8,000 metric tonnes of wheat daily. He disclosed that the new mill with a 2,250 metric tonnes capacity will help promote its objective of consolidating and maintaining its leadership position in the food industry.

Vanguard, MONDAY, SEPTEMBER 16, 2013 — 29


30 —Vanguard, MONDAY, SEPTEMBER 16, 2013

Corporate Finance

Custodian & Allied explains delay in release of quarterly results By NKIRUKA NNOROM


ustodian & Allied Plc has attributed the delay in submission of its 2012 quarter one and two financial statements to adopt full International Financial Reporting Standard, IFRS. In a notice, Friday, to the Nigerian Stock Exchange, NSE, the company said efforts are being made to ensure that three of its companies, including the subsidiaries key into IFRS reporting standard and harmonise the results of those companies. It, however, stated that the individual results of the subsidiaries - Crusader General Insurance Ltd and Crusader Life Insurance Ltdwere recently approved by the regulators. The company assured that the results would be made public as soon it gets necessary regulatory approvals, while appealing to its shareholders and other stakeholders for understanding. Following regulatory and legal approvals of the business combination between Custodian and Allied Insurance Plc and Crusader Nigeria Plc, the merged entity known as Custodian and Allied Plc, recently said it has embarked on restructuring of the organisation. Custodian and Allied Insurance Plc had reported a profit after tax of N1.4 billion for the financial year ended December 2011. This represents a drop of N642 million or 34.43 percent when compared with the profit after tax of N2.042 billion achieved in the comparative period of 2010. According to the audited results, the company’s gross earnings went down by N3.663 billion or 26.69 percent to N10.061 billion from N13.724 billion achieved in the preceding year. The company proposed a dividend payout of eight kobo for every shareholder whose name appeared on the register before the closing date, May 2, 2012.




his week, interested investors will begin to jostle for the three nationalised banks starting with Enterprise Bank Limited. Two weeks ago, the AMCON-appointed financial advisers, Citibank and Vetiva Capital, set this Friday, September 20, as deadline for investors to submit Expression of Interest for the Acquisition (EOI) of AMCON’s shareholding in Enterprise Bank. Enterprise Bank was one of the three bridge banks created by the Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) to assume the assets of the three troubled banks whose licences were revoked due to inability to meet the September 30th 2011 deadline for recapilisation. Enterprise Bank assumed the assets of Spring Bank, Mainstreet Bank assumed the assets of Afribank, while Keystone Bank assumed the asset of Bank PHB. The three nationalised banks were later sold to AMCON, who appointed new managements and promised to stabilise the banks and sell them to investors after three years. By the end of 2012 operating year, the three banks had returned to profitability. Enterprise recorded N11.3 billion profit; Keystone recorded N2.8 billion while Mainstreet recorded N24.1 billion profit. This made the banks more attractive for investment and set the stage for AMCON to divest from them. But the corporation decided to start with Enterprise Bank and in July, it appointed financial and legal adviser for the sale of the bank. Citibank Global Markets Limited was appointed as financial advisers, while G.Ellias & Company emerged as the legal adviser. During a visit to Vanguard Newspaper, Managing Director/Chief Executive AMCON, Chike-Obi explained that the decision to start with Enterprise Bank is because it is the smallest of the three, and that lessons from the sale of the bank would come handy in the sale of the two remaining nationalised banks. In its attempt to sell Enterprise, two factors are very instructive. The first is the troubled history of the bank. The predecessor of Enterprise Bank, Spring Bank, was formed by the merger of six banks that could not meet the N25 billion new capital base deadline of December 31st

Sale of Enterprise Bank and the lessons of history

•Mustapha Chike-Obi , AMCON boss 2006. The banks were Citizens International Bank, ACB International Bank, Fountain Trust Bank, Guardian Express Bank, Omega Bank, and Trans International Bank. But the bank was later engulfed by what the CBN described as irreconcilable differences among board members. This led to the sack of the Agbetuyi- led management by the CBN and the appointment of the Ndanusa-led management. The crisis was triggered by the outcome of a capital verification exercise of the CBN, which revealed that



The import of this is that Enterprise Bank is built on financial institutions that have always been dogged with crisis, and thus AMCON needs to ensure that this history is not repeated in the sale of the bank


only two of the legacy banks (Guardian Express and ACB International) contributed positive capital to the merger. But the erstwhile Chairman of the bank, Reverend Agbetuyi, who was also former Chief Executive of Omega Bank, accused the CBN of helping Guardian Express and Citizens Bank to overstate their capital contributions to the merger. In a letter widely published, Agbetuyi accused the CBN of ignoring warning of fraudulent activities of the Mike Chukwu-led management, and also called

for the resignation of Professor Soludo, the then CBN Governor. Despite the assurances of the regulators and their appointed management, Spring Bank never recovered from the impact of the crisis. Thus, it was not surprising it was among the eight troubled banks. Furthermore, and in addition to this is the controversy that trailed effort to recapitalise Spring Bank by the CBN-appointed management. On June 14, the bank issued a statement saying that it was in recapitalisation talks with some institutions including ICICI and U.S-based private equity firm, Cloudleap Partners. But the following day, ICICI issued a statement saying it was not in any investment discussion with the management of Spring Bank. The import of this is that Enterprise Bank is built on financial institutions that have always been dogged with crisis, and thus AMCON needs to ensure that this history is not repeated in the sale of the bank. Also instructive are the lessons from the recapitalisation of five of the eight troubled banks. Four of them solved their recapitalisation challenge through acquisition by local banks. Intercontinental Bank was acquired by Access Bank, Oceanic by Ecobank; Finbank was acquired by First City Monument Bank, and Equitorial Trust Bank (ETB) by Sterling Bank. Union Bank on its par embraced the core investor approach to resolve its recapitalisation challenge. A consortium of investors led by African Capital Alliance (ACA) formed Union Global Partners which recapitalised

the bank by injecting $500 million to acquire 65 per cent of the bank’s share. But the recapitalisation was at some point stalled due to the refusal of the Securities and Exchange Commission (SEC) to approve the bank’s right issue, which was a condition for the injection of capital by the ACA consortium. In addition to these, the consortium initially delivered $300 million as against the $500 million it promised. It was the intervention of AMCON that saved the situation. Though now history, as the promised capital had been injected, new management appointed, and the bank now back to profitability, the process when compared to that of the other four troubled banks should serve as a lesson to the CBN and AMCON in the sale of Enterprise Bank. Shortly after his assumption of office, the CBN Governor, Mallam Sanusi Lamido expressed his preference for foreign banks and investors for the resolution of the troubled banks, but the resolution of Intercontinental Bank, Oceanic Bank, Finbank and ETB indicates that it may be better to put faith in the local banks. According to the AMCON advisers, investors interested in Enterprise must state their strategic rationale for the acquisition of Enterprise Bank; have relevant financial services industry experience and/or demonstrate ability to manage a bank like Enterprise; and show evidence of financing capacity. Definitely, the 150 branches and 154 ATM network of Enterprise Bank would be strategic to a number of local banks and who without doubt have the required experience and ability, as well as the financing capacity. These include Diamond Bank, Skye Bank, Sterling Bank Stanbic IBTC and the latest entrant, Heritage Bank. The management of these banks are looking for opportunity to expand their branch network so as to boost their customer base and enhance their market share and profitability. Thus, while ensuring that the necessary criteria are not compromised and the process is transparent and devoid of controversy, it would be instructive for AMCON in its bid to sell Enterprise to defer to the adage that says charity begins at home.

Vanguard, MONDAY, SEPTEMBER 16, 2013 — 31

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32 — Vanguard, MONDAY, SEPTEMBER 16, 2013

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Vanguard, MONDAY, SEPTEMBER 16, 2013 — 33

Homes & Housing Finance

Housing development using local building materials

Mortgage creation: MBAN scribe advocates holistic approach By YINKA KOLAWOLE


chieving effective creation of mortgages in Nigeria that will guarantee easy access to affordable housing requires a holistic approach by government and other stakeholders in the mortgage/ housing finance sector. Executive Secretary/CEO, Mortgage Banking Association of Nigeria (MBAN), Mr. K ayode Omotosho, stated this in a paper presented at an International Conference on Affordable Housing in Abuja. He noted that though access to housing is very readily

available through mortgages in developed countries, it has continued to remain a major challenge in some emerging economies like Nigeria due to poor legal and regulatory framework, high costs of titling, dearth of long term finance and absence of foreclosure laws. According to him, “Over the last 20 years, the mortgage sector has focused primarily on the creation of affordable housing as a means to empower Nigerians of all income groups with tradable/ transferrable instruments for wealth creation. The ongoing reform/recapitalisation of the mortgage banking sector and the creation of a Mortgage Refinance Company with the aim to strengthen and create

liquidity in the sector are moves in the right direction. However much would still need to be done to improve the legal and regulatory frameworks in order to achieve effective creation of mortgages in Nigeria.” Omotosho remarked that the sector would develop more rapidly with a reform of the land tenure system since, according to him, originators of mortgages would ultimately rely on land titles as collateral in the form of acceptable and tradable instruments. He said efforts to create a large number of housing units through mortgages would require long-term funding/liquidity in the mortgage sector, noting that recapitalisation of

UK property sector jobs soar to record high *Analysts fear new housing bubbles he number of estate agents has soared to a record high with one in four jobs created in the past year in the property sector, according to official figures. According to the Office for National Statistics, the number of jobs in the sector rose to 562,000 in the second quarter of the year, exceeding the 2008 peak and the most since its records began in the late 1970s. The figure was up by 77,000 compared with the same period last year. The statistics suggest that Britain’s current growth is being driven by a new housing boom. The sector, which includes estate


agents and property developers, is growing so quickly it has amounted to the fastest growing segment of national workforce in the three months ending in June. The total number of new jobs in the economy during the same period was 334,000. data will add to fears that the country is heading for a house price bubble. Danny Gabay, director of economics consultancy Fathom, said: ‘We’re no longer a nation of shopkeepers; we’re becoming a nation of estate agents. I would certainly agree that the economy has turned a corner; my concern is about how sustainable this recovery will be, given that it is based on using government subsidies

to encourage already overextended households to take on even more debt to finance their consumption.’ Concerns over the housing market boom were echoed by Business Secretary Vince Cable, who urged Chancellor George Osborne to rethink his Help to Buy scheme. The scheme, announced in March’s Budget, is designed to help first-time buyers get on the property ladder and enable existing homeowners to “trade up” to larger properties by giving banks greater confidence to lend. Under the second phase of the scheme, the government will guarantee a proportion of the loan for purchases of up to £600,000 for those able to put down a deposit of between 5 percent and 20 percent.

