Financial vanguard 04052015

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MAY 4, 2015

Continues on page 22

THE nation's foreign exchangereserves fell one per centmonth-on-month to $29.5 billion

by April 28, from $29.8 billion a monthearlier, the central bank said weekend.This implies that the reserves at thecurrent rate of importation can supportjust three months of import.

The reserves were down 22.6 per centyear-on-year when they stood at $38.14billion. The apex bank, Central Bankof Nigeria has used its foreign exchangereserves to support the local currencyin the wake of falling global oil prices.

At the foreign exchange market lastweek despite dollar auction sales worth$91.2 billion by international oilcompanies on Monday, the Nairaclosed flat at N199.10/$1.00 at the inter-bank market. This rate was maintainedthroughout the week. Similarly, theCBN’s clearing rate steadied atN197.00/$1.00 for the week.

As a follow up to the CBN’swithdrawal limit on overseas cardholders to $50,000 (from $150,000) perannum and daily cash withdrawals to$300, the apex bank has further clarifiedthat customers’ cards linked todomiciliary accounts overseas are notaffected. Demand for the dollar bytravelers may increase locally as a resultof this decision, market operators saythey expect exchange rate to continueto trade within the current level at theinter-bank segment of the foreignexchange market in the coming week.

However, at the BDC segment of theforeign exchange market, the Nairadepreciated by N3.00 or 1.3 per centto N220.10/$1.00 from N223.10/$1.00

The national economy, pre-generalelections was facing huge financialhaemorrhage as politicians, corporatebodies and foreign investors movedfunds massively out of the country aswell as from Naira to dollar. In January2015, data available at CBN showedthat the sum of $2,196,805,444.97 was

‘External reserves can't pay formore than 3 months of imports’

Drops 1% from $29.8 billion to $29.5 billion by April 28BY OMOH GABRIEL

paid out by the CBN as internationalremittances on behalf of Nigerians. InFebruary, the sum of $1,273,415,392.55went out as payments.

In a survey of payments made by theCBN on behalf of the public in 2014, atotal of $22.1 billion went out of thecountry in five weeks, an average of

$4.5 billion a week. While about $3.083billion went out in the week ending 31stJuly 2014, the amount of foreignexchange flowing out of the country roseto $4.2 billion for the week ending 30thAugust. It however dropped to $4.1billion on the 30th of September andmoved astronomically to $5.29 billionfor the week ending 31st October 2014.The foreign exchange outflow wentfurther up to $5.35billion for the weekending November 30th. This capitalflight has resulted in the crash of thenaira exchange rate which hadremained stable before the election andthe crash of the international crude oilprice.

CBN defends Naira with $4.7bnThe Central Bank of Nigeria in the

bid to raise the value of the localcurrency has spent $4.7 billion so farthis year to defend the naira even asthe nation’s external reserve fell furtherto $29.6 from $29.6 billion at the middleof April 2015. Data published by theCBN on its website show that theexternal reserve fell by $189 millionfrom $29.778 billion on April 2nd to$29.589 billion on April 9th.Consequently the reserve has fallen by$4.879 billion since December 31st 2014.

Commenting on developments in thenation’s foreign exchange market in thefirst quarter of the year, ManagingDirector/Chief Executive, FinancialDerivative Company Limited, Mr.Bismarck Rewane had said that the apexbank had so far spent $4.7 billion todefend the naira this year, adding thatthe nation’s external reserve import andpayments cover has fallen to 4.8 months,1.2 months below the internationalstandard for healthy external reserve.

Rewane also stated then that the 13per cent appreciation of the naira in theparallel market in the last two weeks toN197 per dollar from N225 was due toelection sentiment and elimination offear premium. He predicted that theappreciation would soon be reverse and

CMYK

22 — Vanguard, MONDAY, MAY 4, 2015

the naira would depreciatefurther because thefundamentals remainunchanged. “At the parallelmarket, the naira will trade atN215-N220 against the dollaragain”, he said”.

Rewane advised theincoming government of theGeneral Mohammudu Buharito allow the naira find its truevalue, calling for reduction ininterest rate and easing ofmonetary policy stance.

Nigerian stocks rally asKenya sinks in 1stdivergence since ’13

At the Capital MarketNigerian equities posted thebiggest gains in sub-SaharanAfrica in April, helped by areversal of investor flows that’sseen the market benefit atKenya’s expense for the firsttime in 16 months. TheNigerian Stock Exchange AllShare Index rallied 9.3 per centin April, the most among 14gauges on the continent, andthe steepest gain since May2013. The FTSE NSE Kenya 25

Economy

Index is down 0.6 per cent inApril, its first retreat in sixmonths. It marks the first timesince December 2013 that themeasure has declined whileNigeria’s index has risen.

Nigerian assets soared afterPresident Goodluck Jonathanconceded defeat to formermilitary ruler MuhammaduBuhari on March 31, soothingfears of a dispute in Nigeria,which has a history of election-related violence. “The clear,peaceful, and seemingly fairconclusion of Nigeria’spresidential, legislative, andstate elections has boostedinvestor sentiment,” JohnAshbourne, an Africaeconomist at CapitalEconomics Ltd. in London,said. In contrast, confidencetoward Kenya soured with thedecline in tourism and surgingimports that’s pressuring thecountry’s current accountdeficit, he said.

The Kenyan shillingweakened 0.2 percent to 94.70per dollar by 4:49 p.m., thelowest since November 2011on a closing basis. It dropped2.5 percent in April, the secondstraight 30-day loss.

Nigerian GainsNigeria’s All-Share Index

rose 1.9 percent to 34,708.11in Lagos, the commercialcapital, to erase this year’slosses. In Nairobi, Kenyanequities rose 0.4 percent to229.81 for a 2015 advance of6.2 percent.

The Nigerian nairastrengthened 0.1 per cent perdollar to 199, paring the lossthis month to 0.1 per cent. Thenaira has been trading around200 per dollar after the centralbank in February extendedtrading restrictions introducedsince mid-September to controlthe currency’s value. Itdropped 21 per cent to a recordlow of 206.32 between the endof June and Until the electionresults were announced at theend of last month, Nigerianequities were the world’s worstperformers, with investorsdeterred by uncertainty overthe vote and a 40 percentplunge since June in the priceof crude oil, which accounts forabout two-thirds of governmentrevenue and 90 percent ofexport earnings. Feb. 12 as oilprices slumped.

MEETING - From left: Mr. Kolawole Olayinka ,Regional Commercial Manager, BritishAirways, West Africa; Prince Adeyemi Adefulu President Nigerian-British Chamber Of Com-merce (NBCC); Mr. Alan Davies Managing Director, James Cubbit Architects and Mrs. JoyceAkpata, Director General NBCC at the Chamber’s Breakfast Meeting held in Lagos.

‘External reserves can't pay formore than 3 months of imports’

Continued from page 21

11 ships arriv11 ships arriv11 ships arriv11 ships arriv11 ships arrive Lagos pore Lagos pore Lagos pore Lagos pore Lagos portststststswith petroleum productswith petroleum productswith petroleum productswith petroleum productswith petroleum products

Eleven ships laden withpetroleum products had

arrived at the Lagos portsweekend, the Nigerian PortsAuthority NPA said. This iscontained in 'ShippingPosition,' a daily publication ofNPA. It said that the vesselsconveyed petrol, kerosene andbase oil, adding that two otherships with rice consignmenthad also sailed into the ports.

The publication also statedthat 37 ships were beingexpected at the ports fromApril 30 to May 23. According

to it, 13 of the ships will sailinto the ports with food items,including rice, buckwheat,bulk sugar, salt and frozenfish. It disclosed thatcontainers were expected tobe brought in by 12 ships,while seven others wouldberth at the ports with generalcargo. It added that theremaining five ships wouldarrive at the ports withpetroleum products, whichwould include diesel andpetrol.

Okonjo-Iweala denies appointingOkonjo-Iweala denies appointingOkonjo-Iweala denies appointingOkonjo-Iweala denies appointingOkonjo-Iweala denies appointingPWC to audit NNPC accountsPWC to audit NNPC accountsPWC to audit NNPC accountsPWC to audit NNPC accountsPWC to audit NNPC accounts

MINISTER of Finance,Dr Ngozi Okonjo-

Iweala has denieda p p o i n t i n gPricewaterhouseCoopers(PWC) to conduct theNigerian National PetroleumCorporation (NNPC) audit.This is contained in astatement issued by theSpecial Adviser to theMinister on Media, Mr Paul

Nwabuikwu, in Abuja.According to the statement, agroup of three accountingfirms filed a suit against theminister before a Lagos HighCourt with the allegation.“The group is alleging thatshe appointed the globalaudit firm, PwC to conduct therecently concluded forensicaudit of the NNPC againstthe provisions of the LocalContent Act.

Insurance brokers seek abolition of operationalbidding fees

The Nigerian Council ofRegistered Insurance

Brokers (NCRIB) hascondemned payment ofbidding fees as prerequisitefor offering insurance brokingservices.

Mr Ayodapo Shoderu,President of NCRIB, said in

Lagos that such charges werehighly exploitative. He saidthat some companies andgovernment institutions werecharging members beforethey could render services.According to Shoderu,insurance brokers asprofessionals, provideservices like lawyers,architects, and accountants.

“ So they should not be alsoplaced under such burden,”he said

He said that the councilhad ordered its members tostop paying such charges.

“The council managementhad already dissuadedmembers from paying suchexploitative fees.

Cobham appointedNACCIMA's new D-G

Mr Emmanuel Cobhamhas been appointed as

the new Director-General ofthe Nigerian Association ofChambers of Commerce,Industry, Mines andAgriculture (NACCIMA). Astatement by Mrs RosemaryAgweven, the Public RelationsManager, NACCIMA, saysCobham is a lawyer, journalistand “administrator parexcellence”.

The statement also said thatCobham had “ wide andvaried experience which heamassed working at senior

levels in the state, nationaland internationalorganisations”.

Cobham was a formerCorrespondent of NTA whoserved four different MilitaryAdministrators and onecivilian Governor of CrossRiver as Chief Press Secretaryand Director of Press Affairsfrom 1992 to 1999. He workedbriefly at the African UnionCommission, AU, as LegalOfficer in the SecurityArrangements and CeasefireCommission.

Chamber urges Anambra toaddress multiple taxes, levies

D r Tim Anosike, thePresident, Onitsha

Chamber of Commerce hasurged Anambra Governmentto address multiple taxes andlevies in the state. Anosike,who gave the advice inOnitsha, said unless theproblems were addressed,they would drive awaypotential investors to thestate. “Addressing the issue ofmultiple taxes and levies inthe state, which will includestreamlining/publishing theapproved regime of taxes and

the authorised collectionagencies, is very essential.The measure will not onlyimprove the revenue base ofthe state government, but willalso checkmate incidence ofillegal tax/levy collection inthe state. Let this problem betackled once and for all inthis state,” he said.

The chamber boss, however,lauded the state governmentfor pursuing its four-pointagenda, adding that the effortwas gradually yielding theneeded dividends toresidents of Anambra.

Vanguard, MONDAY, MAY 4, 2015 — 23

Economy

CMYK

The forensic auditconducted byPWC on NNPC to

ascertain the veracity of thealleged missing $20 billionfrom the Federation account isto say the least, verydamaging to the already poorimage of the officials of theout-going PDP-led FederalGovernment. The report wassupposedly a fact-finding onebut what came out was asmokescreen thegovernment wanted to use towhitewash a very filthy cupfor Nigerians to drink with.PWC had qualified the auditsaying it did not obtainneeded information fromNPDC, a subsidiary of NNPC.The qualification of the auditreport has cast doubt on thereliability of the report. Theauditors have tacitly put adisclaimer on the reportsaying it was for the use of theAuditor-General only.Interestingly, there are nowdenials from principal actorsin the saga. Blame game hasstarted as the Auditor-General is quoted as saying hedid not act on the report asthe Presidency has vestedinterest in it. The Minister ofFinance has deniedcommissioning the firm tocarry out the audit.

From the content of thereport, the governmentbriefed the auditors of what itneeded and what it intendedto achieve which was not tofind out if the nation waslosing resources by lack of

Institute openjudicial probeinto NNPC

adequate control in the oiland gas operation of NNPCand its subsidiary. In the realsense, the Minister of Financewho instituted the probe, theAuditor-General whoreceived the report and theMinister of Petroleumresources have questions toanswer. The Finance Ministermust tell Nigerians details ofthe briefing she gave PWCeven though she has deniedsetting up the audit. Did thefirm of auditors meet herexpectations? If yes, she isculpable of cover up. If no,who was she desperatelytrying to cover up?

The Auditor-General mustexplain to Nigerians when hereceived the report as aninternal auditor, whatrecommendations he made togovernment knowing full wellthat by practice, the auditreport was qualified. TheMinister of PetroleumResources must explainknowing full well that by thecaveat the auditors put on thereport, it was not useful foranything but the waste paperbin. She should also answerfor the fact that lots of thenation's scarce resourceswere wasted in a report thatab-initio was not meant tofind out anything.

The fact that the auditors said“When you are given a job,there are procedures for doingthe job based on agreementwith the client, the out-goinggovernment must tellNigerians what agreement it

reached with PWC on the so-called forensic audit. Theauditors, to excusethemselves from behind-the-scene scandals going on ingovernment put a caveat onthe audit so that others wouldnot use the so-called forensicaudit of the NNPC account insearch of the missing $20billion or rely on it fordecision-making. It is also toprotect the company fromany legal action that mayarise from the job.

PricewaterhouseCoopers intheir introductory letteraddressed to Nigeria’sAuditor-General, the auditfirm said findings in its 199-page report were limited toavailable information and didnot constitute a review inaccordance with generallyaccepted standards. Thereport said: “The procedureswe performed did notconstitute an examination ora review in accordance withgenerally accepted auditingstandards or attestationstandards.

“Accordingly, we provide noopinion, attestation or otherform of assurance with respectto our work or the informationupon which our work wasbased”. PWC said that thereport “ was solely for theOffice of the Auditor-Generalof the Federation, for theirinternal use and benefit andnot intended to, nor may theybe relied upon, by any otherthird party.

The report did not givestrong and independentopinion of its findings despitegovernment claim theinvestigation was carried outusing forensic techniques.

Many Nigerians may notunderstand what a qualifiedaccount stands for.

A secondary school friend ofmine, who had distinction inICAN examinations andpractised auditing before hisappointment as aCommissioner in NigerianInsurance Commission askedthat I read the content ofI N T E R N A T I O N A LSTANDARD ON AUDITING705 to understand why anauditor will qualify an auditreport. The Audit guide 705for auditing showed that anauditor ’s report is a formal

opinion, or disclaimerthereof, issued by an auditoras a result of evaluationperformed on a legal entity.The Guideline said that anauditor’s report is consideredan essential tool whenreporting financialinformation to users,particularly in business. Sincemany third-party users prefer,or even require financialinformation to be certified byan independent externalauditor, many auditees rely onauditor reports to certify theirinformation in order to attractinvestors, obtain loans, andimprove public appearance.

