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SEPTEMBER 3, 2012

Continues on page 18

CURRENCY BUYING CENTRAL SELLING

CBN Exchange rate as at 31/08/2012*The Hon. Minister of State for Federal Capital Territory, Oloye Olajumoke Akinjide (middle) flanked on the right bythe Secretary, FCT Area Councils Joint Account Allocation Committee (JAAC), Alhaji Yusuf Tsaiyabu and the Chair-man, Kuje Area Council, Hon. Danladi Etsu Zhin (left), during the JAAC meeting chaired by the minister in Abuja.

Alcohol sales surge in Nigeria

Alcohol sales in Africa aresurging because of economicand population growth, a trend

rubbing against the grain of anotherdemographic factor defining the region:intense religiosity. By almost anymeasure, Africa is an exceptionallydevout place and the major growth areafor Christianity and Islam. This shouldhave implications for investors,especially in the fast-growing retail andbeer sectors: they must navigate sacredsensitivities in areas such as marketingand factor the faithful into forecasts anddemographic profiles for the continent’spopulation of just over a billion.

Brewing executives have said they tonedown their advertising campaigns inAfrica and these do tend to beconservative. In Nigeria for example,scantily-clad women tend not to featureon billboards promoting beer brands.Instead, a man in a suit is portrayed

•Despite rising religious beliefs

sipping a refreshing cold lager, ormore often than not, the ad showsjust a giant bottle and glass.According to a 2010 report by the PewForum on Religion & Public Life, thenumber of Muslims living in Sub-Saharan Africa rose 20-fold from

1900 to 234 million.Christianity has grown at an even

more blistering pace, with numberssoaring almost 70-fold over the sameperiod of time to 470 million from just7million. And in the case ofChristianity, much of this growth has

been concentrated in Pentecostalchurches and other evangelicaldenominations which, like Islam, tendto frown on alcohol. The Pew surveyalso questioned people in 19 Africancountries about their views on alcoholconsumption and found that majorityin all but three countries - Cameroon,Chad and Democratic Republic of

New World Bank President, JimYong Kim heads to the Ivory

Coast and South Africa this weekon his first trip to Africa since takingthe reins of the global developmentlender two months ago. The visitcomes at a time when Africaneconomies are among the fastestgrowing in the world although theirdevelopment is constrained byshortages of roads, ports, power

World Bank chief in Africa for first overseas visit

supply, water and sanitation. Despitehigh rates of growth, rising youthunemployment and inequality are agrowing concern.

“Africa is truly taking off and I lookforward to hearing directly fromgovernments and people on thecontinent on how the bank can helpdrive more inclusive developmentthroughout Africa,” Kim said in astatement.

During his trip to the Ivory Coast,starting on Tuesday, Kim will meetPresident Alassane Ouattara and hiseconomic team, which have managedto turn around a stagnant economywithin a year since the end of a civilwar that claimed more than 3,000 lives.The government has launched several

Continues on page 18

DOLLAR 154.8 155.3 155.8

POUNDS 245.2496 246.0418 246.8339

EURO 194.9087 195.5382 196.1678

FRANC 162.2131 162.7371 163.261

YEN 1.971 1.9773 1.9837

CFA 0.277 0.287 0.297

WAUA 234.6356 235.393 236.1513

RENMINBI 24.3824 24.4616 24.5408

RIYAL 41.2745 41.4078 41.5411

KRONA 26.1509 26.2353 26.3198

SDR 235.4198 236.1802 236.9406

164.35 +0.95

2,611.00 +10.00

19.78 +0.03

114.68 +2.03

96.48 +1.86

18 — Vanguard, MONDAY, SEPTEMBER 3, 2012

Cover Story

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Continued from page 17

*The Hon. Minister of Trade and Investment, Olusegun Aganga, and Executive Chairman,Adhama Textile & Garment Industry Limited, Alhaji Saidu Dattijo Adhama, inspecting thenew textile machines acquired through the Bank of Industry’s credit facility to the company,during Aganga’s two-day inspection tour of industries in Kano.

Congo - found it morallyobjectionable.

“Views on this issue arerelated to how religious aperson is,” said Neha Sahgal,a Pew research associate.What we found is that in mostof the countries those whopray several times a day aremore likely to find drinkingalcohol morally objectionablethan those who pray less,” shetold Reuters in a phoneinterview.

Against this backdrop ofpiety, the conservativeapproach to advertising seemsto be working. Home to someof the world’s fastest growingeconomies, Africa’s thirst forbeer and spirits is surging:analysts estimate beervolumes rose around 7percent last year. Excludingthe mature South Africanmarket, growth reached morethan 10 percent. Drinkscompanies want to maintainthe momentum.

SABMiller is investing upto $2.5 billion over the nextfive years to build andrenovate breweries on thecontinent. African sales ofrival Diageo, the maker ofGuinness, have risen by anaverage 15 percent in each ofthe last five years, accountingfor 14 percent of the group’stotal. Nigeria’s 160 millionpeople are now the world’ssecond biggest consumer ofGuinness, after Britain, andanalysts expect it to take thenumber one slot within acouple of years. Cameroon,with a much smallerpopulation of around 20million, is the fifth biggest.

In Nigeria, Africa’s mostpopulous country, which is

Alcohol sales surge in Nigeria

major infrastructure projectsand restored security acrossmost of the cocoa-growingcountry. He will also visit anindustrial park for small andm e d i u m - s i z e dagribusinesses, which willhighlight the push for moreinvestment in agricultureamid increasing volatility infood prices.

The World Bank last weeksaid global food prices hadjumped 10 percent in July asdrought parched crop landsin the United States and inEastern Europe, and it urgedgovernments to shore upprograms to protect thepoorest. Kim will end his tripin South Africa where he will

World Bank chief in Africa

for first overseas visit

evenly divided betweenIslam and Christianity,church and mosque numbersare exploding alongside beerconsumption. Beer turnoverin Nigeria is growing fasterthan its economy. “At themoment, beer consumption isabout 19.5 million hectolitersin 2012 and growing at about8-9 percent per annum,” saidEsili Eigbe, an analyst atStanbic IBTC, who covers thebrewery sector. A number offactors could explain this.Africa’s population is youngand many of the region’sconverts find their religiouszeal only as they grow a littleolder. In any case, most

people’s drinking peaks intheir 20s. And a lot ofAfricans, like a lot of peopleon other continents, are bothreligious and thirsty.

“People’s sense of moralitysometimes doesn’tcorrespond with theirbehaviour. This is not uniqueto Africa,” said Sahgal, anexpert on polling on religiousissues. Some Africans areperfectly comfortable with thisfact. “Islam advises againstalcohol but does not forceyou. I drink to help me relaxafter a hard day’s work,” saidWasiu Abudu, a 42-year-oldauto mechanic who lives inLagos.

hold talks with South AfricanPresident Jacob Zuma andFinance Minister PravinGordhan, as well as localentrepreneurs.

A wave of labor unrest andviolence in South Africanmines has highlightedfrustrations over risingpoverty, inequality andstubbornly highunemployment. “South Africais a key factor of Africangrowth and a leading voicefor the African continent inthe G-20 and other globalforums. It is also an importantdriver for trade andinvestment,” said Kim,former president of the IvyLeague college Dartmouth inNew Hampshire.