primary mortgage banks (PMBs) and the evolution of a Mortgage Refinance Company (MRC) are initiatives towards creation of liquidity in the sector. He also said there is the need for concerted efforts by Federal Mortgage Bank of Nigeria (FMBN), PMBs and MBAN to enhance the National Housing Fund (NHF) contributions/collection system to deepen the NHF Scheme in order to create more mortgages. The MBAN scribe further called on PMBs and other mortgage originators to work together to form Syndicate/ Consortia/Club Arrangements to share risks and expand the scope of project execution for large scale housing development. He also said primary mortgage originators/ lenders and estate developers need to collaborate with governments and employers of labour to work out modalities for bridging the affordability gap in homeownership financing at optimal interest rates, to ensure that loanable funds for affordable housing are available to wider income groups. Other measures recommended by Omotosho include: fast-tracking the passage of the foreclosure bill into law; reduction in high costs of titling which constitute major impediments to perfection of legal titles and access to mortgages; automation of mortgage loan processes to improve efficiency and effectiveness towards creating more mortgages and introduction of new building systems for production of housing projects on large scale. He also identified the Land Use Act of 1978 as primary impediment to the development of a virile mortgage banking/housing finance sector, calling for amendments to the Act in the main area of obtaining Governor ’s consent to mortgage for every transaction and subsequently work towards removing the Act from the Constitution. He added that government needs to promote the reduction in costs and increase in the quality of building materials, noting that this would ensure that housing units would last longer with minimal maintenance measures. “Considering that mortgages are crucial to the provision of affordable housing on a large scale in Nigeria, MBAN is working hard and collaborating with the three tiers of government and other key stakeholders towards creating the enabling environment for the Sector to thrive. It is however important that all players in the built environment should work together to increase the housing units available to Nigerians through large scale production on economies of scale and virile mortgage finance arrangements,” he stated.

BRIEFS FG nets N4.3bn from ground rents, C of O in 2012 he Federal G o v e r n m e n t generated N4.3 billion, through the Ministry of Housing and Urban Development, from ground rents and issuance of Certificates of Occupancy in 2012. Immediate past Minister of Housing and Urban Development, Ms Ama Pepple, disclosed this in Abuja before she was relieved of her post last week. She also said that 2,800 housing units have been developed through estate development loan in the countr y, as part of efforts by government to reduce the nation’s huge housing deficit. According to her, 626 housing units were delivered under the public private partnership scheme and another 850 units by the Federal Housing Authority (FHA). These are in addition to 3,529 housing units which had been developed through loans obtained from the Federal Mortgage Bank of Nigeria (FMBN), she noted.


Nasarawa targets N5bn monthly land revenue

ith computerisation W of its lands contiguous to the Federal Capital Territory (FCT), Nasarawa State government is targeting N5 billion monthly revenue from land transactions. Nasarawa State Commissioner for Lands, Sur vey and Town Planning, Sonny Agassi, stated this while briefing members of Nasarawa State House of Assembly (NSHA) Standing Committee on Lands who were at Mararaba, the gateway to the Federal Capital Territory (FCT), to inspect the execution of the computerised lands system called Nasarawa Geographic Information Systems (NAGIS). He said through NAGIS, the state government intends to turn Karu into a business district, adding that by the end of the 24 months the execution of the project is expected to last, Nasarawa can boast of a revenue base of nothing less than N5 billion monthly from the land size of 27,000 square kilometers.

34 — Vanguard, MONDAY, SEPTEMBER 16, 2013

Micro - Finance

When banks fail as small business advisers Stories by PROVIDENCE OBUH


ne of the roles of banks as mandated by the regulatory body, Central Bank of Nigeria, CBN is to act as advisory body to small business owners. To this end, Secretary, Association of Micro Entrepreneurs of Nigeria, AMEN, Mr. Frederick Okeleme, in a telephone conversation said that the Small and Medium Enterprises, (SMEs) sector is suffering as a result of lack of proper orientation. Okeleme said; “What do you expect from a sector that has been abandoned by the banks? The sector will collapse, they will not do well, the banks have not been playing their advisory role as mandated by the CBN. “That is why we are having challenges in this sector, because banks keep organising capacity-building programmes within themselves, forgetting that the microentrepreneurs have a role to play in this society.” Meanwhile, a survey carried out by Optionis reveals that only one in five small businesses received pro-active help and advice from their bank, also that entrepreneurs see quality advice from their bank as more

important than access to finance when it comes to supporting growth. Managing Director, Optionis, Derek Kelly, said; “Emerging entrepreneurs and small business owners seem to be having an increasingly remote relationship with their banks. “This is perhaps unsurprising, given the popularity of online

banking amongst this busy section of society, for whom ‘anytime and anywhere’ services have tremendous appeal. “However, banks need to work harder to find ways to offer advice and support to these customers, particularly on an issue such as cash flow that is crucial to businesses surviving the difficult first few months and years.”

CFI holds financial inclusion 2020 global forum


s the struggle to achieve global financial inclusion by 2020 continues, Centre for Financial Inclusion, CFI is set to host the Financial Inclusion 2020 Global Forum. The forum scheduled to hold from October 28 to 30, 2013 is focusing on achieving global financial inclusion by the year 2020. The forum will be hosted by the Center for Financial Inclusion (CFI), which was founded in 2008 in Washington, DC, by US-based NGO, Accion and will be attended by leaders in public policy, mainstream and specialised financial sectors, technology and corporate sectors and international non-profits. Financial Vanguard gathered from a statement that the forum will explore strategies for expanding global financial inclusion. According to the statement, “the organiser of the event seeks to bring about the conditions to achieve full financial inclusion worldwide by promoting collaboration among a variety of industries. It operates under a core belief that financial inclusion requires that everyone has access to a range of quality financial services at affordable prices, delivered by a range of providers in a competitive market. “Financial Inclusion 2020 (FI2020) is a movement that rallies stakeholders to achieve full financial inclusion and proposes 2020 as the apex for action.”

Accion expands to Ikorodu A

c c i o n Microfinance has expanded its reach to Ikorodu, to further deepen access to finance for low income earners and small business owners in Lagos State. This is following the recently launched N220 billion, Central Bank of Nigeria (CBN) Micro, Small and Medium E n t e r p r i s e s Development Fund, MSMED. In a document made available to Vanguard and signed by Head, E x t e r n a l Communications, Mrs. Oluwayemisi Mafe, the bank's issued and fully paid-up share capital of N1.205 billion as well as total asset of N3 billion gives it the

robust financial base to service its increasing customers. This is even as it disbursed over N18.7 billion in loans to about 97,000 customers since 2007 when it started operations. With 20 branches and counting, the bank assured micro entreprenuers and low income earners of safety and security of its activities. Mafe said; “driven by passion for ensuring a brighter future for customers, Accion Microfinance Bank offers a broad range of products to customers, whether it is a personal loan product, savings account for transactional purposes, loan products for micro entrepreneurs, to the fixed deposit

account for individuals and organisations who seek a safe purse at a competitive interest rate. “Having consistently delivered on its promise from inception to date, customers know that whatever their business needs, the bank can assist in the growth of their businesses, ensuring that their families are well taken care of and their children are able to have an education by providing access to quality banking services and consistently delivering on its promise of easy access to its products and services while ensuring the security of customer’s funds.”

Vanguard, MONDAY, SEPTEMBER 16, 2013 — 35


Halt of budgetary allocation to NAICOM:


Government must create special fund for insurance — Operators

Attitude of insurance buyers not encouraging – Adetimehin





•Fola Daniel, Comm. for Insurance

the responsibilities of ensuring the effective administration, supervision, regulation and control of insurance business in Nigeria and protection of insurance policyholders, beneficiaries and third parties to insurance contracts. Operators’ reaction It will be recalled that the strategic objectives to be achieved by the insurance sector as articulated in Nigeria vision 2020 are to ensure insurance credibility and protect policy holders; embarked on risk-based capitalisation of insurance companies; embed the governance and risk management framework for the insurance companies and to diversify and integrate insurance products into financial services for long term financing. In order to achieve the foregoing objectives it was envisaged that there will be increased financial literacy and awareness, human capital development and attraction of expertise, integrated and linked IT systems, improved legal and regulatory framework. According to Managing Director of Risk Guard Africa, Mr. Yemi Soladoye, in considering the announcement on the one hand, it is safe to say that the federal government is on track to stop allocation to the insurance sector if NAICOM is to continue with its day to day routine of mere supervision of the insurance sector.

•Gus Wiggle, Linkage Assurance MD

According to him, if NAICOM will remain the same autonomous agency that generates its funds from insurance operations alone just to oversee insurance activities, then the decision to stop allocation to NAICOM is on track. According to Soladoye, insurance contribution to GDP has remained at one per cent after all these years, although NAICOM is doing a good work on market development in recent times, as such the announcement could lead to more stringent supervision. Soladoye however said that the task of developing the


ecently, the administration of President Goodluck Jonathan announced that budgetary allocations to the National Insurance Commission, NAICOM, the regulatory body for insurance practice in the country, will stop from next year. Minister of State for Finance, Dr. Yerima Ngama, who made the disclosure, said that the sector needed urgent steps to reposition it to play its roles in the nation’s economy. According to Ngama “This is the last time NAICOM will get one kobo from the budget.” However, the announcement has thrown up a lot of uncertainties in the insurance sector even as stakeholders are beginning to query whether NAICOM is matured enough to regulate activities in the sector without government assistance. NAICOM as a regulator The Nigeria insurance industry started in 1921. The first major step at regulating the activities of insurance business in Nigeria was as a result of the fallout of the report of J.C. Obande Commission of 1961, which resulted in the establishment of the Department of Insurance in the Federal Ministry of Trade. The Department was later transferred to the Ministry of Finance. The report also led to the enactment of the Insurance Companies Act of 1961, which came into effect on May 4, 1967. Insurance business in Nigeria is regulated by two main Acts and supervised by the National Insurance Commission (NAICOM). The Insurance Act No. 1 of 2003 (1A) governs the licensing and the operation of insurers, reinsurers, intermediaries and other providers of related services. The second Act which is an omnibus one - the Companies and Allied Matters Act (CAMA) 1990 governs all companies, except those that have their respective enabling Acts such as the National Insurance Corporation of Nigeria (NICON) and the Nigeria Reinsurance Corporation. The National Insurance Commission Decree No. 1 of 1997 (NA) established NAICOM and vested it with

should see the announcement as a positive challenge rather a threat. The point of strength for NAICOM is that the retail market is growing; also the percentage of levies which NAICOM can generate from insurers is unlimited and indefinite. “But government itself must fund a financial market development plan or a long term fund for the insurance sector if it wants the sector to commit into mortgage financing and infrastructural development. This will help the sector to increase its contribution to GDP to over three per cent probably in the next six years. Hence,

