Financial Vanguard

CMYK

MARCH 3, , , , , 20142014201420142014

KPMG ALUMNI: From left, Mr Seyi Bickersteth, Senior National Partner, KPMG; Mr Aigboje Aig-Imoukhuede,guest speaker and Mr Yomi Sanni, Partner and Chief Operating Officer, KPMG at the KPMG Alumni Cocktailheld in Lagos on Thursday. Photo Lamidi Bamidele

Banks make brisk profit short-selling Naira

Forex: CBN intervention fuelsboom in interbank market

The Intervention of the CentralBank of Nigeria in the foreign

exchange market through specialforeign exchange sales to banks hascreated a boom in the interbankforeign exchange market.

Vanguard investigations revealedthat banks are making huge profitsshort-selling the naira in the interbankmarket.

Meanwhile, the interbank foreignexchange rate has refused to returnto pre-suspension of Sanusi level,thus generating pessimism over theeffectiveness of the CBN intervention.

Since February 20, when theGovernor of the Central Bank ofNigeria (CBN) was suspended, theapex bank had been conductingspecial foreign exchange sales withthe aim of taming the interbankforeign exchange rate which shotupwards to N169 per dollar onFebruary 20.

But the impact of the interventionhas been momentary due to increasedanxiety among foreign investors anddealers. On a daily basis, theinterbank exchange rate rose until itgot to about N167 per dollar and fellas soon as the apex bank intervened.

Investigation further revealed thatsome foreign exchange dealers,especially in the big banks, have beentaking advantage of this situation,buying from the apex bank at theofficial exchange rate and selling inthe interbank market.

“It is called short-selling," an insider,who preferred to be anonymous toldVanguard. The dealers deliberatelyoffer to sell dollars when the marketrate is high, in anticipation of cheaperdollars that the apex bank wouldpump into the market that day.

Meanwhile, because settlement inthe interbank market is T+2, thedealers have enough time to use thecheap CBN dollars to settle the salesmade at the high exchange rate.

“They are praying that the crisesshould continue, so that they can meettheir target for the year in the firstquarter. In some instances, the dealersdeliberately bid up the interbank rate

so as to prompt the apex bank tointervene, “a currency analyst, whodoes not want to be named, told

Continues on page 18

By BABAJIDE KOMOLAFE

Cover Story

CMYK

18 — Vanguard, MONDAY, MARCH 3, 2014

Continued from page 17

Continues on page 19

Vanguard.

Intervention noteffective

Meanwhile, the interbankforeign exchange rate

has defied the intervention ofthe apex bank, closing atN165.32 per dollar.According to data from theFinancial Market DealersQuote (FMDQ), this is N1.37higher than the N163.75 perdollar interbank rate onFebruary 19. “The general belief is that theintervention is not effective inreturning the interbank rateto the pre-suspension level,”said a banker, adding thatthis belief is fuellingincreased speculation againstthe naira.

Apparently aware of thisdevelopment, Acting CBNGovernor, Dr. Sarah Alade onMonday held a conferencecall with dealers and foreigninvestors. A senior foreignexchange analyst whoparticipated in the conferencebut does not want his namementioned, told Vanguardthat Alade told participants,which included globalfinancial firms like J.PMorgan, that the CBN willdefend the naira with theexternal reserves. She saidthat the apex bank does notplan or intend to devalue thenaira. It was gathered thatmost of the participantsexpressed apprehension thatthe CBN might eventuallydevalue the naira, given thecontinued decline in thenation’s external reserves.Some of them wanted toknow if the CBN wouldmaintain or reverse the recent

PARTNERSHIP: From left, Mr Nicolah Farah, General Manager, Dajcom Limited; MrMitsuno Nakashima, Group Deputy General Manager, Sharp Corporation, Japan; Mr AkinOpeodu, Vice- Chairman, Mutual Benefits Assurance; Mr David Safa, MD, Dajcom Limitedand Mr Fumio Yamaguchi, MD, Sharp Middle East FZE, Dubai during the partnershipannouncement press briefing between Sharp and Dajcom held in Lagos on Thursday.

increase in Cash ReserveRatio (CRR) on public sectordeposits.

External Reservescontinue to fall

But with the nation’sexternal reserves

declining persistently, marketparticipants and analystsbelieve that the apex bank isfighting a lost battle trying todefend the naira.“If the CBN continues thisway, it will soon run out ofreserves,” a bank chiefexecutive told his staff.

Last week, external reservesfell by another $790 million to$40.26 billion. Cumulatively,the external reserves havedeclined by $3.35 billion. Ifthis trend continues, thegeneral belief is that thereserves might fall below $35billion by the time a new CBNGovernor takes office, and the

apex bank might becompelled to stop defendingthe naira with the reserves.This view is aptly expressedby the Economist IntelligenceUnit’s (EIU) Medium-termprospects which areunfavourable. However,whereas short-term currencystability seems likely toreturn, we have more seriousdoubts about the naira’smedium-term prospects,” itsaid.

In a commentary titled,Nigeria economy: The nairais safe, for now, the EIU said,“Whereas short-term currencystability seems likely toreturn, we have more seriousdoubts about the naira’smedium-term prospects. TheCBN does allow periodicadjustments to avoid anyrapid running-down offoreign reserves, a move thatseems increasingly likely laterin 2014 or 2015. The last suchadjustment took place in 2011when the marker was shiftedslightly from N150 per dollarto N155 per dollar. Largerrevaluations were carried outat the height of the globalfinancial crisis in 2008-09,when the naira target wasmoved from N120 per dollarto N150 per dollar. Althoughthe 2011 devaluation helpedNigeria’s reserves recoverover the next year, it fell fromUS$48bn in the first quarterof 2013 to US$43 billion inJanuary 2014. “ The timing of a readjustmentis less certain. Although weare convinced that a nairaadjustment will take placeduring the next 18 months,predicting the timing of it istrickier. There are two mainscenarios: The new CBN

,

,

Forex: CBN intervention fuels boom ininterbank market

A depreciationbefore the 2015elections couldbe consideredpoliticallyunpalatable,given that itwould beunpopular withthe electorate,both by raisingimport pricesand as a sign ofweakness in theadministration’seconomicmanagement

FORMS OFENTREPRENEUR:

There are different formsof entrepreneurship, and

they will be treated one afterthe other.

Sole proprietorship:This is a situation whereby

the function of an entrepreneuris performed by one person,who owns the business but haspeople who are led by him orher, working to achieve thedesired success. It is importantto note that running a businessfor the sake of just makingprofit for yourself is notentrepreneurship; you must bean employer of labour. If youlook around the country today,we have lots of entrepreneurswho fall under this category,e.g. Eleganza Group ofCompanies - dealers inhousehold and kitchenappliances, Zenon Oil, Houseof Tara (a leading make-upbrand in Nigeria), Dangote. All,

,Running a

business for thesake of just makingprofit for yourself is

notenterpreneurship;you must be an

employer of labour

these are examples ofentrepreneurs that are soleproprietors but whatdistinguishes them from theordinary businessman, are thatthey are employers of labour(they have employees workingfor them). They identifiedneeds in the society and madean effort to fill them.

Partnership:This is a situation in which

the business is founded andrun by more than one person,who are also employers oflabour. This type ofentrepreneurship is foundmostly in law firms, accountingfirms, estate surveyors, but notlimited to these practices e.g.we have DHL, May & Baker,Aluko & Oyebode, amongstothers. Other types ofentrepreneurship includeprivate companies, publiccompanies, limited liabilities,corporations or statutorycorporations.

At this juncture, I would like

to state that there is a markeddifference between abusinessman and anentrepreneur. While abusinessman is one who isinvolved in business just tomake profit for himself andmeet his needs, anentrepreneur is one who is anemployer of labour and awealth creator, and is alsoinvolved in business.Interestingly, the steps I willbe treating in this book andeverything I have said so far,applies to both thebusinessman and theentrepreneur, and that isbecause most times, somebusinesses evolve from justbusiness to entrepreneurship.

CHARACTERISTICS OFAN ENTREPRENEUR

Successful entrepreneurs/businessmen all around theworld possess certaincharacters, traits or qualities,which have become theyardstick or benchmark formeasuring their success. If youwant to thrive then you mustacquire these traits.?

Do what you enjoy.Personal satisfaction is a very

important ingredient thatcontributes to the growth ofyour business. When you dowhat you enjoy doing, this willbe reflected in the success ofyour business or subsequentlack of success. In fact, if youdon’t enjoy what you aredoing, chances are that youwon’t succeed.

? Have an eye foropportunity:

Many entrepreneurs are veryquick to detect opportunities/needs and do not hesitate tokey into such openings andsatisfying them. They are verysmart, sharp and witty,opportunities do not need topresent themselves twice to theeagle-eyed entrepreneur, justonce and they seize it, makingthe most of it.?

Right mental attitude:Successful entrepreneurs

have the right mental attitudeand are warm, this endears himto many. They are veryreceptive and they nurture therelationships that areconnected to their dreams.There’s an old saying that;“your attitude determinesyour altitude”.

The Basic Guide to Startingyour Business Part 7

CMYK

Vanguard, MONDAY, MARCH 3, 2014 — 19

Continued from page 17

Cover

,

,

Sanusi should answer hisquery; MDAs must makefull disclosure

I quite sympathize withSanusi because whenthe chips are down,

those who find in him awilling tool will be thefirst to abandon him

governor, who will formallytake office from June at theexpiration of Mr Sanusi’sterm, allows a one-off depre-ciation. He or she (but expect-ed to be Godwin Emefiele,who was nominated by MrJonathan within hours of MrSanusi ’s suspension) islikely to be concerned bythe erosion of reserves andcould blame the need for areadjustment on events be-fore his time in office. Therewould not be a need for avery large depreciation,

perhaps to N165 or N170per dollar, but such a movewould head-o f f marketspeculation and give thenew governor time to settlein. “A depreciation beforethe 2015 elections could beconsidered politically un-palatable , given that i twould be unpopular withthe electorate, both by rais-ing import prices and as asign of weakness in the ad-ministration’s economicmanagement . The new

CBN governor nominated bythe president (subject toSenate ratification), may de-cide that it would be pru-dent to delay a devaluationuntil after the conclusion ofelections due next Febru-ary . Such devaluat ionmight need to be larger inmagnitude, given that re-serves would have fallenfurther in the meantime. Afractious election periodand our expectation of out-breaks of unrest would also

Forex: CBN intervention fuels boom in interbank market

WHEN President Umaru Yar'Adua (may his gentle soul rest in peace), nominated Sanusi Lamido Sanusi as the CBN governor- designate to the Sen-

ate, the Editor of Vanguard Media Limited, Mideno Bayagbon, asked me to puttogether a profile on the CBN governor-designate for publication. I did a quicksearch on him on the internet. I was interested in Sanusi's economic philosophyand thought that could guide his actions and utterances. An economist is either amonetarist, or a fiscalist. While a monetarist believes in the use of interest ratesand other monetary variables to target economic fundamentals, the fiscalist tendstowards the use of taxes and tariffs to achieve the same purpose; all for the com-mon good.

As much as I tried to placeSanusi on these platforms, Idid not in my search, find anysingle paper written by himbefore becoming CBN gover-nor that was not socio-politi-cal or activist-based proclaim-ing the right of women underSharia law or a response to asocio-political debate betweenthe north and south.

The article I put together forthe Editor was such that in hisopinion, could not be pub-lished at the time so that it willnot appear as if Vanguard wasagainst the appointment ofSanusi as CBN governor. Theeditor was right because atVanguard, editing is knowingwhat not to publish.

I am stating this in the lightof the series of events that ledto Sanusi's suspension. Nige-rians are either completely ig-norant of trends or are simplydisinterested in the affairs ofthe country that they reduceeverything under the sun tosentiments and ethnic colour-ation.

The ongoing debate on Sa-nusi's suspension has por-trayed the CBN as a sovereignwithin a state. The real issuesare being brushed aside andsentiments and opposition forthe sake of it, have taken thecentre stage. Worse are thecivil society groups and theAPC whose utterances and po-sitions are just one sided.They are not looking at the lawfrom an objective perspective.The Executive Secretary of theFinancial Reporting Council,Mr Jim Obazee met with jour-nalists in Akodo, Lagos Statein December on a two-day re-treat. At the retreat, he statedthat the CBN has not compliedwith the directive of the coun-cil that its accounts should berendered in the International

Financial Reporting Standard(IFRS) format. When probed,he simply said that the dead-line given will expire by De-cember 2013 and by January2014, he will reel out namesof agencies of government thathave failed to comply. The glo-bal business community is em-bracing the International Fi-nancial Reporting Standard asa result of the need for full dis-closures following lessonslearnt from the global finan-cial meltdown of 2008. TheCBN as the regulator of banks,has since compelled banks tocomply, but its own accountsare not rendered in the sameformat. Nigerians have notbothered to ask why the CBNdoes not want full disclosure.

Nigerians have also notasked whether the FinancialReporting Council was creat-ed by an act of the NationalAssembly and if so, does ithave the powers to do what ithas done?

Sanusi has been the CBNGovernor for almost five years,is he just discovering that theNNPC account is fraught withanomalies? Under PresidentYar Adua, was he not awarethat NNPC has been a pain inthe neck of government? Whynow? Was Sanusi blowing theso-called whistle knowingwhat he has done and that ashis tenure draws to a close,questions will be asked?

I quite sympathize with Sa-nusi because when the chipsare down, those who find in

him a willing tool will be thefirst to abandon him. Is El-Rufai making altruistic visit tothe suspended governor or forthe benefit he has derived fromassociating with him? Who isdoing the architectural draw-ings of the proposed CBN con-ference centre? Nigerians maywant to know who won thecontract. The land proposedfor the structure that original-ly belonged to NITEL and wassold by BPE for peanuts wasbought by the CBN for a whop-ping N17 billion. Why and forwhat reason was the cost es-calated from N1.7 billion toN17 billion?

The issues involved in Sanu-si's suspension have not theinterest of the common Nige-rian at heart as many arejumping on the rooftops andsounding populist in order tobe branded "patriotic". Thereal patriots as I have foundout are those who apply pres-sure where it matters most -and sometimes on some issuesthat might be in private for the

general good. To any objec-tive analyst, the facts of thematter are clear and are allnow in the public domain.

Mid last year, about June 7or so, the Financial ReportingCouncil of Nigeria (FRC)wrote to the President. Thiswas a damning attack on theintegrity of the CBN wherevery strong financial wordslike "fraud" and "misrepresen-tation of facts" were used free-ly and also recommended thatstrong action be taken againstthe CBN Governor and all theDeputy Governors. The Coun-cil's 2012 financial report onthe CBN to my mind, is an at-tack on the entire institution(CBN). What some Nigeriansare not looking at is that theJune 2013 letter was issued byFRC in response to CBN's ear-lier response to its audit que-ry. This means that there hasbeen correspondence betweenthe CBN and the Council.Does it mean that the ex-changes were taking placewithout the CBN Governor

knowing? Was the CBN letterto Mr. President about threemonths after it was querieddrawing attention to revenueshortfalls and NNPC's failureto credit the Federation Ac-count with all the monies thatit was supposed to, an after-thought aimed at divertinggovernment's attention fromthe rot in the CBN? No Nige-rian, including my good self,is holding brief for NNPC, Ido know that Muhtar Mansurwhen he was minister underYar Adua said NNPC was a bigproblem to government. Therot in NNPC has been on for along while so if there is ashortfall, then there is a prob-lem if the CBN that is bankerto government is just realisingthis as a drain on public fundsand a serious issue that shouldbe looked into.

Nigerians who own busi-nesses or run companies knowfor certain that the FinancialReporting Council has beengiving them sleepless nightsbecause they are forced tocomply with its cumbersomereporting process. The privatesector companies have nochoice but to comply. Whyshould government officialsbe exempt from complyingwith the same rule? Is Nigeriarunning two economies, onefor the private sector and theother for government? Cer-tainly not!

What Nigerians should bedemanding is that all Minis-tries, Department and Agen-cies of government - federal,state and local - must publishtheir accounts with full disclo-sures. NNPC's account used tobe published when GaiusObaseki was Managing Direc-tor. Why did NNPC stop mak-ing public its accounts? TheCBN must provide satisfacto-ry answers to FRC's queriesand all other MDAs must besubjected to scrutiny. Period!

further undermine marketconfidence in the currency.“On balance, we believethat the first scenario isslightly more likely, butwould not be surprised tosee the second come to fru-ition. Under either situa-tion, Nigeria’s position asa key frontier market is setto wane over the next 18months. Although bullishpronouncements—such asNigeria’s recent inclusion

in the “MINT” (Mexico, In-donesia, Nigeria and Tur-key) list of future economicgiants by a prominent econ-omist, Jim O’Neill—hassome merit, recent eventshighlight the need for ex-treme caution when analys-ing the prospects of a coun-try as complex and turbu-lent as Nigeria. A countrywith enormous economicpotential also brings with itenormous risks.”


CMYK

Business & Economy

World leadingn e t w o r k i n g

company, Ericsson, hasrolled out the latestsolution for ManagedServices at the ongoingMobile World Congress todrive down cost of servicesin all sectors of economy.

Highlighting the benefitsof the solution, Ericsson´sVice President and Headof Managed Services,Jean-Claude Geha, notedthat the introduction of thesolution was driven by thefact that the main driver ofservices in everyestablishment globally ishigh cost of services,which is why the solutionis coming in to enableoperators address thechallenge by outsourcingtheir key services.

He said over the years,Ericsson had focused notonly on finding solutions toreduce high cost of servicesbut on deploying high

Ericsson rolls out solution to curbhigh cost of services

BY EMMANUELELEBEKE, fromBarcelona

technologies, assembling theright competence and makingaccess to operators for moreefficient and cost effectiveservices. Geha, who disclosedthat Ericsson had alreadyentered into partnership with

can also offer an extensiveexperience services tooperators by advising andsupporting them to securenetwork quality, revenueenhancement and improvedcost efficiency. ́ ´

MTN for deployment of thesolution said, all the servicesegments within the totalpackage are flexible in termsof scope and setup, and can beadapted to fit client´s needs.