Continued from page 17

,

,

An entrepreneur is aperson who makesplans for a business

or a piece of work and gets itgoing. Anyanwuocha (2001)observes that theentrepreneur is the chief co-ordinator, controller andorganizer of the productionprocess. The entrepreneurcombines other factors ofproduction (land, capital andothers) in such a way as toobtain maximum productionof goods and services atminimum costs. In order toeffectively enhanceoccupational skills in thepresent day, entrepreneursneed also to acquireinformation andcommunication technologyknowledge and skills.Mkpozi (1996) observed thata country that is developingand manufacturing its owngoods either from Hi-Tech orsmall/medium scaleindustries using indigenousskills and exports some ofthose goods to other countriesis usually economicallystable. This could be betterachieved through theacquisition of entrepreneurialand occupational skills intechnology and vocationaleducation. Individuals withtechnical and vocational skillsand good knowledge of ICTare characterized by self-reliance, self-employmentand fit properly into today’stechnical, entrepreneurialand business world.

The entrepreneur should,therefore, possess technicalskills, ideas and managementskills which are necessary forthe success of the venture.One of such skills isinformation andcommunication technologywhich is characterized byemployee empowerment andinvolves the making ofunskilled and semi-skilledworkers to be skilful andfunctional in today’s world. Italso involves thedevelopment of task orientedteam of workers who nolonger depend on individualmanagers for all theirdecisions to achieve targets.Technical process re-engineering are also requiredto redesign technical work

Vocation and technicaleducation – A key toimproving Nigeria’sdevelopment (3)

processes, jobs,organisational structure,management system, andalso in process designs usedin manufacturingindustries.

These components of ICThave great implications forthe enhancement ofentrepreneurship educationin technology andvocational education field ofwork. According to Azuka,Nwosu, Kanu and Agomuo(2006), classroom behaviourmust align with ICT-drivenenvironment which is

constantly shaping and re-shaping the work place andconsequently, what is learntand how learning takes place.

There are various numbersof opportunities fortechnology and vocationaleducation graduates withentrepreneurship skills in ICTdriven technical andvocational educationenvironment. Theseopportunities exist in variousforms for enhancingentrepreneurship skills.Nwabuona (2004) viewsentrepreneurship educationas the identification of thegeneral characteristics ofentrepreneurs and howpotential entrepreneurs canbe trained in managementtechniques needed foreffective performance ofpersons for long time survivalof an organisation.

Theentrepreneurshould,therefore,possesstechnicalskills, ideasandmanagementskills whicharenecessaryfor thesuccess ofthe venture

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,

The recentpronouncement of the

Central Bank of NigeriaGovernor, Sanusi LamidoSanusi of the intention of theCBN to redesign the nation’scurrency, has provoked lots ofargument from both theinformed and the not so wellinformed. The CBN hasproposed to issue a N5,000note and to coin N5, N10, N20etc. The CBN had argued thatit was long it last reviewed thecurrency in circulation in thecountry. Is the CBN carryingout the review for the sake ofit or it wants to achieve aparticular monetary policy?There are mainly twoimportant instruments withwhich objectives ofmacroeconomic policy can beachieved. Monetary policy isconcerned with changing thesupply of money stock and rateof interest for the purpose ofstabilizing the economy at full-employment or potentialoutput level by influencingthe level of aggregatedemand.

More specifically, in times ofrecession, monetary policyinvolves the adoption of somemonetary tools which tend toincrease the money supplyand lower interest rates so asto stimulate aggregatedemand in the economy. Onthe other hand, in times ofinflation, monetary policyseeks to contract the aggregatespending by tightening themoney supply or raising therate of interest to combatinflationary pressure. In thepresent circumstance, is theCBN seeking to move the

CBN currency redesignmove is self seeking,no foreseeable gain

economy to full employmentor fight inflationary pressure?Far from it! In the context ofdeveloping countries likeNigeria, there are fourobjectives of monetary policy:to ensure economic stability atfull-employment or potentiallevel of output; to achieveprice stability by controllinginflation and deflation; topromote and encourageeconomic growth in theeconomy and achieve balanceof payment of exchange ratestability.

According to the CentralBank of Nigeria Act, 2007,(Section 2), “the key objectsof the Central Bank shall beto: (a) ensure monetary andprice stability; (b) issue legaltender currency in Nigeria;(c) maintain external reservesto safeguard the internationalvalue of the legal tendercurrency; (d) promote a soundfinancial system in Nigeria;and (e) act as banker andprovide economic andfinancial advice to the FederalGovernment.”

The Central Bank byfocusing on the naira,

means that it intends to laygreater emphasis on the mostimportant function of centralbanks everywhere in theworld namely, to issue legaltender currency and to defendits value domestically, byensuring low inflation andexternally, by ensuringappropriate and stableexchange rate regime.

In what way willredesigning the naira, theissuance of N5, 000 note andcoinage of the lower

denominations enhance thedomestic and internationalvalue of the naira? It is doubtfulif the current move will take thenation anywhere near the

stated goals. Printing willdefinitely not be done locallybut abroad. The N40 billion tobe expended will be paid toforeign contractors who willgenerate employment in theircountry at our own expense.The CBN under ProfessorChukwuma Soludo promisedthat the Nigeria SecurityPrinting and Minting Companythe CBN took over will beresuscitated to undertake theprinting and minting 100 percent of the local currency.Where is the Mint and itsposition today? Is redesigningthe nation’s currency Nigeria’spriority now, in a situation ofmassive unemployment? WillN40 billion if invested in othersectors of the economy notincrease production and make

goods and services cheaperthus reducing the level ofinflation in the country?

The CBN by desiring to putinto circulation a higherdenomination of the naira isadmitting to the failure ofmonetary policy to adequatelyaddress inflation in thecountry. In any part of the

world where cashless policyis pursued, higherdenomination currencybecomes obsolete as peopleare encouraged to doelectronic payment. It isridiculous that at a time whenall government payments tocontractors, employees andothers, are done throughelectronic means, the CentralBank is coming up with ahigher denomination. Whoneeds it? Whatever is theargument being put forwardby the CBN to justify this, itis not going to enhance thelocal and external value of thenaira and as such, it is of nouse at the moment. What theCBN should do for Nigeria asthe second largest economy inAfrica is to make the Naira

the currency of reference onthe continent, and thus astrategic catalyst for achievingthe goal of an internationalfinancial centre as well aspromoting Nigeria’s rapideconomic development.

The thrust of any currencyreform in Nigeria should

focus on how to ensure itsstability and globalintegration. This will help todeepen the financial systemand national economy, andmake the naira the currency ofreference in Africa. The CBN’slast attempt to re-introducecoins into the economy was afiasco. The 1 kobo, 2 kobo, 5kobo, 10 kobo, 20 kobo, andone naira that were coinedliterally disappeared fromcirculation. Before then, goodsand services were available inthe affected lowerdenominations. As soon asthey were coined, marketwomen started rejecting them,took them to goldsmiths andmelted them for ornaments.