“If government wants insurance to stimulate the growth of other sectors of the Nigerian economy as well as generating funds to other sectors and increase its contribution to GDP, then the sector should have a sort of national financial system project or plan that is similar to vision 20:2020.

financial system of any country is always a federal government project. “If government wants insurance to stimulate the growth of other sectors of the Nigerian economy as well as generating funds to other sectors and increase its contribution to GDP, then the sector should have a sort of national financial system project or plan that is similar to vision 20:2020. “If government is not going to reverse itself, NAICOM


government must create a special fund for NAICOM.” Managing Director of Linkage Assurance Plc, Mr. Gus Wiggle said that NAICOM is matured enough to stand on its own. He said “I think it is a positive development because it will aid NAICOM to attract international agencies to support them. For the federal government to take such a decision it must have found it necessary to do so.”

anaging Director of Jully Insurance Brokers and Immediate past President of Chartered Insurance Institute of Nigeria, CIIN, Mr. Wole Adetimehin has said that the attitude of insurance buyers in Nigeria is not encouraging as most people are yet to fully embrace the values of insurance and the few that are buying insurance are either compelled under a contract or statutory requirement. Speaking with Vanguard, Adetimehin said some of these militating factors could include drastically low per capita income, unemployment and high incidence of job losses, poor dwindling economic environment and activities, as well as poor pay and reward system within the Nigerian landscape including failure or ignorance of insurance buyers to appreciate the essence of premium payment and the implications of nonpayment under an insurance contract among several other factors. He said that the recent “No premium no cover” policy of the National Insurance Commission, NAICOM, is for the benefit of all stakeholders and the insurance buying public, investors in the sector, and the Nigerian economy at large. Adetimehin said the meaning and interpretation of ‘No premium no cover’ as it applies to all stakeholders operating in the insurance industry simply means give and take which implies that without payment of premium to insurers or brokers as the case may be, there will be no cover to such insuring publics. He further said it is meant to forbid the issuance of any insurance policy or contract documents by insurance firms invalid except where premium has been paid by the insured or collected by the broker handling the transaction. He said, “In cases where brokers are involved, the regulation allows the broker access to policy documents from the insurers on the issuance and delivery of a credit note for the premium already collected but awaiting remittance to the insurers within a period of 30 days.

36 — Vanguard, MONDAY, SEPTEMBER 16, 2013

End Of Oil Dependent Economy — 1 “Budget: Oil production estimates short by N1.1 tr”. Daily Trust, September 9, 2013. “Rising debt profile: In search of solution”. Daily Trust, same day. he first story continued by informing Nigerians that “About 65 million barrels of crude oil worth N1.1 trillion was short in the first half of this year, using the 2013 estimate by government”. The second story was the real wake up call to Nigerians about our dismal economic future if we continue with our over-reliance on crude oil for our survival. According to the paper, “the country [Nigeria] began a new journey into the shackles of foreign and domestic indebtedness in which by 2011, statistics indicated its total foreign debt soared to the tune of US$47.9 while the domestic debt platform rose to about US$42.3 billion, much higher than even before the debt relief”. Nigerians who have not lost their memory would recall


that Dr Ngozi Okonjo-Iweala, was the Minister of Finance under Obasanjo who came, preached to us the virtues of avoiding debts; took $24 billion of our external reserves to help get Nigeria out of our previous debt trap. It is one of the great ironies of Nigeria’s contemporary history that it is the same Minister who is supervising our gradual but inexorable return into the debt trap. Three reasons account for this. One, the 65million barrels shortfall which Nigeria had experienced, so far, would by the end of the year have escalated to close to 100 million barrels shortfall. The 2013 Budget had since been reduced to something like a piece of soiled toilet paper – already used and to be discarded. It is a fact, which the government of Nigeria is reluctant to admit, that this year’s budget has failed miserably and should be discarded as a guide to government action from now on. As a corollary damage to the

collapse of the current year’s budget, the projections for 2014, in the three pears rolling plan, must also be discarded. There is no measure known to anyone that the Federal government had taken to stem the growing tide of stolen crude oil. So, it is safe to assume that the revenue shortfall from crude exports will continue until next year. My experience with budgeting had taught me that next year’s projections must take heavily into account the actual for the current year. With this year in shambles, and no plan to reverse the trend, next year’s calamity is a foregone conclusion. The Minister of Finance during the opening of another conference of the National Council on Finance and Economic Development, NACOFED, with the theme “Reconstructing Nigeria’s Public Finance” announced that: “Clearly we have to do something about our rising level of domestic debt”, as if we don’t know the options

available to us. Nobody needs a Ph. D in economics from Harvard or MIT to know that with our debt stock at such frightening levels, reduced Federal government revenue, next year, will dictate one of two unpleasant options – none of which will do us any good. Nigeria will either spend an increasing percentage of its revenue servicing debt, if it honours its obligations, or it will have to default on some of its payments and suffer the consequences of a severe drop in credit rating. Bluntly stated, our sources of loans and credits will begin to dry up and the interest we will be forced to pat, if we receive any credit at all, will go up. Nigeria will return to the vicious cycle of debt — from which we escaped when Okonjo-Iweala was here the last time. The most important reason we are in this mess and why the future is so bleak is related to our stubborn refusal to diversify our economy and multiply our revenue base.

The first National Economic Summit Group, NESG, workshop was held in 1992 when Chief Shonekan was the Head of Government under military President Babangida. That workshop addressed, extensively, the issue of diversification into agriculture, manufacturing and exports. I was in the group discussing Diversification. I stopped attending the NESG seminar when it became a mere talkshop; we talked; passed resolutions; wrote communiqué which governments since Babangida ignored because oil was flowing at a higher rate and the price of crude was going up. The attitude was “why bother to do the hard work when easy money could be made in oil?” Last week, twenty one years after the first, the NESG was still discussing diversification with agriculture taking centre stage. But, every person at that seminar knows that agriculture alone will not get us there. We need to develop other sources of revenue, very quickly, or we are doomed. Oil is beginning to fail us; or are we failing oil?


1.55 4.41 1.26 5.32 1.35 54.99

5.05 1.20

76.95 9.06

Livestock/Animal Specialities Livestock Feeds Plc

CONGLOMERATES Diversified Industries A.G. Levents Nigeria Plc Chellarams Plc John Holt Plc SCOA Nigeria Plc Transnational Corporation UACN Plc

CONSTRUCTION/REAL ESTATE Building Construction/Structure ARBICO Plc Constain (WA) Plc

CONSTRUCTION/REAL ESTATE Non-Building/Heavy Construction Julius Berger Nig Plc Roads Nigeria Plc

39.90 58.75

10.40 6.20 13.95 2.59 4.75 25.00 4.21 2.44 7.00 10.39 0.50 0.98 19.43

0.50 0.84 1.22 0.50 0.50 1.35 0.50 0.50 0.50 0.50 0.67 0.50 0.50 0.50 0.50 2.16 0.50 0.71 0.50 0.50 0.55 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.99

Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc

FINANCIAL SERVICES Banking Access Bank Plc Diamond Bank Nigeria Plc Ecobank Transnational Incorporated Fidelity Bank Plc First City Monument Bank Plc Guaranty Trust Bank Plc Skye Bank Plc Sterling Bank Plc UBA Plc Union Bank Nig. Plc Unity Bank Plc Wema Bank Plc Zenith Bank Plc

Insurance Carriers, Brokers and Sector African Alliance Insurance AIICO Insurance Plc Continental Reinsurance Plc Cornerstone Insurance Company Consolidated Hallmark Insurance Custodian and Allied Insurance Plc Equity Assurance Plc Goldlink Insurance Plc Great (Nig) Insurance Plc Guinea Insurance Plc International Energy Insurance Plc Investment and Allied Assurance LASACO Assurance Plc Law Union & Rock Insurance Plc Linkage Assurance Plc Mansard Insurance Plc Mutual Benefits Assurance Plc NEM Insurance Co. (Nig) Ltd Niger Insurance Co. Plc OASIS Insurance Plc. Prestige Assurance Co. Plc Regency Alliance Insurance Sovereign Trust Insurance Staco Insurance Plc Standard Alliance Insurance UNIC Insurance Plc Unity Kapital Plc Universal Insurance Plc Wapic Insurance Plc

Other Financial Institutions Africa Prudential Plc Crusader (Nigeria) Plc Deap Capital Management & Trust Plc FBN Holdings Plc Nigeria Energy Sector Fund Royal Exchange Assurance

0.50 0.80 1.20 0.50 0.50 1.34 0.50 0.54 0.50 0.50 0.63 0.50 0.50 0.50 0.50 2.07 0.70 0.70 0.50 0.50 0.55 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.90

10.41 6.22 14.00 2.50 4.75 24.90 4.26 2.46 7.05 10.39 0.50 0.97 19.65

39.90 60.00

32.27 3.74 1.94

49.00 938.26

1.95 0.50 1.21 15.20 552.20 0.55

2.00 0.50 1.09 15.65 552.20 0.55

6.60 0.72

32.27 3.74 1.81

Household Durables Nigerian Enamelware Plc Vitafoam Nig. Plc Vono Products Plc

1.65 0.50 0.50 0.50

49.00 935.00

Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc

9.01 10.46 83.00 2.82 11.61 0.65

1.65 0.50 0.50 0.50

9.01 10.40 83.00 2.89 11.60 0.67

Food Products Dangote Flour Mills Plc Dangote Sugar Refinery Plc Flour Mills Nigeria Plc Honeywell Flour Mill Plc National Salt Co. Nig Plc UTC Nigeria Plc