He explained that Ericsson

Etisalat Nigeria has takencustomer experience to a

different level with the launchof the first ‘Gold Series’experience centre situate atVictoria Island. The newexperience centre will providean environment thatencourages customers toexplore and immersethemselves in the essence ofthe Etisalat brand, saysMatthew Willsher, AgManaging Director of thecompany. At the media briefingheld at the experience centrein Victoria Island, Director,Brands & Communication,Etisalat Nigeria, Willsher saidthat the centres were designedto enable customers exploreand experience the productsand services offered by thebrand in a highly interactiveand exciting environment thatstimulates the senses andeducates the customer onwhat’s possible with thebrand’s technology.

His words, “The new goldseries centres encapsulates theessence of our brand andbrings it to life for ourcustomers.

Etisalat’s ‘GoldSeries’experiencecentre berths

SAMSUNG UNPACKED: From left, Business Development Director, Hand Held Products, Mr.Daesung Ra; Director of Hand Held Products, Mr. Emmanouil Revmatas and Managing Director,Mr. Brovo Kim, all of Samsung Electronics West Africa, at the Samsung Galaxy S5 Global Un-packed Event at the just-ended Mobile World Congress in Barcelona, Spain, last week.


CMYK

Business & Economy

REWARD: From left, Mr. Rajesh Kumar, General Manager, Bayswater Industries Ltd; ChiefReggi Uduhiri, Executive Director, Alhaji Abu Zamao,winner of Toyota Fortuner, MunirKhan, Regional Manager, North and Mr. Lawal Idris, Executive Director, Bayswater Indus-tries Ltd at the Mr. Chef Distributors Reward/5th ceremony held in Lagos.

The Federal Governmenthas begun inspection of

local automotive assemblyplants across the country asevidence of the implementationof the Nigeria AutomotiveIndustry Development Plan.

Speaking during theinspection of the PeugeotAutomotive Nigeria (PAN) carassembly plant in Kaduna onFriday, the Minister ofIndustry, Trade andInvestment, Mr. OlusegunAganga, said more local andinternational investors weretaking advantage of the hugeopportunities provided by thenew automotive plan to investin Nigeria.

The minister said: ” I amgreatly encouraged by thefacilities I’ve seen here at PAN’scar assembly plant in Kaduna,which I am told is the biggestin West Africa. It shows that weare not just starting from thescratch when we say that wewant to encourage automobilecompanies to establish andassemble their cars here inNigeria, in line with the newautomotive policy.

“One of the reasons PAN’smassive and world classfacility, which used to employabout 4,000 Nigerians, wentunder was the absence of acomprehensive and holisticauto policy that takes care ofthe entire automotive valuechain. This is what the newauto policy wants to address.”

He added: ”Also, I havebeen greatly encouraged by the

FG begins inspection of local automotiveassembly plants nationwide

announcements that have beenmade by reputable and globalOriginal EquipmentManufacturers (OEMS) that theyare coming to establish theirautomotive assembly plants inNigeria. Nissan has said that it iscoming to Nigeria, and that itsfirst car will be produced in thecountry by April. They havealready sent their technical teamand are working with their localpartners in Nigeria.

”Hyundai is also coming toassemble its vehicles in Nigeriaand has already sent its SDKs intothe country; Innoson has alreadysigned an agreement with twoChinese Companies to expand

its existing automobile assemblyplants. These show that we havemade remarkable progress justwithin a period of four monthssince the policy was approved andannounced.”

The Minister reaffirmed theFederal Government’scommitment to the fullimplementation of the auto policy,and stressed that Governmentwould continue to provide anenabling environment and levelplaying field for all stakeholdersin the auto industry.

He said: “So far, we have beenpleasantly surprised by thepositive response from local andinternational investors who are

already taking advantageor have signified theirinterest in leveraging thehuge opportunitiesprovided by the newautomotive policy. As amatter of fact, it took manyyears for some automobilemanufacturing countries toattract the level ofattention and interestwhich Nigeria is gettingtoday. For example, whenSouth Africa came up withtheir auto policy, they hadto go to each of the OEMsto convince them to comeand invest in South Africa.

Abuja-Kaduna rail line for completion byDecember — FG

Government in order toensure that the December2014 deadline is met.

He expressed satisfactionover the work done so far,insisting it is part of theFederal Government’stransformation agenda in theTransport sector to re-positionthe rail sub sector bydeveloping standard gauge asmodern rail system in thecountry.

According to him: “Abuja-Kaduna railway is verystrategic to Nigeria as acountry and to theGovernment in particularnoting that “we are achievinga very huge milestone in thedevelopment of inter-modaltransport system in Nigeria”.

He said further that the

corridor has reached about 72per cent completion level andwork is going on assiduously adding that the majorstructural works are almostcompleted.

‘You can see that the work isgoing on assiduously, thebridges are almost completedso also culverts and overpassbridges among others.

The minister who was in atrain ride from Idu to GwagwaKarimu was accompanied byhis Permanent Secretary, Engr.Nebolisa Emodi, the Director ofRail and Mass Transit in theministry, Engr Gafar Bature, theManaging Director of NRC, Engr.Oluwaseyi Sijuade and some topofficials in the ministry.

He argued that thisparticular project and other

projects in the othersectors of the economyspread across thecountry are thetestimonies of the factthat Mr President hastransformed the country.

On the challengesfacing the projects, theminister said that effortsare being made to ensurethat the two majorconstraints whichinclude waterinterference at km 19 andcertain estates builtalong the rail lines atKubwa are addressed bythe relevant authoritiesin the FCT.

The Federal Governmenthas assured Nigerians of

its commitment to ensure thatthe Abuja-Kaduna railway iscompleted by December2014.

The Minister of Transport,Senator Idris Umar who gavethe assurance shortly afterthe inspection of the railmodernisation project fromIdu to Jere project sites inKaduna State on Friday, saidthe Abuja-Kaduna railwaywill certainly be completedby the end of this year.

Umar said that the projectis on course and explainedthat all necessary supportrequired by the contractorshandling the project, havebeen provided by the Federal

CAC institutesCorporateCitizensAward forentrepreneurs,companies

In order to encouragedynamism in business, the

Corporate AffairsCommission, CAC, hasinstituted Corporate CitizensAward to reward individualsand businesses that haveconducted their businessesaccording to best practice.

CAC Chairman, Mr. FunsoLawal in Abuja lastThursday explained that theaward is aimed at promotingthe culture of goodgovernance in the Nigerianbusiness environment.

“The guiding principle forthe corporate citizens’ awardis the need to create aconducive environment forbusiness growth, to creategreater efficiency, opennessand transparency in doingbusiness. The commitment isto change our focus in doingbusiness in Nigeria andstimulate the growth of thedomestic economy."

Otunba Lawal who statedthis while constituting thepanel of judges for thecommission’s annualcorporate citizens award,however added that theintervention would be in formof provision of advisoryservices rather thanmonetary.

He insisted that the ideawas born out of the desire toensure that the companiesplying their trade in Nigeriaare viable enough to supportthe economy.

He also disclosed that theaward will be whollysponsored by corporate bodiesand individuals insisting that“CAC will not spend a kobo onthe award.”

To be eligible for the award,the nominee must havecomplied with therequirements of the Companyand Allied Matters Act(CAMA) and all industryregulations to date.

In addition, the chairmansaid the nominees must alsohave performed creditably wellin its Corporate SocialResponsibility andproductively in the sector heoperates.

Other criteria include: qualityof financial management,management of stakeholdersrelations, workplaceenvironment, industrialleadership, innovation andenvironmental performance.

Stories by FAVOURNNABUGWU


CMYK

Banking & Finance

By BABAJIDEKOMOLAFE

,

,As part of its efforts at

increasing the capacity ofMicro, Small and Medium-scale Enterprises (MSME) inrunning profitablebusinesses, Diamond BankPLC, a leading player in theNigerian Retail Bankingspace, has through itsDiamond BusinessXpressseminar provided training incash budgeting forentrepreneurs.

The seminar, which held inOwerri, Imo State, marks the 40thedition of the Bank’sBusinessXpress Seminar, a monthlycapacity building workshop aimedat building managerial capacity andinstitutionalized processes withinthe sector. The topics discussed atthe session included: Failing to Plan,Finding and retaining Customers,Strategic Planning, What isBusiness Really About?andZeroOne.

In his welcome address, Mr.Stanley Akwara, RegionalManager, Owerri Region, DiamondBank PLC who was represented byMr. Charles Oguibe, BusinessManager, Waast Avenue branch ofthe Bank said, “We are gatheredhere for a capacity building seminarfor MSMEs.

BRIEFING: From left, Hanspeter Ackerman, Executive Director, Investment, Uche Orji, MD/CEO and Stella Ojekwe-Onyejeli, Executive Director, Risk Management ; at the press briefingon Nigeria Sovereign Investment Authority Progress Update held in Abuja.

THE AFRICAN START-UP:A new approach to fundingSMEs development

The story of OlumideOlusanya, as revealed on

‘The African Start-Up’, willmake you want to become anentrepreneur, despite thedaunting and frustratingchallenges. But, Olumide wasalso confronted by thechallenges. A medical doctor,who founded the first onlineNigerian grocery store,Gloo.ng also encounteredand suffered vast and variedchallenges which impedes,hinders and sometimesnullify the fulfilment of thedream of many entrepreneurs.In Africa, the challengesrange from lack ofinfrastructure, funding andaccess to market, as well aslow capacity. In addition tothese is the unstable politicalclimate and war likesituations in many Africancountries, which makes itdifficult to even live not totalk of starting a business.

Olumide did not allow thesedifficulties to frustrate hisvision, he rather overcamethem. The same goes forBankole Cardoso, founder ofEazy Taxi, Fomba Trawally aLiberian businessman whostarted his career as a streetvendor and just recentlyopened Liberia’s first paperand toiletry productmanufacturing company.

African countries need moreof these individuals who candefy the frustrating difficultiesof turning ideas into goodsand services via the vehicleof entrepreneurship. They areneeded to address theproblem of youthunemployment across thecountry. They are needed toboost productivity to enhancenational growth anddevelopment. Small andMedium Enterprises arecritical to the development ofevery economy. They are theones that produce most of thegoods and services that areeither consumed byindividuals or serve as rawmaterials by big companies.We can’t do without them.

Thus African countries mustdevise ways to produce moresuccessful entrepreneurs.One of the ways of doing thisis to inspire aspiring andexisting entrepreneurs withthe story of Olumide andFomba. That is what FirstBank of Nigeria, inPartnership with Cable NewsNetwork (CNN) Internationalhopes to achieve with, TheAfrican Start-Ups, a 30-minute documentary whichfollows entrepreneurs acrossAfrican countries to see howthey are working to make theirdreams become reality.

In addition to Olumide,Cadoso and Fomba, theprogramme has featured start-ups like Isaac Oboh whostarted Media 256 a raisingfilm and production companyin Kampala, Uganda as wellas a new digital store whereNigerians can access localmusic calledMyMusic.com.ng founded byTola Ogunsola, Damola Taiwoand Dolapo Taiwo.

The programme, which isfunded exclusively by FirstBank, explores how ideas aregenerated, formulation ofbusiness plans, and access tocapital and productdevelopment amongst otherthings. The African Start-Upoffers viewers theopportunities to seeentrepreurship in a moredetail view with each showdedicated to an entrepreneur

taking viewers through dailychallenges, where the rulesare not defined, the setbacksare frustrating and theopportunities are for thosewith vision and creativity. Each segment is aimed toinspire the viewers as theywitness these determinedindividuals defying the odds.

Beyond the inspirationalimpact on viewers, The AfricanStart-Up, represents a newvista in the quest to boost SMEdevelopment in Nigeria andin Africa. SME operatorsneed many things, but theyalso need inspiration, theencouragement that comesfrom knowing that thechallenges they face aresurmountable, and have beensurmounted by somebody. Thisis rarely acknowledged inmany funding support forSMEs. FirstBank has not onlyacknowledged this criticalneed it has also make it animportant ingredient of itsmodel of helping SMEs acrossNigeria.

“African Start-Up” is a firmcommitment of our drive tosustain the development ofSME’s in Nigeria and Africaas a whole. “We are proud tosponsor ‘African Start-Up’ onCNN International”, saidFolake Ani-Mumuney,FirstBank’s spokesperson andHead, Marketing & CorporateCommunications,

“SMEs play a critical role asthe engine of growth in theeconomy, providingemployment to thousands ofpeople and contributingsignificantly to GDP. Thissegment is a critical platformfor repositioning the nationaleconomy for sustained growth,and one which aligns withFirstBank’s position as theNo.1 SME Bank in Nigeria.

“Having supported SME’sin Nigeria for over a centurywith first class products andservices, CNN’s African Start-Up aligns with ourcommitment to drive andsustain the growth of SME’sin Nigeria”, she said.

“We’re delighted thatFirstBank has chosen toconnect with CNN’s globalaudience of key businessdecision makers and opinionleaders around the world via‘African Start-Up”,commended Celine DeCarlo,Account Director CNNInternational Ad Sales.

FirstBank’s funding of theprogramme is part ofdeliberate strategy developedto support the growth ofSMEs. The strategy is drivenby a focus on helping SMEsdevelop capacity needed toachieve their goals. This is reflectedin the maiden edition of its SMEConference titled “SMEConnect”one of its SME’s value propositionsto focus on empowering small andmedium enterprises and SMEentrepreneurs.

Africancountries mustdevise waysof producingmoresuccessfulentreprenuers.One of theways of doingthis is toinspireaspiring andexistingentreprenuers

IFC, a member of theWorld Bank Group, and the

Central Bank of Nigeria willthis week host the secondInternational SustainableBanking Forum in Lagos,Nigeria. The Forum will serveas a platform to shareinternational and localexperience and best practiceon sustainable banking, andto build partnerships tosupport sustainable bankingin emerging markets.

The Forum will bringtogether policymakers fromgovernments, multilateraldevelopment banks, financialinstitutions, civil societyorganizations, and technicalinstitutions, to share insightsand ideas on sustainablebanking.

Solomon Adegbie-Quaynor,IFC Country Manager forNigeria, said, “The Forumwill bring togetherrepresentatives from theNigerian financial sector withcolleagues from all over theworld.

CBN, IFC hostsustainablebankingforum

Diamond Banktrains MSMEson cashbudgeting

CMYK


Banking & Finance

Bank payment obligationintroduced to enhanceinternational trade — ICCN

OPENING: From left, Chief Funmilola Okunowo; Mr Ladi Balogun, Managing Director, FCMB;Mrs Olajumoke Bakare, Managing Partner, First Almond Attorneys, and Mr Gbenga Onabanjo,at the official opening of First Almond Attorneys in Lagos. Photo by Shola Oyelese.

International Chamber ofCommerce Nigeria, ICCN

has entered into partnershipwith the financial messagingprovider, Swift to introduceBank Payment Obligation,BPO to drive internationaltrade in Nigeria.

BPO is an alternative meansof settlement in internationaltrade that provides the benefitof a letter of credit in anautomated environment,without the drawbacks ofmanual processing associatedwith traditional trade finance.

Speaking at the unveiling ofthe platform in Lagos, theChairman of ICC BankingCommission, Chief RaymondIhyemebe said that the newplatform does not replaceletters of credit but gives newopportunities, as a newplatform for makingpayments.

He said the launch is partof efforts to educate banks onthe advantages and the risksinvolved with the newinstrument before it becomeseffective.

He said that ICC BankingCommission is partneringwith Swift, an internationalpayment organization knownworldwide, which handlesmost of the internationalpayments banks make onbehalf of their customers.

He said that, “ICC BankingCommission is also working

BY JONAHNWOKPOKU

with ICC International inParis which has becomeexpert in this field to come andpartner with us and try toexplain to the banks whatBPO is all about. And I canassure you that here inNigeria we feel that weshould understand it betterand fully before it isimplemented. We don’t wantthe risks of such paymentsdraining our reserve.”

He further explained that,“There are many other

instruments in the past whichwere working side by sidewith letters of credit. This alsodoes not replace letters ofcredit. It will work side by sidewith letters of credit. In termsof cost, it is cheaper to theimporter, the exporter and thebanks. So anything that willreduce cost to a business iswelcome.”

He however noted that therisks also have to be assessedand if the risks are okay, thebanks can carry it onboard.

Ihyembe said althoughthe new platform haspositive implications for theeconomy and the businesscommunity care must betaken in handling the risksas it is capable of gravelyaffecting the nationalreserves if risks are notproperly assessed.

According to him, “Theimplication for the economyis that it will be moreefficient, it will be costeffective but at the same itposes its own risks bycommitment being enteredinto by banks to other banksabroad which will crystaliseand become a kind ofburden on our reserves. Sothat’s why the issue of risksassessment, the issue ofknowing one’s customersbetter and understandingwhat is involved is verycritical because we do notwant payment under thisplatform to begin to drainour reserves.

“We have emphasized toour bankers they must thinkof themselves first asNigerians because theydon’t have their ownbalance sheet per se but thebalance sheet from whichthey operate is Nigeria’sbalance sheet. Andtherefore we have to act ascorporate Nigeria, theinterest of Nigeria first, notjust for small bank profits forindividual banks but for theprofit of the country.

“What we are doing issensitizing the banks,getting them to understandthe advantages anddisadvantages, gettingthem to understand therisks involved. It is not yetimplemented but we are atthe stage of trying tounderstand it better beforeit becomes operative.”

Group Managing Directorof Union Bank of Nigeria

Plc, Emeka Emuwa hascalled on Nigeria and otherAfrican Nations to makeagriculture more productivein their fight to end thescourge of poverty in thecontinent.

He gave made this call atthe International Conferenceorganized by the AfricanRural and Agricultural CreditAssociation (AFRACA)sponsored by Union Bank ofNigeria PLC.

In his welcome address tothe conference which wasthemed “propelling EconomicDevelopment throughFunctional Agricultural ValueChain financing models:

African nations should make agriculturemore productive —Emuwa

lessons learnt and emergingopportunities, in Lagos,Emuwa advised the AfricanNations to redouble theirefforts to make agriculturemore productive.

While wishing theparticipants drawn fromAfrican member nations, heaverred that the best way toimprove the financial flow tothe agricultural sector andrural Communities is througha deep and enhancedunderstanding of thecomponents of the ValueChain.