Elementary economicsalso teaches that at certainlevel, coins cease to becomelegal tender. There is no wayany one in today’s Nigeria willwant to carry N5,000 in coinsaround with him. Today, Nige-rians have prices listed in 50kobo, N5, N10 and N20 be-cause they are notes and notcoins. The base price list todayis N50 because it is a note.Coining N5, N10 and N20 willsimply take them out of circu-lation. If the CBN were to learnfrom experience, it will knowthat as soon as twenty naira iscoined, it will go out of circu-lation and N50 will become thebase currency. If this happens,prices will be redenominatedand this will lead to local priceadjustment. If this does notlead to induced inflation, theCBN should give us anothername for it.

The CBN by desiring toput into circulation ahigher denomination ofthe naira is admitting tothe failure of monetarypolicy to adequatelyaddress inflation in thecountry.

BUSINESS & ECONOMY

Edo Chairman, TradersWelfare Union, MrLucky Irukpe, has

said that the state governmentloses N1.2 million to illegaltax collectors every week in allthe major markets in the state.Irukpe told newsmen in Beninthat illegal tax collectorsinvade markets and extortmoney from street traders thatwere not remitted to thegovernment.

He said that the act wasbeing carried out by some ofthe committee members set upby government and privateowners of market stalls. The

Edo Govt. loses N1.2m to illegal tax collectors weeklychairman said he had been avictim of extortion for the past17 years, adding that therevenue collected were notgoing into the coffers of thestate government. He saidthat the population of streettraders were more than theregular traders inside themarket, adding that a one-million capacity market couldnot accommodate the traders.Irukpe said, “We, the tradersare the only ones that canstop street trading within 21days, if given the opportunity.

“We are determined to put astop to street trading to

ensure that the sufferings andunjust harassment of thetraders in the hands of illegaltax collectors becomes a thingof the past.” According to him,the committees set up to put astop to street trading are not

capable because they lackmoral justification to tacklethe menace. Irukpe explainedthat street trading was anembarrassment to the on-going development stride ofthe governor, adding that it

was occasioned by agents andlandlords who hike the rent ontheir shops.

He called on the stategovernment to address theissue of the agents andlandlords, whotake advantage of everysituation to increase rent onshops.

IFC, a member of the WorldBank Group, and Interna-tional Enterprise Singa-

pore, part of the Ministry ofTrade and Industry, signed amemorandum of understandingon Thursday to jointly identifygrowth sectors in Africa for Sin-

IFC and IE Singapore sign memorandum of understanding to invest in Africa

gapore-based companies toinvest in and to share busi-ness leads and opportunitiesthrough partnerships. Thesigning took place on thesidelines of the two-day Afri-ca Singapore Business Fo-rum.

The forum is hosted by In-ternational Enterprise Singa-pore to provide a platform forSingaporean and other Asiancompanies to connect withpotential business partnersfrom Africa.

20 — Vanguard, MONDAY, SEPTEMBER 3, 2012

CMYK

BRIEFS

Business & Economy

Bankers fault Sanusi, describeintroduction of N5,000 note aseconomic waste

BY VICTORAHIUMA-YOUNG

LAGOS: BANKERS inNigeria, under the ae-gis of the Association

of Senior Staff of Banks, In-surance and Financial Insti-tutions, ASSBIFI, has faultedplanned introduction ofN5,000 note by the CentralBank of Nigeria, CBN, nextyear, saying it would be aneconomic waste to the nation.

ASSBIFI in a statementargued that the estimatedN40 billion to be spent on theproposed Naira restructuringcould be better channeled toenhance the perennial powerproblems, health, education,and road rehabilitation and soon.

In the statement by itsPresident and SeniorAssistant Secretary-General,Sunday Salako and FridayInegbedion respectively,ASSBIFI said, “the announce-ment of Thursday August 23,2012 by the Central Bank ofNigeria on the proposed re-structuring of the Naira thatwill lead to the introductionof N5,000 note come year2013 was received with greatshock that we are yet to re-cover from. ASSBIFI, as anumbrella body for all seniorworkers in banking, insur-ance and financial institutionsin Nigeria strongly opposethe whole idea of the pro-posed Naira restructuring atthis point in time, particular-ly the introduction of higherbanknote of N5,000 next yearby CBN under its currentlyredesign programme tagged‘PROJECT CURE.’ The ques-tion we are asking as practi-tioners and as Nigerians iswhat project or object is theprogramme out to ‘cure’? Isit inflation, interest rate, im-

proper banking habit, bankrobberies, unemployment, cor-ruption, money laundering,poverty, insecurity, etc?

“We have always advocatedthat national issues of thismagnitude with serious mon-etary and fiscal implicationson the nation's economy, shouldbe subjected to public debate.We seriously disagree with the

CBN Governor’s claim that theidea is as a result of inflation-ary pressures, rather, we be-lieve it is more of miscalcula-tion and economic somersault.Nigerians are yet to come toterms with the economic gainsof Sanusi’s reformation agendasince assumption of office as gov-ernor of Central Bank of Nige-ria. For instance, interest rate is

still at double digit level; dustsraised by the recapitalisation cumnationalisation of banks are yetto settle as workers are laid offin droves without adequate pro-vision for their terminal benefits;the cash-less programme is stillat the experimental stage.

“Let us take some time to lookback. This is the 10th time thenational currency, Naira will berestructured since its introduc-tion in 1973 to replace thepounds sterling. Prior to thePounds, the people of Nigeriawere using cowry shells as cur-rency. In all of these, it only sig-nals the devaluation of thenation’s currency and slip-pery slope towards hyper-inflation. The introductionof higher value currencynotes in the economy oftensignifies a regime of in-creased and sustained fis-cal deficit financing. Ourancestors developedhunch-backs carrying sacksof shells, so the presentgeneration has bluntly re-fused the same load ofcoins. What they do imme-diately is to price all goodsand services out of thosecoins range. The infrastruc-ture suitable for appropri-ate use of coins in our soci-ety are conspicuously ab-sent.”

“Bank workers are con-stantly and continuallymaimed and killed as banksare fire bound with dyna-mites and huge sums of rawcash carted away. High de-nomination currencies willincrease the amount of cashat bank vaults thus makingthem vulnerable to attacks.

Concessionaire invests N40bnon port infrastructure

Managing Directorof Apapa Bulk Ter-minal, Capt. Em-

manuel Omotayo, has saidthat the company has invest-ed over N40 billion ($250 mil-lion) on infrastructure after theconcession of the terminal in2006. Omotayo disclosed thisin an interview in Lagos. Hesaid that the company, ownedby the Flour Mills of Nigeria,had even spent more on portsdevelopment before 2006.

“Before the port reform pro-gramme, Flour Mills had beenoperating Berths One to Four.We developed the ports be-fore the reform was intro-duced. In spite of our invest-ments in cargo throughputand infrastructure in the ports,we still pay the Nigerian PortsAuthority (NPA) for use of theports. Government, in its mag-nanimity, gave us right of firstrefusal when the issue of con-cession came up.