15.55 248.50 19.97 162.00 0.75


100.00 50.00


76.95 8.46

5.05 1.25

1.55 4.41 1.26 5.32 1.35 54.51


0.50 47.42 37.00


Closing Price (N)

6.60 0.72


Beverages-Non-Alcoholic 7-UP Bottling Company Plc

Microfinance Banks Fortis Micro-Finance Bank Plc NPF Micro-Finance Bank Plc Mortgage Carrier, Broker and Sector Abbey Building SOC Aso Savings and Loans Plc Resort Savings & Loans Plc Union Homes Savings Plc

15.99 248.50 20.04 163.48 0.70


100.00 50.00

Beverages-Brewers/Distillers Champion Breweries Plc Guinness Nigeria Plc International Breweries Plc Nigerian Brew Plc Premier Breweries Plc

Real Estate Investment Trusts Skye Shelter Funds Union Homes Real Estate Investment CONSUMER GOODS Automobile/Auto Parts DN Tyres & Rubber Plc


0.50 46.48 37.00

1st fTier Securities AGRICULTURE Crop Production FTN Cocoa Processors Plc Okomu Oil Palm Plc Presco Plc

Real Estate Development UACN Property Development


Oil and Gas and Products Petroleum Prod ucts Capital Oil Plc


Opening Price (N)

Capital Market


27,548 22,000 140,000 7,365,890

100 2,000 75,000 70,000

4,100 100

1,000 5,240,910 6,414,900 534,000 10,000 409,403 120,000 62,500 500,000 200,000 633,000 1,670,890 1,000 2,000 380 966,400 9,975 1,487,700 700,000 190,000 48,374 3,500 4,500 200 5,700 3,722 100 3,066,000 330,000

5,878,412 5,549,486 6,672,748 10,548,255 865,336 10,487,555 6,774,012 2,118,260 3,796,722 182,970 23,528,206 2,827,324 14,341,358

158,900 8,075,103

60 83,777 12,915,242

118,063 139,856

852,944 1,623,383 89,170 803,156 382,719 485,008


50,000 554,237 152,472 272,880 20,000


1,000 -


11,200 5,800

67,679 970,700

7,200 1,000 5,636 10,000 10,059,348 425,698


1,000 2,298,300 55,496


Quantity Traded

0.75 0.50 2.02 20.00 552.20 0.78

1.57 0.50 0.50 0.50

6.00 1.18

0.50 1.11 1.03 0.54 0.50 2.44 0.50 0.68 0.50 0.50 0.50 0.50 0.50 0.60 0.50 2.59 0.54 0.81 0.61 0.50 1.01 0.50 0.56 0.50 0.50 0.50 0.50 0.50 1.08

12.39 7.51 14.04 3.47 5.70 26.09 6.50 3.05 7.69 10.60 1.22 1.75 21.49

41.02 47.39

36.19 5.54 2.88

37.27 840.10

19.90 16.20 95.00 6.60 6.70 0.88


4.63 255.00 7.10 100.00 1.01


100.00 -


62.26 8.28

4 2,720,390.38

2.54 7.60 8.82 8.28 1.82 42.50


0.50 24.58 8.30


Year High

0.00 0.50 2.02 8.57 552.20 0.50

1.37 0.50 0.50 0.50

0.00 0.92

0.50 0.50 0.58 0.50 0.50 1.08 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 1.06 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50

4.70 1.92 9.90 1.13 2.90 13.02 2.65 0.80 1.64 2.34 0.50 0.52 11.96

21.02 27.60

33.96 2.91 2.88

8.33 400.00

4.31 4.02 57.00 2.31 3.80 0.50


2.23 186.00 5.23 72.50 0.93


97.00 -


32.96 3.01


1.45 6.43 5.89 5.52 0.50 28.70


0.50 14.53 6.40


Year Low

0.19 0.00 0.00 2.03 12.68 0.13

0.19 0.02 0.00 0.00

0.04 0.92

0.00 0.50 0.14 0.02 0.50 0.28 0.01 0.00 0.03 0.01 0.00 0.02 0.00 0.00 0.03 0.16 0.00 0.37 0.02 0.03 0.06 0.04 0.09 0.00 0.00 0.00 0.02 0.00 0.07

1.42 0.90 2.81 0.43 0.00 2.10 0.71 0.54 0.67 0.00 0.00 1.34 2.09

0.82 1.44

13.89 0.61 0.00

1.35 25.43

0.00 0.91 4.09 0.39 1.01 1.13


0.00 9.95 0.41 5.08 0.00


11.75 -


4.11 4.73

0.16 0.31 0.00 0.35 0.24 6.89


0.10 7.33 2.75



9.16 0.00 0.00 9.85 43.55 6.00

47.6 7 25.00 0.00 0.00

150.00 10.56

0.00 22.20 6.79 27.30 10.00 7.43 50.00 0.00 16.67 50.00 0.00 25.00 0.00 0.00 16.67 16.19 0.00 2.19 26.00 16.67 15.50 12.50 5.65 0.00 0.00 0.00 25.00 0.00 15.43

8.73 8.34 5.00 7.93 0.00 12.39 9.15 5.43 11.19 0.00 0.00 0.43 10.24

4.39 32.91

2.44 7.07 0.00

27.61 32.84

16.91 14.38 16.89 16.92 5.75 8.83


0.00 19.98 16.29 22.22 0.00


8.51 -


10.11 2.26

5.18 20.74 0.00 15.77 3.64 4.14


50.00 2.77 4.37

P.E. Ratio

1.71 2.74

0.73 1.93 0.50

Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc

Intergrated Oil and Gas Services Oando Plc


4.90 3.35 6.24

Transport-Related Services Airline Services and Logistics Plc Nigerian Aviation Handling Company


Road Transportation Associated Bus Company Plc Speciality Interlinked Technologies Plc

1.90 1.78 2.52 4.00


4.55 0.88





Printing & Publishing. Academy Press Plc Learn Africa Plc Studio Press Nig. Plc University Press

Media/Entertainment Daar Communications Plc

Hotels/Lodging Capital Hotel Ikeja Hotel Plc

Courier/Freight/Delivery Red Star Express Plc Trans-National Employment Solutions C & I LEASING PLC

SERVICES Afromedia Plc Automobile/Auto Part Retailers RT Briscoe Plc

Hospitality Tantalisers Plc

20.50 0.50 28.80 35.70 112.00 36.14 157.90

0.50 11.61

OIL AND GAS Energy Equipment and Services Japaul Oil & Maritime Service

Petroleum and Petroleum Products African Petroleum Plc Beco Petroleum Plc Conoil Forte Oil Nig Plc Mobil Oil Nigeria Plc MRS Oil Nigeria Plc Total Nigeria Plc

3.98 11.87 12.68 4.30 1.05 2.92 0.66

Mortgage Carriers, Brokers and Se Abbey Building Society Plc INDUSTRIAL GOODS Packaging/Containers Abplast Products Plc Beta Glass Co. Plc Greif Nigeria Plc Nampak Nigeria Plc Poly Products (Nig) Plc Studio Press (Nig) Plc W.A. Glass Ind. Plc



Paper/Forest Products Thomas Wyatt Nig. Plc

6.50 10.50

Non-Metalic Mineral Mining Multiverse Plc

Metals Aluminium Extrusion Ind Plc



Tools and Machinery Nigerian Ropes Plc

Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company

3.35 6.13



1.90 1.80 2.52 4.00


4.55 0.82


4.00 1.03




20.50 0.50 28.80 35.70 106.00 36.14 157.90



3.98 11.87 12.68 4.30 1.05 2.78 0.66


1.93 0.50






1.71 2.70

21.00 8.70 43.40 8.72 190.00 0.50 1.90 92.00 5.01 2.04 10.93



21.00 8.70 43.40 8.63 193.00 0.50 1.90 92.00 4.96 2.04 10.93



ICT Telecommunications Starcomms Plc INDUSTRIAL GOODS Building Materials Ashaka Cement Plc Berger Paints Plc CAP Plc Cement Co. of Northern Nig. Plc Dangote Cement Plc First Aluminium Nigeria Plc DN Meyer Plc Lafarge WAPCO Plc Portland Paints & Products Nig Plc Paints & Coatings Manufacturers Premier Paints Plc

18.70 2.29



16.83 2.29


4.32 3.10 2.00 64.00 2.04 1.05 7.36 1.85



103.50 18.08 1.30

Closing Price N

IT Services NCR (Nig) Plc Tripple Gee and Company Plc Processing Systems Chams Plc


Computers and Peripherals Omatek Ventures Plc

4.32 3.10 1.98 64.00 2.04 1.05 7.36 1.85

ICT Computer Based Systems108 Courteville Investment Plc


Pharmaceuticals Ekocorp Plc Evans Medical Plc Fidson Healthcare Plc Glaxo Smithkline Consumer Nig May & Baker Nigeria Plc Neimeth International Pharm Nigeria-German Chemicals Plc Pharma-Deko Plc


103.50 18.26 1.30

Opening Price N

HEALTHCARE Medical Supplies Morison Industries Plc Healthcare Providers Union Diagnostics & Clinicals Services