A qualified opinion report isissued when auditorsencounter one of the twotypes of situations which donot comply with generallyaccepted accounting principle.The two types of situationswhich would cause an auditorto issue this opinion includeSingle deviation from GAAPwhen one or more areas of thefinancial statements do notconform to GAAP or are mis-stated and Limitation of scopewhen the auditor could notaudit one or more areas of thefinancial statements. Theauditors in this case did notagree with what thegovernment wanted. Thegovernment had wanted amisrepresentation of facts toplacate the Nigerian public.The NNPC cover up is a gamethat has been on for decades.There have always beendouble entry for subsidy claim,there have been crude oillifting without records. Whatall of these mean is that NNPCis a rotten egg and a home oflooters.

What is needed is an openjudicial probe of theoperations of NNPC right frominception.

The Minister ofPetroleumResources mustexplain, knowingfull well that bythe caveat theauditors put onthe report, it wasnot useful foranything but thewaste paper bin

Association urges DISCOs to invest more in embedded power projects

The Electricity MeterM a n u f a c t u r e r s

Association of Nigeria hasurged electricity distributioncompanies (Discos) to investmore on embedded powergeneration projects to stabilisepower supply in the country.

Muyideen lbrahim,Executive Secretary of theassociation, gave the advice inLagos.

Ibrahim said that embeddedpower generation remainedone of the most vital ways ofsolving the nation’s electricityproblem. He said that thedwindling power situation in

the country posed seriousworries since the privatisationof the Power HoldingCompany of Nigeria (PHCN).Embedded power generation

is the process through whichthe Discos obtain powersupply from independentpower generating firms. Thescribe also urged the Discos

to explore the use ofrenewable energy because itwas environmental-friendly.

He attributed the currentchallenges of the transmission

network to long years ofneglect and urged thegovernment to ensure theTransmission Company ofNigeria tackled the issue.

MTN Nigeria Ltd hasurged Nigerians to

buy into an APPtitudecampaign that would enablesubscribers to access theinternet easily, faster andsmarter. MTN ChiefMarketing Officer OlubayoAdekanmbi made the appeal

MTN woos Nigerians with easy, faster internet applicationsat a news conference to heraldthe inauguration of theAPPtitude campaign in Lagos.

“The journey to BetterMecontinues and in a quest tobecome a better me, thejourney must be easier, fasterand smarter.

“In order to democratise the

access to the internet,Apptiude is the new attitude,”he said. He said that 90 percent of internet access inNigeria was via mobiledevices and as such, there wasneed to simplify access inorder to grow uptake andconsumption.

Adekanmbi said that

Nigerians could transform thisby using apps which werepermanently on their devicehomepage and self-updatingwith latest information.

According to him, the mainobjective of the campaign wasfor Nigerians to be able toaccess the internet through ashort cut.


CMYK

Business & Economy

Lafarge Africa Plc, hasrecorded a revenue of

N57 billion in the first quarterof 2015, which is 15 per centhigher than first quarter, Q12014.

It also recorded a ProfitAfter Tax, PAT of N8.6 billionand N14.6 billion of cash wasgenerated from operations.The company’s and Group’srevenues increased by 25 percent and 15 per cent in Q12015, when compared to lastyear. Wapco Operations had astrong quarter with 16%volume growth and afavorable mix and pricing,leading up to its overall 25 percent growth. The Ready-Mixrevenue grew by 40 per centand South Africa by 7 percent. Ashaka was affected bythe insecurity in the North andheightened election

Lafarge Africa's Q1 revenue up by 15%apprehensions in March,2015, and saw a temporaryrevenue dip in Q1.

Meanwhile, the board ofdirectors of Lafarge Africagranted approval for aMandatory Tender Offer to allqualifying shareholders ofAshaka Cement Plc in 2014.Consequently, the Tender Offeris now concluded andregulatory approval has beenobtained for the approval ofthe shares transferred. LafargeAfrica ownership stake inAshaka Cement has increasedto 82.46% from 58.61%. Weexpect final regulatoryapproval in the coming weeks.

In his statement, theChairman, Board of Directors,Chief Olusegun Osunkeye , said“Our company has delivereda good performance in spite ofthe general elections and

market uncertainty. Weremain highly committed todelivering a strong result in2015 in line with our ultimateobjective of improving valueto our shareholders”.

Commenting on the results,the Chief Executive Officer,Lafarge Africa Plc, Mr.Guillaume Roux mentionedthat ‘’We have achievedstability in our operations,marked by our solidperformance. Theconsolidation of ourbusinesses and expansionprojects presents an excellentfoundation for future growth.Our management team is fullymobilized to deliveroperational excellence whilstalso leveraging on the strengthof the Lafarge Group”.

Guinness Nigeria Plc,h a sannounced

that it will be establishing aN10 billion CommercialPaper (“CP”) programmewith the view to launching itsinaugural CP issue under theprogramme in a week’s time.The announcement wasmade at the signingceremony which held at thecompany’s headquarters inIkeja, Lagos.

Speaking at the signingceremony, Mr. John O’Keeffe,the Managing Director/CEOof Guinness Nigeria, said“We are very pleased withthe successful launch of thisCommercial Paperprogramme for GuinnessNigeria Plc and the supportreceived from our advisors toget us to this point.

“This will be the firstcorporate CP programme tobe established in recenttimes, following the newCBN guidelines coming intoeffect, and we are pleased to

Guinness Nigeria establishes N10bncommercial paper programme

be the first company to takeadvantage of this opportunity.We look forward to a robustuptake of this inauguralissuance imminently, whilstretaining the flexibility offeredby the programme to tap intothe CP market again in thenearest future.”

Witnessing the signingceremony wererepresentatives of thetransaction advisors whichinclude Stanbic-IBTC CapitalLimited and StandardChartered Securities NigeriaLimited as Joint Arrangers,Aluko & Oyebode as LegalCounsel, KPMG as Auditors

to the Issuer, and StandardChartered Bank NigeriaLimited as IssuingCalculation and PayingAgent. Also in attendancewere officials of FMDQ OTC,a Securities and ExchangeCommission licensed over-the-counter market operatorfor fixed income securities.

Also speaking at the event,Kobby Bentsi-Enchill, Head -Debt Capital Markets, ofStanbic IBTC Capital statedthat Guinness Nigeria hasshown industry leadership intaking up the CP. He said“This transaction is a uniquemilestone event, and

represents the first CPProgramme to be establishedby a non-financial institutioncorporate issuer following thenew guidelines oncommercial paper from theCentral Bank of Nigeria,published in 2009. In thatregard, Guinness Nigeria hasagain clearly demonstrated itsinnovative approach towardsexecuting the company ’sfinancing strategy, in anincreasingly competitivemarket environment. We atStanbic IBTC are also proudto have partnered withGuinness on this landmarkachievement”

The Nigerian MansardInsurance Plc has

been acquired by the Francebased AXA, one theinternational leadinginsurance and assetmanagment groups.

The acquisition of Mansardfollowed the earlier control ofAssur Africa Holding (AAH)that holds 77 per cent in theMansard Insurance Plc. MrVictor Osibodu, Chairman ofMansard Insurance, said thatthe development would forcethe company to change itsname to AXA Mansard Plc.

The chairman toldshareholders of the companyat their recent Annual GeneralMeeting (AGM) in Lagos thatAXA was a global insuranceplayer in insurance and assetmanagement with 160,000employees serving 102million clients in 56 countries.

“In December 2014, AXAgroup, in a bid to actualise itsSub-Saharan Africanexpansion, acquired 100 percent equity in AAH. AAHbefore its acquisition, holds 77per cent stake in MansardInsurance PLC, therebymaking AXA the beneficialowners of Mansard,” he said.

AXA Group ofFrance acquiresMansardInsurance Plc

PARLEY - From left: Ronke Fasalayo, Corporate Communications, Meadow HallFoundation; Kemi Adewale, Head, Meadow Hall Foundation; Kehinde Nwani, GroupManaging Director and Ola Opesan, Head of School during the Meadow Hall Foundationmedia parley in Lagos.

Nigerian namedamong six highperformingworld’sentrepreneurs

The Chief ExecutiveOfficer of BAU

Research and DevelopmentNigeria Limited, GossyUkanwoke, has been selectedalongside five otherentrepreneurs, spanning sixcontinents, as highperforming entrepreneurs.For this feat, Ukanwoke willjoin his counterparts fromaround the world toparticipate in Ernst & Young(EY)’s prestigiousentrepreneurship programtagged ‘acceleratingentrepreneurs’.

The programme, run byErnst & Young (EY), gives sixhigh-potential entrepreneursfrom around the worldsupport to scale up theirbusiness by receiving one-to-one expert guidance,networking and insight-sharing opportunities at the15th EY’s annual GlobalWorld Entrepreneur Of TheYear event in Monaco,between 3-7 June 2015 aswell as on-going support fromEY.

The final six participants,who were selected by anindependent judging panel of‘Growth Coaches’, assessedthrough criteria such asentrepreneurial spirit, socialimpact, innovation andleadership, are Sarah Kauss(S’well Bottle, US); StefanieKurniadi (NasiGoreng Mafia,Indonesia), Idriss Al Rifai(MENA 360, United ArabEmirates), Bulent Tekmen,Ininal, Turrkey and GossyUkanwoke, BAU Research andDevelopment, NigeriaLimited).

According to Bunmi Akinde,EY Entrepreneur of The YearLeader for West Africa, theselection of Gossy Ukanwokeis only African, points to thelevel of innovation andentrepreneurial spiritembedded in the country.

“Nigerians have always beenentrepreneurial people,innovative and enterprisingeven under difficultcircumstances. They findsolutions to the problems weface as Africans and reinforcethat the Africa growth story isa narrative we are writingourselves. This is definitelytrue of his entrepreneurialdrive and we are proud toshowcase him on a globalstage,” says Bunmi Akinde.



Banking & Finance

Stories byBABAJIDE KOMOLAFE

Forex limit on naira debit card:CBN to set BVN trap for multiplecard holders

Very soon, bankcustomers thathave multiple

naira debit cards linked todifferent banks accountswould not be able to spendmore than $50,000 for

overseas transaction throughtheir cards.

This is because, theCentral Bank of Nigeria(CBN) is set to meetelectronic payment serviceproviders to devise measuresto ensure that bankscustomers are not able tohave access to more than the

$50,000 limit for on foreignexchange that could beaccessed through naira debitcards for overseastransactions.

Recently, the apex bankreduced this limit to $50,000per annum per person from$150,000. It also reducedlimit of daily foreignexchange withdrawal while

abroad to $300 per day from$12,000.

The reduction followed anexclusive report by FinancialVanguard which revealed thatforeign exchange users werecircumventing the foreignexchange limit on naira debitcards. This is done byobtaining multiple naira debitcards linked to different bankaccounts, and thus haveaccess to foreign exchangeabove the limit stipulated bythe CBN.

Financial Vanguard reliablygathered the CBN intends tocheck this abuse by using theongoing BiometricVerification Number (BVN)enrolment exercise. It wasgathered the BVN of everybank customers would belinked to the cards issued tothe customer by banks. Bydoing this, the apex bankwould be able to use the BVNto enforce the limit on foreignexchange that each bankcustomer can access foroverseas transactionirrespective of the number ofnaira debit cards issued to thecustomer by banks.

It was further gathered thatthe apex bank is set to meetwith the major electronicpayment service providerslike Nigeria InterbankSettlement System (NIBSS),Visa International,MasterCard, Interswtch todiscuss how to link the BVNto payments card issued tocustomers for the purpose ofenforcing the foreignexchange limit for overseastransaction through nairadebit cards.

Heritage Bank moves to consolidate leadership status*Appoints three top bankers as directors

Heritage Bank hasappointed three

top bankers as directorsto consolidate itsemergence as one of theleading banks in thecountry.

The three new directorsare Mrs. Adaeze Udensi,appointed as ExecutiveDirector, SouthDirectorate, Mr. OlaOlabinjo, appointed asExecutive, Lagos, South-West and CorporateBanking Directorate, andMr Jude Monye,appointed as ExecutiveDirector, RiskManagement/Chief RiskOfficer.

Managing Director/Chief Executive,Heritage Bank, Mr. IfieSekibo, said that thea p p o i n t m e n t sdemonstrates HeritageBank’s commitment tooffering the best andsafest banking services by

employing highly competentand experienced bankers withproven track record ofperformance.

“The successful acquisitionof Enterprise Bank hasprojected Heritage Bank intothe leadership rank of thebanking industry with hugeexpectation of quality, fast andefficient banking servicesfrom our customers andmembers of the bankingpublic.

“We intend to consolidate onthis leadership status andexceed expectations byensuring every customer ofthe enlarged Heritage Bankenjoys fast and efficientservices irrespective of theirlocation in the country. Thethree new directors arebringing to Heritage Bank,over 50 years of bankingexperience among them,spanning various aspects ofbanking services across theindustry, and these wouldcontribute greatly to the

achievement of this goal”,Sekibo said.

Prior to joining HeritageBank as the ExecutiveDirector, South Directorate,Mrs. Adaeze Udensi workedat Zenith Bank Plc where sheearned various awards for topperformance. She holds aBachelor ’s degree andMaster’s degree in Banking& Finance and BusinessAdministration respectivelyfrom Rivers State University ofScience and Technology, andhas over 17 years of richbanking experience.

Mr. Ola Olabinjo, ExecutiveDirector in charge of Lagos,South-West and CorporateBanking Directorate, joinedHeritage Bank from FCMBwhere he was Senior Vice-President and DivisionalHead. He has over 18 yearsof banking experiencespanning InvestmentBanking, Corporate Banking,Transaction Banking, RiskManagement, Treasury and

Operations. He holds aBachelor ’s and Master ’sdegree in Economics from theUniversity of Ife and theUniversity of Lagosrespectively and is also analumnus of Lagos BusinessSchool.

Jude Monye, the ExecutiveDirector, Risk Management/Chief Risk Officer, joinedHeritage Bank from WemaBank Plc where he was theChief Risk Officer and HeadEnterprise Risk Managementdivision. Monye has over 25years experience in variousareas including RiskManagement, Finance,Credit Administration,Regulatory Compliance;Control, and System Audit;Structured Finance inUpstream Oil sector, SMEDevelopment and Projectmanagement. He holds aB.Sc in Chemistry, MBA andM.Sc degrees fromUniversity of Nigeria andIbadan respectively.

Union Bankfinances PNGGas’ plant withN4bn

Union Bank of NigeriaPlc has signed a N4

billion agreement to financeEgboama Gas Plant owned byPNG Gas Limited.