“In view of our heavy invest-ment in the ports before theconcession, we accepted to beconcessionaires,” he said.Omotayo said that when theport reform came, it was a

blessing to the operators be-cause they had a vision ofwhat they wanted to do. Hesaid that the entire infrastruc-ture they met prior to port con-cession had been pulled downdue to their level of decay andnew structures put in place.The company chief said thatthe new infrastructure erect-ed after the concession in-cluded warehouses, sugar re-finery, marine towers, wheatand cement discharge equip-ment as well as conveyors.

He said that the companyhad also built silos with stor-age capacity of 250,000 tonnesup from the 8,000 tonnes si-los met in 2006. Omotayo saidthat due to on-going improve-ments in the terminal, vesselswith a draft of 12.5 metrescould now berth at theterminal instead of the 9.5metres draft met in 2006. Hesaid that the terminal had thecapacity to receive vesselswith deeper draft, butinadequate depth of water inthe channel had preventedthis.

“One of our challenges isthe lack of adequate water in

the channels. A vessel that iscapable of carrying 75,000tonnes of cargo, but due to thewater depth, brings in only40,000 to 56,000 tonnes ofcargo. We submitted anapplication to the NPA in 2010to reconstruct part of theterminal, but this is yet to beapproved,” Omotayo said.

According to him, anotherchallenge is lack of adequatespace because the terminalhad been delineated andcarved out. “This puts a limitto what we can do in the ter-minal. Our predominant op-eration is cargo operation,warehousing and logisticsprovision, but if we want to gointo other businesses, we arelimited. We have been intend-ing to go into liquid bulk man-ufacturing like vegetable oilunder our agro-allied indus-tries, but we are constrainedby lack of space. The MD saidthe terminal was predomi-nantly for bulk cargo such aswheat, cement, fertiliser, sug-ar and wet bulk cargoes suchas ethanol, palm oil and baseoil.

*From left: Mallam Ahmed Kuru; Managing Director/Chief Executive Officer, Enterprise BankLimited; Mrs. Louisa Olaloku, an Executive Director of the bank; Sir George EfughinambaAkomas, a customer of the bank and Chairman of Geolly Farms; Mr. Emeka Onwuka, Enter-prise Bank Board Chairman, and Mrs. Nneka Onyeali-Ikpe, another Executive Director of thebank at the bank’s Customer Forum at Onitsha, Anambra State, recently.

FG targets$8bn frompalm oilexport— Minister

The Federal Governmenthas said that it was tar-

geting eight billion dollarsrevenue from palm oil exportunder the Agriculture Trans-formation Agenda (ATA). DrAkinwumi Adesina, Ministerof Agriculture and Rural De-velopment, announced theplan in Abuja at the signingof the agreement for EstateParticipation in the Oil PalmNursery and Field plantingactivity. The minister ex-plained that the countrywould have achieved the tar-get if it had made use of itsoil palm industry in 1961. “Ni-geria used to be the largest ex-porter of palm oil in the 1960suntil Malaysia came here andgot its improved palm nutsfrom Nigeria. Now Malaysiamakes $18 billion from oilpalm export. We want to getback to when palm oil used tobe the mainstay of our econo-my,” Adesina said. He saidthe situation changed follow-ing the anomaly caused by thediscovery of crude oilin commercial quantity in the1970s. The minister said Ni-geria produced only 1.3million tonnes of vegetableoil and imported more than350,000 tonnes of vegetableoil annually.

NNPC plansto upgradepipelines

Managing Director ofNNPC, Mr. Andy

Yakubu has said that a pro-gramme was underway for therehabilitation and upgradingof the nation’s pipelines.Yakubu, who disclosed this ata conference organised by theNational Association of Ener-gy Correspondents in Lagos,said that the rehabilitation waspart of the plan to deregulatethe downstream sector. Hesaid that the development wasalso to stimulate the growthof Liquefied Petroleum Gas,which he said, was a signifi-cant substitute to kerosene.Yakubu was represented byDr Timothy Okon, the Coor-dinator of Strategic Planningin NNPC. Yakubu said thatthe programme, which wouldlast for two years, wouldensure subsidy proceeds weredeployed to address supplychain bottlenecks. He saidthat the aftermath of theprogramme would facilitategrowth of alternative transportsystem such as rail transportand inland water ways.

Vanguard, MONDAY, SEPTEMBER 3, 2012— 21

CMYK

22 — Vanguard, MONDAY, SEPTEMBER 3, 2012

BRIEFS

Business & Economy

FG distributes 1.3m oil palmseedlings

BY CHRIS OCHAYI

In its efforts to restore thepast glory of palm oilproduction in Nigeria,

the Federal Government saidit has distributed over 1.3million oil palm seedlings to18 oil palm plantations or es-tates drawn from 11 states inthe country.

Minister of Agricultureand Rural Development, Dr.Akinwumi Adesina, whoflagged-off the seedlingdistribution exercise duringthe signing of agreement withthe representatives of the 18oil Palm Plantations in Abuja,said the country will soonbecome one of the leadingproducers of oil palm in theworld. Adesina lamented thatNigeria spends over $500million in the importation ofover 350,000 metric tonnes ofvegetable oil annually, asituation he described as“unacceptable” to theNigerian economy.

The minister explainedfurther that under theAgricultural TransformationAgenda of the presentadministration, his ministrywould support the productionof a total of 240,000 hectaresof oil palm in the next threeyears as well as improve theproductivity of farmersthrough fertility managementpractices. As part of themeasures to increase theproductivity and output of oilpalm, the minister assuredthat his ministry will enhancethe semi wild grove yieldthrough gradual replacementof old and unproductive wildpalms with improved plant-ing materials.

Under the arrangementwhich is a public-privatepartnership, the FederalGovernment would providefree improved nuts orseedlings to the participatingestates which will be requiredto nurse the seedlings for thenext 10-12 months andthereafter transplant them totheir own plantations. Theminister added that theimproved oil palm seedlingshave high-yielding capacityestimated at over 21 metrictonnes per hectare and highresistance against manytropical diseases.

He disclosed that theFederal Government hasconcluded plans to introducemotorised harvesters that canharvest 500-900 fresh fruitbunches per day, as well as

support the primary proces-sors to own the Small ScaleProcessing Equipment,SSPE.To this end, he stated that hisministry has begun the com-pilation of the list of small-holder co-operative groupsinterested in the equipmentin order to provide them withtechnical support, noting that

First Bank Plc has accepted toprovide funds for the pur-chase of the equipment.

To create viable market foroil palm producers in Nigeria,he said the FederalGovernment will soon ban theimportation of cheap crudepalm oil into Nigeria, to

forestall a situation where oilpalm transformation agendawill be undermined.

The 18 participatingplantations or estates are fromKogi, Edo, Ondo, Delta, CrossRiver, Ogun, Akwa Ibom,Bayelsa, Abia, Osun andEnugu States.

FMCG’s GDP contribution risesby 24%’

...Flour millers to benefit from growth

NKIRUKA NNOROM

The Fast MovingConsumer Goods,

FMCG, sector’s contributionto the country’s GDP nowstands at 24.3 per cent.

The recent momentousgrowth being witnessed inthe FMCG sector presentsunusual opportunity forNigerian flour millers tounleash their growthpotentials, a report by theFinancial DerivativesCompany, FDC, has shown.