Sim Capital Alliance Plc Stanbic IBTC Bank Plc UBA Capital Plc

82,800 662,062



40,000 83,000 100 52,000


10,000 131,100


34,131 1.13




82,191 2,600 77,009 61,177 10,132 2,641 15,089



6,888 1,600 500 29,198 200 84,311 2,749,340


71,936 1,318,179






1,020 2,717,101

325,829 4,571 50,786 405,600 214,408 2,000 500 242,910 44,100 25,750 30



790 800



100 636,090 838,022 32,216 24,440 104,882 479 3,053,443



1,318,197 7,103,372

Quantity Traded

Year Low

2.78 11.75



0.00 6.82



400 2.07


3.67 126,613



1.57 6.50



3.17 0.30 0.00 3.60


3.00 1.33


2.65 0.25



141.00 63.86 195.50

163.50 2,100 240.00 200

0.50 0.50 3.89



3.98 12.71 13.97 3.60 1.05 2.92 0.63


1.62 2.58






5.94 1.47

12.00 8.10 15.16 4.16 95.00 0.50 1.02 36.58 5.11 0.51 10.93


3.25 3.25



5.31 0.70 0.83 2.58 3.61 0.95 0.95 4.28



103.50 10.64 0.03

37.10 0.70 5.59



3.98 15.58 15.03 4.30 1.86 2.92 0.63


2.50 2.58






6.91 3.60

30.00 12.57 43.98 15.49 132.51 0.75 3.51 48.05 5.28 3.36 13.40



9.31 3.59



5.31 1.45 3.20 23.11 5.61 1.96 12.91 200



103.50 15.69 1.41

Year High

0.60 12.53






0.34 0.92


0.60 11.12




6.11 2.98 14.63

4.93 0.00 0.61



0.00 3.90 0.90 1.22 0.30 0.07 0.00


0.11 0.00






0.5 0.25

2.14 1.09 2.28 1.47 7.56 0.00 0.00 4.10 0.44 0.23 0.00


0.00 0.01



0.19 0.44 2.62 0.20 0.09 0.00 0.00



10.56 0.87 0.21


4.22 8.75






34.09 2.12





11.11 19.23 17.07

7.40 0.00 6.99



0.00 3.26 0.00 3.52 6.18 41.71 0.00


13.15 0.00






39.60 9.16

7.86 4.97 8.88 2.31 13.17 0.00 0.00 42.86 14.19 2.89 0.00


1.43 0.00



9.05 14.13 0.00 0.00

88.50 0.00 3.07



9.71 18.03 6.71

P.E Ratio

Daily Stock Market Report as at Friday, September 13, 2013

Vanguard, MONDAY, SEPTEMBER 16, 2013 — 37

38 — Vanguard, MONDAY, SEPTEMBER 16, 2013

People in Business

Africa must embrace domestication to achieve greatness —Lartey Stories by EBELE ORAKPO



This picture is very poor pls change it

*Dr. Henry Lartey .... It's time for a sustainable renaissance of economic, cultural and political empowerment


ntil Africans learn to look inwards and tap into the great potentials the continent is endowed with, it will continue to be the least developed continent in the world. This was contained in a statement made available to Vanguard by Dr. Henry Herbert Lartey, a presidential candidate in Ghana’s last elections on the platform of the Great Consolidated Popular Party (GCPP). Lartey harped on the need for Africans to unite in what he termed a sustainable renaissance Africa. “As the first African nation to achieve independence, Ghanaian sovereignty brought with it both the challenge and responsibility of proving to the world that the Blackman is capable of managing his own affairs. Yet, 53 years after, in the midst of abundance in both human intellect and God-given natural resources, we prefer to go begging capin-hand at the doors of other nations soliciting for help which is never forthcoming,” he stated. Lartey said that the concept of domestication, which his party preaches, is the answer to Africa’s myriad problems. “The late Dan Lartey, founder of the GCPP, sought to reawaken the spirit of unification and economic empowerment through the implementation of Operation Feed Yourself in which he introduced the concept of domestication: ‘Eat what you grow and grow what you eat; feed your industry and export what is left.' Domestication is about using your own resources for development. Unfortunately, this principle still has not been embraced by African governments even though it has successfully turned India, Brazil, and China into economic powerhouses on the global stage. In 2013, we still have problems with housing, sanitation, water, education, food, and electrical energy which is necessary to support our industries,” he noted. Speaking further, Lartey said; “In this global economy based upon computers and high technology, electrical energy is one of the most important and valuable commodities in the world today. Africa has an

Nigeria may witness huge transformation in Power, Petroleum sectors

Domestication is about using your own resources for development; this principle has successfully turned India, Brazil, and China into economic powerhouses

abundance of energy in the form of the sun, wind, and other renewable sources. Let us apply the principles of domestication towards these resources so that we can produce sustainable energy for ourselves and the world. Let us domesticate advances made in the international community in areas of science, technology, medical and engineering services, so that we can achieve sustainable homes and


communities, sustainable health care and sanitation, sustainable agriculture and economies, as well as an empowered people. "It was the dreams and hopes of our founders that Ghana would be a Black Star leading the peoples of Africa towards a powerful and united Africa; this is the reason why the founding constitution of the First Republic of Ghana has a

clause which states that Ghana shall surrender its sovereignty to the United States of Africa. It stated that 'the union of Africa should be striven for by every lawful means and, when attained, should be faithfully preserved' and 'That the Independence of Ghana should not be surrendered or diminished on any grounds other than the furtherance of African unity.' “It is time for a sustainable renaissance in Africa: A sustainable renaissance of economic, cultural and political empowerment that will last from one generation to the next."

ith what is happening in the Power sector, soon, we might see another big transformation in that industry because when the electricity distribution companies (DISCOs), motivated by business and profit, take over, you will be sure that they will be demanding power to be given to them in order to distribute to citizens and also that everybody pays his/her bill." This was the submission of Engr. Ernest Ndukwe, former Executive Vice-chairman, Nigerian Communications Commission at the 5th anniversary of Business Journal magazine in Lagos. Ndukwe who chaired the occasion advised the electricity regulator to ensure that everybody has a metre. "This question of estimated bill cannot continue; and I am sure people will resist it when the private operators come on stream. I believe that no matter how much the tariff is, once you can have light, you can control how much you spend so if you have 20 bulbs, you can reduce it to five but any time you need light, let it be there. So metering is so critical so that people will not just pay for what they don’t use," he said. He praised the efforts of Alhaji Aliko Dangote in planning to build a refinery in the country saying it is "a major, major investment. For the first time, there is a private sector initiative in building refineries in Nigeria and I know that will transform that industry. So I think Nigeria is moving forward despite our political challenges here and there." He asked Nigerians to pray that the political situation should be such that it does not affect the progress of the country. "Japan sometimes in one year has about three prime ministers but it doesn’t affect their economy because the place is established and things are going on. Thailand can change prime ministers two times in a year but that doesn’t change the progress of the nation. Established economies run almost on autopilot. We are praying for the same thing in Nigeria, that despite whatever happens in the political environment, the policies, programmes and strategies for development are maintained in such a way that we will continue to move forward," he said.

Vanguard, MONDAY, SEPTEMBER 16, 2013 — 39

Business News

Why SWF investment is delayed — Orji


he Managing Director of the Nigeria Sovereign Investment Authority, Mr. Uche Orji has said that what appeared to be a delay by the organization in kick-starting investment activities was to enable his team under-take water-tight deals that would guarantee good returns. The authority had earlier promised to commence investment in June this year, meaning that about three months have already been lost. Speaking at the Security and Exchange Commission’s Learning Series, at the weekend in Abuja, the MD said “it takes 14 months to incubate a deal. I will not rush to invest your money and then come out to regret later”. According to Mr. Orji, the NSIA would be run as public sector enterprise with a private sector philosophy and that his team would comply fully with Santiago Principles, including transparency of investment processes and independence of decision making. He added that the NSIA would be a financially self-sustaining public sector enterprise with a private sector philosophy as its expenses would be paid from returns investment and has to pay a dividend to the federation account after five years of profitability. Vehicle for attracting foreign investment The authority’s boss said that the fund would be a catalyst for other Sovereign Wealth Funds across the globe to invest in the Nigerian economy. His words, the “presence of co-investment partners is a key component of our infrastructure investment process. So Far, we have received positive feedback from potential partners, including other SWFs and private equity firms” Case studies According to Mr. Orji, the Norway’s Government Pension Fund Global which was established with an initial seed fund of $ 300 million in 1996 has been grown to $665.30 billion. The fund played a key role in Norway’s ability to weather Euro Crises. He added that the Abu Dhabi Investment Authority of the United Arab Emirates, UAE, which also started 1976 has grown to $627.00 billion. The NSIA boss also revealed that in spite of the Libyan crisis, the Libyan Investment Authority which was established in August 2006 has maintained $65.0 billion fund; while Angola’s Fundo Soberano Angolano which began 2012 now has $5.0 billion. The NSWF he assured would “help increase the macro-economic credibility of Nigeria and to act as a buffer against short term

macro-economic instability. “Assets will be invested conservatively, striking a balance between generating a modest positive return and preserving capital in nominal terms. Given the unpredictable and short-term nature of the Fund’s potential liabilities, immediate liquidity is required”. Mr. Orji also revealed that the target returns would be about United States Consumer Price Index + 4 per cent as the Stabilisation Fund’s base currency would be denominated is the US dollar. On sectors to be

considered for investment, the MD indentified transportation, water resources, rail, aviation, power transmission, mining, gas pipeline, storage & processing, oil refining and real estate. In order to accelerate development across the country, the fund would also be invested in agriculture, healthcare, ports, roads, as well as, Free Trade Zones & Industrial Parks. According to him, the immediate areas of investment would be agriculture, toll roads, Healthcare ( Diagnostic

centres) rail, real estate, aviation and water resources, where the management would consider investing in dam from where power could be generated while providing crops irrigation, as well as, fishing opportunities to farmers. Mr Orji revealed that the organization would support power generation and distribution , as well as, communications which he considered as opportunities to pioneer the development of new infrastructure securities to attract conservative capital, from within and outside the country.

FCMB's 30th anniversary celebrations

EMS established to replace PHCN, says FG BY CHRIS OCHAYI


he Federal Government has explained that it established the Electricity Management Services Limited, EMS, to take over the responsibilities of some non-core professional and subsidiary services of the defunct PHCN and its successor companies. Minister of Power, Professor Chinedu Nebo who said this during the inauguration of EMS team in Abuja, said further that the EMS was a professional and technical agency to close up gaps which might have been created in the wake of reform carried out in the power sector. The EMS he said would also to provide all needed ancillary and support services to the Nigerian Electricity supply Industry Limited, NESI. Prof. Nebo noted that, “the post privatisation challenges of the rapidly evolving private sector led power industry cannot be over emphasized, hence the establishment EMS as a player in providing sector wide services.