In his words, “If you can getagriculture to become moreproductive, you will be betterpositioned to tackle thescourge of poverty in the

continent. It is unfortunatethat there has been adecline in the sector due tothe emergence of othereconomic sectors in Africa”

Citing the example ofNigeria, Emuwa told theconference that theemergence of oil and gassector that stunted theagricultural sector.

He said that Union Bankhas been supportingagriculture over the years;stressing that in the currentfinancial year, Union Bankwill be engaging directly withfarmers in order to have adeep understand the entiresegments of the business, soas to inject more funds thanhave been invested in the past.

The Central Bank ofNigeria (CBN) has

introduced uniform accountopening form and minimuminformation requirements forthe three tiered Know YourCustomer (KYC) for banks andother financial institutions.

The introduction of the formswas announced via a circularto all banks and financialinstitutions titled, “UniformAccount Opening Forms andMinimum InformationRequirements for the threetiered Know Your Customer(KYC) for customers of banksand other financialinstitutions in Nigeria”. Thecircular, signed by the KevinAmugo, Director of FinancialPolicy and Regulation, said,“Towards the efforts to ensurethat depositors in banks andother financial intuitionsprovide necessarybackground information foreffective Know Your Customer(KYC) due diligence, theCBN in collaboration withrelevant stakeholders hasdeveloped uniform accountopening forms.

CBNintroducesuniformaccountopening forms

International FinanceCorporation (IFC) has

named Diamond Bank PLCBest Issuing Partner Bank inthe sub-Saharan African .

The award was presented tothe Bank’s officials at theinaugural Global TradePartners Awards dinner heldat the conclusion of the IFC6th Global Trade PartnersMeeting. The meeting tookplace last week in Lisbon,Portugal and it attracted over350 delegates from 56countries.

Portuguese Deputy PrimeMinister Paulo Portasdelivered the openingkeynote address, kicking offtwo days of insightfuldiscussions on building cross-border banking networks,developing innovativesolutions for agribusiness andcommodity finance, andenhancing global valuechains by financing small andmedium enterprises.

IFC namesDiamondBank bestissuingpartner bank


CMYK

Corporate Finance

MTN has reaffirmed itscommitment to

growing the economy ofNigeria, just as it discoveredand rewarded Artists inAfrica

As part of its loyalty toenriching the lives of itssubscribers throughdiscovering, empoweringand developing talents acrossAfrica MTN, has rewarded thewinners of the just concludedMTN Afrinolly Short FilmCompetition held recently.

The season 2 of the competitionwhich started on September 1,2013, with over 400 entries fromAfrican film makers from 16countries, has produced ten up-and-coming filmmakers inAfrica. After three months ofcompetitive procedure, whichdeployed top of the rangetechnological platforms involvingonline master classes and votingprocesses, an international panel ofjudges headed by Femi Odugbemi,an award-winning filmmaker,writer and photographer,announced Florian Schott as thebest in Short Film category whileVictor Okoye emerged winner inthe Documentary category.

Stories by PETEREGWUATU

Shareholders in thecountry have backed

the suspension of theGovernor of Central Bankof Nigeria, CBN, MallamLamido Sanusi by theFederal Government.They said it was longoverdue, as theirinvestment in the bankingindustry worth billions ofnaira had been destroyedunder his reformprogramme.

President, NigerianShareholders SolidarityAssociation of Nigeria(NSSA), Chief TimothyAdesiyan, said "The issueof Sanusi had beendragging for some timenow. The suspension isunexpected at thismoment. It is uncalled forat the moment, since hehas almost finished histenure. PresidentGoodluck Jonathan shouldhave removed him longbefore when it wasobvious. But since he didnot do that , then thePresident should havebeen patient enough andallow him to conclude histenure and handoverproperly to a successor.With the situation, as it isnow, the action mightaffect the market, thoughtemporary. However, sincethere is ongoinginvestigation against someof his action, it should bereminded that theshareholders are nothappy with him, when heforcefully nationalizedthree banks belonging tous .The question is, arethe three banks doing wellsince they were taken overby Asset Management

Sanusi destroyed our investmentin banks — ShareholdersCorporation of Nigeria,AMCON? The answer is no.Then, what is the essence ofnationalizing them. We theshareholders of these bankswere shortchanged and wewould like the issue to berevisited and investigatedbecause we like justice toprevail. When two elephantsare fighting it is the grassthat suffers. So for the actingCBN Governor, I wish herwell. She has been part ofthe system so there shouldbe continuity.”

In his remark, NationalCo-ordinator, Proactive

Shareholders Association ofNigeria, PROSAN, Mr.Taiwo Oderinde said “ It is a

welcome development andeven overdue for GovernorSanusi to leave the system.The shareholders have beencrying and calling on thegovernment to sack him but intheir own wisdom he was stillretained. Sanusi is not loyalto the government, henceshould not be there. This is alesson to his successor. So, thesuccessor I believe is aprofessional to the core andnot a politician because thatposition is very critical to theeconomy and whatever hedoes has a way of affectingthe entire economy. Sanusihas done more harm than goodfor the economy. It is easy todestroy than to repair. Hedoes not merit the position. Idon’t forsee any negativeeffect for his suspensionbecause the institution is stillthere with adequateworkforce, after all thefinancial markets is not at itsbest, still struggling.”

In his remark, Mr. AdebayoAdeleke, General Secretary,Independent ShareholdersAssociation of Nigeria (ISAN)said “ Sanusi’s suspensionwas long over-due. Sanusi’stenure as CBN governorshould be investigated by theEconomic and FinancialCrimes Commission(EFCC).The suspension hadproven shareholders right onSanusi’s high level of financialrecklessness. He should beasked to account for hisstewardship.”

The newly constitutedmanagement of Union

Dicon Salt (UDS) hasassured theirshareholders ofimproving theperformance of thecompany in the comingyears.

As part of its restructuringprocess, the companyappointed Bex Nwawuduand Chuka Mordi as Co-Managing Directors of thecompany, while formerActing Managing Director, Col. Henry Mgbemena,reverts to his former role ofExecutive Director -–Production.

Speaking, Nwawudu said

,

,

It is awelcomedevelopmentand evenoverdue forGovernorSanusi toleave thesystem

New Union Dicon Salt mgt assureson improved performance

“ We are committed to ensuringthat Union Dicon Salt Plcachieves and surpasses itsobjectives of industrialoperational turn-around,increased repositionedproduction, and excellentincreased delivery capacity”

Continuing, he said “A keyelement of our investmentphilosophy is that we arededicated to developingNigeria transform UDS into aworld class Agribusiness andfood processing companythrough access to funds,projects and partnerships andindeed the whole of Africa, byactively supporting, throughfunding and capitaldevelopment, projects thatyield accelerated, yet

sustainable and consistentgrowth. We strongly believethat Union Dicon Saltincorporates all of theseelements Nigeria and indeedWest Africa is crying out forincreased local food productionand sector value-added.”

In the last quarter of 2013,CBO Capital Partners becamea significant minorityshareholder in Union DiconSalt, by acquiring 44 millionunits at the par value, 15 percent of UDS Plc, whilst alsobeing awarded a boardmanagement contract andoption to purchase anadditional 240 million units inorder to have a controlling stakein the company at a placementprice of N14 each.

Africa PrudentialRegistrars Plc has

proposed a dividend of 35kobo per share to itsshareholders. Coming withinthe first year of thecompany ’s listing on theNigerian Stock Exchange(NSE), the dividend, whenratified by shareholders of thecompany, will be paid out onactivities for the 2013 financialyear.

The company disclosed thisin a statement, stating “ Newinvestors in particular arebenefiting from AfricaPrudential Registrars’investor-centric managementpolicy, which has ensuredsteady returns on investmentfor its shareholders. Theproposed dividend paymentattests to the company ’sdetermination to add value toshareholders, and ensureincrement in shareholderwealth.”

AfricaPrudentialRegistrars topay 35kdividend

MTN affirmscommitmentto economy,rewards filmindustry

AWARDS: From left, Managing Director, REDMoney (publishers of IFN), Mr. Andrew Morgan;GM/Head, Listings Sales and Retention, Nigerian Stock Exchange (NSE), Mrs. Taba Peterside;Dele Olajundoye (Kole Awodein & Co); Hon Commissioner for Finance, Osun State, Dr. WaleBolorunduro; Chief Executive Officer, Lotus Capital, Mrs. Hajara Adeola and Director, LotusCapital, Mrs. Lateefah Okunnu at the Islamic Finance News Awards.

CMYK

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Sim Capital Alliance Plc 103.50 103.50 103.50 103.50 10.56 9.71Stanbic IBTC Bank Plc 19.80 20.50 571,099 15.69 10.64 0.87 18.03UBA Capital Plc 2.77 2.84 20,040,771 1.41 0.03 0.21 6.71

HEALTHCAREMedical SuppliesMorison Industries Plc 1.91 2.23 785 10.54 9.52 0.00 0.00Healthcare ProvidersUnion Diagnostics & Clinicals Services 0.50 0.50 387,550 0.50 0.50 0.00 0.00

PharmaceuticalsEkocorp Plc 3.72 3.72 168 5.31 5.31 88.50Evans Medical Plc 2.70 2.68 61,320 1.45 0.70 0.19 0.00Fidson Healthcare Plc 2.56 3.05 1,986,664 3.20 0.83 0.44 3.07Glaxo Smithkline Consumer Nig 69.00 69.00 28,979 23.11 2.58 2.62May & Baker Nigeria Plc 2.19 2.17 259,191 5.61 3.61 0.20 9.05Neimeth International Pharm 1.84 1.85 361,598 1.96 0.95 0.09 14.13Nigeria-German Chemicals Plc 7.36 7.36 2,150 12.91 0.95 0.00 0.00Pharma-Deko Plc 1.52 1.52 1,589 200 4.28 0.00 0.00

ICTComputer Based SystemsCourteville Investment Plc 0.81 0.74 702,066 0.52 0.50 0.10 10.00

Computers and PeripheralsOmatek Ventures Plc 0.50 0.50 32,500 0.50 0.50 0.00 12.50

IT ServicesNCR (Nig) Plc 16.83 16.83 5,098 9.31 3.25 0.00 1.43Tripple Gee and Company Plc 1.97 2.07 360 3.59 3.25 0.01 0.00Processing SystemsChams Plc 0.50 0.50 7,360,191 50,000

ICTTelecommunicationsStarcomms Plc 0.50 0.50 4,000 1.47 0.50 0.00 0.00

INDUSTRIAL GOODSBuilding MaterialsAshaka Cement Plc 18.00 18.20 366,799 30.00 12.00 2.14 7.86Berger Paints Plc 9.50 9.87 40,933 12.57 8.10 1.09 4.97CAP Plc 46.55 46.55 41,865 43.98 15.16 2.28 8.88Cement Co. of Northern Nig. Plc 9.70 9.24 569,110 15.49 4.16 1.47 2.31Dangote Cement Plc 237.00 240.00 653,438 132.51 95.00 7.56 13.17First Aluminium Nigeria Plc 0.50 0.50 20,000 0.75 0.50 0.00 0.00DN Meyer Plc 1.48 1.48 62,385 3.51 1.02 0.00 0.00Lafarge WAPCO Plc 105.00 105.10 155,465 48.05 36.58 4.10 42.86Portland Paints & Products Nig Plc 5.77 5.49 50,020 5.28 5.11 0.44 14.19Paints & Coatings Manufacturers 2.00 1.90 100,000 3.36 0.51 0.23 2.89Premier Paints Plc 10.00 11.00 123,564 13.40 10.93 0.00 0.00

Packaging/ContainersAvon Crowncaps & Container 1.63 1.63 4,316 6.91 5.94 0.5 39.60Nigerian Bags Manufacturing Company 2.74 2.70 2,717,101 3.60 1.47 0.25 9.16

Tools and MachineryNigerian Ropes Plc 7.85 7.85 40 8.69 8.26 0.00 0.00

NATURAL RESOURCESChemicalsBOC Gases Plc 6.66 6.66 1,000 9.20 6.80 0.78 7.37

MetalsAluminium Extrusion Ind Plc 7.75 10.50 500 12.39 10.70 0.13 85.77

Non-Metalic Mineral MiningMultiverse Plc 0.50 0.50 3,000 0.50 0.50 0.01 0.00

Paper/Forest ProductsThomas Wyatt Nig. Plc 0.83 0.87 43,412 1.38 1.38 0.00 0.00

Electronic and Electrical ProductsCutix Plc 2.10 2.00 104,000 2.50 1.62 0.11 13.15Nigerian Wire & Cable Plc 0.50 0.50 100 2.58 2.58 0.00 0.00

Mortgage Carriers, Brokers and SeAbbey Building Society Plc 1.44 1.44 2,000 1.51 1.33 0.03 28.80INDUSTRIAL GOODSPackaging/ContainersAbplast Products Plc 3.98 3.98 6,888 3.98 3.98 0.00 0.00Beta Glass Co. Plc 19.38 19.38 49,455 15.58 12.71 3.90 3.26Greif Nigeria Plc 12.68 12.68 10 15.03 13.97 0.90 0.00Nampak Nigeria Plc 4.30 4.30 29,198 4.30 3.60 1.22 3.52Poly Products (Nig) Plc 1.05 1.05 200 1.86 1.05 0.30 6.18Studio Press (Nig) Plc 2.92 2.78 84,311 2.92 2.92 0.07 41.71W.A. Glass Ind. Plc 0.63 0.66 2,749,340 0.63 0.63 0.00 0.00

OIL AND GASEnergy Equipment and ServicesJapaul Oil & Maritime Service 0.52 0.51 2,561,675 0.97 0.87 0.19 6.06

Intergrated Oil and Gas ServicesOando Plc 19.18 19.40 1,691,935 78.97 27.99 1.73 4.17

Petroleum and Petroleum ProductsAfrican Petroleum Plc 20.50 20.50 82,191 37.10 0.50 4.93 7.40Beco Petroleum Plc 0.50 0.50 2,000 0.70 0.50 0.00 0.00Conoil 51.70 51.70 27,300 5.59 3.89 0.61 6.99Forte Oil Nig Plc 88.40 88.40 27,255Mobil Oil Nigeria Plc 124.85 124.85 3,830 163.50 141.00 6.11 11.11MRS Oil Nigeria Plc 54.44 54.44 1,980 2,100 63.86 2.98 19.23Total Nigeria Plc 173.00 173.00 3,218 240.00 195.50 14.63 17.07

HospitalityTantalisers Plc 0.50 0.50 10,000 200 0.01

SERVICESAfromedia Plc 0.50 0.50 100 0.72 0.51 0.00 12.75Automobile/Auto Part RetailersRT Briscoe Plc 1.29 1.30 731,395 3.65 1.30 0.21 8.19

Courier/Freight/DeliveryRed Star Express Plc 4.62 4.40 430,500 3.67 2.65 0.60 4.91Trans-National 2.50 2.68 251,592 0.25 11.12Employment SolutionsC & I LEASING PLC 0.51 0.53 534,927 1.64 0.90 0.04 11.25

Hotels/LodgingCapital Hotel 4.55 4.55 1,000 400 3.00 0.34 34.09Ikeja Hotel Plc 0.69 0.66 48,000 2.07 1.33 0.92 2.12

Media/EntertainmentDaar Communications Plc 0.50 0.50 10,000 0.50 0.48 0.00 0.00

Printing & Publishing.Academy Press Plc 2.20 1.99 310,296 3.68 3.17 0.25 12.19Learn Africa Plc 1.90 1.90 40,734 0.30Studio Press Nig. Plc 2.40 2.40 30 0.00 0.00University Press 4.10 4.10 622 6.82 3.60 0.54 27.69

Road TransportationAssociated Bus Company Plc 0.94 0.94 26,700 0.80 0.50 0.00 0.00

SpecialityInterlinked Technologies Plc 4.90 4.90 1,995 5.15 4.90 0.00 0.00

Transport-Related ServicesAirline Services and Logistics Plc 2.71 2.98 95,010 2.78 1.57 0.60 4.22Nigerian Aviation Handling Company 5.56 5.63 569,236 11.75 6.50 12.53 8.75

Opening Closing Quantity Year Year P.EPrice N Price N Traded High Low E.P.S Ratio

Oil and Gas and ProductsPetroleum Prod ucts

Capital Oil Plc 0.50 0.50 2,000 0.50 0.50 0.09

1st fTier SecuritiesAGRICULTURECrop ProductionFTN Cocoa Processors Plc 0.50 0.50 3,000 0.50 0.50 0.10 50.00Okomu Oil Palm Plc 40.50 41,00 825,230 24.58 14.53 7.33 2.77Presco Plc 44.10 46.00 409,048 8.30 6.40 2.75 4.37

Livestock/Animal SpecialitiesLivestock Feeds Plc 3.95 3.92 552,267 0.66 0.48 0.11 15.00

CONGLOMERATESDiversified IndustriesA.G. Levents Nigeria Plc 1.67 1.67 3,041 2.54 1.45 0.16 5.18Chellarams Plc 3.95 3.95 4,500 7.60 6.43 0.31 20.74John Holt Plc 1.27 1.27 1,500 8.82 5.89 0.00 0.00SCOA Nigeria Plc 5.32 5.32 5 8.28 5.52 0.35 15.77Transnational Corporation 3.99 4.00 7,622,078 1.82 0.50 0.24 3.64UACN Plc 61.25 65.22 1,013,214 42.50 28.70 6.89 4.14

CONSTRUCTION/REAL ESTATEBuilding Construction/StructureARBICO Plc 5.30 5.30 31,443 4 20Constain (WA) Plc 1.50 1.57 414,172 2,720,390.38

CONSTRUCTION/REAL ESTATENon-Building/Heavy ConstructionJulius Berger Nig Plc 75.00 75.00 19,085 62.26 32.96 4.11 10.11Roads Nigeria Plc 8.46 8.46 42,564 8.28 3.01 4.73 2.26

Real Estate DevelopmentUACN Property Development 19.99 19.99 8,915 20.15 11.59 1.69 7.33

Real Estate Investment TrustsSkye Shelter Funds 100.00 100.00 250 100.00 97.00 11.75 8.51Union Homes Real Estate Investment 50.00 50.00 - - - - -