The loan facility will providethe required funding for therefurbishment and upgrade ofgas plant located in DeltaState.

Commenting on theagreement, the ExecutiveDirector, Corporate Bankingat Union Bank, Mr. EmekaOkonkwo said: “Union Bankis pleased to be supportingPNG with the financing ofEgboama plant which isexpected to produce about 101tons of liquefied petroleumgas per day. This project willno doubt enhance effortstowards increasing domesticutilization of gas in thecountry and reducingdependence of oil.”

In addition to producing101 tons of liquefiedpetroleum gas per day, theEgboama gas plant is alsoexpected to produce 38 tonsof propane gas per day, 750barrels of natural gas liquidsas well as 25 million standardcubic feet of lean gas per day.The lean gas would be pipedinto the national gas grid tosupport power generation.

Union Bank is a key playerin oil and gas financing andis resolute in promoting anddeveloping industries in thesector as part of itstransformation programme.

UNIC foundationgrants over$2.8mscholarships

Over seven hundred(700) graduate and

undergraduate students havebeen granted scholarships($4, 000 each) worth morethan $2.8 million to pursuevarious courses leading to theaward of bachelors andmasters degree certificates.

Addressing awardees at theaward /convocation ceremonyheld at the old auditorium ofthe Lagos State University onWednesday, the president ofUNIC foundation, EngineerChristopher Imumolen saidthe awardees has the uniqueadvantage of automaticscholarship with PresleyUniversity, USA, leading tothe award of an internationalDegree (B.sc, Msc, PHD).

He further stated thatUNIC has dedicatedpersonnel that monitor theprogram to ensure thatstandards are complied with.

SYMPOSIUM - From left: Representative of Director-General, Nigerian Institute of MedicalResearch (NIMR), Dr. Nkiruka Odunukwe ; Chairman of the occasion, Prof. Olubunmi Otubanjo;Lagos State Commissioner for Health, Dr. Jide Idris; and Category Manager, Pestcare,Healthcare, and Aircare, RB, West Africa, Qaiser Rashid, during a symposium in commemorationof World Malaria Day 2015 at NIMR Auditorium, Yaba in Lagos.


Banking & Finance

Chairman, StandardChartered Bank Nigeria

Limited, Sir Remi Omotosho,has called on the Institute ofDirectors (IoD) Nigeria, toadopt zero-tolerance formalpractice by sanctioningdirectors that flout corporategovernance codes

Speaking at the Institute’sNew Members’ Evening inLagos, Omotoso said that theinstitute must enforcemechanisms to sanction anyerring members fromestablished rules andstandard.

He said, “IoD Nigeria is theguiding beacon in corporategovernance teaching anddevelopment in Nigeria. Itsmembers are among the best

Why incoming govt should notraise tax rates - Analysts

Economic analystshave cautioned thei n c o m i n g

administration of GeneralMuhammadu Buhari againstincreasing the tax rate as away of generating additionalrevenue to cover declines incrude oil revenue.

Speaking in the Bi-monthlyEconomic Bulletin of theFinancial DerivativesCompany Limited, they saidthat efforts to show upgovernment revenue throughtax increase could backfire byencouraging tax evasion andavoidance.

Analysing the challengesbefore the new government,they said, “A top priority of thenew federal governmentadministration will be how tocover the huge fiscal gapcreated by the plunge in oilrevenues and massiveelection spending in the 2015general elections.

“This must be addressed inorder to finance developmentprograms and facilitate theday-to-day running ofgovernment and economicactivities. To shore upgovernment revenues,options available to thegovernment include: raisingthe tax rate, blocking existingleakages and borrowing.While many have agreed thatthere is need for borrowing,there are differing viewswhen it comes to blockingleakages and increasingtaxes.

“With an estimatedpopulation of 170 million andgross domestic product (GDP)of $568.5 billion, Nigeria’s taxto GDP ratio was 5.23 percentin 2014. This is quite lowcompared to tax-to-GDP ratioof over 20 percent in mostcountries. In fact, the taxrevenues collected in Nigeriain 2014 was lower than in2013 despite an 11.3 percentin- crease in GDP.

“A high level of tax leakage,the difference between taxpotential and tax collections,accentuated by the non-transparency of the currenttax structure, has often beencited as one of the reasons forlow tax revenues in Nigeria.The Minister of Finance notedthat blocking leakages isexpected to add severalmillions to Nigeria’s revenueswhile the new federaladministration expects overN1 trillion to be recovered.

“In addition to leakages,Nigeria also has one of thelowest VAT rates (5%) in the

BABAJIDE KOMOLAFEworld. The IMF recentlyadvised, in its Article IV report,that there is an urgent needfor Nigeria to increase its VAT.It is believed that increasingthe VAT rate will boostrevenues, which will help tocreate the fiscal spacenecessary to implementdevelopmental projects inspite of declining oil revenue.

“While increasing tax rateswill go a long way in boostinggovernment revenues, we

believe it should be done withcaution to prevent a backfire.Higher taxes have often beenfound to encourage taxavoidance and evasion. Thisis all the more likely in anenvironment where a lack oftransparency with the taxstructure discourages peopleto trust the taxation system orvoluntary comply withpayment.

“Hence, it seems morereasonable that the

government block leak agesas an immediate step torecovering revenues ratherthan increasing the existingtax rate. In the medium tolong term, we believe as thegovernment undertakesmore developmentalprojects and put a better taxstructure in place thatencourages transparency, itcan convince the people toaccept a higher tax rate.”

AGM - From Left; Mr Ityoyila Ukpi, Company Sec , Dangote Cement Plc, Alhaji Aliko Dangote,Chairman, Dangote Cement Plc, Mr Onne Van der Weijde, Group Managing Director, ChiefExecutive Officer, Dangote Cement Plc, and Mr Devakumar Edwin, Group Chief ExecutiveOfficer, During the 2014 Annual General Meeting of Dangote Cement Plc, held IN Lagos.PHOTO: Kehinde Gbadamosi

IoD should sanction erring directors,says StanChart chair

BY PROVIDENCE OBUH

known practitioners. Iod hasa duty to ensure that itsmembers practice what theinstitute preaches. It mustdevise and enforcemechanisms to sanction anyerring members fromestablished rules andstandards. The role of IoD innational life of Nigeria is acritical one particularly inleadership development andall of us who are membersmust support the institute toplay this role diligently.”

In a separate interview, hestate: “We are not where Godhas purposed us to be as acountry because of selfishnesswhich is the main driver ofcorruption. People areworking to enrich themselvesowning billions of naira piledup not legitimately earned, ifwe deal with corruption,every sector of the Nigerianeconomy will benefit.

Also speaking, PresidentIoD, Mrs. Eniola Fadayomi,explained that the instituteholds induction of newmembers twice in a year butowing to increasingdemand, the councilapproved an additionalinduction to be held withinthe year.

Commending theinductees, she encouragedthe inductees to be availablefor services, saying,“Membership of the IoDshould not be mistaken fora jamboree. Rather it is acall and admission intobeing part of global networkof respectful group ofpeople that championpositive changes in thebusiness environment oftheir organisations and theeconomy at large.”

Ecobank Nigeria hasunveiled Advantage

Banking, a dedicatedservice for the mass affluentand upwardly mobilesegment of society.Advantage Banking byEcobank offers convenienceand ease in carrying outbanking transaction forcustomers within thecategory. The AdvantageBanking initiative whichsuggests the redefinition ofbanking service in Nigeriais characterized by thedesign of special productsthat suit the life style ofpeople within the segment.This would make bankingmuch simpler, friendlier,more engaging and morepersonalised.

Unveiling an AdvantageService Lounge in Lagos onTuesday, Deputy ManagingDirector, Ecobank Nigeria,Mr. Anthony Okpanachi,said Advantage BankingService is an extension ofthe bank’s strategy to offerits customer dedicatedbanking service across allcustomer type. According toMr. Okpanachi, AdvantageBanking Service isdesigned in such a way to“ensuring our customers getthe quality of service theydesire. We have a bouquetof lifestyle enrichingproducts available toaddress their day-to-daybanking needs. We providethem a dedicatedrelationship manager, whofollows them, providing alltheir banking needs whereever they may be or inwhatever they do.”

Also speaking, ExecutiveDirector, Ecobank Nigeria,Mr. Kingsley Umadia, saidthe vision to createAdvantage Banking Serviceby Ecobank followscontinuous interaction withthe average bank customerin Nigeria which reveals thedire need to personalizeengagement with theindividual. He emphasizedthat the customer wouldrather be treated as aseparate entity having his/her individual and peculiarneeds resolved in a tailormade fashion to getmaximum satisfaction andendearment to the brand.Mr. Umadia emphasizedthat Advantage Banking byEcobank is about buildinga rewarding partnershipwith customers by meetingtheir financial, investmentand lifestyle needs when itmatters most.

EcobankunveilsAdvantageBankingservice


CMYK

Corporate Finance

CIS records N64 million surplusesafter six years of losses

... Approves President’s request to step aside

BY PETER EGWUATU

The CharteredInstitute of

Stockbrokers (CIS) hasbounced back to reckoningas it recorded N64 millionsurpluses as against aseries of losses for sixconsecutive years.

The Council of CIS hasalso approved the requestof the President andChairman of Council, Mr.Albert Okumagba, to stepaside, pending the on-going oversight activitiesof the Securities andExchange Commission(SEC) at BGL Group,where he is also GroupManaging Director/ChiefExecutive Officer.

In approving therequest, the Council hasauthorised the First VicePresident, Mr. OluwaseyiAbe, FCS, to act in thecapacity of President andChairman of Council of theInstitute.

Besides, the institutewhich held a successful20th Annual GeneralMeeting (AGM hasembarked on manyinitiatives to re-brand,grow membership,benchmark its operationswith the global standardand play pivotal roles inthe growth anddevelopment of theNigerian Capital Market.

Generally, stockbrokers

commended the newadministration for itsoutstanding performancewithin one year and theaggressive approach whichhas put the Institute on theNational consciousness.

In his remarks, the ActingPresident and Chairman ofCouncil, Mr. Oluwaseyi Abeurged the Stockbrokers to

support the on-goingtransformation by payingtheir membership andpractising fees promptly.Abe implored them to showmore interest in theInstitute’s activities.

By the institute’s currentAnnual Report and FinancialStatements, “From a financialperspective, the institute

recorded a surplus of N64million Naira, a significantlandmark as it representsreversal of the series of lossesrecorded in the last six years.This is accounted for by fourmain factors- a massive debtrecovery drive whichachieved modest results,higher income from self-financing activities, efficientcost management and control,and receipt of grant from theNigerian Stock Exchange”

The Financial Statementalso indicates that the instituteshall undertake acomprehensive rebranding totake its rightful place in thefinancial market, ensurerevamping of its finances,and initiate a process throughwhich it will be used as aplatform to supportknowledgeable professionalsthat would help deepen thefinancial inclusion in Nigeria.

On membership drive, theinstitute has strengthened itsProfessional Diploma inSecurities and Investment tocreate opportunities for theyouths that are interested inpursuing a career in thefinancial market. By this role,the institute would supply themanpower requirement of thenation towards achieving thenational saving strategy andfinancial inclusion plan.

“To this end the CISprofessional DiplomaExamination has been re-designed as fully computer-based test holding everymonth as opposed to twice ayear. This is aimed atreducing our time required tocomplete certification therebyaccelerating the process oftraining and certifyingcandidates”.

Sterling Bank calls for monetarypolicies focused on growth

BY PROVIDENCE OBUH ...Records N9bn PAT

Sterling Bank Plc hascalled for continued

accommodative monetarypolicies and flexible fiscalpolicies focused on growth,even as it recorded a ProfitAfter Tax, PAT, of N9.0 billionagainst N8.3 billion in 2013in its financial year endedDecember 2014.

Speaking at the 53rd AnnualGeneral Meeting, AGM inLagos, Chairman, Board ofDirectors, Mr. Asue Ighodalo,said that the Governor of theCentral Bank of Nigeria(CBN) is expected to balancemonetary policy measureswhich support growth againstthose needed to rein inflationand stabilise their domesticcurrencies and financialsystems in the emergingeconomies.

Ighodalo said that thesecond half of the year, 2015should offer some respite todomestic economy as politicaluncertainties taper the currentmultinational counter-insurgency push, curbs theactivities of insurgents in thenorth-eastern part of thecountry and international oilprices gradually inch upwardon the back of expectations ofoutput cuts by OPEC at itsnext meeting in June 2015.

On the other hand,Managing Director/CEOSterling Bank, Mr. YemiAdeola, said that the year waschallenging for the bankingindustry and that the doublewhammy of macroeconomicshocks and tighter regulatoryenvironment put significantpressure on the margins of the

banks.Adeola said that the

domestic economy would beweighed down in the firstnine months of the year by theimpact of lower global oilprices and distractions fromintense politicking, butshould witness a gradualuptick during the latter partof the year as crude oil pricesinch upwards and somecertainly returns on thepolitical front.

While the economiclandscape may bechallenging, I stronglybelieve that the Bank is on asound financial footing, givenits stronger capital position,asset quality and dedicatedworkforce to advance itsgrowth plans.

Custodianand Alliedrecords 40%growth in firstquarter

T r a n s n a t i o n a lCorporation of

Nigeria, Transcorp Plc, hasannounced N2.57 billionprofit after tax for its firstquarter ended 31 March2015. The results showedthat revenue for the Groupstood at N9.92 billion, whichrepresents a slight drop offive percent from quarterone 2014 results of N10.54billion.

The company’s revenueincreased by 39 percent toN736 million from N528million recorded in thecorresponding period of2014.

Group PBT for the periodwas N2.57 billion, while thecompany made a profitbefore tax of N761.35 millioncompared to the loss beforetax of N573.95 million in2013.

TranscorpannouncesN2.57bn PBT inquarter 1

Custodian and Allied Plca wholly owned

Nigerian investment holdingcompany quoted on theNigerian Stock ExchangeNSE has recorded a 40 percent growth in its Profit BeforeTax,PBT for the first quarterended March 31, 2015.

It also recorded significantinvestments in general andlife insurance, pension fundadministration, trusteeshipand property holdingbusinesses, as shown in itsunaudited consolidatedresults for the three monthsperiod ended 31 March,2015. The results furtherdemonstrate the diversity ofCustodian’s revenue base andits resilience in a challengingoperating environment.

The Custodian Group’sProfit Before Tax for the threemonths period rose by 40% toN1.87 billion over that of thecorresponding period of 2014while the Group’s asset baserose to N50.6 Billion fromN48.9 Billion as at 31stDecember, 2014.

Barring unforeseencircumstances, the Board ofDirectors stated that the trendwould be maintained for theremaining period of thefinancial year.