“The importance of establishing EMS is therefore informed by the need to have a professional and technical agency of government at this crucial stage of power sector reform to close up technical gaps which might have been created. The EMS is therefore to take over the responsibilities of some noncore professional and subsidiary services of the defunct PHCN and its successor companies,” he said. According to him, “these services include engineering laboratory, meter test stations, central stores system, testing and certification of major electrical power equipment. Other activities will include providing the platform for standardisation in the industry, archiving the power sector data and information management. “What this means is that, your mandated functions is to respond to the need for sustenance and improvement of power supply and service delivery. At the same time, you must ensure quality and standardisation of materials, equipment and machines used for electricity generation, transmission and distribution networks in

Nigeria. Finally, let me remind you that the management team is expected, with the formal inauguration today, to reposition EMS into a technical and financial efficient, sustainable, and commercially viable company. It must be able, after today, to provide the needed services to drive support and sustain the emerging private sector lead electricity industry in Nigeria.” The minister who recalled the EMS was established as one of the successor companies unbundled from the Power Holding Company of Nigeria, PHCN, in accordance with the Electricity Power Sector Reform, EPSR, Act 2005. He added, it was therefore, as expected, incorporated into a government owned limited liability company under the purview of the Ministry of Power. In his remarks, Managing Director of EMS, Engineer Peter Ewesor said the team was determined to reposition the agency into a world class commercially viable organisation, to provide the needed services to drive, support and sustain the emerging private sector led electricity industry in Nigeria.

BRIEFS Standard Chartered sees strong Africa retail prospects on growth tandard Chartered Plc (STAN), the U.K. bank that earns most of its profit in Asia, expects to open 100 new branches in Africa by 2016 to benefit from the continent’s $1 trillion of annual retail spending. The lender opened 27 new outlets last year and will also “invest heavily ” in digital technology over the next four years, Raheel Ahmed, Dubai-based head of consumer banking for the Middle East, Africa and Pakistan, said in e-mailed comment to. The bank will focus on small and mediumsized companies and private banking, he said. “There is so much growth potential, particularly where economies are growing rapidly,” Ahmed said. “In Nigeria, only 14 or 15 percent of the people have bank accounts,” he said. Standard Chartered’s operating revenue at its Africa consumer banking unit rose 9.4 percent in the first half to $257 million. Economic growth in SubSaharan Africa will accelerate to 5.1 percent this year and 5.9 percent next year from 4.9 percent in 2012, according to the International Monetary Fund.


Umpqua agrees to buy Sterling Financial for $2bn mpqua Holdings Corp. (UMPQ), Oregon’s biggest bank, agreed to pay about $2 billion in stock and cash to buy Sterling Financial Corp., the lender backed by Warburg Pincus LLC and Thomas H. Lee Partners LP. Sterling holders will receive 1.671 shares of Umpqua stock and $2.18 in cash for each of their shares, the companies said in a statement. That values Spokane, Washingtonbased Sterling at $30.52 a share, 26 percent more than its $24.20 close on Aug. 30, when Bloomberg reported Sterling was for sale. “With our size, shared cultures and financial strength, our combined organisation will be uniquely positioned to deliver value,” Umpqua Chief Executive Officer, Raymond P. Davis, who will lead the combined company, said in the statement.


40 — Vanguard, MONDAY, SEPTEMBER 16, 2013



y adding a fingerprint scanner to its newest mobile phone, Apple Inc is offering a tantalising glimpse of a future where your favourite gadget might become a biometric pass to the workplace, mobile commerce or real-world shopping and events. Although Apple’s executives said that its Touch ID technology embedded into the iPhone 5S’ home button would only provide fingerprint access to the phone and its own online stores, analysts said Apple’s embrace of such technology, called

Apple fires biometrics into mainstream biometrics, would be key to wider adoption. “It really propels biometrics into the mainstream,” said specialist, Alan Goode, the UK-based managing director of research consultancy, Goode Intelligence. Jonathan Ive, Apple’s senior vice-president of design, hinted of its future in a video

presentation at the launch. “Touch ID defines the next step of how you use your iPhone,” he said, “making something as important as security so effortless and so simple.” Passwords and personal identification numbers (PINs) have long been the mainstay of access to devices,

bank accounts and online services, despite their poor record. Many passwords can easily be guessed, while others can be hacked by bruteforce attacks - essentially a computer program running through all possible permutations. They also involve one too many steps for lots of users: Apple said that half of smartphone users don’t bother to password-protect their devices. Hence the appeal of

biometrics, which take something unique to the individual a fingerprint, an iris, voice or facial features as authentication. Apple’s move may not have an immediate impact beyond improving the way users unlock their devices and interact with Apple services like iTunes and its App Store. But that is itself a significant step. Apple has more than 500 million iTunes accounts. Anything that increases security and removes steps in the payment process is bound to boost online purchases. It will also raise the comfort levels of companies supplying the content to a mobile commerce sector expected to reach $40 billion next year in the United States alone, according to Euromonitor estimates. Users afraid of using their mobile device to make purchases online or in the real world because they fear it will be stolen or their password seen may feel liberated using a fingerprint, said Michael Chasen, CEO of SocialRadar, which is building location-based mobile applications for social networking. For

mobile commerce, he said, that could “be the missing piece”. Beyond the web, Apple could combine the Touch ID with its existing “Passbook” app that stores coupons, tickets to events and boarding passes on an iPhone and allow event organizers and airline companies to validate those documents, said Sebastien Taveau, chief technology officer at California-based Validity Sensors, which makes sensors for other manufacturers. “Apple wants to make deals with music and entertainment companies with very strong opinions on digital rights management,” Taveau said. The fingerprint scanner, when used in transactions with these companies, could “ reassure all these industries”. Biometric security should also appeal to enterprises nervous about allowing the personal devices of employees on the office network, analysts and industry insiders said. “If this has been implemented right, every enterprise that enforces a password or PIN lock on the device will begin using the fingerprint sensor instead,” said Song Chuang, Singaporebased research director at Gartner. Apple is not the first to

Lack of proper retail structure drives e-commerce in Nigeria — Nwaozuzu BY JONAH NWOKPOKU he MD/CEO, Girlyesentials Nigeria Ltd, an ecommerce retailer, Chinma Nwaozuzu, has attributed the rapid growth of e-commerce in Nigeria to nonexistence of proper retail structure in the country. She stated this while speaking to Vanguard on how pure-click companies, especially ecommerce retailers are revolutionising the retail structure in Nigeria. She said the growth of e-commerce in the country is as a result of people’s response to the convenience and product availability that e-commerce retailers offer. According to her, “Besides the fact that Nigerians like shopping, it is also because before the e-


commerce industry took off, there was not a real structured retail chain. For instance, before now, when you want to buy something, you don’t even know where to get things from. All the shops tried to offer general merchandise goods and had to offer similar products; so one had to go from shop to shop searching for a particular product. There was no proper structure in place. “That is completely opposite of what obtains in the e-commerce industry where everything is streamlined. If you go to an online shop's web site for instance, and you want to buy electronics, everything is concise and clear to navigate and it makes things easier. It’s more convenient and also tries to help you compare prices easier as you can access different sites through the same medium,” she said.

Vanguard, MONDAY, SEPTEMBER 16, 2013 — 41


Addressing tax evasion and compliance


Acting Exec. Chairman, FIRS, Alh. Kabir Mashi brings in sufficient revenue to the Government. Since tax payment involves the outflow of money from taxpayers, some taxpayers have adopted many strategies to evade tax. Tax evasion is defined as “the wilful attempt to defeat or circumvent the tax law in order to legally reduce one’s tax liability.” Tax evasion is punishable by both civil and criminal penalties. Tax avoidance on the order hand, is defined as “the act of taking advantage of legally available tax planning opportunities in order to minimize one’s tax liability. While tax evasion is criminal, tax avoidance is legal. This was aptly supported by the celebrated case of Ayrshir Pullman Motor Services & D.U. Ritche V.CIR (1929). The fact of the case and the judgement is as follows:The taxpayer changed the structure of its business from sole proprietorship to partnership with five of his children to minimise tax. He appealed to the Court of Session against an assessment which failed to recognise the change. Allowing the appeal, Lord Clyde held: No man in this country is under the smallest obligation, moral or other, to so arrange his legal relations to his business or property as to enable Revenue to put the largest possible shovel into his stores. The Inland Revenue is not slow.... and quite rightly to take every advantage which is open to it under the taxing statutes for the purpose of depleting the taxpayer’s pocket. And the taxpayer in like manner, is entitled to be astute to prevent, so far as he honestly can, the depletion of his

means by the Revenue. Tax compliance tools In order to encourage taxpayers to continue to comply and bring noncompliant taxpayers into the tax net, to increase the tax base and revenue, governments all over the world have put in place some compliance strategies backed by appropriate legislations. Section 26(1) of the Federal Inland Revenue Service Establishment Act (FIRSEA) 26(1) gives the Service to call for returns, books, documents and information. FIRSEA 27Gives additional power to the


axes are the enforced proportional contributions from persons and property, levied by the state by virtue of its sovereignty for the support of government and for all public needs. From the above definition, it is seen that taxes are contributions to a common pool by the people for the use of the people. Governments all over the world need taxes in order to sustain their relevance and to provide for the needs of its citizenry. Features of a good tax system A tax system is expected to be fair and nondiscriminatory. For a tax system to meet these requirements, it must have the following attributes. 1. Neutral – A Neutral tax must be unbiased across economic activities, and not overly penalise work in favour of leisure, nor tax income used for saving and investment more heavily than income used for consumption. 2. Visibility – A very large segment of the population must be keenly aware that government costs money, government spending should be held at levels at which its benefits match its costs. This is a critical factor in most developing countries (including Nigeria) where the citizenry believe that tax revenues are not being expeditiously administered. 3. Fairness – This is often stated as making the rich pay higher share of their income in taxes than the poor. There should be some amount of income exempt from tax to shelter the poorest citizens. 4. Simplicity– A tax system should be easy for the government to administer and enforce, and be easy and inexpensive for taxpayers to comply with. The elimination of multiple layers of tax would also create a system that is much simpler and easier to administer, enforce and comply with. These are critical issues in Nigeria tax systems that require urgent attention. Our tax laws are old and complex, giving room for varied interpretations and applications. 5. Convenience – A good tax system should be convenient in terms of time and mode of payment to the taxpayer. 6. A d m i n i s t r a t i v e Efficiency – The process of levying and collecting taxes must be administratively efficient, transparent and economical without any distortion. 7. Productive – A tax system should be such that

Both the government and the taxpayers must resolve to work in collaboration and meet mid-way for the society to develop and enjoy peace and security.