CONSUMER GOODSAutomobile/Auto PartsDN Tyres & Rubber Plc 0.50 0.50 50,000 0.50 0.50 0.00 0.00

Beverages-Brewers/DistillersChampion Breweries Plc 14.51 14.51 2,000 4.63 2.23 0.00 0.00Guinness Nigeria Plc 180.36 197,90 627,256 255.00 186.00 9.95 19.98International Breweries Plc 29.40 29.40 75,172 7.10 5.23 0.41 16.29Nigerian Brew Plc 145.61 152.00 57,220,312 100.00 72.50 5.08 22.22Premier Breweries Plc 0.77 0.77 10,000 1.01 0.93 0.00 0.00

Beverages-Non-Alcoholic7-UP Bottling Company Plc 82.64 82.64 6,750 51.49 ,39.00 2.69 13.92

Food ProductsDangote Flour Mills Plc 9.50 9.50 52,156 19.90 4.31 0.00 16.91Dangote Sugar Refinery Plc 11.41 11.30 627,726 16.20 4.02 0.91 14.38Flour Mills Nigeria Plc 78.38 78.00 552,277 95.00 57.00 4.09 16.89Honeywell Flour Mill Plc 3.80 3.50 1,043,490 6.60 2.31 0.39 16.92National Salt Co. Nig Plc 13.20 13.20 157,446 6.70 3.80 1.01 5.75UTC Nigeria Plc 0.56 0.56 2,084 0.88 0.50 1.13 8.83

Food Products-- DiversifiedCadbury Nigeria Plc 86.25 86.25 36,778 37.27 8.33 1.35 27.61Nestle Nigeria Plc 1,071.31 1,100.00 486,236 840.10 400.00 25.43 32.84

Household DurablesNigerian Enamelware Plc 32.27 32.27 60 36.19 33.96 13.89 2.44Vitafoam Nig. Plc 4.11 4.28 92,640 5.54 2.91 0.61 7.07Vono Products Plc 1.66 1.52 101,500 2.88 2.88 0.00 0.00

Personal/Household ProductsPZ Cussons Nigeria Plc 38.00 38.00 146,746 41.02 21.02 0.82 4.39Unilever Nigeria Plc 45.00 48.00 277,345 47.39 27.60 1.44 32.91

FINANCIAL SERVICESBankingAccess Bank Plc 7.76 7.70 21,639,823 12.39 4.70 1.42 8.73Diamond Bank Nigeria Plc 6.60 6.62 45,737,768 7.51 1.92 0.90 8.34Ecobank Transnational Incorporated 14.89 14.76 606,413 14.04 9.90 2.81 5.00Fidelity Bank Plc 2.18 2.27 5,677,836 3.47 1.13 0.43 7.93First City Monument Bank Plc 4.75 4.75 865,336 5.70 2.90 0.00 0.00Guaranty Trust Bank Plc 24.30 25.40 33,406,416 26.09 13.02 2.10 12.39Skye Bank Plc 3.85 3.70 2,208,644 6.50 2.65 0.71 9.15Sterling Bank Plc 2.20 2.27 1,486,352 3.05 0.80 0.54 5.43UBA Plc 7.70 7.84 22,945,820 7.69 1.64 0.67 11.19Union Bank Nig. Plc 9.20 9.20 255,167 10.60 2.34 0.00 0.00Unity Bank Plc 0.50 0.50 121,575 1.22 0.50 0.00 0.00Wema Bank Plc 1.10 1.15 4,838,211 1.75 0.52 1.34 0.43Zenith Bank Plc 20.60 20.50 76,266,897 21.49 11.96 2.09 10.24

Insurance Carriers, Brokers and SectorAfrican Alliance Insurance 0.50 0.50 500 0.50 0.50 0.00 0.00AIICO Insurance Plc 0.86 0.87 1,245,645 1.11 0.50 0.50 22.20Continental Reinsurance Plc 1.09 1.14 650,000 1.03 0.58 0.14 6.79Cornerstone Insurance Company 0.50 0.50 46,250 0.54 0.50 0.02 27.30Consolidated Hallmark Insurance 0.50 0.50 7,000 0.50 0.50 0.50 10.00Custodian and Allied Insurance Plc 2.00 2.06 9,054,578 2.44 1.08 0.28 7.43Equity Assurance Plc 0.50 0.50 1,010 0.50 0.50 0.01 50.00Goldlink Insurance Plc 0.50 0.50 93,000 0.68 0.50 0.00 0.00Great (Nig) Insurance Plc 0.60 0.60 71,700 0.50 0.50 0.03 16.67Guinea Insurance Plc 0.50 0.50 37,000 0.50 0.50 0.01 50.00International Energy Insurance Plc 0.67 0.67 173,565s 0.50 0.50 0.00 0.00Investment and Allied Assurance 0.50 0.50 1,670,890 0.50 0.50 0.02 25.00LASACO Assurance Plc 0.50 0.50 500 0.50 0.50 0.00 0.00Law Union & Rock Insurance Plc 0.50 0.50 100 0.60 0.50 0.00 0.00Linkage Assurance Plc 0.50 0.50 151,500 0.50 0.50 0.03 16.67Mansard Insurance Plc 2.30 2.30 15,970 2.59 1.06 0.16 16.19Mutual Benefits Assurance Plc 0.50 0.50 14,600 0.54 0.50 0.00 0.00NEM Insurance Co. (Nig) Ltd 0.82 0.81 2,804,591 0.81 0.50 0.37 2.19Niger Insurance Co. Plc 0.50 0.50 104,500 0.61 0.50 0.02 26.00OASIS Insurance Plc. 0.57 0.55 360,000 0.50 0.50 0.03 16.67Prestige Assurance Co. Plc 0.56 0.56 241,010 1.01 0.50 0.06 15.50Regency Alliance Insurance 0.50 0.50 100 0.50 0.50 0.04 12.50Sovereign Trust Insurance 0.50 0.50 1,500 0.56 0.50 0.09 5.65Staco Insurance Plc 0.50 0.50 200 0.50 0.50 0.00 0.00Standard Alliance Insurance 0.50 0.50 50,130 0.50 0.50 0.00 0.00UNIC Insurance Plc 0.50 0.50 12,320 0.50 0.50 0.00 0.00Unity Kapital Plc 0.50 0.50 14,100 0.50 0.50 0.02 25.00Universal Insurance Plc 0.50 0.50 80,100 0.50 0.50 0.00 0.00Wapic Insurance Plc 0.96 0.95 516,300 1.08 0.50 0.07 15.43

Microfinance BanksFortis Micro-Finance Bank Plc 6.60 6.60 4,100 6.00 0.00 0.04 150.00

NPF Micro-Finance Bank Plc 0.73 0.79 380,199 1.18 0.92 0.92 10.56Mortgage Carrier, Broker and SectorAbbey Building SOC 1.49 1.49 3,000 1.57 1.37 0.19 47.6 7Aso Savings and Loans Plc 0.50 0.50 185,447 0.50 0.50 0.02 25.00Resort Savings & Loans Plc 0.50 0.50 400,000 0.50 0.50 0.00 0.00Union Homes Savings Plc 0.50 0.50 168,750 0.50 0.50 0.00 0.00

Other Financial InstitutionsAfrica Prudential Plc 3.99 4.04 122,176,985 0.75 0.00 0.19 9.16Crusader (Nigeria) Plc 0.50 0.50 22,000 0.50 0.50 0.00 0.00Deap Capital Management & Trust Plc 0.99 0.99 100 2.02 2.02 0.00 0.00FBN Holdings Plc 13.33 13.24 40,494,338 20.00 8.57 2.03 9.85Nigeria Energy Sector Fund 552.20 552.20 100 552.20 12.68 43.55Royal Exchange Assurance 0.60 0.60 600,000 0.78 0.50 0.13 6.00

Opening ClosingPrice Price Quantity Year Year P.E.

Company (N) (N) Traded High Low E.P.S. Ratio

Capital Market Daily Stock Market Report as at Friday, February 28, 2014

26 —Vanguard, MONDAY, MARCH 3, 2014

CMYK

Corporate Finance

In the shortest month of theyear, a good short was

hard to find. Global stocks,bonds and commodities rosetogether in February for thefirst time in seven months,reversing January’s losses inequities and raw materialsand burning short sellerswho bet on more declinesfollowing the FederalReserve’s decision to beginreducing stimulus efforts.

Commodities climbed themost since July as a droughtin Brazil triggered rallies incoffee and sugar. Equityinvestors focused on theweather, too, chalking upeconomic data that trailedforecasts to a barrage of U.S.snowstorms, and findingencouragement in improvingearnings and takeovers.

Leaders of the world’smajor economies pledged tomaintain accommodativepolicies and pay more heedto their repercussions, easingconcern that turmoil inemerging markets willspread as attention shifted toviolence in Ukraine.

“It’s an unusual confluenceof events,” Alan Gayle, asenior strategist atRidgeWorth CapitalManagement, said in a Feb.27 phone interview fromAtlanta. “Earnings generallyexceeded estimates, which isfavorable for stocks.Geopolitical risks werehigher than expected andinflation pressures werelower than expected and thathelped drive yield lower. Themarket is hoping that a lot ofthe economic weakness isweather-related.”

Shares rise on U.S.economic data, euro hits yearhigh

Stocks on Wall Streetzoomed to a record high onFriday, shrugging off arevised downward estimateto U.S. growth, while theeuro hit its highest level thisyear after inflation in Europestabilised, coolingexpectations of loosermonetary policy.

The benchmark Standard &Poor ’s 500 stock indexsurged to an intraday recordafter a round of mostlypositive economic data. Adiscouraging read on U.S.gross domestic product,however, cast some doubt onwhether higher equityvaluations are justified.

LITERACY PROGRAMME: From left, Ralph Omoregie, Group Head, Customer Experienceand Analytics, Heritage Bank; Zuriel Oduwole, Brand Ambassador of Heritage Bank; MaryAkpobome, Executive Director and Niyi Adeseun, Executive Director, Manilla, at HeritageBank’s Financial Literacy Programme in Lagos.

Stories by NKIRUKANNOROM

Cadbury Nigeria plc hasexplained that

undertaking share capitalreduction was the bestoption available to it toaddress the issue of excesscapital in its coffers.

Addressing thestockbroking communityand the management of theNigerian Stock Exchange,NSE, at the Facts behindCapital Reduction of thecompany on the NSE, YinkaAdeboye, Financial &Strategy Director, CadburyNig. Plc, said that thecompany decided to settlefor capital reduction aftercarefully weighing otheravailable options and theirimplication for itsshareholders.

She listed other options toinclude either reinvestingthe money for expansionarypurposes, undertaking ashare buy-back or giving itout as dividend.

Considering re-investingthe capital, Adeboye saidthe company did not foreseeany future capitalrequirements that would notbe met from internallygenerated resources to theextent that it is faced withan opportunity requiringsignificant additionalcapital.

“Company’s projections

‘Why Cadbury opted for share capitalreduction’

indicated that it wouldgenerate sufficient capital tomeet its expansionary andoperational requirements.Rather than invest excesscapital on behalf ofshareholders at what may besub-optimal returns, the Boardof Directors decided torecommend the return ofexcess capital toshareholders,” she said

“Dividend was anotheroption, but we considered thetax obligation. If we are to pay

whether not they participatedin the buy-back.

Adeboye, however, notedthat the capital reduction didnot impact the ownershippercentages of shareholdersneither did it affect the capitalvalue of a shareholder ’sinvestment in the company.

Also speaking at the event,the Managing Director, EmilMoskofian, assured thatundertaking capital reductioninstead of reinvesting thefund does not suggest lack ofappetite by the company tocommit more fund into the

interim dividend, it will besubjected to with-holding taxand we thought that ourshareholders may not likethat,” she stated, adding thatthe Board would continue toassess uses for distributableprofits, which might includereinvestment for growth anddividends to shareholders.

Speaking further, sheexplained that in event acompany decides to adoptshare buy-back approach, itmay result in shareholding ofindividual shareholderschanging depending on

The new ManagingDirector/CEO of Fidelity

Bank Plc, Mr. NnamdiOkonkwo, has promised tomaintain the culture ofsteady dividend paymentthe bank has been known forover the years.

He made the promise atthe valedictory/welcomedinner organised by thebank for him and the out-going CEO, Mr. ReginaldIhejiahi, in Lagos.

Affirming that FidelityBank is known fordelivering unequalledvalue to its shareholders,Okonkwo stated that thebank has paid dividends inthe last eight years withoutfail, saying that the bankunder his management doesnot intend to discontinue theculture.

He said, “When

Fidelity Bank assures shareholders ofsteady dividend payment

shareholders invest in acompany, they do so becausethey expect a return, and thiscan only come from thestrength of the company’srevenue; the kind of revenuethat pays your bills as well asreturn in profit.

In actual sense, our visionis to make sure that they notonly get dividend, but thatthey are paid higher than whatthey have been getting in thepast.”

Applauding his predecessor,the CEO said that steppinginto his shoes was not a meantask, but promised toconsolidate on hisachievements, saying, “I havetold them that I will take thebank to a kind of level thatwhen they look back five yearsfrom now, they will realise thatthey have not laboured invain. To that I will becommitted and deliver.”

“If I was going into atroubled bank, any little thingI do, people will say thatmagician has come, but nowthat the bank is strong, it willnot be easy, but I am excitedthat he has laid a solidfoundation for me,” he added.

He thanked the Board forchoosing him from manyother options they had,promising to ride on thestrong and experienced teamof management and staff todeliver expected result.

“I am not just making emptypromises. I know this becauseI have strong and dedicatedteam behind me. We will drawon our youthful strength,team spirit and tenacity togive you a bank thatshareholders will be proudof,” he further assured.

Speaking, Ihejiahiexpressed optimism that thebank would record even

greater strides under theleadership of the new CEO,while attributing his successwhile in office to support tosupport from the Board ofDirectors.

He noted that his careerbenefited from benevolence ofpeople he met during hiscareer, who gave him thechance to succeed.

In his remarks, theChairman, Christopher Eze,said, “In our view, no honourdone Reginald will beundesirable. He led thebanking the most critical timein banking landscape, not justin Nigeria, but globally. Hewas always there to implementthe Board decision. He led thebank through major capitalrestructuring to ensure that thebank grew stronger andstronger.”

Stocks,commoditiesburn bears infrozenFebruaryrallies


CMYK

Micro-FinanceCommodity index

Stories by PROVIDENCE OBUH

A social enterprise foundation, setup to support Africa’s emerging

entrepreneurs has said that Africa willhave the largest workforce globally by2040, just as Ernst & Young (EY)entered into a three-year sponsorshipagreement with Mara Foundation.

In a statement, Ashish J Thakkar,Founder of Mara Group and MaraFoundation, said: “By 2040, Africa willbe home to 1 in 5 of the world’s youngpeople, and will have the largestworkforce globally, at 1.1bn people. IfAfrica truly wants to competeinternationally, we must seize theopportunity now to develop aworkforce that is competent, confidentand creative. Mara Foundation has

Africa to produce largestworkforce globally by2040 —Foundation…as EY partners foundation to boost

entrepreneurship in Africa

further boost the chances ofentrepreneurs turning their businessideas into reality. The announcementis borne out of a shared belief thatSMEs will act as a fundamentalchannel for increasing employmentand building economic growth inAfrica.

“It comes just one week after the UK’sDepartment for InternationalDevelopment (DFID) announced ashake-up of aid programmes in Africashifting away from traditional prioritiessuch as fighting disease and hungerand doubling funding in investmentsthat boost growth and create jobs. Lastmonth, Japan also announced agreater focus on Africa, as did the USwho revealed plans to host a US-Africasummit in August to further strengthenties with one of the world’s most

Honeywell Flour Mills Plc haspartnered the Ekiti State

Government on entrepreneurshipdevelopment at the primary schoollevel to combat the geometric increasein the level of unemployment in thecountry.

Speaking during the Honeywell-sponsored second Trade Fair for PublicPrimary Schools in the state, SeniorBrand Manager, Mr. Lanre Da-Silva,said that his company decided topartner the government in sponsoringthe programme because the objectiveof the fair was in tandem with thephilosophy of the company whichbelieves in introducing the children toentrepreneurship development to makethem self-sufficient when they grow up.

Da-Silva said his company was gladto partner with Ekiti State UniversalBasic Education Board (SUBEB) toboost early education in the state,saying, “there is no human being

Honeywell takes entrepreneurshiplearning to Ekiti schools

,,

been set up for this veryreason, and I’mdelighted that EY are onboard to support us inour endeavours. Theirinsights and expertisewill be invaluable to theentrepreneurs we workwith.”

The statementexplained that theagreement will see EYproviding a wide rangeof services to thefoundation, includingindustry specialists to actas mentors, monitoringand evaluation systems

dynamic and fastest-growing regions.”

Also, Mr. Ajen Sita,CEO for EY, Africa,said: “EY is passionateabout supportingentrepreneurship andpartnering with MaraFoundation in thisregard is a perfect fit forus. It allows us tocontinue living ourpurpose of ‘building abetter working world’through nurturing andd e v e l o p i n ge n t r e p r e n e u r s .

Entrepreneursare importantto a nation'seconomichealth and byuplifting them,we are givingback to thecommunitiesin which welive and serve

to improve efficiency and generalstructuring, governance andoperational advice.

According to the statement, “Thebreadth and depth of EY’s support will

Entrepreneurs are important to anation's economic health and byuplifting them we are giving back tothe communities in which we live andserve.”

without potential or natural endowment.You don’t have to be professors beforeyou become great in life. With minimaleducation and good skills, you can riseto any level”, he said.

He, however charged the parents tobe conscious of the natural potentials intheir children, saying such natural knackmust be nurtured to maturity for them tohave sustainable and prosperous future.

Deputy Governor of the state, Prof.Modupe Adelabu, said the essence ofthe programme is to enhance the pupils’entrepreneurial and technical skills thatcould make them employers of labour infuture, rather than job seekers,commending the company for investingin such project,.

Adelabu said, “As we all know,entrepreneurial education is meant toequip the pupils with relevant skills toenable them stand on their own withoutnecessarily running after non-existingwhite collar jobs after leaving schools.