FORUM - From left: Chief Medical Director, University of Benin Teaching Hospital, Prof.Michael Ibadin; Chief Executive Officer, Bufferzone Limited, Mr. Akin Fadeyi; Zonal Coordi-nator, South West, National Health Insurance Scheme, Mrs. Olajoke Balogun; and CMD,Muhammed Abdulahi Wase Specialist Hospital, Kano, Dr. Munkaila Yusuf, during the HealthAccess Season II Talk Show of the NIHS in Lagos.


CMYK

Corporate Finance

FMDQ reiterates commitment to promoting pricestability, transparency

FMDQ OTC Plc hasreiterated itscommitment to focus

on product and marketdevelopment initiatives thatwould promote price discoveryon the platform and enhancetransparency in the over-the-counter, OTC, market.

Chairman of the company,Dr Sarah Alade, stated thiswhile outlining theExchange’s five year strategicplan at the exchange’s 3rdAnnual General Meeting, inLagos.

According to her, the fiveyear strategic plan, whichspans 2015 – 2019, would seethe exchange actualizing itsvision of being the number

Chams Plc, Nigeria’sidentity management and

payments system company, has assured

Chams targets improved profitability vianew products’ deployment…Pays N93.9m dividend

Stories by NKIRUKANNOROM

one in Africa in the fixedincome and currency market.

She assured that theexchange was poised toreposition the Nigerian fixedincome and currency marketto become more globallycompetitive and support thenation’s economy.

Reviewing the company’s2014 performance, Aladeexplained that the companyposted a revenue of N1.75billion, as against N155.65million achieved in 2013,while profit before tax rosefrom N133.4 million toN708.5 million during theperiod under review.

She explained thattransaction fee during theperiod was charged for thefull year, adding that itaccounted for 91.29 per centof the total revenue.

Alade noted that thecompany focused onactivating and developing itsfunctions in the areas ofmarket and businessdevelopment, Legal,Regulatory, operations andtechnology in 2014.

During the year, FMDQ,according to her, achievedunprecedented transparencyin the OTC fixed income andcurrency markets andpositioned itself to offer value

added services to the listingof bonds in Nigeria byachieving the approval of itsbond listings and quotationrules by the Securities andExchange Commission, SEC.

To consolidate on theperformance, Alade said thecompany would focus ondeveloping innovativeproducts and marketinfrastructure, promotingprice discovery andtransparency, providingquality and reliable research.

Other key areas of focus in2015, according to her

include; facilitating educationand capacity building for allstakeholders, fosteringintegration of the Nigerianfinancial market withinternational market andincreasing investors’confidence.

According to her, the rollout of products such ascurrency derivatives, reposand syndicate underwrittencommercial papers issuancefacility will go a long way toadd value to stakeholders anddeepen the market.

its shareholders that the company is set to recordimproved profitability in the coming years giventhe on-going projects and prospects for the newproducts to be deployed.

This is even as the shareholders approved thedistribution of N93.9 million dividends, whichtranslates to 2 kobo per ordinary share of 50 kobopreviously held by shareholders.

Giving the assurance at the 31st Annual GeneralMeeting, AGM, in Lagos, the chairman, Very Rev.Ayo Richards, said the company is poised to releaseinnovative products that will have major impact inthe identity management space and make life moresecure and convenient for its customers.

He said as part of the company’s strategic plan toconsolidate the achievement recorded in the lastthree years and fosters its aspiration of dominatingthe identity management space in Africa, itpartnered renowned consulting firm to forge acorporate strategy that would serve as a roadmapfor the medium term. Commenting on the 2014results, Richards said in spite of the tough marketcondition during the year under review, whichimpacted the company’s performance, it recordedimproved performance from its subsidiaries.

He noted that the company recorded total revenueof N4.1 billion in contrast to N3.4 billion in 2013,representing 21 per cent increase.

The profit for the year after taxation increased by49 per cent to N280 million compared to N188million in 2013 just as the total assets grew by 12per cent to N12 billion from N10.7 billion recordedin 2013.

Also speaking at the event, the Group ManagingDirector/Chief Executive Officer, DemolaAladekomo, informed the shareholders of hisdecision to retire from the board of the companyeffective September this year.

He said, “I will be leaving the role I loved to playsince the inception of this company. On the otherhand, I look forward to this new epoch of my life asI would be leaving in the confidence that I amentrusting the company in the hands of highlycompetent and professional management whowould bring fresh ideas to business.”

Continuing, Aladekomo explained that 2014financial year was period of business consolidationfor Chams as it took positive step to achieve its setobjectives which is evident in its financials.

“We achieved some major milestones on ourexisting projects and also fostered numerous newbusiness partnerships. Our ability to deliver growthacross major financial indicators further attests toour strong market positioning and industryleadership,” he said.


CMYK

Homes & Housing

Stories byYINKA KOLAWOLE

ASO Savings andLoans Plc is set tobecome the largest

mortgage bank in the country,controlling 40 percent of themarket share of the mortgageindustry with the completionof its acquisition of UnionHomes Savings & Loans Plc.

The recently concludedtransaction will see thecombined entity having abalance sheet size of N110billion which makes it thebiggest outside the depositmoney banks in the financialsector.

Vanguard gathered that theoperational integration ofboth entities is expected tospan 3 to 6 months followingwhich Union Homes will befully collapsed within ASO.The financial synergy createdby the combination will

ASO controls 40% ofmortgage market

accrue primarily from a biggerpost-acquisition balancesheet, resulting in increasedability to attract deposits andshore up liabilities due torenewed customer confidence.Also, the shared internal costsand economies of scale is

expected to bring about animprovement in operationalcost management.

A reliable source privy to thedeal said on condition ofanonymity because he wasn’tauthorised to speak publiclyon the matter, stated: “Aunified business platform forboth Union Homes and ASOwill deliver financialsynergies that will maximizeprofitability, shareholdervalue, revenue per customer(plus other target indices) andincrease market share. To thisend, we expect to seeimproved operational andprofitability ratios within 3years post acquisition.”

The new entity will have anexpanded client base anddistribution network, as ASOstands to inherit almost 30branches from Union Homes,many in locations where ASOis currently not present,

particularly in the southernparts of the country. Oncompletion of the transaction,ASO’s larger balance sheet isexpected to help deepen homeownership and the growth ofNigeria’s small but rapidlyexpanding mortgage industry,which is challenged by highcost of capital for mortgagelenders.

Analysts say the larger ASOSavings could leverage on theservices of the newlyestablished Nigeria MortgageRefinance Company (NMRC)to expand the tenure of itsmortgages to between 15 and20 years, from the 5 to 10 yearspresently obtainable. “Theycould use short-term moneyand create long term mortgageasset, and sell those assets toNMRC for cash, to do similarmortgages. NMRC is alsogiving mortgage lenders likeASO a chance to get relativelymore affordable interestrates,” an analyst said.

Recall that the federalgovernment launched NMRCin 2014 to expand thesecondary mortgage market,allowing lenders to reinvesttheir assets into more lendingand in effect increasing thenumber of lenders andmortgages in the market. “Weanticipate that the NMRC willstimulate the secondarymarket for Mortgages. Ourmodest goal is to grow theactive mortgages in Nigeriafrom 20,000 to 200,000 in 5years,” said Finance MinisterNgozi Okonjo- Iweala at thelaunching.

ASO Savings’ (stand alone)2013 audited financialstatements showed profit aftertax PAT increased by 205.42percent to N207.51 millioncompared with N117.14million loss recorded in thecorresponding period of 2012.With the acquisition, the newASO is well positioned toexpand aggressively asNigeria’s population andincome per capita grows.

The country’s rapid rate ofurbanization which the WorldBank put at 51 percent in 2012and an estimated 80 millionpeople living in the cities isexpected to spur the demandfor housing.

Recent data released by theNigeria Bureau of Statistics(NBS) shows that in the fourthquarter of 2014, real growthrecorded in the building andconstruction sector stood at12.66 percent (year-on-year),while housing finance Africain its housing vision 2020report states that the yearlyhousing requirement ofNigeria was 500,000 unitswhich is expected to reach 2.1million by 2020. Thisrepresents a minimum growthrate in housing requirementof 11.6 percent per annum forthe next 9 years, according toanalysts.

On completionof thetransaction,ASO’s largerbalance sheetis expected tohelp deepenhomeownership

Modern mini housing development

The Lagos StateGovernment generated

N27.05 billion from landtransactions in the statebetween January andDecember 2014.

Permanent Secretary, LandsBureau, Hakeem Muri-Okunola, who disclosed thisat a press conference inLagos, noted that the 2014land revenue amounted to anincrease of N18.65 billion overthe N8.3 billion generated in2013. “The revenueperformance, which isconsiderably more than thetotal of the previous year byabout N18.65 billion was dueto transaction on the sale of

Lagos generates N27bn from land transactionsland for industrialdevelopment in the Free TradeZone. The revenueperformance for the yearunder considerationexceeded the Bureau’sbudget for the period by 165percent,” he said.

Muri-Okunola emphasisedthat aside from some majortransactions, the revenuefrom the new schemes beingexpected in the year underreview as well as the propertyrecertification project couldnot be realised, therebymaking it difficult for thegovernment to generaterevenue from these sources.He said that the revenue

would be improved uponwhen the new schemes;property certificate andtransaction on state land arebrought on board.

On the grant of Governor’sConsent, the PermanentSecretary disclosed that 6,623applications were receivedand processed in 2014,generating N4.3 billion whichexceeded the target of N3.2billion. He also revealed thatcompensation of N2.8 billionwas paid to affectedindividuals and companieswhose properties wereacquired by government foroverriding public interest.

US mortgagerates rise onmixed economicreports

Mortgage rates in theUS were pushed up

slightly by mixed economicreports, according to the latestdata released by Freddie Mac.

The 30-year fixed-rateaverage rose to 3.68 percentwith an average 0.6 point.(Points are fees paid to alender equal to 1 percent ofthe loan amount). It was 3.65percent a week ago and 4.29percent a year ago. The 30-year fixed rate has stayedbelow 4 percent for more than20 weeks, dating toNovember. The 15-year fixed-rate average grew to 2.94percent with an average 0.6point. It was 2.92 percent aweek ago and 3.38 percent ayear ago. The 15-year fixedrate hasn’t been above 3percent since March 19.

Hybrid adjustable ratemortgages also moved higher.The five-year ARM averageedged up to 2.85 percent withan average 0.5 point. It was2.84 percent a week ago and3.05 percent a year ago. Theone-year ARM averageclimbed to 2.49 percent withan average 0.4 point. It was2.44 percent a week ago.

UK mortgageapprovalstrendingupwardsAfter a slow start to the

year, the number ofmortgages being approved isnow “trending upwards”,according to the UK’s HighStreet banks.

Figures from the BritishBankers Association (BBA)show that 38,751 house-purchase mortgages wereoffered in March, up from37,453 in February. That is thehighest number for 6 months,but 14 percent lower than ayear ago. The BBA said thatone reason for the improvingpicture was the low mortgagerates on offer.

Lenders have continued tocut rates, as the prospect ofthe Bank of England raisinginterest rates has receded.Five-year fixed rates are nowavailable for less than 2percent a year. “The thirdsuccessive modest rise inmortgage approvals ties inwith our belief that housingmarket activity is nowgradually turning around,”said Howard Archer, ChiefEuropean and UK Economistwith IHS Global Insight.

UNION HOMES ACQUISITION:

Insurance

Stories by ROSEMARYONUOHA

WORKSHOP - From left: Mr. Ganiyu Ayodele Sanni, Past President, Institute of Public Analystsof Nigeria (IPAN); Dr. Dahiru Adamu, President; and Mr. Kayode Isah, Hon. Commissionerfor Health, Kwara State during the 21st IPAN Mandatory Workshop at Ilorin recently.

Shareholders ofMansard Insurance Plc

have given the Board andManagement of the companythe approval to change thecompany’s name to AXA-Mansard Plc.

Shareholders of thecompany unanimously gavethe approval at thecompany ’s 23rd annualgeneral meeting in Lagos lastTuesday.

Recall that French insurer,AXA, acquired 100 per centstake in Assur Africaholdings, which holds a 77percent stake in Mansard,thereby making AXA thebeneficial owners ofMansard.

Chairman of the Company,Mr. Victor Osibodu, said thatwith the acquisition, Mansardstands to benefit fromlimitless access to globalresources, capacitydevelopment, strong globalbrand recognition incorporate space and staffcross-positioning adding thatMansard staff have nowbecome members of amultinational group.

“These are a few benefitsamongst many others. I am very confident that thesefactors will transcend intobetter service delivery andproduct innovation that willdeliver unequaled solutionsto our esteemed customersand translate into increasedreturns for all shareholders,”he stated.

He said the purchase of theparent body of Mansard byAXA group has received allnecessary regulatory

Mansard geMansard geMansard geMansard geMansard gets shareholderts shareholderts shareholderts shareholderts shareholdersssssapprapprapprapprapprooooovvvvval tal tal tal tal to co co co co change thange thange thange thange to AXAo AXAo AXAo AXAo AXAapprovals thereforeMansard can now bid farewell to its erstwhile majorityshareholders Assur holdingand cleave to its new identity.

On the company ’sperformance during the yearended December 31, 2014, theChairman said gross premiumgrew by 28 percent fromN13.59 billion in 2014 toN17.40 billion in 2014.

Net premium income of the

company grew by 20 percent from N 7.54 billion in 2013 toN9.05 billion in 2014.

Profit before tax rose by 2percent from N 1.98 billion in2013 to N2.02 billion in 2014against 27 percent dip in profitafter tax which decreasedfrom N2.1 billion in 2013 toN1.5 billion in 2014.

He said total asset of thecompany rose by 24 percentat the period from N36.1

percent in 2013 to N 44.9billion.

Osibodu further said asa result of series ofexpenses incurred by thecompany during theperiod which is expected to yield remarkable profitin future, the company could not announce anydividend to itsshareholders.

PrestigeAssuranceseeks brokers’collaboration

Managing Director ofPrestige Assurance

Plc, Mr. Balla Swamy hasappealed to insurancebrokers to do business withhis company stating that noinsurance company inNigeria can survive withoutintermediaries.

Swamy, who made theappeal at the NigerianCouncil of RegisteredInsurance Brokers, NCRIB,evening in Lagos last week,said that his company isfocused on productinnovation, technology,customer service andintermediaries.

Swamy said, “PrestigeAssurance is managed bythree experienced Indianexpatriates and run by wellexperienced Nigerian teamof 76 employees. TheCompany is blended withIndian and Nigerianinsurance marketexperience. The companyhas a history of promptclaims settlement andcustomer friendly relations.”