FDC observed in itsmonthly Economic Bulletinfor the month of August,themed, ‘Investment Case forFlour Mills & FMCG Sectorin Nigeria’, that thechanging consumer tastewhich tilts towards flourproducts favours growth in

the flour milling business.The report, specifically

observed that the change inbehaviour has led to fooditems like pasta and noodles,which are not of Nigerianorigin, to now make up asignificant portion of thepopulation’s diet as well asconsumer spend.

According to the report fromFDC, this positions the flourmillers at the forefront ofopportunities in the country.

FDC said, “The FMCGsector remains one of thefastest growing sectors of theeconomy and we believeopportunities still exists in thissector. The size of the marketis heavily influenced by thecountry ’s demographicdynamics and the profoundinfluence that western cultureis having on consumertastes.”

Giving a statisticalbreakdown of activities in theFMCG sector, the companysaid Nigeria’s consumermarket was estimated atapproximately N15 trillionwith the food and drinksaccounting for the largestcomponent.

The Nigerian populationwhich is estimated atapproximately 168m people,majority of which in the 16-35 age bracket, also presentsan advantage for the millers,the company further stated.

“The FMCG sector hasbenefited the most from thisyoung burgeoningpopulation. The sector grew10 per cent from 2000 until2010 with the sector ’scontribution to GDPincreasing from 13 per cent to24.3 per cent over the sameperiod.

FG pledges toopen up moreriver ports, revi-talise railwaysystem

President GoodluckJonathan said in Onit-

sha, Anambra State, thatplans were underway to openup other River Ports and revi-talise the railway systemacross the country. Jonathanmade this known while inau-gurating the rehabilitatedOnitsha River Port. He saidthe measure would help inthe transportation of goodsand services through waterand reduce the overuse ofland in conveying heavygoods across the nation. “Wenoticed that transportingheavy goods on land helpmake our roads tear and getbad by the day. So when railsystem and water transporta-tion are revitalised, it willreduce the use of land intransporting heavy goodsacross the country,” he said.Jonathan said he was happywith the security situation inthe zone.

Deputy Account-ant-Generalsays IPSASintroduction willcheckcorruption

The Deputy Accountant-General of the Federa-

tion, Alhaji Babayo Shehu,said on Thursday that theintroduction of InternationalPublic Sector AccountingStandard (IPSAS) wouldcheck corruption in publicservice. Shehu said this inBauchi on the sideline of atwo-day sensitisation work-shop on the introduction ofthe accounting system for gov-ernment’s establishments inthe North-East zone. “Whenyou have a system that youreport more transparently, youpromote more accountabilityand the reports are easily un-derstood by the general pub-lic, then, it makes it difficultfor people to commit and hidefraud. The world has decidedto adopt the internationalstandard, so, Nigeria cannotbe left out because we are justone out of the many nationsin the world. So, to allow theaccounts of our various gov-ernments to be comparablewith the accounts of othernations, we also have to adoptthe IPSAS. That is why theFederal Executive Councilapproved the implementation.

"And don’t forget that thisinternational standard is pub-lic sector, there are also inter-national standards for the pri-vate sector, called the Inter-national Financial ReportingStandard which private sec-tor companies are bound toimplement since the FederalExecutive has approved it.”

*The presentation of cheque to winner of Nokia Danfo Reloaded competition took place atthe Nokia office in Victoria Island Lagos recently. From left: Mr Fikayo Aremu,Planning andAnalytic Mgr, Linda Yeo,Senior Product Mgr both of Nokia presenting the Dummy Cheque toMr Jibola Bakare, the winner, while Miss Mayowa Okuyiga, Legal Officer, Lagos State Lotter-ies Board looks on. Photo by Biodun Ogunleye

CMYK

Vanguard, MONDAY, SEPTEMBER 3, 2012 — 23

CMYK

Banking & Finance

BRIEFS

Delta StateGovernment hascreated an economic

development andperformance measuringmechanism which will assessquarterly, various ministries,directorates and agencies,MDAs, in the state.

Speaking at a pressconference, Mr. BismarckRewane, chairman of thestate's Economic AdvisoryTeam, EAT, said the EconomicDashboard is a self-evaluation process which willhelp to increase the level oftransparency andaccountability in corporategovernance as well as openthe gateway for citizens andinvestors to easily assesseconomic development in thestate.

According to him, the

*From Left: Mr. Enitan Oyekanmi, Branch Manager, Standard Chartered Bank; PaulineIheme, Cluster, Customer Relations Manager, Priority and International Banking, StandardChartered Bank; David Shigarda, winner of the Visa Card Olympic promo and Idowu Thompson– Regional Branch Manager, Abuja &North Region of Standard Chartered Bank, during apresentation to winners of the Olympic Visa Card promo in Abuja.

Bank’s lending to theNigerian economydepreciated by 2.7 per

cent in the second quarter of2012.

This was in contrast to animprovement of 8.3 per centrecorded in the first quarterof 2012.

According to the EconomicReport for the SecondQuarter of 2012, released bythe Central Bank of Nigeria,the total amount lent by banksdipped by N368 billion fromN13.68 trillion recorded atthe end of the first quarter of2012 to N13.313 trillion at the

Banks’ lending to economydips by N368bn

end of the second quarter.The decline, according to

the report, is as a result of asignificant decline in bank’slending to the FederalGovernment, a developmentwhich dampened the effect ofan increase recorded inlending to the private sector.

At the end of the secondquarter, the report disclosedthat banking system’s claimson the Federal Governmentdeclined by 213.2 per cent tonegative N1.381 trillion,compared to a decline of 11.3per cent in the precedingquarter.

The CBN blamed thedecline in banks’ claims onthe Federal Government to

the banks’ decision to reducetheir holdings in governmentsecurities, especiallyTreasury Bills and bonds,noting, however, that theFederal Government,however, remained a netlender to the banking systemat the end of the reviewquarter.

However, the CBNdisclosed that bankingsystem’s credit to privatesector rose by 4.1 per cent toN14.694 trillion, in contrastto the decline of 0.4 per centat the end of the first quarterof 2012.

The CBN attributed theincrease in credit to theprivate sector on a 3.9 per

cent appreciation in claims tothe core private sector.

Furthermore, the CBN, inthe report, stated that netforeign assets of the bankingsystem appreciated by 3.0 percent at the end of the secondquarter, compared with anincrease of 2.4 at the end ofthe first quarter, attributingthis to the increase in CBN’sholdings.

Continuing, the reportstated, “At the end of thereview quarter, other assets(net) of the banking systemdeclined by 4.7 per cent tonegative N 7.355 trillion,compared with the decline of2.6 and 10.4 per cent at theend of the preceding quarterand the correspondingquarter of 2011, respectively.The development reflected,largely, the fall in unclassifiedassets of the CBN.”

The report further disclosedthat currency in circulationstood at N1.364 trillion,dropping by 4.8 per cent,compared with a decline of 8.5per cent at the end of the firstquarter, due to a 12.6 per centreduction in currency outsidethe banking system in thesecond quarter.

The report said, “Totaldeposits at the CBNamounted to N6.469 trillion,indicating an increase of 15.7per cent, in contrast to adecline of 7.1 per cent at theend of the preceding quarter.