Interview

By BABAJIDE KOMOLAFE

One year ago, Heritage Bankcommenced operations as an

offshoot of the defunct SocieteGenerale Bank, inheriting itsliabilities. In this interview,Managing Director/Chief Executive ofthe Bank, Mr Ifie Sekibo, spoke on theimpact the bank has made on theindustry, how it has coped with thechallenges of intense competition, andthe tight monetary policy of the CBN.Excerpts

What has been the impact ofHeritage Bank on the Nigerianbanking industry within its first yearof operations?

The greatest impact of HeritageBank on the Nigerian bankinglandscape, modestly I will say, is ourcontribution to the consciousness ofchannels for distribution of financialservices beyond the brick and mortar.It made other banks to see theimportance and the need to continuallyimprove on their distribution. Everyone of us, all the banks, suddenly hadto rethink their strategies. Because thequestion was simple, what wasHeritage Bank coming to do, if theyare not going to have 300 branchesthat everybody was running for, 1000,highest number of branches, how canthey survive? And it dawned oneverybody that the only way HeritageBank could survive is to drive channelsbasically on the e-banking platform.And off course they had biggerpockets, so they quickly jumped on it.But, honestly, that has being ourmodest contribution. And it isinteresting. The second impact, I willtake, is the restoration of confidencein the financial sector, that people seea bank go down after about ten yearsand still have their money come backto them. This gives them hope thatSavannah Bank will also come back.That hopes it (Heritage Bank) givesto people, that confidence itengenders in people is very importantfor financial service delivery andcontinuous sustainable bankingservices. I think that those two, I willsay is our contribution.

The industry is fiercely competitive.How has the bank coped with thecompetition?

I have had to say this over and overagain, I have not focussed oncompetition, rather we have focusedon the little things we can be able todo, and let competition bother on whatwe are doing. Like we came out boldlyand say we would be looking at SMEs,we want to grow SMEs of our own,we want to empower that sector, andoff course the whole market reacted toit. We said we want to deal withchannels; the whole market reacted toit. So the truth is, we have remainedfocused on the things we can do welland let competition bother about whatwe are doing. Again we say we aregoing to look at different point ofpresence, that we are going to roll outAutomated Banking Centers (ABCs),again the market jumped at it andstarted looking at how to roll outABCs, and now some banks are

We need a policy fchannels public sereal sector — Herita

planning to roll out their ABCs,because it is the best way, thecheapest and easiest way to getfinancial services to the unbanked. Soyou have to find a way to remain inyour position of strength. And again,we can’t compete on brick and mortal.Somebody has about 700 to 1000branches, and I have ten, and we arein the same market, you can’t competewith him in terms of bricks and mortar.If I focus on him I will not do business.So I focus on my little strength, andthat is what we have done over thelast one year. Have we gotten to wherewant to be? Far from it, but we canclearly see the direction which we areheaded. As part of our anniversary,we shall be launching our agencybanking on the 4th of March. And it isalso part of the little things we aredoing, to show that it is possible,agency banking is possible. We needto diversify our own distributionchannels; we need to diversify ourown revenue base. We run into themarket and we said we are not goingto charge COT, for some banks, thatis 25 per cent of their revenue base,and we say zero and we are justcoming in new. Everybody hadthought, “You can’t survive it”, but it,

,is not true, we will survive it, ourrevenues are growing every day. Itmight not be as astronomically as youwant it to be, but it is growinggradually because for us it is not 100meters dash, it is building asustainable business, building andenduring legacy. Building anorganisation that will outlive us, andso we cannot deal with it as a rush.My board luckily are professionals,that know their sense of stayingconsistently on your strategy to build,and making sure that the back end ofyour strategy is well taken care off asyou build. And I give it to the centralbank, they were of immense supportto us, they gave us all the

encouragement and all it takes in theircapacity, closed supervision, very veryclose supervision. And it isunderstandable. Some people say,“Why are they always on us? I said, itis important that they keep a close eyeon us because of where we are comingout from. For the systemic stability, itis important that we don’t do anythinguntoward, but have our eyes set on alonger vision, five years, ten yearsfrom now. We believe, we believe, fiveyears from now, we should be amongthe first five financially solid banks inthe country. And if that is the case,you have to put in place the buildingblocks now. It will outlive me as aperson, but I need to put thatfoundation in place. And theprocesses, the structures, and all ittakes to have a sustainable bankingprocess have been put in place, it is abusiness, and we have to treat it asone.

So the bank is not in a hurry?

We are one year, just one year old;some of our elder brothers are over a100 years. There is no way I can say Iam in a hurry chasing somebody whois over a 100 years. This is a businessthat thrives on trust. There is a fiducialrelationship here, it thrives on trust,and it thrives on personal life styleand sentiments. Nobody wakes up onemorning and start trusting everybody,the best we can do is show we areworthy of trust. The best we can do itto get people who are not in thefinancial services space, to be includedin the financial services space. Andso for us, one of the beauty of the newway of sustainable banking is financialinclusion, and we seem to feature justat the nick of it, so nobody is old inthat space, we are all new but whatwe have as an edge above others isour newness, we can take it on as aviable, new project, without causingthe gorillas in the system to overwhelmthe new

What is your experience with SMEs?

Our experience with SMEs is thatthey are a group of people that arewell driven in terms of ideas, in termsof how to turn their ideas into productservices, wealth creatingopportunities. But there are certainingredients that are lacking. One,because of the way we are traditionallystructured, that one man must owneverything, and so rather than workin partnerships and in teams, peoplelike to go it alone. That makes themvery un-bankable, that makes themhigh risks, and it makes them easilydefault when they are looking for

funds, in fact they are unable to accesscapital to fund their projects. What we thendid to overcome that challenge is to createwhat we call a SME Clinic. What does thatdo for them? It makes them know that thereis a lot of value in partnership, there is alot of value in knowing what your businessrequires to survive and what you requireto survive. Your business and you cannotbe one and the same person. And so theremust be separation. Then off course, webrought in some persons, someorganisations that need to train and givethem comfort so that they can be moreorganised and they understood some thosechallenges, which hitherto had beensomething they see as only for the bigorganisations. Then they began to accesscapital. And I tell you they pay, they pay,they even pay more than the big ones. Butin that space, because they are so many, itis easy to have one or two that still want toremain with the old ways. And they don’trepresent the totality of the SMEs. Theydon’t. I consider those ones as been theminorities. And when we have one or twoof such cases, we just either explain to thatperson why we go through the route or youwill lose a life time opportunity of beinggreat. initiatives.

And what have you done in terms of e-

We should not shyaway from it; wewant to make thatmove because ofthe strategic fit,because we havebeen throughrestructuring andreorganisation ofthis, and thegovernment andcurrentmanagement ofEnterprise Bank inrestructuring andputting thatorganisationtogether. We don’twant a misfit or amismatch in thatspace

CMYK


Interview

framework thatector deposits toage Bank CEO

payment platform?

Modestly, we did invest a lot in I.T, andlike I said, that is one of the strategy webrought to the platform, that what you arethinking about, it is not just a thought thing.It must be the way of life. So for us, our e-payment platform is the way of life. It is theonly way we have been able to stay in theindustry and in the market in the face of allthe competition. That we are participatingin every activity that every bank couldundertake have been because of therobustness of our e-payment platform. It isvery robust and we intend to improve on it.

Heritage Bank came into the industry ata time of monetary tightening. How hasthis impacted the bank and what has beenthe response?

I will say it the way it is. The impact hasbeen very severe on us as a bank. We havehad to struggle most times to deal with it.Given what we inherited from ourpredecessor organisation, they were veryheavy in public sector. So the residue of whatwe took was largely public sector. But wealso know that it was not sustainable to goin that direction. So we went out seriouslyto do the SMEs. You see when you are on

space of SME; you are not worried toomuch about CRR. But that does notmean we did not feel the impact, allof us felt the impact. It is a major drainto our liquidity. That is on one side.As a national economic goal of curbinginflation, of defending the naira, ofdealing with exchange rate issues,

what was happening was also not sustainable.Where we take public sector funds and go andbuy treasury bills, and borrow the same moneyto the government who gave the money to us.That business model is also not sustainable forthe country. Should it be a CRR of 75 per cent,100 per cent of 25 percent, it is neither here northere. For me, that is my personal opinion, canwe diversify our revenue base as a country. Thereal sector has to work and if we were deployingthe public sector fund to the real sector, then itis a veritable option to keep, allowing the publicsector funds stay with the banks but if we arejust moving it into treasury bills, then not. Should

we have policies that enable us movethat money into the real sector? Maybethat would have been a better way tolook at it. But don’t forget that thereare a lot of pros and cons for each ofwhat I am saying, and I would notclaim to be an expert in it. I will onlysuggest that we need to weigh all theoptions.

What is your outlook for the bankin the next 12 months?

I am sure it is public knowledge thatwe are one of those in contention toacquire Enterprise Bank. And it isimportant that in the next 12 months,our dual approach on where we aregoing to. One, we have an organicgrowth plan, that in the next one year,we do hope that we achieve 30branches, organically. We aregrowing on our capital and what wehave. The inorganic option is wherewe have organic fit, which we believewe do have. We should not shy awayfrom it. We want to make that movebecause of the strategic fit, becausewe have been through restructuringand reorganisation of this, and the

government and current managementof Enterprise Bank in restructuringand putting that organisation together.We don’t want a misfit or a mismatchin that space. And so, we are not shyto say we are fit for it. Now thatjudgement, as to whether we are fitfor it, why we think we are, is left forthose selling to say Heritage Bank isfit or not. We have made our case, theywill announce publicly those of us thatare .., but we are not hiding that wedid bid, and we have always said wewill bid, and we bided. If we achieveour strategic acquisition drive, thenwe would have shorten our five yearprojections almost in one year,achieved that in one year but if wedon’t achieve the strategicacquisition, then we would followthrough with our five year projection,of which we think this year we hopeto achieve 30 branches. So that is justa given. I mean you have to plan onall the cylinders you have, and wehave. The beauty of who we are is thatwe have been through this kind ofthings before. It took us nearly threeyears to achieve Heritage Bank fromSGBN. So if it takes us another oneyear to achieve another bigger andstronger Heritage Bank, with anEnterprise bank in the tow, we wouldbe glad but if not, we still will grow.Because right now we are alsoplanning the EGM that we are hopingto get immediately after our one yearanniversary, which will approve thatwe raise more capital to be able tocontinue our strategic intent.

And how soon are you going to belisted on the stock exchange?

At least we should be running forthree years before we get on thatplatform. So we believe that withinthree years, we should have goodfinancials and all that, and met all theregulations to be on the stockexchange.

Apart from capitalisation, howimportant is it to your strategic intentthat you list on the stock exchange?

When we were coming in, we madesome promises to the shareholders thatwe have to have an exit strategy forsome of them that are not willing toinvest very long, saying we would beat the capital market to enable themhave an exit strategy. It also gives usa clear pricing for our net worth, forwhat we are worth, believable one. Wecan give any valuation to our self butthe market would be able to betterassess if we are in the marketalongside our peers. Those are thingsthe capital market offers us. It is betterthat we hold our self to those higherideals which the capital market is alsogoing to hold us to. We would becomemuch more transparent in reportingour numbers, and they would be inthe public domain for anybody to see.Those things that investors are willingto see, they would be able to see, asagainst being a private company. Ifmy shareholders choose not to docertain things, but as a publiccompany we are compelled by law,though as a bank, we are bound bycertain rules and regulations to betransparent and meet all the reportingstandards that are required.

I have notfocused oncompetition,rather wehave focusedon the littlethings we canbe able to do,and letcompetitionbother aboutwhat we aredoing

,

,

*Mr Ifie Sekibo


CMYK

Homes & Housing Finance

Sovereign Wealth Fund toinvest N1.56bn in NMRC

Stories by YINKAKOLAWOLE,with agency report

Sovereign Wealth Fundis to invest $10 million

(about N1.56 billion) in theNigerian MortgageRefinancing Company(NMRC) to improve itsmarket position.

Mr. Uche Orji, ChiefExecutive Officer, NigeriaSovereign InvestmentAuthority, managers of theFund, said the currentinvestment in NMRC hasbeen planned as a coreequity investment by theSWF.

The Federal Governmentprovided additionalfunding of $550 million toSWF two weeks ago,bringing the currentportfolio of the Fund to$1.55 billion.

NMRC offers help toproperty owners torefinance their mortgage.The private-sector drivencompany has been setupwith main objective ofsolving the issue of long-term funding constraintswhich have stalled thegrowth of the primarymortgage market. Withgovernment support,NMRC is expected toboost the real estate sectorin Nigeria, which has seencontinued growth over thelast few years.

In November 2013, thefederal governmentsecured a $300 million softloan from the World Bankfor the take-off of theNMRC, in a bid to tacklethe nation’s housing deficitestimated to be 17 millionunits. At the launch of

NMRC last month in Abuja,Finance Minister &Coordinating Minister of theEconomy, Dr. Ngozi Okonjo-Iweala, said the company willhelp provide long-termfinancing to mortgage lenderswhich will help them to beable to give more housingloans. She said needs toprovide more than twomillion homes a year to reducethe housing shortage, notingthat NMRC will help extendmaturities for Nigerian home-buyers to as much as 20 years,encouraging the building of75,000 new homes a year andcreating at least 300,000 jobsinitially.

SWF was set up via theNigeria SovereignInvestment Authority Act of

2011 for the purpose ofmanaging the surplus incomeproduced from Nigeria’sexcess oil reserves andinvesting invest the savingsgained on the differencebetween the budgeted andactual market prices for oil toearn returns that wouldbenefit future generations ofNigerians. It commencedoperations in October 2012with an initial allocation of $1billion as seed capital.

The Fund is composed ofthree distinct funds orwindows, each with specificinvestment and developmentobjectives, namely: TheStabilisation Fund is meant to

safeguard against budgetarydeficits, a last resort fromwhich government maywithdraw annually to meetshortfalls in the budgetbrought about by falls in oilprices or other budgetaryconstraints; The FutureGeneration Fund is a savingsfund that will seek investmentin long-term investments andassets to provide savings forfuture generations ofNigerians and; The NigeriaInfrastructure fund is tosecure investments in theinfrastructure development ofthe country in areas such asagriculture and othergovernment directed projects.

*Access to mortgagefacilitates ownershipof bungalows like this

The Lagos Stategovernment saves N6

billion annually to fund itsnewly launched HomeOwnership MortgageScheme, known as LagosHOMS, aimed atfacilitating easy access toaffordable housing byresidents of the state.

Governor BabatundeFashola disclosed thiswhile unveiling thescheme in Lagos recently.He said in order to deliversome of the housingprojects to kick-start theprogramme, the stategovernment has beensaving N200 millionmonthly from the internallygenerated revenue and laterincreased the saving to N500million monthly, with apossibility of furtherincreasing the saving.

“I am happy that we took

Lagos saves N6bn yearly to fund mortgage schemethe decision to confront thisproblem and I hope that thesolution we offer today will bethe long term solution. Part ofthe pride I have about thisproject is that we have not hadto borrow money to fund any ofthese housing units. Ourprogress so far is the result ofrigorous planning and financialdiscipline, savings andcommitment. These projectshave been fully funded from thetaxes that our people have paidas monthly internally generatedrevenue (IGR).

“About 3 years ago, when wetook the view that the LagosState Ministry of Housing on itsown cannot deliver all thehouses that Lagosians requirewithout the active support andparticipation of private sectordevelopers, this Scheme wasborn in my mind. The nexthurdle was how to deliver it. Westarted saving N200 million

monthly, whether the internallygenerated revenue increased ordecreased; and today, we arenow saving N500 millionmonthly, and it is possible toincrease this as more people paytheir taxes.

“The role of the Ministry ofHousing will increasingly bethat of a regulatory one,facilitating private sectorhousing development andenforcing housing regulations,leading research into systemsbuilding and cost savinginitiatives that increase theaffordability of homes and thespeed of construction. Ourultimate plan is to be theguaranteed purchasers todevelopers who will acquiretheir own land, build to ourspecification and to our agreedprices. This way, many morehouses can come on streambecause of private sectorparticipation, and Government

will use the IGR from tax payers’money to buy from thedevelopers and sell to thecitizens on a 10 year mortgagepayment.

“When I signed the Landlordand Tenant Bill into law, Iexplained that it was thebeginning of a housing plan forLagos. Many commentators whoeither did not listen to me or didnot understand me reasoned thatI should have provided housesfirst. The truth is that there areempty houses. People simplycannot afford them.

While the Tenancy Lawrepresents our moralintervention to protect citizenswho earn monthly income fromlandlords who demand multipleyear advance payments, theLagos HOMS represents ourleadership intervention toincrease the stock of affordablehousing on convenient paymentterms.

Over 4,500 civil servantsin the employ of the

federal government have sofar benefited from theFederal Government StaffHousing Loans Schemebetween 1950 and May2013.

This was revealed by theHead of Media Unit of theFederal Government StaffHousing Loans Board, MrAkinwale Adegbola, inAbuja.

According to Adegbola,the highlight of the board’sperformance was between2010 and 2013 when thefederal government injectedN10 billion into the scheme.

He described the schemeas government’s socialresponsibility to its workers,adding that the loanapplications currentlyamounting to N6.7 billionare given at 3 percentinterest rate. He called foradditional funds allocationso more can benefit.

4,500workersbenefit fromFG’s housingloan

Zamfara StateGovernment has signed

a Memorandum ofUnderstanding (MoU) withthe pan-African financeinstitution, Shelter Afrique,on the development ofaffordable housing in thestate.

The deal was sealed whena delegation led by GovernorAbdul’Aziz Yari and seniormembers of the stategovernment, accompaniedby the Nigerian HighCommissioner to Kenya, Mr.Akin Oyateru, visited theoffice of Shelter Afrique inNairobi. The delegation wasreceived by the ManagingDirector of SHAF, Mr.Alassane Ba and all membersof the senior managementcouncil of the organisation.

Discussions between thetwo parties centred on thedynamics of a Public-Private-Partnership (PPP),culminating in the signing ofMoU between the two partiesto develop affordablehousing in the state.