According to Swamy,Prestige is equipped with anIT platform called GIBS andis Web based; three ways ofcommunication by personalcontact, email and SMS isactivated; portal servicesavailable for major businesspartners to provide effectiveservices; automatic onlineupload of motor and marinecertificates to NigeriaInsurance IndustryDatabase, NIID, as well asclaims are being attended onspecified time lines. TheManaging Director assuredthe brokers that quotes willbe attended to on time as theywill provide competitiverates in line with the risk andmarket, while theirmarketers will patronizebrokers and managementteam will be in touch withbrokers also. He also saidthat the vision of thecompany is to be the mostrespected, trusted andpreferred non-life insurer inNigeria while their charter is“highest priority to customerneeds, courtesy and caringoccupies pride place in ourwork culture. Ourcommitments are to actcourtesy, fairly andreasonably in all our dealingswith the customers,” he said.

BY FAVOUR NNABUGWU, with agency reports

Continental Reinsurance Plc plans to acquirerivals across Africa over the next three years

as it seeks expanaion across the continent, said ChiefExecutive Officer, Femi Oyetunji.

In each of the company’s five African regions, “onesubsidiary has been given the responsibility to lookfor acquisitions,” Oyetunji said in an April 28interview at the company’s headquarters in Lagos.“A few names have come up in each region and we’reassessing them strategically at the board level.”

Premium income for the insurance and reinsuranceindustry is improving in Nigeria, as regulatorsenforce rules requiring companies with at least fiveworkers to provide life coverage. The NationalInsurance Commission is also making propertyinsurance mandatory in the country.

Continental Reinsurance plans to “raise significantcapital” this year through equity sales to enable it to“take advantage of opportunities that abound inNigeria and Africa,” Oyetunji said.

The fundraising, initially planned for last year, wasdelayed after Emerging Capital Partners LLC, a

Continental Re plans Africanacquisitions

Washington-based buyout firm, announced plans to sell itsmajority stake. The investor “is very close to concluding theexercise and will announce the preferred bidder for its 54 percentstake soon,” Oyetunji said.

The March presidential election has bolstered investor confidencein Nigeria, he said. “With the peaceful conclusion of elections,business optimism has grown and people are going to beinvesting.”

President Goodluck Jonathan conceded defeat to former militaryruler Muhammadu Buhari after last month’s vote. The peacefulsuccession soothed investor fears in a country with a history ofelection-related violence.

The reinsurance company, which announced plans this monthto open a construction property and engineering risk services unitin South Africa, intends to boost specialist skills in other areas,including actuaries and information technology, to advise andsupport underwriters, Oyetunji said.

($2.33 billion). “We have various channels for businessprocurement, we have network of office up to the tire 7 in nookand corner of the country; we have different other lines of businesssuch as health insurance, bancassurance, agricultural insurancein a big way,” Swamy stated.


CMYK


CMYK

Interview

You have toured the MomasElectricity Meters

Manufacturing facility, what is yourassessment of the state of theinfrastructure and equipment on theground?

We just finished the factory tour ofMomas and this is a factory where theyproduce prepaid electricity meters. Imust say that I have been very impressedreally by the level of technology ondisplays here. People who have anengineering background wouldunderstand what I mean here.

I saw semi-conductors, integratedelectric circuit and the process of makingthese circuits. It is the first time this ishappening in Nigeria. For me, the keyissue is, we have a company in Nigeriathat is owned by a Nigerians that hasthe capacity to supply almost all of theelectricity meters that we need in thiscountry. For me, there is an industrialpolicy issue here. BoI wants to helpNigerian companies like this that havethe capacity to produce what Nigeriansor Nigerian businesses require.

We don’t need to import such things. This is one of the reasons why our

foreign reserve has been underpressure-we keep importing what weproduce locally; I think the majorstrategic step for our country to take is tocome out with an industrial policy toensure that any company we haveidentified as having capacity to produceitems locally, such companies are givensupports and patronage. Momas produces all kinds of meters-pre paidand post paid, they have evendeveloped a very robust platform thatensures that from your mobile phonesyou can check how much is the balanceon your meter, and whether you needto re charge or not. These are thingsthat we should be very proud of asNigerians. I am very proud of whatthey have done and they requiresupports that they can get from us,Nigerians and the Nigeriangovernments.

How do you integrate yourcustomers so that they patronise oneanother?

Yeah, that is a very good question. Youwill have noticed that I was asked theChairman of Momas (Engr. KolaBalogun) some questions as we weregoing around the facility. When we gotto the part where he showed us the

Nigerians should buylocally made goods togrow economy — MD BoI

We keep importingwhat we producelocally, we cannotdevelop our industrialbase if we are bent onpatronising importedgoods

BY FRANKLIN ALLI

•Mr. Rasheed Olaoluwa

I n this interview, Mr. RasheedOlaoluwa, Managing Director/CEOBank of Industry (BoI), justifies

why governments and the citizensshould patronize Nigerianmanufacturers of high qualityproducts instead of imported goods.

plastic casing, I mentioned to him –areyou procuring the cases from InnosonPlastic Manufacturing, one of ourcustomers, and he said, yes, they get onlythe big ones. Of course, we encourageour customers to patronise each other.There is a portal that BOI is putting upright now which will actually show caseevery BOI customers in terms of all theirproducts, the profile of the company, etc.so that Nigerians can access andpatronise these companies. So, it is a verygood point that you have made that ourcustomers can support each other.

To what extent has the bank assistedthis company?

We supports Momas in terms of bothlong term loan as well working capital.So far so good, the company is meetingits obligations.

How much?I don’t think the client want me to

mention the amount (Laughs)How can we as a country develop our

own industrial base?We cannot develop our industrial base

if we are bent on patronising importedgoods. What I am going to do to bevery specific, is from time to time, I have meetings in Abuja and I am goingto put it on the table; I am actuallyworking on a presentation which Iintends to make to the FederalGovernment. We have identified ourcustomers and other customers we have

identified in the economy who havecapacity, not just capacity, we are talkingabout good quality outputs, people whocan actually produce good things likeSecure ID; the company is among themost modern card manufacturingcompanies in the world, so we really donot have justification for importing cardsanymore in this country. Momas wherewe are today has a very modern prepaidmeters manufacturing facility, so we don’treally have reasons for importing thosethings, rather we need to really find away to support companies like these togrow and create employment. Momashas capacity to hire 500 staff if they arewell patronise but currently their staffstrength is 100. So that is the impact ofwhat we are talking about. We have beenexporting our jobs to other countriesbecause we have been importing goodsfrom them. We need to begin to reallysupport our own manufacturers. Thatis what BOI is out to encourage.

What informed your visit to NFEIndustries Limited and Knight MetalManufacturing Company Limited,subsidiaries of Wempco Group?

These factories were commissionedrecently. NFE Industries Limited inparticular, processes steel billets for wirerods .They are used for processingproducts in Nigeria that are used toproduce nails of different sizes, they areused to produce barbed wire, wire meshand so on and so forth. Before this facilitywas commissioned, as a country, we usedto import wire rods. So this is the firstgroup that is actually producing this itemlocally. This is a very good development,and I am really very impressed.

Again, we are seeing a company thatis producing a product locally to thehighest international quality, and I thinkas a government, we can support andprotect local manufacturers like this. Am aware that there are people who stillimports wire rods up till now but withthis new factory, there is no justificationfor continuing to import.

And luckily from my discussions withthe company’s executives, the ex-factoryprice here is actually cheaper thanimported steel rods; so really, no one has

any reason to import. I really benefitedfrom the discussion in knowing what arethe factors responsible for their costefficiency? You hear a lot ofmanufacturers complaining about howharsh the environment is and all that buthere is a local manufacturer that hasmanaged to put together the variousfactors of production such that the ex-factory price is actually cheaper thanimports. This gives me a lot of hope thatindeed, Nigeria is on the right track; theIndustrial Revolution Plan is working,and I think, going to the future a lot morefacilities like this are going to come upthat will ensure that we become moreself-sustained as a country.

Looking at the ceramic products,there is made-in-Nigeria on the cartons,what is the bank doing to encouragecitizens to patronise locally made qualityproducts?

Before we got to this tile factory, wesaw the nail factory and on the bags ofnails it was written Made in Ogun StateNigeria. That was because the formergovernor of Ogun State, Otunba GbengaDaniel insisted that they shouldn’t justwrite made in Nigeria, they should write Made in Ogun State Nigeria. Butguess what? Our own fellow citizenscomplain that they don’t want that; thatthey should write made in China, that ithelps their markets; so they have to putsome Chinese words on the bags. I thinkwe need to get over this inferioritycomplex among our citizens. A productthat is made in Nigeria to the highestquality, we should be proud of it that itis our own as supposed to longing forproducts made outside Nigeria. So itis a psychology, it is an orientation thatwe need to change.

How many of these factories do youthink can service the whole of Nigeria?

Okay, the factory that produces billets,wire rods has 300 thousand metric tonnesannual capacity; that is massive. I thinkat the end of the day it calls for industrialpolicy. We want to support localproducers. They are the first to take astep in this particular direction, so wewould like to support and encourage anumber of other producers to come onboard so that there is competition justlike you have seen competitions in thetelecom sector. Initially, the MTN wascharging N50 per minute, till today youknow how much completion there is inthat sector; at the end of the day, it is inthe interest of the consumer. So theyhave taken the first step and with supportin terms of industrial policy, andconsumer, other producers will beencouraged to come into the picture. Once there is competition, the price willdefinitely come down.

To what extent has the bank key intothe NIRP?

Yeah, again, we just finished lookingat the ceramic tile factory, where kaolinis mined from the nearby mining leasein Ogun State, the kaolin is mixed witha lot of other raw materials to producetiles and you can see they are ofinternational quality tiles-very rugged,you can designed all kinds of things onit and you can even put your nameand picture on it; this is one of thekey sectors identified in the NigeriaIndustrial Revolution Plan; the threebeing agro processing of our agricproduce into intermediate raw materialsfor industries; the second is Solidminerals and metals this group we havejust visited today is a strong player inthat sector.


Economy

•Goodluck Jonathan President Federal Republicof Nigeria

As xenophobia diplomatictension between Nigeria

and South Africa dies down,South African companies aretaking bullish positions on theNigerian economy, apparentlycrowding out local competition.

Two of the South Africancompanies have, Pepkor andShoprite, amongst many othershave announced expansionprogram that would more thandouble their stakes in theNigerian economy. Pepkor Ltd.,the South African clothingretailer bought by SteinhoffInternational Holdings Ltd. for$5.7 billion in 2014, plans todouble its presence in Nigeriawith 10 store openings per yearthrough 2018. Confirming thisplan Pepkor Nigeria’s generalmanager, Deon Conradie, toldBloomberg last week in Lagosthat the company which openedits first outlet in Nigeria in 2012,will have 31 stores by July thisyear. The clothing and footwearchain plans to sustain thatgrowth rate over the next threeyears, he said.

In a related developmentproperty group, Resilient, one ofSouth Africa’s largest owners ofplatteland malls, has enteredinto a joint venture with WhiteyBasson’s Shoprite to build 10shopping centres in Nigeria. Thedeal, worth more than USD85million, also involves two otherSouth Africa’s big finance andinvestment organizations,Standard Bank and Group Five.

Justifying these newinvestment moves Conradie said“our prices are low and we caterfor that middle-to-bottom market,which is the fastest growing”.Woolworths Holdings Ltd.,another South African retailerthat targets wealthierconsumers, said in 2013 closedthree Nigerian stores because ofhigh costs-to-patronage ratio.

Nigerian demand for goodsother than food is expected toincrease to USD110 billion in2030 from USD20 billion two

South African groups to double Nigeria investments…Target middle-lower income buyersStories ByEMEKA ANAETO,Economy Editor

years ago as Africa’s biggesteconomy grows and its workingand middle classes seekalternatives to outdoor markets,according to McKinsey & Co.While a 40 percent fall in oilprices since June has curbedgrowth in the continent’s biggestcrude producer, the economy isforecast to expand 5 percent in2016, the InternationalMonetary Fund said in its April28, 2015 report.

More than 100 South Africancompanies are doing businessin Nigeria across severalindustries, with the biggestinvestment being in thetelecommunications sector.”

Reacting to the Nigerian-South African commercial

relations South AfricanPresident, Jacob Zuma, said lastyear, “We welcome theparticipation of South Africanbusiness in other sectors inNigeria as well, such asengineering, construction,media, banking, retail,hospitality, oil and gasexploration and services.”

Zuma said there had also beenkeen interest from Nigerianbusinesses to invest and dobusiness in South Africa acrossa number of sectors.

Entry to the Nigerian marketrequires relatively high capital

investment due to inflated rentaland power costs, according toPepkor. Steinhoff, aJohannesburg-based furnitureretailer, agreed to buy Pepkor inNovember last year to expandinto clothing and neweconomies. The deal, said to bethe largest purchase of a SouthAfrican company in more than adecade, will create a retailerspanning three continents.

Looking into the Shopritecalculations on Nigerianeconomy and businessManaging Director of ResilientMr Des de Beer, who has a

formidable reputation forspotting growth opportunities,has been eyeing Nigeria for awhile as the African countrywhere he believes the group canbest replicate its South Africanretail property model. De Beersays Nigeria’s population is ahuge 155million but the countryhas only a handful of formalshopping centres. He believesNigeria offers better potentialreturns than South Africa, whereopportunities for new retaildevelopments have become fewand far between. “The risk inSouth Africa is up but the returnsare down. It’s time to explorefresh markets.”

De Beer says Shoprite hasalready spent a lot of time inNigeria and has an impressiveunderstanding of how thatmarket operates.

“Being able to leverage offtheir existing skills base willsignificantly reduce our risk.”

Resilient and Shoprite’sventure will focus on centres10000m²-15000m² in size. Atleast 10 suitable sites havealready been identified in andaround Lagos and Abuja. Thecentres, to be built over the nextthree years, will be anchored byShoprite stores.

De Beer would like to list theshopping centre fund in Nigeriaonce it reaches the right criticalmass, a similar approach toResilient’s entry into Romania in2007 through New EuropeProperty Investments (Nepi).

A group of indigenous mineral explorershave discovered 196mn metric tones of

coal in Edo State. With the newly-discoveredcoal reserves, 1,200MW of power could begenerated into Nigeria’s national grid,according a report by African Review.

The 35 km-long reserve has a generationcapacity of 1,200MW for the next 50 years,which could sufficiently mitigate Nigeria’songoing power problems, said members ofthe technical team of Jidet Nigeria, whichrevealed the findings. Head of the company’stechnical team Olujide Pocon Tajudeen-Alanstated that the construction of powergeneration facilities could cost aroundUSD1.5 billion.

New coal find to boost power sectorSpecial adviser on renewable energy to the

Nigerian power ministry Albert Okorogu saidthat the discovery of coal was wonderful,especially since Edo State was conventionallynot known to possess coal reserves. “TheMinistry will do all it can in ensuring thatthey move from mining coal to using it togenerate power,” he added.