“The development reflectedlargely the 20.9 per centincrease in FederalGovernment deposits. Of thistotal, the shares of theFederal Government, banksand ‘others’ were N4.714trillion (72.9 per cent), N1.149trillion (17.8 per cent) andN607.30 billion (9.3 per cent),respectively.

“In line with the trends inDMBs’ deposits with theCBN, the Reserve Money(RM), increased by 0.2 percent to N2.513 trillion, fromN2.507 trillion at the end ofthe preceding quarter.

Delta State deploys software for surveillance of MDAs

Economic Dashboard,developed by a firm inGermany and used in variousdeveloped countries, is anautomated software thatmeasures the MDAs'progress, revealing theperforming and non-performing sectors, therebygiving the government acontinual process ofevaluating itself. It will alsohelp to strategise, plan andexecute its set objectives for abetter performance.

He said, “Currently, there isinadequate accountability inpublic governance. As aresult, stakeholders in theprivate sector are partneringwith the state government tolaunch an EconomicDashboard. The EconomicDashboard provides asummary of the keymacroeconomic indices aswell as current state of thesectors with direct impact oneconomic development.

“The Federal Governmentand various stategovernments run on deficitbudget. This means ourannual budget is financedthrough external sources.Many states are using bondsto finance infrastructuredevelopment. As such, theEconomic Dashboard, whichis private sector-driven, is infurtherance of good corporategovernance which is in shortsupply in the country. It willhelp assess the extent thatthe state is optimally utilisingits scarce resources.”

Dr. Ndidi Edozien, CEO,Strategic and ExecutionConsulting added that thepeer review mechanism is aframework created by thestate government to open upwider opportunities for theprivate sector to participate indeveloping the state.

She said the EconomicDashboard will provide datafor the economic team to

measure progress andcontribute in meaningfuldevelopment that is publicand private sector-driven.

Commenting on theoutcome of the meeting ofEAT attended by GovernorEmmanuel Uduaghan andother stakeholders in Lagos,Mr. Rewane said the state isset to revive all the moribundindustries and also developits agricultural sector, with aview to generating morerevenue and employment.

“At the meeting, we notedthat there is major constraintbetween real Gross DomesticProduct, GDP, which is aboutseven per cent and, potentialGDP standing at about 22 percent in the country. In orderto improve the standard ofliving of citizens, thegovernor gave an assurancethat within 90 days, all thedormant industries in thestate will be reviewed andreactivated.

Bernanke sayshe wouldn’t ruleout further assetpurchases

Federal ReserveChairman, Ben S.

Bernanke said he would notrule out further bondpurchases to boost growthand reduce unemployment,which he called a “graveconcern.”

“The costs of nontraditionalpolicies, when consideredcarefully, appearmanageable, implying thatwe should not rule out thefurther use of such policies ifeconomic conditions warrant,”Bernanke said today in aspeech to central bankers andeconomists at an annual forumin Jackson Hole, Wyoming.

Bernanke’s speech comestwo weeks before he leads ameeting of the Federal OpenMarket Committee to decidewhether an expansion of theFed’s record stimulus isneeded to spur growth. Tworounds of large-scale assetpurchases total ing $2.3trillion have so far failed toreduce the job less ra tebelow 8 per cent more thanthree years in to therecovery.

Bernanke ’s 24-pagespeech at the Kansas CityFed’s symposium reviewedthe Fed’s pol icy act ionsthrough the financial crisisand use of nontraditionalpol icy too ls such ascommunicat ion andoutright bond purchases,concluding that they havebeen effective in boostinggrowth and improvingfinancial conditions.

Banks pin hopeson $7.6bn AIAselldown forbuffer

As AmericanInternational Group

(AIG.N) becomes free nextweek to sell a $7.6 billionstake in former unit AIA(1299.HK), deal-starvedbankers in Hong Kong arejostling for a role in whatmay be Asia-Pacific’s biggeststock market event of theyear. A lock-up agreementpreventing the U.S. insurerfrom selling the stakeexpires on September 4. IfAIG does decide to sell theentire 18.6 percent stake, thedeal would be Asia’s biggest-ever block offering, ahead ofVodafone plc’s (VOD.L) $6.6billion sale in China Mobile(0941.HK) two years ago.

A role in the AIA Group Ltdselldown could offer a majorfinancial boost to the banks,in the form of a substantialfee for a day’s work, and asignificant increase to theirdeal rankings heading intothe final quarter of what hasbeen a dismal year.

BY MICHAEL EBOH

By LAZARUSIBEABUCHI

24 — Vanguard, MONDAY, SEPTEMBER 3, 2012

BRIEF

Banking & Finance

*From left: Alhaji Kabir Mashi, Executive Chairman, Federal Inland Revenue Service (FIRS); Dr Musa Babayo, Chairman,Board of Trustees, Tertiary Education Trust Fund; Professor Ruqayyatu Ahmed Rufa’i, Hon. Minister of Education and ProfMahmood Yakubu, Executive Secretary, Tertiary Education Trust Fund at the Year 2012 Tertiary Education Trust Fund (TETFUND)Taxpayers Forum held in Lagos. Photo by Lamidi Bamidele

By MICHAEL EBOH &ELIZABETH AMIHOR

The value of moneymarket assets in the

Nigerian financial systemdipped by N288 billion inthree months — betweenApril and June 2012,according to the Central Bankof Nigeria’s economic reportfor the second quarter of 2012.

Money market assets’ valuewhich opened the secondquarter at N5.534 trilliondepreciated by 5.2 per cent toclose the quarter at N5.246trillion.

The decline, according tothe report, is as a result ofsignificant decline in thevalue of Federal Governmentof Nigeria, FGN, Bonds,Treasury Bills, Bankers’Acceptances, BAs, andCommercial Papers, CPs,owing to reclassification ofsome items.

In particular, the value ofBankers Acceptances held bybanks dropped by 29.01 percent to N20.2 billion at the endof the second quarter,compared with the decline of61.3 per cent at the end of thefirst quarter.

Value of Commercial Papersheld by banks depreciated98.9 per cent to N2.0 billionat the end of the secondquarter of 2012, comparedwith the decline of 3.5 per centat the end of the precedingquarter.

According to the report, thedevelopment reflected thedecline in investments bydeposit money banks anddiscount houses, especiallyBAs accounted for 0.4 per centof the total value of moneymarket assets outstanding atthe end of the review quarter,

Money market assets’ value dips byN288bn in three months

compared with 0.5 per cent atthe end of the precedingquarter.

The CBN disclosed thatOpen Market Operation,OMO, remained the majorinstrument of liquiditymanagement in the secondquarter of 2012,complemented withinterventions in the foreignexchange market.

According to CBN’s report,while the open marketexperienced a fall the inter-bank market rate maintainedan upward trend for most partof the second quarter inresponse to liquiditycondition. The CBN said,“The weighted averageinterbank call rate increased

by 0.14 percent point to 14.34percent at the end of Q2compared to the 14.20 percentwhich stood at Q1 of 2012.