ShelterAfrique,Zamfara signMoU onaffordablehousing


CMYK


CMYK

Insurance

Pension biometrics to determine commencementof transfer window — PenOp

move their Retirement SavingsAccounts (RSA) from one PensionFund Administrator (PFA) to another without hitches. And according toPenOp, this will not be possiblewithout a biometric database of allpension contributors.

Chairman of PenOp, Mr. MisbahuYola said that activities are already inplace to ensure that the industry getsits biometrics right, before it starts itstransfer window.

It will be recalled that the transferwindow ought to have commencedlate last year but was not realistic

because pension operators as well as theNational Pension Commission (PenCom)are currently working hard to ensure thatthe biometrics issue is sorted out.

According to Yola, the important issue intransfer window has to do with identitywhich the biometrics will need to address.

Though, he said the commencement ofthe transfer window is imperative, the issueof biometrics must first and foremost beresolved to avoid double registration,among other identity challenges.

The biometrics, he said, will come withfinger print which would serve as anidentity for an individual, especially in a

there wouldn’t be anycomplaint by RSA holders thattheir data or account istampered with, in the processof moving it from one PFA toanother.

If the issue of biometrics isresolved, he noted that thetransfer window will commencein the industry.

Meanwhile, Yola disclosedthat PenOp is currentlyworking with PenCom tointroduce pension scheme intothe informal sector, noting thatthe current pension schemedoes not favour the informalsector.

He noted that the bill beforethe National Assembly to amend the scheme will takecare of this challenge, such thatthose in the informal sector canbe incorporated into thecontributory pension scheme.

situation wherethere ares y n o n y m o u snames. With this,he noted that

Stories by ROSEMARY ONUOHA

The Pension Fund OperatorsAssociation of Nigeria, PenOp, have

said that they are doing everything theycan to ensure that the anticipated transferwindow in the pension industry commences.

Accordingly, the Association said it isputting modalities in place to first havea biometric database system in place.

The transfer window is a system that would allow pension contributors to

Insurance experts have advised underwriting firmsin the country to improve on their products and

service delivery to build credibility.This is coming on the heels of the emergence of

Managing Director of Sovereign Trust Insurance Plc,Mr. Wale Onaolapo as Inspenonline InsuranceMan of the year.

Onaolapo was declared winner at the 2013Nigerian Insurance and Pension (Inspenonline)Award in Lagos last week.

Speaking at the event, Mr. Yemi Soladoye,Managing Director of RiskGuard Africa Limitedsaid, Nigerians have high level of confidence ininsurance mechanism, but low trust in insurancepractitioners.

This, he said was because most underwriters aremore concerned about the profit they want to make,thus, are less concerned about the welfare of theircustomers.

He noted that operators in insurance companiesare too conservative and lacks self recognition, thus,having opposing mentality, which has done moreharm to insurance industry than good.

He appealed to underwriting firms to createproblem-solving products that could meet the needsand wants of the people. He equally called on themto use other alternative channels to sell insurance,such that, insurance covers could be widelydistributed across the nation.

Soladoye advised underwriters to promptly payclaims as and when due, calling on underwriters towork harmoniously, as well as fully adhering toprovisions in insurance guideline, to grow theindustry.

Speaking on the capital base for microinsuranceoperators, he stated that the statutory N350 million istoo much to operate a micro insurance outfit, pleadingon the regulator to categorise micro insurance intoNational, State, Local and Unit-based licences.

This, he said, would give room for more players,which could only be better for insurance penetration.

Speaking earlier, Mr. Adebayo Adeleke, executivesecretary, Independent Shareholders Association ofNigeria (Isan) stressed that, despite the fact thatinsurance sector has the highest number of listedcompanies on the floor on Nigerian Stock Exchange(NSE), the price of these stocks are below par.

Adeleke who represented Sir Sunny Nwosu,president, Isan, attributed this to low credibility,urging insurers to continue to create better services tomeet people expectation.

Experts task insurerson credibility...As Onaolapo emerges

insurance man of the year

Vanguard, MONDAY, MACRH 3, 2014 — 33

CMYK

Tax Matters

A treaty is a formal, writtenagreement between sovereign

states or between states andinternational organisations. Manycountries have agreed with othercountries in treaties to mitigate theeffects of double taxation. Tax treatiestend to reduce taxes of one treatycountry for residents of the other treatycountry thereby reducing doubletaxation. The goals and provisions varyfrom one treaty to another.

The type of tax treaty within thepurview of the Federal Inland RevenueService (FIRS) and domiciled in the TaxPolicy and Legislation Department isthe Avoidance of Double TaxationAgreement (ADTA).

What is Avoidance of DoubleTaxation Agreement (ADTA)

Avoidance of Double TaxationAgreement (ADTA) is a written taxagreement between sovereign statescalled “contracting states” primarily onthe allocation of taxing rights betweenboth contracting states on the incomeof residents of either of the contractingstates derivable from either states. Theagreement also does the following:

·Guide against the occurrence of adouble taxation scenario in which aparticular income is taxed twice in thehand of a taxpayer by either his homecountry (country of residence) orcountry of source of income.

·Modifies domestic tax laws byreducing the domestic tax rate.

·Grants concessions to beneficiaries.·Guides against the occurrence of a

double non-taxation scenario in whicha particular income escapes taxationfrom both the source state (where therevenue is generated) and residentstate (state of residence of theenterprise) in the hand of a taxpayer.

·Exchange of all relevant taxinformation beneficial to either or bothcontracting states for the furtheranceof the operation of the agreement.

·Assistance in the collection of taxesby either contracting states.

·Establishment of the MutualAssistance Procedure (MAP) for theresolution of disputes emanating fromthe implementation of the agreementor the taxation of income of residentsof both contracting states.

The Purpose of Double Tax Treaties

Double tax treaties are viewed asbeneficial by most states because they

Countries DTA Type Date/Place of Signing Date of Entry into Force Effective DateCanada Comprehensive 4th August, 1992 in Abuja 16th November, 1999 1st January, 2000Pakistan Comprehensive 10th October, 1989 in Lagos 7th March, 1990 1st January 1991Belgium Comprehensive 20th November, 1989 in Brussels 1stJanuary, 1990 1st January, 1991France Comprehensive 27th February, 1990 in Paris 2nd May 1991 1st January, 1992Romania Comprehensive 21st July, 1992 in Abuja 18th April, 1993 1st January, 1994Netherlands Comprehensive 11th December, 1991 in Lagos 9th December, 1992 1st January, 1993United Kingdom Comprehensive 9th June, 1987 in London 1st January,1988 1st January, 1989China Comprehensive 15th April, 2005 in Abuja 21st March, 2009 1st January, 2010South Africa Comprehensive 29th April, 2000 in Cape Town 5th July, 2008 1st January, 2009Italy Air & Shipping Agreement Only 22nd February, 1976 in Lagos1977 1st January, 1978

Tax Treaty

Clarification of Taxing Rights of EachState

Tax treaties create the elucidation oftaxation rights between the two contractingtates involved in the agreement forpurposes of clarity, avoidance of litigationand international conflict. In the case of atax treaty, it states specifically whichcontracting states have the taxing rightand when both of them have the right.

Avoidance of International JuridicalDouble Taxation

International juridical double taxationarises where the same profits are taxed inthe two contracting states in the hand ofthe same person (corporate or individual).The DTA clearly addresses and resolvessuch harsh conditions.

Prevention of Fiscal Evasion with Anti-Avoidance Provision

The acronym DTA in Nigeria is fullycalled the Avoidance of Double Taxationand the Prevention of Fiscal Evasion WithRespect to Taxes on Income and onCapital Gains. The Agreement thereforeplays a dual purpose of preventing doubletaxation and also preventing fiscalevasion. Exchange of informationprovision (see Article 26 below) isintended to assist countries to obtaininformation in order to ensure their taxingrights are preserved, although theeffectiveness of such provisions for tax

avoidance as opposed to tax fraud maybe limited at present.

Encourages Economic CooperationBetween States

Contracting states to the DTA establisheconomic cooperation by opening thegate for companies from their countryto come to the other contracting Sstatebecause of its confidence in the taxsystem of that country.

Double tax treaties generally are oftremendous importance to businesseswith an international dimension.Without them trade would be stifled andeconomies would likewise be affected.It is because of this that treaties oftenassume huge importance whendeveloping tax strategies. However, theintroduction of anti-treaty shoppingarticles (pioneered by the US) in doubletax treaties and the exchange ofinformation between member states isforcing substance into structures whereperhaps a decade ago this would nothave been an issue. Because of theimportance of treaties it is not onlynecessary to understand how theyoperate but also how they areinterpreted.

Date of Entry into Force of the DTA

This is the date the agreement isdeemed to be a law forming part of thebody of the legal system of bothcontracting states. In essence, theagreement becomes an enforceable lawin both states because it has fulfillednecessary domestication procedures.This is provided for in Article 28 (1) ofthe various DTAs that,

“Each of the Contracting States shallnotify to the other the completion ofthe procedures required by its law forthe bringing into force of thisAgreement. The Agreement shall enterinto force thirty days after the date ofreceipt of the latter of thesenotifications”.

Effective Date or Date of Applicationof the Agreement

Both of these clauses are often usedinterchangeably. However, it is the datecitizens of both Contracting States startbenefiting from the agreement asprovided for in Article 28 (2) (a) (i)(ii)of the various DTAs. Technically, theeffective date of the agreement is thefirst day of the fiscal year following thedate of entry into force of the agreement.

List of Countries having DTAs with Nigeria:

,

,

allow business to transact with a degreeof certainty both on the part of theindividuals, partnerships or corporateentities and the government of that statein which that business entity operates. Theperceived benefits of double tax treatieshave been identified as follows:

Contracting states tothe DTA establisheconomiccooperation byopening the gate forcompanies from theircountry to come tothe other contractingSstate because of itsconfidence in the taxsystem of thatcountry

By FRANKLIN ALLI

The Minister of Industry,Trade and Investment, Mr.

Olusegun Aganga, has saidthe consumer market in thecountry is now peaking at over$100 billion and growing fastas the purchasing power of thecitizens continued to rise.

He made this remark duringthe launch of the Nigeria-France Trade and InvestmentCouncil in Abuja. The Councilwas launched to facilitateinvestment flows between thetwo countries ; it is expectedto double from thecurrent N1.049 trillion toN2.098 trillion over the nextfour years (2014- 2017).

“Trade between Nigeria andFrance grew from N550 billionin 2008 to well over N1trillionin 2012, one of the fastestgrowth rates we have seenwith our trading partners.

“For decades, France hasbelieved in the potential ofNigeria; but more importantly,France has backed up its beliefwith real actions. This isbecause when the Frenchbelieve, they invest. This iswhy the Nigeria-FranceBusiness relationship is centralto our economic agenda; andthis is why we have organisedthis forum here today,” saidAganga.

Nigeria’sconsumermarket worth$100bn— Aganga

Dufil Prima Foods Plc,makers of Indomie instant

noodles may have broken theworld record by introducing450g pack of its noodle.

The 450gram is of the chickenvariety, a landmarkachievement in global noodlecircles. The new variant is tiedto the brand’s efforts incatering for the growing needsof the family and easing thehassle associated withpurchasing multiple packs formeals on the home front.

“As far as the global culinarylandscape is concerned,Indomie has recorded a majorbreakthrough with the launchof our new Family Pack,” saidMr. Deepak Singhal, CEO,Dufil Prima Foods.

Indomie entersmarket with450g pack

CMYK

Business & Economy

“So we can once again enjoygoing to Koriko Bar in the earlyafternoon; go home; take a nap

and return for the evening bash. Delethis is wonderful news.”

That was how one old patron of theBristol Hotel in the late fifties to middle1960s received the news of the revivalof Bristol Hotel. Every old socialitehad several tales to tell about theirexploits at the Bristol Hotel – when itwas the place to go. Mine was notdifferent from most.

On August 4, 1964, with theAmerican government sponsoredASPAU scholarship in my pocket, Iwas showered with cash from well-wishers. It was a time when kids werecelebrated for having brains thanbrawns. The Alitalia aircraft charteredto take fifty Nigerian kids, ten fromIgbobi College alone, to America, wasalready waiting at Ikeja airportaccording to one of our neighboursworking for the Nigerian Airways.Departure time was 10 p.m. But, withmore money in my pockets than brainsin my head, I headed for Koriko Barwith friends, many now dead andproceeded to lavish close to thirtypounds (about N1.5 million today) inone afternoon. I almost missed theflight but for the vigilance of a lovingmother who sent out a search party tohunt down her wayward son. Wearrived at the US Embassy just in timefor the bus to take off. Still nothingregretted. I left the bar man withsufficient cash for my friends tocontinue drinking free of charge forthree days!!!

Bristol Hotel had always been aplace for the young at heart, the self-confident, the daring and those whowanted to enjoy life to the fullest. Thatis the spirit the developer wants torevive, and with it, restore hope thatthings will actually get better – startingwith the nation’s most importantCentral Business District….

BUDGET 2014: A HOSTAGE TO APECULIAR MESS

“History never repeats itself; mandoes.” Barbara Tuchmann, Historian,expert on 13th and 14th CenturiesEurope.

BRISTOL HOTEL REVIVAL:LAGOS CBD getsa boost – 2

,

,government expenditure at all levels.There is more than sufficient blame to passaround. But, everything can besummarized as the failure of a mostly oldand tired leadership at the top. Not oldin terms of age; mind you. But, old in thesense that most of them have been aroundgovernance since 1999 and generallythings had gone from bad to worse.

Even the presence of a former WorldBank Managing Director as FinanceMinister, which had raised hopes ofexcellent and prudent financialmanagement, close to global standards,had resulted in despair. Visitors fromabroad, reading our newspapers orwatching our independent televisionstations – AIT, CHANNELS, etc — mightbe forgiven for wondering if the Federalgovernment of Nigeria employs anybodywith a basic knowledge of economics andfinance. Otherwise, how does one explain

President had sent forward; it will alsomost likely join all the previous budgetswhich were reduced to mere paperwork.

One cardinal reason for atrociousexecution of budgets had been theperpetual inability to estimate therevenue for the period under review.Anybody with wide experience inbudget preparation understands that itis impossible to be totally accurate aboutthe revenue estimates. But, generally,any deviation in excess of five percentcan only be excused by circumstancesbeyond control and unforeseen.Otherwise, if it a negative variance,those in charge had demonstratedincompetence. No single budget passedunder Jonathan had failed to deviateby more than five per cent. Somethingis definitely wrong. One does not needto agree with the beleaguered Governorof Central Bank to know that when your

economic managers fail repeatedly todeliver on promises represented bythe budget, it is time to try anotherteam and skipper.

Allied to that is the fact that theFederal Ministry of Finance simplydoes not know how much revenueNigeria should be generating; howmuch should actually be paid into theFederation Account and how muchis actually remitted to that account.All the charges against the NNPC,the CBN, Customs, etc with respectto revenue diverted or embezzled,only point to a financial system inwhich anything goes – a financial jokecast in hell. That a globally respectedperson is now Minister while allthese messy deals are going onshould constitute our greatestconcern. “If gold rusts, what then williron do?” asked Geoffrey Chaucer,1342—1400 (VANGUARD BOOK OGQUOTATIONS p 78). Okonjo-Iwealais, on paper, the best candidate wecan find for this job. But, paperqualifications only suggestintelligence. A Nigerian Minister,especially in the Ministry of Finance,must also possess wisdom.Unfortunately, while all sorts ofinstitutions have been established toteach economic, finance, banking,insurance, entrepreneurship andleadership, none teaches wisdom –which is the quality which enablesus “To know that which before us liesin daily life..” John Milton, 1608-1674.

Her lack of sufficient wisdom iswhat explains why she appears to betotally at a loss when beinghammered by members of theNational Assembly, about anotherembezzlement of public funds atNNPC or elsewhere or badlyprepared budget estimates by someagencies or ministries or the uses andabuses of Duty Waiver. Dr Ngozi-Okonjo Iweala had gone to dinnerwith several “devils” armed with ateaspoon; instead of a shovel. Whenthe 2014 budget might have failed asthe previous three did, she will haveanother F on her score-sheet asMinister. The fault will not be totallyher own. But, it is her fault that shedoes not know she is in the wrongplace, at the wrong time….

NEXT WEEK: THE INHERITORS–LAWSON GROUP OFCOMPANIES.

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

the fact that two months into the year,with the budget still crawling its waythrough committees of the NationalAssembly, populated by distractedindividuals, neither the President northe Finance Minister is raising an alarm.In the end, a budget will be hastily

When was the lasttime you heard thePresident, the FederalMinister of Finance,the Senate Presidentor the Speaker of theFederal House ofR e p r e s e n t a t i v e stalking about the 2014budget? Probably, along time ago. ThePresident, during hismedia chat, hardlytouched on it –possibly because hewas not specificallyasked severalquestions about it. Yet,by the time you readthis column, twomonths would haveelapsed put of twelve,17% of the time gone,and yet we have nobudget to guide

patched together inApril –, which will besigned all the same.

Invariably, whatthe President, theFinance Ministerand the NationalAssembly fail torealize is that abudget is basically asocial contract and apromise to the peopleabout their economyand ultimately theirfate during the yearthe budget is to beimplemented. TheExecutive Branch,since 1999, hadalways taken thecynical attitude that,“Promises, like pie-crusts, are made tobe broken.” JonathanSwift, 1667-1745,(VANGUARD BOOKOF QUOTATIONS p203). PresidentJonathan has alreadyset a record withrespect to the numberof promises he hadmade and failed tofulfill. When the 2014budget is finallypassed, it will befourth budget this

Historyneverrepeatsitself; mandoes.”BarbaraTuchmann,Historian,expert on13th and 14th

CenturiesEurope

Building quality: SON coming with cement laboratoriesindustrialization of Nigeria: The role ofstandardization” in Abuja.

To fully address the problem associatewith the problem, he said SON had beenworking with block makers and otherstakeholders in the country.

Odumodu, though maintained thatthere is no sub-standard cement in theNigerian markets safe misapplicationmisapplication of the product by blockmakers and other users. The directorgeneral said the organization would sooncompile the list of block makers that areusing the right quality cement andpublish them in the media to furtherencourage them.

While explaining that there are different

grades of cement, he added that “allcement companies are producing 32.5and 42.5 per square meters of cementfor concretes in the country”.