Jidet Nigeria, according to the report, hasmet with the power ministry in Abuja todiscuss the best ways to attract technicalpartners and financiers with a view toactualise the project.

“We want to commence the application andprocessing of licenses to officially enter thepower sector.

Resilient, one of SouthAfrica’s largest ownersof platteland malls, hasentered into a jointventure with WhiteyBasson’s Shoprite tobuild 10 shoppingcentres in Nigeria

•Jacob Zuma President S. Africa

34 —Vanguard, MONDAY, MAY 4, 2015

National Assembly’sbiggest joke in four years

“Reps raise 2015 budget byN134.5bn, pass N4.4tn.”

PUNCH. April 24, 2015.

It is just as well that overseventy per cent of the

current representatives in theNational Assembly will not bereturning. This is probably theleast productive legislativebranch in the world today.Unproductive, that is, inanything which could bebeneficial to the people ofNigeria. It might however be thefront runner for mischief andidleness.

Only God knows how over fourhundred adults, most highlyeducated, presumed to becapable of handling simplearithmetic, can in the last weekof April pass a budget which thefirst three months have provedimpossible to execute. Yet, amonth before most of them aresent to the dust bin of ourpolitical history, they increasedthe budget byN134.5bn at atime whenaggregaterevenue is notonly fallingrapidly, it ismost likely tofall further.

Among themostirresponsiblemembers of theHouse are thosecommittees withoversightresponsibilitiesfor the oil andgas sectors ofthe economy.Among otherduties,Nigerians would have expectedthat they will undertake toremain current with the trend ofglobal prices of crude and gas aswell ad future trends – short,medium and long. Additionally,they would regularly share theinformation with other membersof the NASS to serve as guide todecisions about the budget.Obviously, they have failed to dothis. Otherwise, it is difficult toimagine why so many adults,presumed to be knowledgeablecould be asking for expenditureof revenue they know will neverbe realized.

Already, the price of crude oilhad stayed stubbornly below thebenchmark, sales are down, andare likely to get worse in Apriland May as some of our biggestcustomers have failed to take uptheir options. Even, non-oilexports are experiencing globalresistance as many of ourproducts are being rejected forquality reasons.

Altogether, the picture whichemerges is bleak. With therevenue projections sounderwhelming, no seriouslegislators can agree to pass a

budget higher than when it wasfirst presented late last year.

“We are not amused.” QueenVictoria, 1819-1901.

Queen Victoria, like mostmonarchs, kept several clownsand court jesters, whose dutywas to entertain the monarch andher guests – just as we have ourown Ali Baba and Basket Mouthetc. Clowns performing beforequeens and kings however ran aterrible risk. One their jokes arenot funny to the monarch theycould hear the sentence passed:“I will make you shorter by ahead” (Queen Elizabeth I, 1533-1603. Since most of the jesters inthe NASS have been“decapitated” by the voters, wecan no longer threaten them withremoval. We can only try tounderstand why patriotic adultswill engage in an exercise infutility.

What then could have informedthis absurdity? The obvious

answer is politicalvendetta. The second,closely related, is thequality of individualswe send to the NASS.

Nigerian politiciansare largelyirresponsible. Most ofthem are in the NASSfor what they can getout of it not what theycan contribute. Thatexplains why importantbills like PIB takeforever to get throughthe House and they stilldon’t get passed.Similarly, annualbudgets are treatedwith the disdain theydon’t deserve. Nobudget had been

passed before April since 2000and none had been implementedby the Executive branch. Yet, notonce had the NASS conducted aninquiry into why a documenttaken seriously elsewhere in theworld suffers this fate in Nigeria.

Political vendetta underlies thecurrent budget passed by theHouse. With most representativeson their way out, they feel noobligation to fashion out the bestpossible budget for the country.Instead what they have come upwith is a banana peel for Buhariand the incoming NASS which willbe dominated by the APC. Most ofthem who can think, know it won’twork but they don’t give a damn.

It remains to be seen if PresidentJonathan will sign theappropriation bill into law andjoin the jesters in a bid to registertheir displeasure that, for them,the party is over. If he doesJonathan would have sacrificed agreat deal of the goodwill hegarnered by conceding defeatimmediately after the electionresults were announced. He willstrengthen his claim to oureternal gratitude by not signingit.

We canonly try tounderstandwhypatrioticadults willengage inan exercisein futility


CMYK

E-Commerce

Big data is a broad termfor data sets so largeor complex that

traditional data processingapplications are inadequate.Challenges include analysis,capture, search, sharing,storage, transfer,visualization, andinformation privacy. The termoften refers simply to the useof predictive analytics orother certain advancedmethods to extract value fromdata, and seldom to aparticular size of data set.

Specifically, businessesespecially online relatedones use big data, bycombining data from webbrowsing patterns, socialmedia, industry forecasts,existing customer records, etcto predict trends, prepare fordemand, pinpoint customers,optimize pricing andpromotions, and monitor real-time analytics and results.

According to McKinseyanalysis of more than 250engagements over a five yearperiod, companies that putdata at the centre of the salesand marketing decisionsimproved their marketingROI by 15 to 20 per cent.

In Nigeria, the availabilityof big data has not proved tobe very economically useful.This is due to restrictedaccess placed on big data.Some institutions that retainand continue to gather suchlarge amount of data includethe telecommunicationcompanies. Through sheerlarge number of mobilephone users, SIM cardregistration and increasingpenetration of smartphones,these telecommunicationscompanies have been able togather so much data morethan any other institutions inthe country.

At the just concludedMobile West Africaconference held in Lagos,Senior Manager, EnterpriseMarketing, MTN Nigeria,Tayo Egunjobi, presenting apaper titled: ‘Thoughts onBig Data’ explained thatNigeria has more big datathan it knows what it can dowith it.

According to him, “We areswimming in an ocean of datamade possible by theinternet, mobile penetration,web and businessapplications.”

Giving instance of big dataavailability in Nigeria usingMTN as an example, he

Big data: Driving e-business throughopen accessStories by JONAHNWOKPOKU

Through sheer large number ofmobile phone users, SIM cardregistration and increasingpenetration of smartphones, thesetelecommunications companies havebeen able to gather more data thanany other institution in the country

MOBOfreerecords 44%penetration inNigeria

MOBOfree.com, a socialmarketplace, has

announced that it hadexperienced an increase ofmore than 44percent in thenumber of registered users ofMOBOfree.com in Nigeriaover the past twelve months,resulting in a 1042 per centincrease in the number ofclassifieds published onMOBOfree.com in Nigeriawhich makes more than500,000 active listings on theplatform in Nigeria only. Overthe same period, the numberof registered users ofMOBOfree.com in Ugandaincreased by more than1555%, resulting in a 5548%increase in the number ofclassifieds published onMOBOfree.com in Uganda.

With 4 million registeredusers, including two millionmonthly active users inNigeria and a strong footprintin Uganda and Zimbabwe,MOBOfree is one of thelargest and most successfulclassifieds platforms in Africa.

noted that MTN with its 60million active mobile linesrecords about 2.6 millionminutes of voice calls monthly.It also records 77 per cent ofInternet Traffic generatedthrough mobile devicesutilising about 40 millionMegabytes from MTNMonthly.

In terms of businessapplications, he noted that

MTN holds 8.5 Petabytes ofData with a growth rate of 30per cent.

What all these mean is thatwith such huge concentrationof data in one place, decisionsaround technologyconsumption habit can easilybe made through careful studyand analysis of these data.

The problem however is thataccess to these data isrestricted by thet e l e c o m m u n i c a t i o n s ’regulator, the NigeriaCommunications Commission.Although the restrictions toaccess to these data has notprevented MTN from miningthe same data to sell toadvertisers who use these withlittle considerations to privacy

rights of mobile phones users.For these, industry analysts

believe that the restrictionsplaced on data usage isimpeding the growth ofelectronic business in thecountry. But the telcos arguethat it is matter of security, andmost importantly, compliancewith industry regulations.

At a panel discussing howNigeria can benefit from

liberal data policy, ChiefExecutive Officer, eTranzactInternational, Valentine Obinoted that strides have beenmade in payments in Nigeria,from the time where datacollection was a very difficulttask, to 2015, a period that isseeing an increased focus ondata collection from regulatorsand organizations, an examplebeing the recently institutedBank Verification Number.

According to him, access tobig data can play a critical rolein e-fraud prevention.

He said: “One bigprerequisite for financialinclusion and in fraud controlfor financial institutions is acheck called ‘Know yourCustomer.’ It is one of the

biggest challenges we face inthe payments industry, and allplayers can come together tohelp solve this issue. TheTelcos own a lot of user dataand can help the paymentsplatforms by sharing this data. "There is a big need for theTelcos to share data in orderto safeguard and protectcustomers from fraud just likebanks share data with theswitching platforms.”

Kojo Boakye, Policy andAdvocacy Manager, Alliancefor Affordable Internet alsospeaking, pointed out thatAfrica stands a better chanceat benefiting from increasingbroadband and smartphonepenetration if better policiesregarding data access are putinto place. According to him,instead of the telcosmonopolising the data, openaccess can help businesses toconsolidate gains while newventures stand a better achance at navigating theirbusinesses to profitability andreduce the high failure ratesprevalent among start-ups.

But in a swift reaction, AirtelNigeria’s Head, New ProductsDevelopment, OkechukwuIgwegbe noted that the issueof access to data lies primarilywith the regulators. Whileacknowledging the benefitsinherent in open access, healso pointed out that there arestill other institutions like theIndependent NationalElectoral Commission and theNational IdentityManagement Commissionwhich can also boast ofavalanche of reliable big dataand have not embraced theopen access strategy beingcanvassed.

PARLEY - From left: Mr. Oliver Omajuwa, General Manager, Sifax Off-dock; Mr Philip Ofulue,Executive Director, HR and Administration, Sifax Group; Mr. Machaus Brinsma, MD, SifaxGroup and Mr. Sunkanmi Olubi, Asst Manager, Commercial during Sifax Group media parleyon the activities of the company held in Lagos. Photo Lamidi Bamidele.

One Africa Media grouphas confirmed full

acquisition of Nigeria’s jobportal, Jobberman.com.Under the deal, co-founders,Ayodeji Adewunmi, OpeyemiAwoyemi and OlalekanOlude will double asshareholders and Directors inOne Africa Media. The triowill still act in their currentroles as CEO and Senior VicePresidents respectively butwill also operate at the grouplevel bringing theirexperience and expertise tobear in other One AfricaMedia-owned businessesthrough a shares roll-up deal.Speaking on the deal, AyodejiAdewunmi said, “We startedJobberman with the vision ofbeing the No. 1 destination forjobs in Africa; a mission wecontinue to work toward. Withthe additional fundingprovided by One AfricaMedia, and the new groupdesignations, we are betterpoised to achieving this goaland also growing other sistercompanies of Jobberman inthe One Africa Media group.We can now go on to conquerAfrica and keep a firm grip onNigeria which is Africa’s mostpopulous nation and largesteconomy.”

One Africa Mediaacquires 100% ofJobberman






CMYK

Tax Matters

The tax system sincemedieval times has

undergone reforms, thesereforms focused on taxpayersare meant to increase servicedelivery and customersatisfaction. The FIRS is notleft behind as reforms havebeen undertaken with a viewto make our operationsfriendlier, convenient andconform to global bestpractices. In order to simplifythe payment method, FIRShas designed a new paymentplatform called e-tax Pay.

What is e-tax Pay?E-tax Pay is an online self-

service tax payment systemwhereby the taxpayers aregiven an opportunity to paytheir taxes through theirbanks’ online payment portal.It is an initiative put in placeby FIRS in collaboration withNigerian InterbankSettlement System (NIBSS)and approved collectingbanks. This is to assisttaxpayers pay their taxes withmaximum ease. Taxpayerscan do it themselves using theelectronic service channelsprovided by their bankers.(These service channels willinclude the banks internetbanking, ATM and othermobile banking platforms.)

Conditions to meet beforeusing e-tax pay platform

You must have registeredand obtained TaxpayerIdentification Number (TIN)

You must have an accountwith the bank

You must have sufficientfunds in the account to coverthe tax liability/transaction

Steps to take to makepayment through e-tax payplatform

Having satisfied thecondition of obtaining aregistered TIN, an existingaccount and sufficient funds,then;

Select the service (e-tax Pay)from the list of servicesdisplayed on the bank self-service channel or request forthis service from the bankbranch

Provide all the requiredinformation including thetaxpayer‘s TIN.

Select the tax type (e.g.Company Income Tax, Pre-operation Levy, Value AddedTax, etc.)

Enter the amount to bedebited from the accountprovided

Confirm that all theinformation provided arecorrect and valid

Submit the request.When this process is

completed the platform will

Tax on the go, anywhere, anytime

notify FIRS online real time.Also FIRS has online accessto the tax portal to viewtransactions real time to knowtaxpayers that have made taxpayments.

Taxes that can be paid usingthe e-tax pay channel

You can use the e-tax paychannel to pay all taxes/leviescollected by the FIRS. Theyinclude:

Petroleum Profit TaxEducation TaxCompanies Income TaxVAT

Personal Income Tax/PAYE(Residents of FCT and non-Residents)

Withholding TaxNational Information

Technology LevyCapital Gains TaxPre-operation LevyLate filing penalty.Stamp dutiesDocumentation required

when you want to pay tax.Prepare the relevant tax

returnsCompute tax payable or

prepare remittance schedule(CIT/PAYE/WHT/VAT)

Fill the relevant self-assessment forms

Benefits of using e-tax PayPromotes transparency and

boost the taxpayer ’sconfidence and trust in the taxsystem

Promotes voluntarycompliance

It is convenient, saves timeand compliance cost; astaxpayers can do it themselveswithin the confine of theiroffices without going to thebanking hall.

E-taxpay solutionstreamlines the process flowin tax remittance, with allbanks collecting for FIRSusing their various channels.

Banks integration to theNIBSS e-taxpay is a veritableavenue for enabling all formsof tax payments/collectionsparticularly from the bank

accounts of payers to thedesignated bank accounts ofFIRS.

This solution harmonizesonline tax assessment with e-taxpay platform; which givesconvenience of assessmentand remittance.

NIBSS collection platformhas been integrated to thesystem(s) of FIRS for dataacquisition and online real-time notification oftransactions.

The security of payment isintact as the platformleverages on the robustsecurity infrastructure ofbanks.

It makes accountreconciliation easy for FIRS.

It enhances effectivebudgeting and forecastingdue to the availability ofadequate information ondetails of tax revenuerealized over a period of time.

Security of the e-tax PayPlatform

The e-tax pay service is safeand secure. The platformleverages on the securitymeasures provided by theservice channels of the banks.The system through NIBSSvalidates taxpayer ’sinformation against FIRSrecords and automaticallynotifies FIRS.