Service to call for further returns and payment of tax due. FIRSEA 28–Requires every bank upon demand by the Service, to provide quarterly

returns specifying:(a) In the cases of an individual, all transactions involving the sum of N5,000,000.00 and above (b) In the case of a body corporate, all transactions involving the sum of N10,000,000.00 and above, the names and address of all customers of the bank connected with the transactions and deliver the returns to the Service. (c) Section 28 (3) – Provides sanction to any bank that contravenes above provisions. FIRSEA 29 – Gives power to access lands, buildings, books and documents. FIRSEA 32 - Gives power of addition for non-payment of tax and enforcement of payment. FIRSEA 33 Tax Investigation; this section empowers the Service to employ special purpose Tax officers to assist any relevant law enforcement agency in the investigation of any offence under this Act. FIRSEA 47- Gives the Service powers to prosecute any of the offences under this Act subject to the powers of the Attorney–General of the Federation. The role of tax audit In addition to all the tax provisions mentioned above, FIRSEA S:26(4) and S.60(4) CITA went further to state:“Nothing in any other provision of this Act shall be constructed as precluding the Service from verifying by tax audit or investigation into any matter relating to any return or entry in any book, document, accounts including those stored, on a computer, in digital, magnetic, optical or electronic media as may, from

time to time, be specified in any guideline by the Service”. All the above provisions, among others, are compliance tools meant to ensure that a taxpayer does not pay less or more than what he is required to pay by law. This objective is achieved through tax audit exercises. The purposes of tax audit are to; *To educate taxpayers *Maintain self assessment system *Collect taxes as imposed by the laws through the encouragement of voluntary compliance *Maintain public confidence in the integrity of tax system. *Provide deterrent effects on other taxpayers not yet audited, as they may quickly file their returns in order to avoid sanctions. Most taxpayers will be willing to pay their taxes as and when due, if government is transparent and accountable. It is the common experience in the developing countries that governments have not demonstrated enough commitment towards providing the citizenry with required facilities and infrastructure that would encourage an average taxpayer to be voluntarily compliant. Roads, electricity, education and health facilities are in short supply, facilities that are already in place are not properly maintained. There is growing apathy among the taxpayers about the commitment of government to use the taxes paid to provide for their needs. These are the issues that need to be addressed in order to improve the level of compliance. Both the government and the taxpayers must resolve to work in collaboration and meet midway for the society to develop and enjoy peace and security. A government must have the trust of its citizens. Government that cannot be trusted may not have moral the courage and determination to maximize its tax potential. Total tax revenue, which is the tax rate multiplied by the tax base, can be increased when government is physically present in every nook and cranny of the country by means of provision of social amenities. The citizenry is getting impatient and agitated. The time for the government to do the right thing is now. Tomorrow may be too late.

42 — Vanguard, MONDAY, SEPTEMBER 16, 2013


Dana Air negotiating new Boeing planes acquistion By LAWANI MIKAIRU


ana Air Head of Commercial, Obialor Mbanuzuo has revealed that negotiations to acquire new airplanes from Boeing, airplane manufacturer, has reached advanced stage as the airline is determined to increase its fleet to seven planes before the end of the year. The airline currently operate five airplanes. Mbanuzuo made this revelation during the official inauguration of Calabar-Uyo-Abuja daily flights by the airline at the Muritala Muhammed Airport, Lagos . He said the airline will acquire new Boeing classics before December to meet the demands of the new routes it is opening. He further explained that there has been clamour by passengers for the airline to resume the Calabar –Uyo route. The airline Head of Corporate Communication, Tony Usidamen explained

that the daily flights will originate from Calabar ,through Uyo, before departing to Abuja . He said the airline will offer competitive fares on the new routes. He however called on government to intervene in the high cost of aviation fuel which constitute more than Thirty percent

operating cost of airlines. Affordable low cost aviation fuel, according to him, will enable airline reduce airfare. On viability of the routes, Usidamen noted that most routes are currently under serviced as most airlines cannot cope with the volume of passenger traffic . He further noted that “ Dana is

ready to compete with other airlines as it has the competitive edge of rendering quality service “ On safety and security of passengers, Dana Head of Safety and Security, Adil Bourmaki said the airline is making conscious efforts to meet international safety standard in line with IATA rules. He further said security measures have been put in place by the airline to check the recent upsurge in airside invasion by potential stowaway.

NAMA begins calibration of navigational aids igerian Airspace Management Agency, NAMA, has commenced calibration of navigational equipment at some airports and en route stations across the country to enhance air safety. NAMA General Manager, Public Affairs , Supo Atobatele, said the calibration exercise started at the weekend in Lagos with the routine calibration of the two Instrument Landing Systems [ILS] , Very High Omni-directional Radio Range/Distance Measuring Equipment [VOR/DME] and the Path Approach Precision Indicator(PAPI)of the Murtala Muhammed


International Airport. “ Equipment being calibrated include- the recently installed ILS/ DME,CVOR/DME at Enugu airport, Makurdi and Kanji. The newly installed air field lighting system at Makurdi will equally be flightchecked by Flight Calibration Services of the United Kingdom using DA42 multipurpose platform aircraft.” ” Other navigational aids being calibrated areConventional OmniDirectional Radio Frequency [CVOR], Instrument Landing System[ILS], Distance Measuring Equipment[DME] Very High Omni-Directional Radio Frequency [VOR] all

located in ,Uyo Abuja , Kano and Portharcourt.” “Similarly ,Communication radio coverage check for Lagos and Kano area control centres will be undertaken during the calibration exercise.” The Managing Director of the Agency Engineer Mazi Nnamdi Udoh , disclosed that the exercise would last for fourteen days, explaining that the calibration of the navigational aids would assist in putting all the navigational aids in proper shape at these airports and en-route stations. Udoh said NAMA spends about N200milion annually to calibrate navigational aids at 26 airports across the country.

New security equipment installed at all airports By DANIEL ETEGHE he Federal Airports Authority of Nigeria, FAAN, has taken further steps to improve safety and security at the airports by installing additional and more modern security equipment, in line with the on-going transformation in the aviation sector. According to Yakubu Dati General Manager, Corporate Communications, FAAN, the Authority has already installed seven brand new Xray scanning machines at the Murtala Muhammed Airport, Lagos, five at the cargo basement of the international terminal, one at the Hajj and Cargo terminal and another at the airport’s domestic terminal 1. This is in addition to existing security equipment at the airport. All the other airports in the county are also benefitting from the installation of these new scanning machines.


Vanguard, MONDAY, SEPTEMBER 16, 2013 — 43

Advertising, Media & Marketing Stories by PRINCEWILL EKWUJURU

Customers as Elephants - 2


ince the National Lottery Regulatory Commission, NLRC and the Consumer Protection Council, CPC, were established by the Federal Government to regulate, monitor and control the activities of companies engaged in promotional activities, the situation has changed. Today, promo organisers pay attention to smallest details to what they have promised, failing, they definitely will attract the wrath of the regulating agencies. Promos have been held and pledges fulfilled, presently, Star larger beer is running an on-going national consumer promotion, NCP, tagged: ‘Star Win & Shine promo,’ where surprises abound, few minutes before September 7, 2013, James Oladimeji became N200,000 richer, had he been told earlier definitely he wouldn’t have believed it. That however turned out to be the life changing story of the Ilaje born, 200 Level Chemical Science student of Olabisi Olabanjo University. The 26 year-old who runs a viewing centre within his environment in Gbagada, Lagos, was convinced by a friend to attend the first Star ‘Win and Shine’ party held at De Marquee restaurant and bar located atop Mega Plaza, Victoria Island, Lagos. The party which featured two sessions of the Win &


James Enikuomehuin Oladimeji, winner of N200,000,posing with his dummy cheques, while Gbenga Adeyinka, show compere, addresses the audience at the first Star Win & Shine National Consumer Promotion raffle draws held in Lagos.

I’ll fund my education with Star promo proceed — Winner Shine promo raffle draws kicked off at 7:30pm and lasted till the following morning. No sooner had Oladimeji and his friends ordered their Star Larger through an attendant who explained to them what to do with their crown corks to participate in the raffle draws during the course of the party. Oladimeji and his friends

decided to take advantage of Star’s discount and bought several bottles of Star lager beer, keeping the crown corks. He said: “I started having hopes when I got two crown corks with differentiated codes which I sent to 30383 and my line was instantly recharged with N200.” Now, he does not only plan to get the LED TV which eluded him earlier, he plans to use part of his winning money to fund his third year in school as he also plans to help his younger siblings who are presently at various stages of their education.

SERAs unveils new statuette he organisers of the Social Enterprise Reporting Awards (The SERAs) have announced the unveiling of a new Gold and Silver statuette to replace the former one. In a move aimed at making SERAs a truly Gold Standard award, the organizers contracted the re-designing and manufacture of the new statuette to R.S. Owens, a company based in New Jersey, USA. This is the company that produces the world renowned Oscars and Golden Globes statuette. According to the coordinator of the SERAs, Ken Egbas “our new statuette is priceless and a massive improvement on the previous version. This is the statuette to have and own. Egbas added that: “ we are sure that organizations who will take home the statuette on September 21st will cherish this masterpiece and derive great pride in their achievement. The organizers of the SERAs believe that the new statuette will inspire more companies to commence their sustainability journeys