He said Nigerian cement industry isone of the best with new technology thatconforms to the highest internationalstandards, adding that the industry isconstantly working with SON to ensureup-to-date testing, certification ofproducts and quality norms.

“Cement mixing is not totally responsiblefor buildings collapse, our findings showthat this often comes from concrete mixing.A bag of cement is meant to produce 30blocks, but some people often use it tomould 50 blocks.

“Buildings collapse is not about thequality of cement, but the corruptionand misapplication in mixing it fordifferent purposes by the users. As oftoday in Nigeria, any block of 9 inchesbeing sold for N200 is of low standard”,he explained.

According to Odumodu, 32.5 gradesof cement are supposed to be used forblock making and plastering purposesand 42.5 concrete and heavyconstructions.He said in a bid to addressthe problem, SON is planning to setup cement testing laboratory for blockmakers and other users in the country,adding that the organization had beenworking with the stakeholders.

By FAVOUR NNABUGWU

Worried by the incessant buildingscollapse in Nigeria, the

Standards Organisation of Nigeria,SON is making arrangements to opencement testing laboratories across thecountry in order to confirm the qualityof cement before the commodity isallowed into the market

Director-General of SON, Dr. JosephIkem Odumodu made this known inAbuja last week Wednesday whilebriefing newsmen at the managementretreat organised by the organizationwith the theme-”SMEs and the



CMYK

E-Commerce

Nigeria’s onlinem a r k e t p l a c e ,

Kaymu.com.ng hasadvocated for niche marketingfor Small and MediumEnterprises, SMEs in Nigeriaas an effective strategy forprofit optimization.

A niche market defines theproduct features aimed atsatisfying specific targetaudience. It is the act ofsegmenting the market for aspecific product and

Any regulation of thebitcoin crypto-currency

should involve internationalcooperation to avoidloopholes, Japanese vicefinance minister, Jiro Aichisaid on Thursday.

Commenting on the closurethis week of Tokyo-based Mt.Gox, once the world’s biggestexchange for the bitcoinvirtual currency, Aichi saidthe ministry would respond tothe problems “if necessary”,after finding out exactly whathappened.

“It’s not just the Ministry ofFinance; many other agenciesare related,” Aichi told a newsconference. “As for its legalposition, a currency (underJapan’s jurisdiction) wouldbe coins or notes issued bythe Bank of Japan. At the veryleast, we can say bitcoin is nota currency.”

U.S. Federal Reserve ChairJanet Yellen, appearing onThursday before a Senatecommittee, said the Fed hasno jurisdiction over bitcoinbut that Congress shouldconsider ways to regulatesuch virtual currencies.

SamsungunveilsGalaxy S5 tofight iPhone

Samsung Electronicsunveiled a Galaxy S5

smartphone with a fingerprintreader and bigger screenthan the current model asAsia’s biggest technologycompany tries to keep high-end consumers from AppleInc.’s iPhones.

The water-resistant phonewill go on sale April 11 withfeatures including a longer-lasting battery than the S4,according to Min Cho,marketing director atSamsung’s mobile unit. Thedevice, shown at the MobileWorld Congress in Barcelona,uses Google Inc.’s Androidsoftware and has a downloadbooster for fourth-generationnetworks and Wi-Fi.

Demand for high-endGalaxy devices was curbed bythe release of new iPhones inSeptember, squeezing salesin the most profitablesegment of the market andcontributing to Samsung’sslowest earnings growth since2011.

E-commerce operators optimistic onvirtual currency, despite Bitcoin failure

Stories by JONAHNWOKPOKU

Last week, one of theworld’s most widespread

e-payment options, Bitcoinexchange suffered a terribleblow. The bitcoin exchange,based in Tokyo, Japan, Mt.Gox went dark. Its websitewent down and the ChiefExecutive of the company,Mark Karpeles said thebusiness was at a turningpoint. Many users lost moneyranging from $300, 000 to$400, 000. A documentcirculating on the internetand purporting to be a crisisplan for the exchange hadsaid that more than 744, 000bitcoins were missing due tomalleability related theft.

Bitcoin is a peer-to-peerpayment system and digitalcurrency introduced as opensource software in 2009 bypseudonymous developerSatoshi Nakamoto. It is acryptocurrency, so-called

because it uses cryptographyto control the creation andtransfer of money. Somecountries have accepted thedigital exchange platformwhile some others like Chinaand Japan, even though itsuse within their countriesremains widespread; havedeclined acknowledging it aslegal tender.

However, despite thisdevelopment, operatorsbelieve that what happenedto Mt. Gox did not portendany extreme danger forbitcoin or for other virtualcurrencies in general. Theyargue that what is needed isbetter technical efficiency tomanage the currency. Someothers believe that what isneeded is better regulation toreduce fraudulenttendencies. Fraud, they argueis the greatest challengeconfronting virtual currency.

The Managing Director ofNigeria’s online marketplace,Kaymu.com.ng, Massimiliano

Spalazzi told Vanguard thatdespite what has happened,bitcoin, including any otherform of virtual currency, hashuge potential for e-commerce.

According to him, Bitcoin orany other virtual currenciesappears to be a very nichepayment option. It affords alower cost and is accessiblewhich satisfies the need of themarket.

He said, “For smallbusinesses, it opens up theirbusiness to a truly worldwidecustomer base. It has thepotential of becoming one ofthe default payment methodsif the kinks in the system areironed out. These kinksinclude volatility, taximplications and illegalonline transaction issues asthere is no personalverification of the users.”

He explained that, “Virtualcurrency is already acceptedby many e-commercesites and has passed the first

round of approval requiredto become a Webstandard. Some of the e-commerce giants havelaunched their own virtualcurrencies too.” He addedthat virtual currencies willevolve over time to becomeone of the default paymentsystems.

On whether virtualcurrency can address thepayment challenges in e-commerce, Spalazziexplained that, “From ane-commerce perspective,the main advantage ofvirtual currency is thatprocessing transactions isfast and cheap. The cost ofreceiving payments is afraction of a credit cardtransaction fee, making itfeasible to receive verysmall payments,” addingthat, “Virtual currency iscompletely open, it doesn’trequire the cooperation ofanyone."

Kaymu advocates niche marketing for SMEs in Nigeria

marketing intently to a smallsubset of the market.

Kaymu said that SMEs inNigeria could resort to nichemarketing in order to providea product or service thatfocuses on specific clientgroup’s needs.

Kaymu said, “Nichemarketing provides anattractive opportunity forSMEs to compete against thescale economies that massmarketing competitors are

able to achieve. As opposedto mass marketing, nichemarketing encouragesbusiness owners to stake outunique market spotsespecially online.”

It explained that, “Nichemarkets consist of groups ofcustomers who have a similardemographic, buyingbehavior and lifestylecharacteristics and thatunderstanding targetcustomer segments is a

crucial factor indetermining whether anoperation has theresources, interest andbusiness elementsnecessary to meet theneeds of the prospectiveconsumers.

“It is no doubt that theinternet is here to stay andhas brought with itamazing opportunities likeniche-marketing a productto a wider audience."

Japan saysany bitcoinregulationshould beinternational

DINNER: From left, Acting Director-General of National Biotechnology Development Agency (NABDA), Prof. Lucy Og-badu with Chairman Senate Committee on Science and Technology, Prof. Robert Boroffice, and an unnamed official duringa dinner in Abuja by OFAB at Transcorp Hilton Hotel. Photo by Emmanuel Elebeke.


CMYK

Aviation

*DANA AIR SUPPORTS EDUCATION: Picture shows pupils of Lilyvale Schools,Akute, Lagos and Greensrich Schools, Ikorodu, Lagos being received by ChiefPilot, Dana Air, Capt. Segun Omole during the school's excursion to Dana Air atMurtala Mohammed Airport, Ikeja, Lagos

By LAWANI MIKAIRU

The agitation by aviation unionsthat the next Minister of Aviation

should be an aviation professional hasgained momentum in recent weeks.The aviation unions comprises AirTransport Services Senior StaffAssociation of Nigeria (ATSSSAN),National Union of Air TransportEmployees (NUATE ), NationalAssociation of Aircraft Pilots andEngineers (NAAPE), NationalAssociation of Air Traffic Controllers(NATCA), National Air TrafficAssociation of Nigeria (NACAN),Nigeria Professional Pilots , AviationRoundtable and the Airline Operatorsof Nigeria (AON). They said lastweek that their position that anindustry technocrat be appointed thenext aviation minister has not changed

But unfortunately, recent revelationsshow that some of those agitating forprofessionals as minister have ulteriormotives for the call as they are actuallycampaigning for their friends to bemade minister. It has been allegedthat some of them have written anopen letter to President GoodluckJonathan lobbying for themselves. Lastweek, President of Airline Operatorsof Nigeria, AON, Captain NogieMeggison convened aviationstakeholders meeting to harmonisetheir position that aviationprofessional should be appointed thenext aviation minister.

This attempt by some industryplayers to use the agitation for theirselfish end, prompted AON PresidentCaptain Meggison to issue astatement condemning what he called“ attempt by some to thwart the unionsproposal for the appointment of atechnocrat as the next aviationminister”.

According to Captain NogieMeggison,” it is constrained to restatethis position on account of feelersemanating from some circles that somepersons are capitalizing on the openletter sent to President GoodluckJonathan to appoint a technocrat asminister to lobby for themselves .” He

Will a professional make betteraviation minister?

said it has come to the notice ofstakeholders that some persons wereusing some experts to make case forthemselves as against the collectiveposition.

Meggison said the resolved that atechnocrat should be appointed asaviation minister, does not mean thatsome industry players or head of aviationagencies that have misled previousaviation ministers, should use the call bythe unions to lobby for the position ofaviation minister for themselves.

Meggison said “one of the majorreasons why industry players need atechnocrat as the next aviation ministeris to rescue the industry from its currentstate, where certain self centre elementswithout pedigree and track record wantto continue to hijack the industry . A clearsituation is where the industry finds itselftoday where such people are now inAbuja lobbying to be the next minister ofaviation. The appointment of a technocratwill be able see through their selfishmotives to enable him or her decipherthe grain from the chaff “

This worry by AON President is sharedby the President of Aviation Roundtable,Captain Dele Ore who also warnedagainst the use of the open letter toPresident Goodluck Jonathan as anavenue by some self-seeking experts toadvance their selfish desire to lobby forthe position of aviation minister.

Captain Ore said “Now that aviationhas a supervising minister he should beallowed to clear the mess left behind atthe Ministry of Aviation by Princess StellaOduah.

The so called aviation professionalsclamouring to be appointed to replace herare being sponsored to cover the tracksof our dear Princess Stella. Documentsbeing brandished as the industry clamourwere fraudulently being used for thisulterior motive because at no time have wegot to a stage where names are beingsuggested.”

“The same so called professionals that arenow agitating to be considered to replacePrincess Stella are those that misadvisedher and are being sponsored for the “BIGCOVER-UP” that needs urgent probes, re-organization of the ministry and someagencies under the Ministry of Aviation.”


CMYK

People in Business

because the engine room ofmanufacturing is power(electricity) and it is themanufacturing sector that willcreate the neededopportunity for employment.Manufacturing holds the keyall over the world and inNigeria, we depend so muchon imported finished goods,raw materials and capital,” hesaid.

Explaining how capital isbeing imported, Obidigbosaid: “Because the interestrates abroad are usually verylow compared to what wehave here, these foreignersproduce goods in Nigeriawith money borrowed fromtheir home countries. Theyexport the borrowed fund byway of raw materials orfinished products intoNigeria, sell them and makemega profits whereas thewholly indigenous industriesare finding things verydifficult because in theabsence of electricity, you aregoing nowhere. The fact isthat some of these megaindustries we use as yardstick to measure economicindices and performancedon’t use power from thenational grid, they providetheir own power and they canafford to do it because theirvolume of operation is so highthat when you distribute theenergy cost, it trickles downto kobos; whereas the localmanufacturers do not havethat capacity to import energyso we depend on either thenational grid or dieselgenerators.”

BY EBELE ORAKPO

Dr Chike Obidigbo is the Chairman/Chief Executive Officer of Hardis andDromedas Ltd., a manufacturing company with factories in Anambra, Ebonyi

and Enugu states. Hardis manufactures a very wide range of domestic/householdproducts, plastics, cosmetics and health products in addition to waste recyclingand research. In this chat with Financial Vanguard recently, Obidigbo spoke onthe economy, relationship between the manufacturing and banking sectors, sayinghe specifically went into manufacturing to create opportunities for sustainableemployment through utilisation of local raw materials. Excerpts:

The real problem in Nigeria’smanufacturing sector:

According to Dr. Obidigbo,manufacturing in Nigeria,especially in the South-East, is a

herculean task. “One of the biggestmistakes we are making is that althoughthe Federal Government is desirous ofcreating employment for the youths, theyare not addressing the issue properly,

,Power, key to job creation:He said government should

concentrate on providingadequate power, otherwisethe Vision 20-20 20 will be amirage. “Before we built ournew factory in Anambra State,we asked PHCN what thepower situation was and theytold us that before we beginoperations, we will be havingup to 70 per cent powersupply. We were very gladbecause that meant we wouldsupplement only 30 per centfrom the generator.

But since we built thatfactory till date, I don’t thinkthere was any month we hadup to two per cent powersupply. So a factory that wasto take 460 workers atinception has less than 200workers because the power isnot there, yet, they charge usN107,000 every month asfixed charge for owning atransformer which we boughtand installed with our money.PHCN came, inspected andthen brought their metre. So

irrespective of what yourmetre reads, you will stillpay the N107,000 fixedcharge every month –whether or not you hadlight for the month! It isvery ridiculous and mostunfair," he noted, addingthat government shouldlook into it.

He expressed sadnessthat Nigerian industriesare dying "not because wedon’t have competenthands, not because wedon’t have goodmanufacturing practice, notbecause we don’t have thematerials to produce andcompete, but because theinfrastructure is not just

there."Creating sustainable jobs:

The former lecturerbelieves that power is the

key to the economicdevelopment of Nigeria. "Idon’t know why thegovernment is beinglackadaisical about powersupply as that is the key to theeconomic development ofNigeria. Sustainable jobsshould come from definitesources like themanufacturing sector, which isthe prime sector of theeconomy, agriculture, tourismand to some extent, mineralresources.

So if the government reallywants to tackle unemployment,they will give 100 per centattention to power generationand distribution. As anindustrialist and formerchairman of othermanufacturers, I need energymore than anything else. Once

we have power, we candouble our productioncapacity and that meansdoubling the labour forceand once we start moppingup the excess labour floatingaround, we will startreducing crime and moreinvestors will come inbecause investment is crime-shy. Wherever there is crime,people are afraid ofinvesting but if we are ableto reduce crime by creatingjobs, for the people, you willknow who is a core criminaland who is a marginalcriminal. Those marginalcriminals need to be saved.Some of the crises are comingbecause the low incomepeople are not catered for.

When we talk of jobcreation, we talk

about jobs that aresustainable, where theemployee is contributing tothe economy not just sittingdown and doing nothing andgetting paid. I believe thatjobs should be created butthey should be createdmeaningfully and in such away that those that are giventhe jobs will have satisfactionat the end of the day andwould have contributedsomething to the economy sothat when they receive theirsalary, they know theyworked for it and will behappy.

"So the industrial sectorholds the key tounemployment andfortunately for us in theSouth-East, we have so manyindigenous manufacturingactivities, very creative,capable and competentpeople who can move oureconomy forward if only theyare given power. If I am inposition, I will not relent untilwe achieve sustainable,quality power that runs for24/7 so that all the smallbusinesses will grow withina very short period. The bestway to reduce crime is tocreate meaningful,sustainable jobs by providingpower."

Industry/banks relationship:Obidigbo described

President Goodluck Jonathanas a very patient man“because if I were in hisposition, I would not haveallowed Sanusi to stay thislong because in spite ofeverything else, he hasperformed so poorly in themanagement of bankingrelationship with industry.Sanusi evolved so many anti-economic growth policies. Hispolicies depressed oureconomy so badly that wewould not have been where weare today if we had the rightpolicies that guideindustrialization.

"Nigeria has one of thehighest interest rates in theworld. It is unimaginable!Sometimes it could go as highas 35 per cent. That is criminal;no industry can survive on thatand without other people’smoney (OPM), you cannotindustrialise; it is impossible.And you cannot grow anindustry on an interest rate of30 – 35 per cent. Are you asmuggler or into drugbusiness? No, you are amanufacturer and at the endof the day, you face productsthat are manufactured underan environment where theinfrastructure is functioning,where interest rate is as lowas 2.5 – 3 per cent. Sometimesyou go to money lenders andthey tell you it is 5 per centper month which is 60 per centper annum.

"The banks are not evenanxious to lend because thereare so many restrictions tolending that any bank youapproach will tell you theyhave stopped lending. So Ithink the president left himalone for too long and it wasnot good to leave somebodyuntil he has done maximumdamage to the economy beforeaction is taken. Sanusi neverhad the interest of industriesat heart and whenever he ismaking reference to industry,he is making reference to thegiant multinationals; theydon’t represent industrialactivities in Nigeria.

"The real industrialists arethe indigenous ones. They arethe ones that need help, theyare the ones that need moneyfrom the banks to grow theirbusinesses; they are the onesthat need patronage fromgovernment; they needprotection from governmentagainst the massivesmuggling taking place inNigeria.

When these things arehappening, our industries arekilled and it does not createany incentive for new peopleto invest in manufacturing sothose of us that are there arejust there because we want tohelp as many as we can andnot because of money and youfind that so many people thathave closed down went intotrading and hospitalityindustry and they made theirmoney.

Manufacturing, key toeconomic growth—CHIKE OBIDIGBO

Our industries aredying not because

we don’t havecompetent hands...

good manufacturingpractice, or the

materials to produceand compete, but

because theinfrastructure is not

just there

*Dr Chike Obidigbo...give 100 per centattention to power generation/distribution

*Some products from Hardis and Dromedas


CMYK

Agriculture

By Wale Akinola The Ondo State Governor, Dr

Olusegun Mimiko, said theestablishment of Ore Agric Village isaimed at harnessing the vast naturalresources in the state to create wealth,fight poverty and boost food production.