… fast track your taxpayment, use the e-tax Pay.

The e-tax payservice is safeand secure. Theplatformleverages on thesecuritymeasuresprovided by theservice channelsof the banks

Alade, Momoh,others inductedas NLI SeniorFellows

BY JONAH NWOKPOKU

Deputy Governor,Economic Policy, Central

Bank of Nigeria, Dr. SarahAlade and Chairman/CEO ofNigeria’s broadcaster,Channels Television havebeen inducted into theNigeria Leadership Initiativeas Senior Fellows.Other Nigerians inductedincluded: Chairman of theGoverning Council ofNigeria’s National HumanRights Commission, ProfessorChidi Odinkalu, Founder/CEO of Main One CableCompany, Ms. Funke Opeke,Permanent Secretary, FederalMinistry of CommunicationTechnology, Dr. TunjiOlaopa and a host of others.NLI is a not for profitorganisation with a missionto create a growing, globalnetwork of credible,accomplished community-spirited Nigerian leaders,committed to takingresponsibility for drivingpositive change in Nigeriaand Nigerian communities.They were inducted in aceremony held in the UnitedStates of America andattended by Justice MargaretMarshall, former ChiefJustice of the SupremeJudicial Court ofMassachusetts andAmbassador Joy Ogwu,Permanent Representative ofthe Federal Republic ofNigeria to the United Nationsat the Yale School ofInternational Affairs, in YaleUniversity, Connecticut.During the four dayprogramme which was inpartnership with YaleUniversity, the fourteenaccomplished Nigerianleaders participated in theseminar themed: “FromSuccess to Significance:Legacy” which focused on theideals and ideas that make agood society as well as valuecreation for a good society.NLI said the major objectiveswere to bring to the fore “theimportance of a good legacythrough individual action;engage the participants torecognize the true picture ofa good society; remindparticipants of theirresponsibility to lead withvalues in their various roles;encourage the participantsthat leadership isgenerational and transferableand, therefore, the need tomentor the youngergeneration.”


CMYK

People in Business

When I realised my potential inentrepreneurship, I quit my job— Olusanjo Philip

Mr. OluwoleO l u s a n j oPhilip is the

Managing Director/ChiefExecutive Officer ofAbeokuta-based GlobalAcademy for Creativity andInnovation, an outfit that isinto production of Iru (locustbean) and other foodcondiments and machinery.In this chat with FinancialVanguard in Abeokuta,Olusanjo Philip speaks onhis business and thechallenges, saying he wasable to start industrialproduction through the helpof Federal Government’sYouWin programme.

Excerpts:

Background:After his primary and

secondary school educationin Kwara State, he gainedadmission into the Universityof Ibadan (UI) in 1993/1994session where he readArcheology and graduated in1997/98 session. Thereafter,he went back for his master’sdegree in Anthropology stillin University of Ibadan. Helater gained employmentwith the same university andleft in 2007 as AssistantRegistrar.

Going into business:Mr. Olusanjo left a

lucrative job to follow hisheart. He said: “When Irealised my potentials inentrepreneurship, I went toObafemi Awolowo UniversityIle-Ife for formal training inentrepreneurship.

"I later started my businessbut my dream of startingindustrial production wasstill in the pipeline until I gotempowered by the FederalGovernment through theYouth Enterprise WithInnovation in Nigeria(YouWin). With that, I wasable to start industrialproduction.

“I was the first to packageiru (fermented African locustbeans also known as Carobbeans or by its scientificname, Parkia biglobosa) in amodern way.

"We process locust beansfrom scratch to finish. Thefinished product is dry andwe have two variants - thepowdered one and the grainbut they are both in sachets."

BY EBELE ORAKPO

Advantages:“Remember I was one of the

first to start industrialproduction of iru but I was thefirst to package it in modernway. Some of the advantagesof industrial processing isthat we have taken away someof the shortcomings in thetraditional iru,” he said.

Although people are awareof the health benefits of locustbeans which include:improvement of vision,digestion aid, blood pressurecontrol in hypertensivepatients, control of bloodsugar and bad cholesterollevel in diabetic patients, andhelps in stomach and mouthulcer treatment, some haverefused to eat it because of itsvery pungent smell.

Said Olusanjo: “Somepeople do not eat it becauseit smells, it gets spoilt easilyand it is prone tocontamination. Not only that,it contains a lot of impuritiesand foreign materials likestones, chaffs etc and alsobecause it is not readilyavailable. You have to godown to the market to get itbut now, all thoseshortcomings have beentaken care of. You now have arefined locust bean withoutimpurities, no odour as it nowhas very good aroma and wellpackaged. It is very handyand you can get it almostanywhere.

“We also have groundpepper packaged in sachets.It is produced from our localpepper, undiluted unlikewhat you get in the marketthat is mixed with colouringor ground kolanut. We sourceour raw materials locally.”

Initial cost:“I started the business with

my personal savings of twomillion naira and then I gotempowerment throughYouWin like I said earlier inthe sum of N6.2 million. Ihave to give kudos andthanks to PresidentGoodluck Jonathan for thatinitiative,” he enthused.

Olusanjo who presently hasnine employees, said he hasinvented three machines toenhance production.

His words: “I have inventedthree machines to enhanceour industrial production.You discover that some ofthe machines we read aboutin the papers, like dehauler,

My dream ofstarting industrialproduction wasstill in the pipelineuntil I gotempowered by theFederalGovernmentthrough the YouthEnterprise WithInnovation inNigeria (YouWin)programme

* Mr Olusanjo Philip... I have invented threemachines to enhance our industrial production

washer etc., are not effectivebut personally, I haveinvented two models ofdehaulers, a washer and afermentor for industrialprocessing of iru.

* Some of the employeesat work.

* Iru


Aviation

Micro-Finance

Godwin Ehigiamusoe MD LAPO MfB

UPMFB tUPMFB tUPMFB tUPMFB tUPMFB to disburo disburo disburo disburo disburse N1se N1se N1se N1se N1.5bn in 20.5bn in 20.5bn in 20.5bn in 20.5bn in 201515151515Stories byPROVIDENCE OBUH

Umuchinemere Pro-credit MicroFinance Bank (UPMFB) is set

to disburse about N1.5 billion as loanfacility to the active poor in its 2015financial year.

Meanwhile, the bank disbursed atotal loan facility of N1.13 billion asmicro loan to about

5, 395 low income earners in 2014.In a statement, the bank said that

about N659, 700, 000, representing58.32 percent was given to micro loan

clients as micro loans and N367, 788,150, representing 32.51 percent of thetotal loan was given as other loans.

According to the statement, the bankis collaborating with the Enugu Stategovernment and the Central Bank ofNigeria (CBN) in a partnershipprogramme in the management of theFederal Government’s N220billionMicro, Small and Medium Enterprises(MSME) Development Fund.

A breakdown of the total facility

indicate that a total of 2,300 male clientsreceived N589,245,900, representing52.09 percent of the total loansdisbursed in 2014 financial yearended, while 1,986 females got a totalof N438,242,250, representing 38.74percent of the total facility.

In the period under review, the bankdisbursed a total Temporary Over Draftand Advances of N103,700,100,representing 9.17 percent of theN1.13bn, to its deserving clients,comprising mainly low income workersthat receive their salaries and pensionsthrough the bank.

How LAPO builds capacity for sustainablegrowthConscious of its target to

achieve five million clients bythe year 2017, LAPO Micro financeBank (MfB) has again churned outgraduates from its ManagementTrainees and Talent Poolprogramme, in partnership with theGerman AFOS Foundation and theGerman Catholic EntrepreneursAssociation (BKU) co-financed bythe German Government.

The partnership is to strengthenthe bank as regards its capacity topromote qualitative growth and toefficiently manage the quality of itsservices.

Management trainee is a selection

of people, fresh graduates withmanagerial skill through selectionprocess and interviews in the bank toensure best candidate in differentareas of the organisation emerge. Thetalent pool programme is a continuousimprovement mechanism throughwhich LAPO will identify, nurture anddeploy selected employees to wherethey will be most effective toguarantee the sustainability of thebank growth process.

The essence of the programme is tohelp the orgaisation effectivelymanage its exponential growth asanticipated in its strategic plan in themedium and long term period of 2013-

2017.Meanwhile about 12 candidates

graduated the management traineesfor 2015, compared to nine in 2013 with39 candidates of talent pool.

In his address titled, “GroomingLeadership and Sustainability,” MDLAPO MfB Mr. Godwin Ehigiamusoe,highlighted; skill, vision, competence,integrity and trust, among others, assome of the qualities a leader mustpossess.

“Leadership is about everything, youmust invest in acquisition ofknowledge to be a leader andcommitment is important tosustainability,” Ehigiamusoe said.

FG engages consultants to reconcileairlines’ debts

Stories ByLAWANI MIKAIRU

Managing Director, NigerianA i r s p a c eManagement Agency

,NAMA, Engr Ibrahim Abdulsalamweekend disclosed that the Federalgovernment has engaged the servicesof financial consultant to reconcile theindebtedness of domestic airlinesoperating in Nigeria to the aviationagencies , namely, Nigerian AirspaceManagement Agency ,NAMA,Federal Airports Authority of Nigeria,FAAN, and the Nigerian Civil AviationAuthority, NCAA.

Abdulsalam disclosed this in a mediachat with aviation correspondents inLagos. He added that the internationalcarriers operating in Nigeria have beenup to date in paying their charges tothe agencies. He also said that if thedebt owed by the local carriers was notproperly addressed, it would groundthe services offered by the agencies inthe aviation industry.

According to him “We are workingout modalities for payment of debtsowed by the airlines. That is why weare not releasing the figure they oweus. It is our local airlines that have beendefaulting in payment; they are partof our system and we have to bemoderate with them.”

“Nobody goes to fly on credit; youhave to pay for the ticket. That is whythe airlines should honour their debtobligations to the agencies. If weground the airlines, people will beaffected. It will not immediately solvethe problem and I believe we will

manage it,” he said.He said that the agency had being

in discussion with an Arik consultantapproved by the federal governmentconcerning the debt owed by theairline. And that Airline Operators ofNigeria, AON, is handling thereconciliation of the debts owned byother domestic airlines aside Arik Air.

On the International Civil Aviation

Organisation Security Audit,ICAOSA, of Nigeria aviation sectorthat would take place in June,Abdulsallam said that NAMA wouldwork with other agencies in theaviation industry to prepare for it.

He also the federal government hadhelped NAMA in paying off its debton the Total Radar Coverage ofNigeria (TRACON) project.

Abdulsalam further said that the newNavigational Aids equipment justprocured by the agency would beinstalled at six airports across thecountry, including Lagos . Accordingto him, a lot of new air routes havebeing created to reduce fuelconsumption and air travel time by theairlines.

Stakeholder calls on local airlines to buy cargo planes

M r Owolabi Awosan, VicePresident, Greater

Washington Logistic cargo company,has called on domestic airlineoperators in Nigeria to buy cargoplanes to facilitate the movement ofcargo across the country by air. Hesaid heavy cargo brought into thecountry by foreign airlines aredistributed across the country by road.

He added that road transportationhas many hazards especially forsensitive goods and perishables. Healso said if airline operators in thecountry had dedicated cargo planes,most of such goods would be freightedby air. Adding that air cargo wasrelatively cheap, faster and safer butpeople lack the awareness to makeuse of the opportunity it creates.

According to him what many peopleare not aware of is that it is cheaper tosend a kilogramme of goods by air thanby road. For example, most couriercompanies charge 1,000 Naira for aparcel of goods that can be freightedby air for not more than 300 Naira,even if it is done through an agent.

He also said government shouldencouraged airlines operators to havededicated aircraft build for cargooperations within the country. “Thereis no dedicated aircraft for domesticcargo distribution within the country.What we have most is the internationalairlines with big belly aircraft that aremostly operating cargo business here.

“The aircraft we use here are not bigbelly, we have big items that cannotgo under the belly of our domestic

carriers. So most of the items go byroad. We use the domestic carriers todistribute items within the countrywhile the international aircraft areused to distribute items outside thecountry.”

He urged the media to partner withcargo companies in the country tocreate awareness among the public.“Logistic is not about moving goods/items by road or sea alone, it is alsoabout using the airspace which is saferand faster.

“Nigeria is more into import thanexport, we are developing nation. Itis now government is promoting ourmanufacturing companies, in a fewyears the country may start exportinggood/items and there will be moregoods/items to export.

CMYK

Advertising & Promotions


CMYK

STORIES BY PRINCEWILLEKWUJURU

In December 2014, afterfinalizing its merger

talks with ConsolidatedBreweries, CB, PLC, whichbrought to 21 brands in itsportfolio, Nigerian Breweries,NB Plc, launched a newproduct, Ace Roots, in whatindustry observers describedas a direct competition withGuinness Ready to Drink,RTD brand, Orijin.

The management of NB,after the merger last yearlaunched its biggestmarketing onslaught againstOrijin, a product from thestable of Guinness NigeriaPlc. The Sales Director of NB,Hubert Eze, while presentingthe brand, said the launch wasinformed by the quest to meetthe needs of consumers andreconnect them to an erawhen herbal drinks held swayto cure many healthchallenges.

He said the drink is blendedwith African herbs mixed withspirit. “We want to take ourconsumers back to the root.Sometimes, we don’t lookback,” he said. While publiclydoing what he called a

Bitters market: Ace Roots closes in on Orijin

“comparative marketing” oncompetitors product, Ezesaid with the significantgrowth of the ready to drinkmarket since 2008, that ismajorly driven by Orijin, NBis coming to the market witha unique selling point. “Thedrinks boosts of at least 14natural ingredients, amazing

alcopop taste, and less sugarand alcohol.” He stated.

However, before the adventof Ace Roots, products likeAlomo Bitters, Kerewa, OrijinBitters, Ogidiga, Ibile, BabyOku, Yoyo, Sappiro LemonGinseng, Kogbebe, Koboko,Osomo, Dadubule, Durosoke,Pasa Bitters and many othersruled the market.

All these products enteredthe Nigerian market using‘sex energy boost’ as selling

point. After all, ‘sex sells’, ittook them little time tooverrun the Nigerianalcoholic beverage marketwith spurious claims ofefficacy to cure and preventall diseases.

Contrary to claims, theseproducts have been found tocontain high dosage ofethanol, caffeine and hemp.Instead of ‘herbal extracts’,the bitter taste of many of theproducts is actually from‘muru’, a substance used intreating pile in the northernpart of the country.

In order to verify the claimby NB also, Vanguardconducted a market researchat various drinking jointsacross Lagos, Ogun, Ibadan,Imo etc, the probe showed thatproduct is fast gainingacceptance and is poised totake over the lead in themarket from competingbrands. What was responsiblefor the quick return oninvestment according to Mr.Ajole Amakua, a BrandSpecialist Director with June24 Media, said the marketingstrings being pulled by NB isgiving the new product anedge, because the ownershave the finance to runvarious campaigns, they arenot controlled like their major competitor. “They havebeen able to establish theproduct in the minds of theconsumers in this short time.”