CONTINUED FROM LAST WEEK lmost 21 years ago, I had an encounter with a big, first-generation Nigerian Bank. I was then a Youth Corps member in Maiduguri, Borno State. I had gone to open an account with the bank for the payment of my wretched N350 monthly allowance. Two weeks later, I went to withdraw the first allowance that ought to have been paid into the bank. The teller nonchalantly told me that an account had not yet been opened for me because somebody had misplaced the two passport photographs I had submitted a fortnight earlier. I was then asked to bring a fresh set of pictures. I complied (did I have much choice?). But I knew that a bank that could afford to throw away my photographs just like that wasn’t worth a second look. Moreover, the service of the bank was so horrible that the corps members that had accounts with it were always the last to receive their allowances. Ever since, I have never thought of being a customer to that bank – I don’t ever plan to be! Somehow, each time I pass by a branch of that bank, the encounters of two decades ago simply rush through my memory. Even the logo of the bank, to me, is a symbol of poor service! I once had the misfortune of being on a Nigerian Airways flight from Lagos to Port-Harcourt. It was actually a combined flight to Port-Harcourt and Douala, Cameroun. The creaking noises from the aircraft left too many butterflies flapping in my stomach. Moreover, the air conditioning system was in such a wonderful state that by the time we got to Port-Harcourt, every passenger had been thoroughly drenched by their own sweat. You can see I have had my more-than-fair share of poor customer experience. As soon as I got to PortHarcourt, I thanked God for the safe trip but made up my mind to travel by road rather than board a Nigerian Airways flight again. Those were the dying days of the airline, anyway. But how long ago was that? I still remember the experience as if it happened only yesterday. One question I would like answered some day is: To what extent did poor service contribute to the demise of Nigerian Airways? What’s the message? If your service was poor some two, five, 10 or 15 years ago, you already have some negative perception baggage to contend with. And you probably have a few elephants out there who haven’t forgotten. They may never do business with you again in spite of the great strides you have made in service excellence since then. They may also persuade others not to do business with you. They may even start a website to thrash your business. (For a seemingly extreme case, please see what Jeremy Dorosin, a dissatisfied Starbucks customer, does on Time, they say, heals every wound. In the world of customer experience, however, the wound may simply fester if it’s deep enough. But all hope is not lost. If you begin to give customers a great experience each time they do business with you, you might just have a few other elephants that would remember your good deeds and spread the word. There is a lot of good sense in thinking longterm. Each encounter you have with a customer is an opportunity to make a lasting impression. How would you want the encounter to be remembered five or 10 years down the line? Some encounters, owing to their perceived significance, get deeply etched in people’s memory. Also related is the issue how far we are willing to go to make things right for a complaining customer. Would you be willing to invest a thousand Naira today to keep a customer happy knowing or hoping that the same customer could make you twenty thousand next year? As we always say in this column, you should do what is right by your customers, not because of what you stand to gain tomorrow (for sure you should reap what you sow) but because it’s simply the right thing to do. CONCLUDED Comments are welcome.

and to participate in The SERAs 2014. The SERAs 2013 event is slated for the 21st of September at the Muson Centre. The Special guests of honour are Executive governor of Osun State,

Ogbeni Rauf Aregbesola and the Executive governor of Katsina state, Dr. Ibrahim Shehu Shema. The keynote address will be given by Professor Pat Utomi, founding faculty, Pan-Atlantic University in Lagos.

ADVAN revamps marketers’ excellence awards


he Advertisers Association of Nigeria (ADVAN) has revamped the annual Advertisers award as the association puts machinery in motion for this year’s edition.The association which is determined to stimulate and promote marketing profession in Nigeria said Award ceremony will take place in October 26, in Lagos promise to highlight the fundamental position marketing occupies in business and the public sector. Entry for the awards which the associationaa has thrown open to both members and non- members will be a celebration of hardwork and ingenuity in the marketing profession, Yomi Ifaturoti, chairperson of the award committee told Journalists in Lagos. Submission of entries has since opened and will close on September 20.Giving details of the award, she said the 2013 marketing excellence award will recognize outstanding and effective marketing in Nigeria. The 11 categories for award are


consumer insights, CSR, experiential, consumer promotions, new brand of the year, digital marketing, brand of the year, innovation of the year, campaign of the year, brand manager of the year and marketing professional of the year. In a bid to adequately award marketing excellence in its true form, there has been a complete overhaul by the association of the award categories, judging criteria, and selection process for the 2013 edition. “All entries will be judged by a team of the marketing professional in the nation and verified by the nation’s leading independent marketing research organizations, to ensure a transparent selection process”. In the former editions, the selection process was based solely on the merit of entries sent in by participants without third party authentication.

44 — Vanguard, MONDAY, SEPTEMBER 16, 2013, Blog Website: Tel:0805 220 1997

CBN’s management of surplus cash as economic sabotage I the-record kickbacks from those banks, which kept free government funds. Thus, Sanusi’s recent directive that banks must keep 50% of government deposits inert, as reserves, is obviously an attempt to stem the folly aaznd the obvious fraud in government borrowing back its own money at horrendous costs. However, there is no positive change since the

surplus will only lead to still higher cost of funds, which will in turn reduce prospects of economic growth, while increasing the rate of unemployment and the impact of ravaging inflation on the poor. It is inexplicable that both the Federal Executive and the National Assembly appear unperturbed by such a suffocating predicament, but it is, worse still, that civil


t is bad enough to ever be in a position where one borrows one’s money back, but for our Central Bank to have done so for so many years at rates of between 13 and 14 per cent, as admitted recently by Governor Lamido Sanusi, can at best be described as an unfortunate moral hazard, which may border on economic sabotage. Indeed, according to Alhaji Suleman Barau, Deputy Governor at the CBN, who corroborated Sanusi’s observation, the three tiers of government had almost N2.384tn lodged in commercial banks in zero interest accounts by June 2013. Barau also revealed that such liquidity instigated government borrowing, and may have already improved the profitability of banks by about N300bn, even when they added no value to the economy; thus, in spite of our economic and infrastructural hemorrhage, banks may have enjoyed a bonanza of over N3000bn for doing nothing in the last 10 years. It is even worse that despite the huge cost of service, funds borrowed were simply kept idle (sterilised) by the apex bank, in order to control excess cash supply in the system. The easy money to be made from warehousing free government funds, produced marketing strategies, which included ambitious targets for delectable mini-clad young women, called relationship officers, as foot soldiers to attract deposits! Inevitably, salaries and budgeted projects of MDAs were deliberately delayed so that public officers could earn off-

Thus, Sanusi’s recent directive that banks must keep 50% of government deposits inert, as reserves, is obviously an attempt to stem the folly aaznd the obvious fraud in government borrowing back its own money at horrendous costs.


CBN’s directive, as the Debt Management Office and the CBN have since borrowed about N300bn with treasury bills and bonds, while simultaneously paying out over N200bn to redeem such matured government debts, to the same banks. Furthermore, the average cost of lending to the real sector has also risen above 25%, while the naira exchange rate has paradoxically come under heavy downward pressure. The latest addition of the accounts of such MDAs as NNPC, Customs and Federal Inland Revenue Service, to the 50% Cash Reserve Requirement will not achieve any meaningful purpose, but may, in fact, be counterproductive, as further reduction of the extant cash

society, including Nigerians of great intellect worldwide, and the experts in CBN’s Monetary Policy Committee appear insensitive to the apparent fraud of government borrowing back its own money at ridiculously high interest rates for over 30 years. Indeed, the label of fraud for such reckless management of public funds is probably a poor euphemism of a more vicious crime of economic sabotage. How, for example, does one explain that, in spite of hundreds of billions of naira government’s free funds in the hands of the banks in 2009, the CBN, simultaneously, curiously maintained Cash Reserve Ratio (CRR) for all deposits, including government

deposits at a mere 1%, but then, proceeded thereafter, to mop up the resultant cash surfeit by committing government to heavy borrowing at double-digit interest rates from the same banks. Interestingly, the CBN mischievously blames excessive government spending for its own inability to bring about lower singledigit rates of interest and inflation. In contrast, international best practice is to increase government spending, so as to create demand, and boost industrial activities and job opportunities, in any economy plagued with mass unemployment like ours. Incidentally, the Guardian newspaper editorial of August 28, observes that “If public sector deposits in June 2013 constituted 20% of the N15tn bank deposit base…, where then is the touted public sector dominance?” The editorial, therefore, rightly concluded that “There remains a further N12tn of private deposits that (with CRR at 12%) endows the bank with a maximum lending capacity of N96tn.” Whether anyone chooses to agree with this analysis is not important; the truth remains clear that CBN instigates the oppressive burden of excess cash in the system, when it captures our dollar earnings and substitutes same with monthly naira allocations. That is why CBN’s self-styled “own dollar reserves” grow as naira liquidity also increases, and propels government to borrow back its own funds at an oppressive cost, to cage spiraling inflation! It is unusual for any central bank to make a claim to its own

foreign reserves, which exist outside a nation’s consolidated revenue fund. To be fair, Sanusi inherited and sustained this fraudulent shenanigan in monetary policy management; nonetheless, this oppressive system continues to create ample room for corrupt enrichment in the management of public funds. For example, fuel subsidy payments and the oddity of government borrowing back its own money at ridiculous rates of interest, cost our nation over N2tn annually, with no value added! Undoubtedly, our severe industrial and economic deprivations will continue for as long as we all close our eyes, while CBN’s monetary policies continue to make us poorer, just as CBN’s own reserves conversely swell. Curiously, on the fiscal front, the same vein of economic sabotage is also discernible in the manner projected revenue in annual budgets is deliberately understated, with extremely conservative crude export price/output benchmarks, so that heavy government borrowing become necessary to fund the ‘ghost’ deficits deliberately created in annual budgets! It is of no consequence to our expert economic managers that existing so-called surplus or excess public funds remain domiciled in zero interest accounts, while government sustains unnecessary heavy debt accumulation at obnoxious interest rates to fund the non-existent deficits. SAVE THE NAIRA, SAVE NIGERIANS.

Business & Economy FG chides terminal operators over inadequate cargo handling equipment APMT gets 30 days ultimatum By GODFREY BIVBERE & PROVIDENCE OBUH


ederal Government weekend issued a 30 day ultimatum to port terminal operators to address the observed lapses in cargo clearing at the ports. The terminal operators were also reprimanded for their inconsiderate attitude to government operatives working at the ports. This is coming on the heels of complaints leveled against port terminals by stakeholders in the maritime industry over maltreatment to port users in their efforts to take delivery of

cargoes the ports. Speaking during a visit to the Apapa container terminal, APMT and Tin-can Island Container Terminal (TICT), Apapa, Senior Special Assistant to the President on Maritime, Mr. Leke Oyewole, and expressed shock over the scanning machines left idle at the terminals. Oyewole identified inadequate equipment as the biggest challenge facing both the TICT and APMT, saying, “APMT is similar to TICT in terms of these inadequacy of equipment, they do not have enough equipment to position cargo for inspection, no

adequate equipment to move cargoes for scanning, it surprised me to find out that scanners are virtually idle. It is not the fault of the people working here, it is not the fault of the customs officers, it is the fault of terminal operators. “In the cause of the tour of Tincan, we did not see anybody move truck for scanning and they have lot of things waiting to be scanned, that is contrary to what we thought is happening at the port,” he stated. For APMT, he explained, “the thirty days ultimatum was coming as a result of the fact that Ministers have met with them and had agreement with this people, and all they promise to do, uptil now they have not done. If you cannot

however, am taking this to the President.

honour the Minister, how can you honour somebody like me,

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


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CONTRIBUTORS Princewill Ekwujuru Naomi Uzor Providence Obuh LAYOUT


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