Federal government Bondsand Nigerian Treasury Bills(NTBs) were issued at theprimary market for the fiscaloperations of the FederalGovernment.”

The apex bank further notedthat FGN Bonds of three, five,seven and 10-year trancheswere auctioned during thereview period, noting that ofthe four tranches, two (three-year and 10- year) were re-openings while the other two(5-year and seven- year) werenew issues.

It said, “The total amountoffered, subscribed to and

allotted were N243.91 billion,N468.22 billion and N243.91billion respectively, withmarginal rates between 14.95– 16.24 per cent. N20 billionand N28.7 billion of the 7-and 10–year tranches werealso sold to non-competitivebids in the month of June.

“Bills of maturities rangingfrom 41 to 357 days were alsotraded in Q2of 2012 to mopup excess liquidity in thesystem. The total sale in thereview period was N681.43billion, while subscriptionwas N1, 978.10 billion.

“The bid rates ranged from12 to 18.5 per cent, while thestop rates ranged from14 to15.56 per cent. The total saleswere 52.02 per cent below thelevel in the previous quarter.

NKIRUKA NNOROM

Guranty Trust Bank Plchas declared its

intention to pay an interimdividend of 25 kobo per shareto the shareholders for thehalf year ended 30

th June,

2012.The half year unaudited

financial statement filed withthe Nigerian Stock Exchange(NSE) showed that after taxprofit rose significantly by64.7 per cent.

According to the filingobtained by Vanguard, onlyshareholders whose namesappear on the bank’s registeras at 10

th of September, 2012

would benefit from thereturns, while thequalification date for GDRholders would be 5

th

September.While ordinary

shareholders would be paidon 21

st September, GDR

GTB declares 25 kobo interim dividend for Q2 2012

holders would be paid on 2nd

October, 2012, the bank said.Breakdown of the results

also showed that post taxprofit rose to N45.55 billionfrom N27.65 billion, whichtranslates to 64.7 per centincrease.

The profit before taxationrose by almost the samemargin to N53.64 billion fromN32.92 billion recorded in thesame period of 2011. Profitfrom continuing operationsclimbed 67.5 per cent toN44.94 billion, while profit toequity holders jumped by66.2 per cent to N45.38 billion.

The bank grossed N106.12billion within the period,compared to N84.77 billionreported in the equivalentperiod of 2011, amounting to25 per cent increase.

GTB’s data showedcommendable credit exposureto the real sector as theposition of its loans and

advances improved by 12.4per cent to N794.70 billion, asagainst N706.89 billion in2011.

While commending thebank on its tradition ofconsistently payingdividends, shareholders atthe last yearly meeting saidit was exciting, especiallynow that other quotedcompanies, particularly banksfind it difficult to paydividend.

Speaking, Sir SunnyNwosu, National Coordinator,Independent ShareholdersAssociation of Nigerian(ISAN), said the move wascommendable.

Also speaking, President,Nigerian ShareholdersSolidarity Association, NSSA,Mr Timothy Adesiyan, saidhe was hopeful thatshareholders would receivehigher returns at the end ofcurrent financial year.

Spain capitaloutflows risenearly 40% inJune

Spain saw close to a 40per cent rise in capital

outflow in June, Bank ofSpain data showed on Friday,as investor confidence in acountry struggling to balanceits public accounts erodedfurther. The central bankreported that net capitaloutflow, not including centralbank operations, was 56.6billion euros ($71 billion) inJune, after an outflow of 41.3billion euros in May.

A total of 315.6 billion eurosof capital has left the countryin the year to end-June,equivalent to nearly one-thirdof the country’s economicoutput. In the first half of 2012capital outflow was 220 billioneuros.

Spain’s economy entered arecession at the end of lastyear, and falling output andtax revenues will test thecountry’s ability to cut itspublic deficit to meetEuropean Union demands.

One analyst said Spain’sdire situation would behelped if the country calls fora rescue package to lower itsfinancing costs, somethingthe government iscontemplating.

Deflation deepensas Japancontraction riskintensifies

Japan ’s consumer pricesslid at a faster pace in Julyand industrial productionunexpectedly slumped,raising the danger that theworld’s third-largest economyhas slipped back into acontraction. The benchmarkprice gauge, which excludesfresh food, fell 0.3 percent inJuly from a year before,putting the central bank’s 1percent inflation goal furtherfrom reach, a governmentreport showed in Tokyo.Industrial output fell 1.2percent. A private measure ofmanufacturing for August wasthe lowest since the aftermathof the record March 2011earthquake.

Today ’s releases reflectdiminishing demandoverseas for the nation’sexports amid the Europeancrisis and exchange-rateappreciation, and the end ofincentives for vehiclepurchases. With PrimeMinister Yoshihiko Noda’sgovernment today predictingit will miss a deficit-reductiontarget, pressure may rise onthe Bank of Japan (8301) toexpand stimulus and sustainthe recovery.

Vanguard, MONDAY, SEPTEMBER 3, 2012 — 25

CMYK

BRIEFS

Corporate Finance

DuPont Co struck a dealto sell its slow-growing

car paint business to invest-ment firm Carlyle Group LP(CG.O) for $4.9 billion cashas it seeks to focus on higher-growth areas such as agricul-ture and nutrition.

A sale of the performancecoatings unit to Carlyle, oneof private equity’s top inves-tors in industrial companies,allows DuPont to cut debt andbetter positions it for acquisi-tions in priority sectors suchas advanced materials and bi-otechnology.

A private equity firm withexpertise in managing costs,Carlyle gets a business thatis a leader in the markets itserves and has a stable cashflow that allows it to seize onopportunities in developingeconomies such as China andBrazil.

Flour Mills blames highproduction cost for profitdeclineBY MICHAEL EBOH& NKIRUKA NNOROM

Flour Mills of NigeriaPlc has blamed tougho p e r a t i n g

environment and the risingcost of production for thedecline in its bottom line inits 2012 financial year.

The company had recordeda turnover of N258.268 billionin its year ended, March 31,2012 financial statement;rising by 8.15 per cent from aturnover of N238.8 billionrecorded in 20112.

Despite the increase in itsturnover, the company’s profitbefore tax dipped by 26.73per cent to N12.049 billion in2012 financial year, fromN16.445 billion recorded inits 2011 financial year, whileits profit after tax depreciatedby 11.36 per cent to N8.377billion from N9.45 billion in2010.

Speaking at a forumheralding its 2012 annualgeneral meeting, in Lagos,Mr. Emmanuel Ukpabi,Group Managing Director,Flour Mills, attributed thedecline in its profit to the highcost of raw materials, highcost of power generation,Federal Government’s policyon cassava and securitychallenges in the Northernpart of the country amongothers.

According to him, the highcost of raw materials,especially rising cost of wheatin the international market, iseroding its profit, in addition

*From left: Mrs. Frances Akpomuka, Company Secretary, Dr. Mohammed Koguna, Chairmanand Mr. Sule Umar Bichi, Managing Director/Chief Executive Officer at the 19th Annual Gen-eral Meeting of Red Star Express held in Lagos. Photo by Sylva Eleanya.

to high diesel and gas cost.He said, “If the Federal

Government will address thecountry’s power situation andthe company resort to the useof public power, ourproduction cost will reducesignificantly.”