What I also noticed is thatAce Root has eaten into a bigproportion of the Orijinmarket. He stated. Aconsumer, who simply giveshis name as Mike said hedrinks Ace Roots because ofits low sugar andaffordability. For OgaziOnami who was accosted atRoyal Garden Restaurant inIba, said he prefers Ace Rootto Orijin because of its naturalherbs, low sugar and its mildalcoholic content. Mr. EmmaEruebe, a Civil Engineer, sayshe cools off with Ace Rootsbecause he has to switch overas a result of low sugar andprice since one has to watchhis pocket and health, what Ialso noticed is that Nigeriansare aware and know what isgood for them.

Even though the visibilityof both products are almostthe same in the market, thereis no where you go you don’tsee the flyers of both product,telling you of theiruniqueness, but the questionis will Orijin be able tosustain its campaigns.?

Aside gaining considerableedge over its closes competitorin the area of pricing, AceRoots is very low in sugar (onecube) compared to Orijin’sabout five cubes per 60 clbottle.

Amidst other competing Bitters brandin the market, Agya Appiah

Bitters Limited, manufacturers of alcoholicAgya Appiah Bitters, Ghana, hasannounced its official entry into Nigeria.

Speaking during a media briefing, Mr.Andrews Akolaa, Acting Chief ExecutiveOfficer, Agya Appiah Bitters, said theintroduction of the new product is toreinvigorate and fill the gap in the NigerianBitters market by providing it with thepurest and most natural blend of alcoholicbitters which is currently being enjoyed inother markets around the sub region andother parts of the world.

He explained that the bittersmanufacturer has always been driven by theneed to do things differently and better. “Wemake bold to say that we are truly a Bittersbrand that is all natural in composition; NOartificial colour, and no artificial flavour,evidenced by a smooth running taste downthe throat.”

On what makes the new product different;Akolaa said: ‘our Bitters’ medicinal valuesare widely acclaimed for improving thegeneral wellbeing of both the young andold. Agya Appiah prepares Bitters fromacclaimed herbs. These herbs have beenused as a result of years of research intothe useful properties of various medicinalplants.”

He noted that the Founder, a foremostpractitioner and former President of theGhana Federation of Traditional MedicinalPractitioners Association, developed thesechoice herbs from the magnificent forests

Agya Appiah entry boosts Nigeria Bitters market

Campaign: Mr Campaign: Mr Campaign: Mr Campaign: Mr Campaign: Mr Biggs to donateBiggs to donateBiggs to donateBiggs to donateBiggs to donate5% proceeds to5% proceeds to5% proceeds to5% proceeds to5% proceeds tocharity charity charity charity charity

Quick Service Restaurant,QSR, Mr Biggs, says it

is embarking on a two proneactivation tagged; ‘’Make ADifference,” with Coca colaNigeria, aimed at connectingwith children on May Day toreward loyalty, where 5percent of its proceeds willbe donated to charity.

Speaking, Mufutau Fasasi,Finance Executive, UACRestaurants, said during apress briefing that themarketing initiative isleveraging on its corporatesocial responsibility, CSRvalues to create the neededvibe and hype which resonateswith the brand’s targetconsumers and pull foot trafficto the restaurants.

Fasasi said that during thecampaign, every customerwho participates stands thechance of winning a Mr Biggsmeal ticket worth N4,000 which would be decidedthrough a raffle draw.

Continuing, he stated, “ourchange collection boxes will beavailable at the restaurants forcustomers to drop theirchange after products arepurchased.” The proceedswill be collated and given tocharity homes.

IDL donatesblock ofclassroomsIntercontinental Distillers

Limited’s, IDL,Corporate socialresponsibility, CSR, Initiative came alive again asthe company donated a blockof four classrooms and twooffices to Ilogbo AsowoCommunity High School,Ilogbo, Ota, Ogun state.

The Managing Director,Chief Patrick Anegbe, whowas of the view that thebuilding will go a long wayin contributing to the growthand improvement in thestandard of education in thecommunity, said, “learningthrives in a conduciveenvironment, as it’s aprerequisite for effectiveunderstanding and qualityeducation.”

He stated that qualityeducation offers “our childrenthe best opportunity in life torealize their dreams andbecome the leaders oftomorrow.”

ACTIVATION - From Left: Adeyanju Babatunde, Key AccountExecutive, Nigerian Breweries Plc., Abeokuta, IyanudunuOgunrinde, winner brand new generator and De Don,Comedian and Compere at the Legend Extra Stout Taste andTell Activation in Abeokuta.

of Ghana into a high quality alcoholicbeverage.

“As a former president of the GhanaFederation of Traditional medicinalPractitioners Association and foremostpractitioner, our Founder has ensured thatthe product meets the best standards and iscommitted to quality excellence. And giventhis background the company has alwaystoed his vision to remain natural in anyproduct we put into the market and thismakes us different.”

“Agya Appiah is endorsed by the Centrefor Scientific Research into plant medicine;the agency responsible for analyzing plantbased medicinal products in Ghana and anaffiliate of W.H.O. The blend of 13 differentmedicinal plants come with many healthbenefits,” he stressed.

He stated that the product comes in a glassbottle size of 750ml and 200ml PET forconnoisseurs on-the go - the perfect size thatfits in any pocket.

To achieve success in this highlycompetitive market Agya Appiah haspartnered with five distribution companiesin Lagos and with their vast network ofwarehouses within major cities, a robustcustomer base and partners across thecountry, they are positioned to provideexcellent and superior sales, logistics andsupport services to Nigerian customers.

Also speaking at the event, SamuelOhemeng, Production Manager, AgyaAppiah Bitters Limited, expressed thecompany’s commitment to maintainingquality and the cultured taste of the product.

Business & Economy

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


CMYK

Omoh Gabriel - Group Business EditorBabajide Komolafe - Deputy Business EditorClara Nwachukwu - Energy EditorPeter Egwuatu - Asst. Business EditorYinka Kolawole - Snr Bus. CorrespondentFavour Nnabugwu - Insurance CorrespondentGodwin Oritse - Maritime CorrespondentGodfrey Bivbere - Maritime CorrespondentMichael Eboh - Energy ReporterFranklin Alli - Industry/Agric. ReporterIfeyinwa Obi - Maritime ReporterRosemary Onuoha - Insurance ReporterNkiruka Nnorom - Capital Market Reporter

CONTRIBUTORSPrincewill Ekwujuru - Media/MarketingJonah Nwokpoku - E-CommerceNaomi Uzor - IndustryProvidence Obuh - Micro FinanceLAYOUT - Graphics Department

The plastic subsector isexpected to grow by

seven percent over the nextten years, just as a positiveoutlook is projected for thepackaging industry due toincreased market demand andsophistication of the Nigerianconsumers.

Also, imports of foodprocessing and packagingmachinery witnessed anincrease of €331 million in2013, compared to €198million in 2010, ManagingDirector, Fairtrade, Mr.Martin Marz, said this at thejust concluded Agrofood &Plastprintpack Nigeria 2015exhibition in Lagos, saying

BY PROVIDENCE OBUH that the figure represents 67percent increase in the periodunder review.

Martin said that theNigerian plastics andpackaging sector has grown toover 3,000 companies and theindustry is fairly developedand tends to mirror the trendin the local fast movingconsumer goods industry.

He noted that flexiblepackaging and plasticspackaging have become verypopular in Nigeria. Rawmaterials employed in thepackaging subsector aremostly imported. “Growth inthe plastic and packagingsector has been driven by theincreasing sophistication ofthe Nigerian middle class.”

Meanwhile, within theperiod, imports of packagingmachinery and equipmenthave gone up from €86million to €182 million at 116percent, while imports ofplastics machinery grew by 71percent from €52 million to€89 million.

Marz added that the foodand beverage sector of theNigeria economy contributeabout 4.6 percent of its GDPnot less than 66 percent of totalconsumer expenditure. Foodand beverage sector is thelargest segment of theNigerian manufacturingindustry compriisng 22percent, “its is estimated at€16 billion in aggregateoutput.

Plastic subsector to grow by 7% by 2025

Media reports, lately,suggested that theapproval for the

2015 Appropriation Bill, whichwas seemingly rushed throughthe National Assembly, in thelast week of April, did notcontain any provision for thepayment of the usual subsidyon petrol and kerosene.Nonetheless, the anxiety oflabour and the otheradvocates and beneficiaries ofthe subsidy scheme may havebeen doused by the SenateCommittee Chairman onFinance, Senator AhmedMakarfi’s subsequentstatement that, contrary tosuch reports, the NationalAssembly had infact approvedthe sum of N100bn as subsidyfor Premium Motor Spirit(petrol) while N43bn wasapproved for kerosene for the2015 fiscal year.Nonetheless, the federalgovernment, had in contrast,budgeted about N970bn forfuel subsidy in 2013, whileonly N515 was released to oilmarketers according to areport titled “Senate approvedN143bn for fuel subsidy” in thePunch edition of 1/5/2015.Furthermore, according to thesame report, “the sameamount was also budgeted forthe 2014 fiscal year, with onlyN414bn so far paid.Thus, with the above historicaldata on subsidy provision andpayments, critics may see theapproved meager sum ofN143bn as a booby trap for theincoming administration,since there is nothing tosuggest that the price of crudewill further plummet below$50/barrel or that demandwould fall below the projecteddaily average of 40m litres.In addition, availablePetroleum Product Pricingand Regulatory Agency,(PPPRA ) data, indicate that

Is the abolition of fuel subsidy imminent?subsidy on petrol has soared toN43.25/litre, up from N2.84 asat January 2015. Thus, anestimated daily subsidy ofN1.7bn with current crudeprice and Naira exchange ofN197/$1, will amount to overN620bn this year. It is not clearif this figure also includesprojected subsidy paymentsfor kerosene. So, why then didthe National Assemblyapprove barely 25% of thehistorical annual averagesubsidy payments.However, Senator Markarfiassured Nigerians that the‘paltry’ subsidy provisionshould not stop the initiationof a supplementaryAppropriation Bill by Buhari’sincoming administration tocover any difference above theN143bn already approved bythe National Assembly.Indeed, if crude prices stabilisearound the current $60-$65/barrel, the subsidy shortfallcould be well over N500bn,and the projected deficit ofalmost N1Tn in the 2015budget may rise beyondN1.5Tn or constitute almost33% of total budgetedexpenditure of N4.49Tn!Instructively, with interestcharges presently between 10-16% for government loans, itmay cost well over N200bnjust to service those debts,which were primarily inducedby expenditures on fuelsubsidy, consequently suchadditional expenditure willcompound the almost N1Tndebt service charge initiallyembedded in the 2015 budget.However, these servicecharges must be distinguishedfrom the N600bn interestpayment that CBN wouldsimilarly incur in the processof mopping up unceasingsurplus liquidity from themoney market. Ultimately,consolidated domestic debt

service charges alone, sadly,may well exceed 30% of thepaltry 2015 budget.Regrettably, delayedpayments of verified subsidyclaims, may inadvertently alsofurther bloat the alreadyoppressive service charges onloans obtained to finance the2015 budget deficit and otherearlier government debts.Curiously, the imminentfederal and state elections, mayhave forced government toaccede to pressure frommarketers to pay thedemanded balance ofN256.2bn, which they claimedincluded core subsidy as wellas interest on delayedpayments and exchange ratedifferentials.Incidentally, the marketers,have since confirmed thatN40bn was the actual coresubsidy value outstanding forpart of 2014 and deliveriesunder Batch A & B in 2015;nonetheless, according to themarketers, the balance on therelated foreign exchangedifferentials and the accruedinterest on the outstandinginvoices would come toN215bn after the maturity ofgovernment’s N100bnsovereign debt note by the30th of April. Thus, if Nigerianswere already apprehensiveabout the huge and clearlyunsustainable incidence ofsubsidy values, then they must

be surely perplexed thatpayments, which were delayedbecause of lack of funds, arenow compounded by anadditional sum of N215bn forinterest on delayed paymentsand exchange rate differentials.Surely, if this is not a scam, it iscertainly a reckless fiscalstrategy which is totally indenial of an imminent nationaldebt trap.In her response, the financeMinister, Dr. Okonjo-Iweala,confirmed last week that thesum of N56bn will additionallybe paid to offset interestdifferentials; according to Dr.Okonjo-Iweala, “after thesepayments, a subsidy balance ofN98bn already certified byPPPRA would be left as theamount owed to themarketers”.Clearly, if the subsidy regimesubsists with the presentculture of delays in settlement,the still outstanding sum ofN98bn will invariably alsoattract additional interestcharges for delayed paymentsas well as exchange ratedifferentials; consequently,consolidated subsidypayments will exceedexpectations and budgetprovisions, particularly if theNaira exchange rate alsocontinues its current slide. Furthermore, if in addition toNaira depreciation, crudeprices unexpectedly climbabove the current $60-65/barrel range, the amount of fuelsubsidy payable for the rest of2015 will similarly increase;worse still, the attendantunbudgeted penalty fordelayed payments andexchange rate differentials willalso increase. Ultimately, ifgood sense, fails to prevail,close to 40% of total budgetedexpenditure in 2015 maybecome dedicated to fuelsubsidy payments!

Incidentally, if governmentappears incapable of alsoreducing its bloated recurrentexpenditure budgets, thepaltry barely N400bnallocation for capital andhuman capacity expenditurein 2015 may become furtherdeflated below 5% of the totalexpenditure of N4.49bn.It is therefore clear that inorder to eliminate subsidypayments without stress, wemay need to ironically praythat crude oil prices (our mainsource of revenue) will fall wellbelow $50/barrel, while theNaira exchange rate will notsuffer further depreciationwhich instigates rising fuelprices, to make subsidyremoval a major challenge.Clearly, organized labour hasalready taken a firm position toreject any attempt to removesubsidy and they have insteadcalled on the government torevamp existing refineries andbuild new ones, so that fuel willbe readily available at lowerprices.It is curious that the samepeople, who clearly recognizethe huge waste and corruptionassociated with public utilities,would still demand for theentrenchment of suchgovernment parastatals.Nonetheless, the abolition ofprice imposition would clearlyattract a host of investors intoprivate domestic refining, butthis would not necessarilyreduce prices to ultimatelyeliminate subsidy.Instructively, however, fuelprices will conversely steadilyfall if the Naira appreciates, asa stronger Naira will translatedown the line to progressivelyinduce cheaper fuel pricesdomestically and ultimatelyeliminate subsidy.

SAVE THE NAIRA, SAVENIGERIA!!

Abolition of priceimposition wouldclearly attract ahost of investorsinto privatedomestic refining

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