The Ore Agric village was one of thethree integrated Agric villagesestablished in the state in 2010, for cropfarming, animal husbandry, mushroomfarming and oil palm revolution.

The Ore Caring Heart Agricultural

Why we are investing in agriculture— Mimiko

Village is a 2000-hectare facility. It has300 fish ponds and mushroomdemonstration farms; 600,000 oil palmsfrom Indonesia and 200,000 from NIFORin Benin at the pre-nursery shed.

The participants quickly planted 47hectares of maize, over 1million palmseedlings and over 1000 hectares ofcassava. Altogether, the poultry sectionhas about 30 large pens made up of threecubicles each, with over 700 layers andbreeders.

The farm has a large dam for watersupply. And there would be no dullmoment: Dr Mimiko ensured that super

chalets built to taste wereconstructed for the accommodationof participants with provision of abore hole, DSTV, two sets of plasmaTVs, two generators, table tennis andother games facilities for recreation.

Indeed, determined to ensurethe success of the agriculturalrevolution targeted at taking over amillion youths off the streets andturning them into employers oflabour,

Mimiko told the participants: “Wehave made this Agric villagecomfortable for you so that you can

chemically done. Each of you willbe empowered with facilities forcrop farming, fish farming, poultryfarming, mushroom farming and I’msure five months down the line, youwill be the envy of your colleaguesbecause your income will be muchmore than what you will earn if youget government job.”

Dr Mimiko disclosed thatarrangements were at an advancedstage to develop alternative meansof power supply to the Caring HeartAgricultural Village at Ore.

In 2013 alone, 5,500 farms weredistributed to interested participantsunder the Employment throughOwnership in Agric Ventures schemewhile 350 ad- hoc farm workers wereprovided with employment.

Also, 2,750 and 4000 hectares wereacquired in Epe and Auga- Akoko inAkoko North East Local GovernmentArea of the state respectively, whilethe administration also flagged off theMobile Farm Service Centre at Ipele,Owo local government area with 20graduates employed to manage thecentres.

The Auga Agric Village extends

concentrate onyour job. Allthe cropf a r m i n gactivities herewill be tractor–driven; yourweed controlwill be

By OLASUNKANMI AKONI

Lagos State Government said it has concluded plansto float an insurance scheme as well as introduce

mandatory uniform for butchers in the state. Thescheme which is expected to cover all the accreditedabattoirs and meat markets is part of theongoing comprehensive reform of meat processingand distribution in the state.

The measure, the state government stressed wasalso part of effort to modernize and sanitise the LagosAbattoir to be at par with what is obtainable in othercountries, like Kenya and Botswana that operatehighly hygiene and modern abattoirs spanningdecades.

Commissioner for Agriculture and Cooperatives,Prince Gbolahan Lawal, who disclosed this at ameeting with stakeholders operating at the AgegeAbattoir, said government was repositioning theabattoir to the next level as all forms of unwholesomemeat supply to the consumers would be curtailed.

He declared that in line with the sanitization of theabattoir, all butchers who would operate at the variousslaughter slabs within the abattoir would put on whiteuniform, while the slaughter slabs would be restrictedto only accredited butchers.

According to Lawal, “There is no way 21 millionLagosians will be allowed to consume unwholesomemeat again. We are trying to benchmark our food chainwith what is obtainable in Kenya and Botswana.

“Kenya Meat Commission was set up in 1958 whilethat of Botswana was set up 10 years after that ofKenya. Our own abattoir was set up just in 1992 andit only work for two years. It is a challenge and wewill face it and we are ready to sanitise the system.

”We want to ensure that the productivity of ourbutchers and meat merchants is highly enhanced.Some States are moving fast and we have to movefaster than them. Our train has left the station andwe are not going back to unwholesome consumptionof meat in Lagos State.”

The commissioner also disclosed that five otherslaughter slabs outside the abattoir had been linedup for rehabilitation to meet up with modern standard,adding that in the next few months, there would be a

Lagos to introduceinsurance scheme,uniform for butchers


Advertising, Media& Marketing

CMYK

Last week, we commenced the series on the Laws ofService Excellence. We considered five principles

– or laws – that undergird the operations of thoseorganisations that excel in service. Such organisationsknow that:

· The customer is the boss· The frontline is the company· Service is driven and supported by

organisational culture· External service mirrors internal service· Customer experience matters more than

company communications.

This week, we shall consider a few more laws. Andjust in case you wish to look at these principles indepth, you may want to get a copy of my book 20Universal Laws of Service. Aside from other things itcontains, the book offers you 120 actionable ideas youcan use to make your service sparkle. Now to the laws.

Excellent service comes at a priceDiscerning customers are usually willing to pay

higher to receive superior service. We are talking aboutthose customers who know and appreciate superiorservice. They perceive value in the service you render.They know that cheap service may not be up to much.So they are willing to pay a little bit more for greatservice. The point is that if your service is great, youcan charge a little more for it.

All customers are not equalCustomers have different needs and wants. They

have different cultural, social and economicbackgrounds. They have different interests andmotivations. But more importantly, customers don’tbring equal value to the business, both in terms of thesize of their business and the profit that accrues fromit. They all deserve respect and courtesy, but they don’thave to enjoy the same level of service.

Little things matterThere is a need to pay attention to minor details, little

courtesies, nuances of meaning, use of words, bodylanguage, corporate signage – anything and everythingthat represents the organisation. We may think thatcustomers don’t notice, but they do. Customers takenote of the little things we do or refuse to do to helpthem.

Most dissatisfied customers won’t complainMost dissatisfied customers won’t complain to the

company. To them, complaining is not worthwhile asit’s like a waste of time. Unfortunately, they tend togeneralize this notion even when they are dealing withorganisations that are excellent in resolving customercomplaints. Organisations should quickly resolve thecomplaints of the few customers who bother tocomplain. To get real feedback from your customers,you may need to actively solicit complaints.

The customer is not always rightYou have heard people say that “the customer is always

right.” Yet we know that customers are human beings,with all their imperfections. So we don’t have to acceptthat the customer is always right, but we need not rubit in whenever we feel they are not right. Whateverhappens, the customer is still the customer. She stillpays the bills. And we still depend on her. Sometimes,what the customer needs is education. It is ourresponsibility to educate her in a very respectfulmanner.

The customer is self-centredCustomers, like everyone else, have their own desires,

needs, wants, pressures, goals – whatever you callthem. Those desires, needs, wants, pressures and goalsare the only things that matter to them. As DaleCarnegie said, “People aren’t interested in you. They’reinterested in themselves.” If you remember this, you’llbegin to view your business from the customer ’sperspective.

Laws of ServiceExcellence – Part Two

*A couple at the Valentine celebration dinner organised by Sweet Sensation Confectionary, tagged,‘Red Hot Valentine’ in partnership with Coca-cola in Lagos.

...breaks foreign media dominance on Africa coverage

TVC News floats payTVplatform

Stories by PRINCEWILLEKWUJURU

TVC News, a 24-hour panAfrica News Channel,

which began operation a yearago said its set to launch aPayTV network that wouldoffer its audience access to 26news channel free of charge.

The new payTV networknamed Continental Satellite(CONSAT) will competeagainst DStv,StarTimes,MyTv andDaarSat, which are currentlyoperating in the Nigerianmarket.

Speaking at the mediasession to announce thecompany’s one yearanniversary, the ChiefExecutive Officer of thecompany, Mr. Nigel Parsons,said TVC News is moved bythe successes it recorded in

just one year of operation andthe company is even morecommitted to invest in theAfrica market in order tochange foreign perceptionabout Africa and Nigeria.”

Since the first publicbroadcast on February 28,2013, TVC News has reachedgreat milestones in newscoverage across Africa andthe globe. Reaching overthree million (3,000,000) households in Africa &Europe, TVC News hasalready been recognised as aunique service, filling a gapthat meant Africa waspreviously the only continentwithout its own self-producednews & current affairschannel.

The 24-hour pan-Africannews channel set out tochallenge stereotypes andcorrect factual inaccuracies

about Africa and its peoples; has alsoremained objective with its newsabout the continent, reporting thenews as it is, as fearless as it isinformative, through African EyesWithin 365 days of its operation, TVCNews proved to be the voice of Africaon the global scene. With excellentnews reportage, reliable and accurateinformation about Africa, the pan-African news channel has succeededin breaking the dominancepreviously enjoyed by foreign newschannels reporting African stories.

TVC News also receivedinternational awards from theInternational Center for Journalists(ICFJ) in Washington DC with areport on the “Failure to eradicatepolio in Nigeria” and was ‘highlycommended’ at the 2013 annualawards of the Association forInternational Broadcasting (AIB) fora report entitled ‘The Accused’ in theInvestigative Documentary category.

Nokia, in partnership withMaggi from the stable of

Nestle Nigeria Plc has hostedcustomers to Social Mediaweek with the launch of newentrant: Nokia Lumia 1520and Lumia 1320. The eventwas special night of food andphotography tagged Eat,Shoot, Repeat.

The launch was held to the2014 social media weekcustomers feasting on classicintercontinental dishesprovided by Maggi.

Head, Nokia Care, Westand Central Africa, Kola

Nokia, Maggi celebratNokia, Maggi celebratNokia, Maggi celebratNokia, Maggi celebratNokia, Maggi celebrate Social Mediae Social Mediae Social Mediae Social Mediae Social MediaWWWWWeekeekeekeekeek

Osinowo explained that theevent was organised forcustomers to have fun, savourexquisite food and share theirexperience throughphotography with friends.

Explaining the features ofthe devices, Osinowo statedthat the Lumia 1520, Nokia’stop of the range WindowsPhone is packed with a 6 inch1080p Full HD screen, 20MPPureView camera with opticalimage stabilization (OIS) andmost importantly, the Storyteller application whichallows people tell stories of

places they’ve visited using pictures.The application brings stories to liveseamlessly and merges two Lumiasignature experiences: PureViewImaging and Here maps, whichallow users to relive their photos ina new, dynamic and interactive way.

Speaking on both devices, MrOlumide Balogun, Senior Manager,Product Marketing, Nokia West andCentral Africa, noted that theintroduction of the Lumia 1520 andLumia 1320 will revolutionize theSmart phone market and boostNokia’s competitive edge in the“phablet” category.


Email:[email protected], [email protected] page:www.lesleba.com/blog2Website: www.lesleba.comTel:0805 220 1997

Business & Economy

CMYK

Omoh Gabriel - Group Business EditorBabajide Komolafe - Finance EditorClara Nwachukwu - Energy EditorPeter Egwuatu - Head, Capital MarketYinka Kolawole - Snr Bus. CorrespondentFavour Nnabugwu - Insurance CorrespondentGodwin Oritse - Maritime CorrespondentGodfrey Bivbere - Maritime CorrespondentMichael Eboh - Capital Market ReporterOscarline Onwuemenyi - Energy ReporterFranklin Alli - Industry/Agric. ReporterEbele Orakpo - Energy ReporterIfeyinwa Obi - Maritime ReporterRosemary Ohuoha - Insurance Reporter

CONTRIBUTORSPrincewill Ekwujuru - Media/MarketingNaomi Uzor - IndustryProvidence Obuh - Micro FinanceLAYOUT - Graphics Department

BY NAOMI UZOR

Kaduna State governmenthas concluded plans to

disburse one billion naira loanto its farmers.

Disclosing this at the justconcluded KadunaInternational Trade Fair,Governor Mukhtar Yero, saidthis year, his administrationhas concluded plans todisburse one billion naira loanto its farmers, as part of acounterpart programme withthe Bank Of Agriculture(BOA).

According to him, the state

Kaduna set to disburse N1bn loan to farmers

government will guaranteethis loan at low interest rates,which will be distributed tofarmers for the purpose ofintroducing moderncommercial farming methods.

“Furthermore, provision hasbeen made in the 2014 budgetof the state, for theprocurement of additionaltractors and other mechanisedfarm implements, and theseare for the use of farmers inthe state. Our aim is toempower our existing farmersand to also make farmingattractive to the youngergenerations. I believe that

agriculture holds the key tocutting down on theunacceptable rate of youthunemployment and social unrestthat we are presently facing as apeople” he stated.

He said his administration’sultimate objective is to boostproduction in the agriculture sector,while also creating the enablingenvironment for establishment ofmore agro-allied industries.

“We believe that achievingfood sufficiency and modernindustrialised agriculturesector, holds the key to oursustainable growth andeconomic development.

Whistleblowers certainly have a role toplay to promote

accountability in publicadministration; however,when a nation’s Central BankGovernor turns whistlebloweron an issue of substantialrevenue misappropriation,then, alarm bells must ring,as the credibility of theadministration, which thesame Central Bank Governorserves would be called toquestion.

Consequently, in view ofthe adverse and far-reachingimpact of the publicstatements of any CentralBank Governor, it may beconsidered as sabotage, or atbest, reckless, if a falseallegation of failure to remit ahumongous sum of $49.8bn tothe public treasury was madewithout due diligence orcircumspection from such astrategic agency ofgovernment. Besides, evenif Sanusi’s revelation wastrue, it will still be a cleardemonstration of an absenceof ministerial coordinationbetween the NNPC, CBNand the Finance Ministry!

Undoubtedly, the integrityof the Nigerian governmentand the credibility of the CBNGovernor must have beenbadly tarnished by Sanusi’sspeedy somersault within twodays, from an alleged revenueshortfall of $49bn to $12bn,and then up again to $20bn,in February 2014! One maybe forgiven for asking if somuch money could have beenstolen while the CBNGovernor slumbered orhelplessly watched theperpetration of this fraud fromJanuary 2012 to July 2013!

In serious-minded economies elsewhere, the

incumbent governor will becompelled by the publicationof such obvious inconsistencyto voluntarily resign and slipaway with his tail between hislegs! Thus, Sanusi’s obvious

Lamido Sanusi: Villain orpatriot?

statistical faux pas andregular denouncements of thequality of governance inNigeria may be pardoned aspatriotic outbursts, if, he,himself, enshrinedaccountability in themanagement of the CBN. Not surprisingly, therefore,the populist view is thatSanusi stands on a highermoral ground than thegovernment in which heserves; consequently, hissuspension from office is seenas an attempt to muzzle andalso punish him for allegedpatriotic whistle-blowing onthe misdirection ofgovernment revenue!

Conversely, however,apparently concerned withmedia report of CBN’s directinterventions in varioussectors of the economy withbillions of naira, thePresidency had in fact, invitedthe office of the FinancialReporting Council (FRC) tocarry out preliminaryinvestigations into some ofthe perceived indiscretions ofthe CBN Governor! The FRCapparently submitted itsfindings to the Presidency byApril 2013; i.e. five monthsbefore Lamido raised the falsealarm of unremitted $49.8bnin his letter of September 25,2013. Sanusi has sinceconfirmed receiving a copy ofthe report of financialrecklessness in CBN as farback as June 2013; however,he admitted late last week, inan interview with a nationalnewspaper, that he did notrespond to the allegationsbecause he was not formallyasked to do so, until hereceived his letter ofsuspension from office in

February 2014! We recall that in the

September 2013 letter toPresident Jonathan, the CBNGovernor had reported thatthe unlawful withholding offederation’s funds by NNPChad subsisted for many years,but he failed to explain whyhe chose to only bring up thismatter for attention almostfour months after the receiptof the damning report of theFRC! Some elder citizenswill see this drama and recallthe logjam of ‘YOU TAKA ME,I DABO YOU’ in the politicsof the old middle belt; theslogan is loosely translated as“before you discredit me, Iwill damage you”!

Some of the more weighty

allegations in the FRC’sreport include an expenditureof N160bn ($1bn) directintervention funds in severalsectors, without legislativeappropriation (i.e., CBN’sexpenditure on projects wereoutside its mandate). Thesum of N1.257bn was alsospent on lunch for Police andprivate guards, while the sumof N38.233bn was allegedlyalso paid, for currencyprinting, to the Nigerian

Security Printing and MintingCompany in 2011, whereasinexplicably, the totalturnover for NSPMC for thatyear was N29.370bn; the CBNwas also reported to havefailed to comply with theprovisions of the PublicProcurement Act!

It is surprising, however,that rather than state his owndefence to the FRC’sdamning report, Sanusi choseinstead to challenge hissuspension as CBNGovernor; according to him,“in order to assert theautonomy of CBN frompresidential interference.”

Indeed, if Sanusi’sstatistics with regard to oilremittances are grossly

unreliable, we may, belatedlyquestion the validity of thestatistical and accounting dataadopted in 2009 for theclassification of failed andperforming loans andultimately, also suspect thevalidity of the probably,unjustified takeover of someviable commercial banks, inconfirmation of thenewspaper scoop “Plot toTakeover Five Top Banks inNigeria” in Vanguard’s

edition of March 23, 2009, i.e.three months before Sanusi’sappointment in June 2009!

Regrettably, the aboven o t w i t h s t a n d i n g ,

Lamido’s strategic andpreemptive propaganda andthe covert mischief in hisSeptember 2013 letter toJonathan, will still make itdifficult to convince someNigerians that Sanusi is thereal villain in this drama!

However, one wonders ifsuch public opinion wouldhave been different, if Sanusihad been suspended orrecommended to the Senatefor removal before he wrotehis controversial September2013 letter to PresidentJonathan. It is clear,however, that with theexisting political polarizationof the legislature, theopposition would have gladlyadopted any perceivedenemy of Jonathan as a bosomfriend!

Consequently, Mr.President must have beenwell advised on the adverselocal and international impactof bringing the damningcontent of the FRC’s report onhis government’s CentralBank governor into the publicdomain!

In this event, it iscommendable that Mr.President strategicallyavoided heating up the polityand scaring away investors bybidding his time and easingout the ebullient Governor afew months before hisretirement, so as to also allowunfettered investigation intothe FRC’s report. EvenPresident Jonathan’s mostardent critics would agree thatit would be impossible forproper investigation to becarried out on the FRC’sreport, while Sanusi, as theaccused, remained in controlof the apex bank!

SAVE THE NAIRA, SAVENIGERIANS!!

,,

Besides, even if Sanusi’srevelation was true, it will stillbe a clear demonstration of an

absence of ministerialcoordination between the

NNPC, CBN and the FinanceMinistry