Ukpabi said the recentpolicy of the FederalGovernment on cassavaaddition in flour production,which led to the introductionof higher tariffs on wheatimportation, has posed aserious challenge to the

company.According to him, the policy

has brought about anintroduction of 15 per centlevy and 10 per cent duty onwheat importation, addingthat a lot of facility will haveto be put in place by flourmillers for them to be able toeffectively implement thepolicy.

“Another challenge inherentin the cassava policy is theacceptability of the finishedproducts by bakers. There isthe question of how many

bakers will be prepared to useflour made from cassava andwheat in the production ofbread,” he queried.

Ukpabi disclosed that thesecurity challenges in thenorthern part of the country isseriously hampering itsoperations, earnings andprofitability, saying that insome of its milling plants inthe region, production is beenimpeded, arising fromgovernment’s imposition ofcurfews and restrictions in theareas affected by insecurity.

On the company’s futureplans, Ukpabi stated that itssubsidiary, Golden PennySugar, is set to commenceoperation fully and will launchits sugar products into themarket before the end of theyear.

He said, “Over the next fewmonths, we would becommissioning our high techsugar refinery powered by twonatural gas-driven turbinesand waste heat exchangeburners, which have qualifiedfor carbon credits under CleanDevelopment Mechanism,CDM.”

Continuing, Ukpabi noted,“Flour Mills’ goal is to beinvolved at all stages of thefood value chain where aprofitable agro-allied platformof cultivating and processinglocally produced rawmaterials will ensure thegrowth and success of our foodbusiness.

“In pursuit of our goals inthe food and agro-alliedbusinesses, we continue toexplore growth opportunitiesthrough acquisitions,mergers, take-overs and otherforms of businesscombinations in other tobroaden our earnings base,create synergies and build aprofitable and sustainablefuture.”

Conoil targets expansion, eyesWest African market

BY PROVIDENCE OBUH

Conoil Plc has pledged toexpand its operations,

even as shareholders applaudthe Board and management ofthe company over itsimpressive financial perfor-mance despite challenges andharsh operating environmentplaguing the downstream sec-tor of the petroleum industry.

Meanwhile, the companyhas promised to project itscorporate brand beyond theNigerian borders with thedetermination to dominate theoil marketing business in WestAfrica sub-region andbeyond.

General Secretary,Independent Shareholders

Association of Nigeria (ISAN)Mr. Adebayo Adeleke spokealongside the othershareholders during thecompany ’s 42ndAnnualGeneral Meeting for the yearended December 31st 2011held in Ibadan, Oyo State.

Adeleke who stated that theperformance of Conoil duringthe period under reviewfurther re-enforced investors’confidence in the company,said that a closer look at theresults posted by thecompany shows a prudentmanagement, strategicplanning and cost controlmeasures, resulting in growthand improved bottom-line.

“The cash flow position ofthe company revealed acompany that is very liquid to

meet its obligations and ex-plore more profitable opportu-nities.”

Earlier, Chairman of ConoilPlc, Dr. Mike Adenuga,attributed the impressiveperformance to the company’scommitment to operationalefficiency, adherence tocorporate governanceguidelines, strategicplanning, pro-activeinvestment and expansionpolicy.

Adenuga noted that despitesome of the bold andcommendable measures theFederal government took tostimulate real growth in thevarious sectors of theeconomy, the businessoperating environment stillremained very challenging.

GT Asset trainsKwara indigeneson risk manage-ment,investment

NKIRUKA NNOROM

Kwara State Governmentin partnership with

Guarantee Trust Asset Man-agement Limited have con-cluded an investment and riskmanagement training forKwara State civil servants, ina move to guarantee their fi-nancial freedom.

Speaking at a two-day work-shop with a title, “Steps to At-taining Financial Freedom”organised by the State Gov-ernment, Mr. NicholasNyamali, Managing Director,GT Asset Management, saidthe firm decided to partnerKwara State government dueto the efforts put in place byGovernor Abdulfatah Ahmedin ensuring welfare of thepeople of the state not onlyduring their active years ofservice but also when theyretired.

Nyamali said his firm wasready to assist public servantsin Kwara State in achieving adesirable retirement throughquality financial freedom, as-set management and risk in-tervention initiatives.

A statement signed by Ab-dulwahab Oba, Chief PressSecretary to the Kwara StateGovernor quoted Nyamali assaying, “We have designedthis gesture to ensure finan-cial freedom among civil serv-ants and help them plan fortheir tomorrow which shallsoon come through retire-ment.”

DuPont to sellcar paint unit toCarlyle for$4.9bn

26 —Vanguard, MONDAY, SEPTEMBER 3, 2012

CMYK

Corporate Finance

BRIEFS

*From left: Minister of Agriculture, Dr. Adesina Akinwumi, Group MD/CEO, Access Bank Plc,Mr. Aigboje Aig-Imoukhuede and Minister of State for Agriculture, Alhaji Bukar Tijani duringthe presentation of 10 Coaster buses donated by Access Bank Plc, to the Ministry of Agricultureand Rural Development to boost Federal Government's Agriculture Sector Transformation Agendain Abuja.

The Nigerian StockExchange, NSE,continues to record

an upsurge in investors’confidence as the value oflisted equities appreciated,last week, by N111.81 billion.

Specifically, equities’ value,represented by the marketcapitalisation and the All-Share index, rose by 1.5 percent.

The market capitalisationwhich opened at N7.448trillion, gained N111.81billion, to close at N7.561trillion; while the All-ShareIndex garnered 351.23 basispoints to close at 23,750.81points from 23,399.58 pointsat which it opened.

Forty-two equitiesappreciated in price duringthe week, higher than thirtyequities in preceding week.Nestle Nigeria Plc led on thegainers’ table, gaining N24.94to close at N550.00 per sharefrom N525.06 per share atwhich it opened; followed byGuinness Nigeria Plc, risingby N3.50 to close at N252 pershare and Nigeria Breweriesgarnered N3.30 to close atN123.00 per share.

Other price gainers include:Chemical and Allied ProductsPlc N2.42, UAC Nigeria PlcN1.65, Seven-Up BottlingCompany N1.50, Flour MillsNigeria Plc N1.50, Okomu OilPalm Plc N1.50, GlaxoSmithkline Consumer PlcN1.28 and Cadbury NigeriaPlc N1.20, among others.

On the other hand, 26 stocksdepreciated in prices, lowerthan thirty-four in preceding

Equities’ value on NSE rises by N112bnweek. PZ Cussons Nigeria Plcled on the losers’ table,shedding N1.12 to close atN22.86 per share; followed byConoil Plc, dropping by N1.03to close at N19.73 per shareand Morison Industries Plclost N0.71 to close at N12.73per share.

Other price losers in the top10 category include: ArbicoPlc N0.66, Nigerian AviationHandling Company Plc N0.60,Dangote Flour Mills PlcN0.35, May and BakerNigeria plc N0.26, DangoteSugar Refinery Plc N0.23,National Salt Company

Nigeria Plc N0.19 and RedStar Express Plc N0.19

The volume of equitiestraded in the week underreview, appreciated by 66.3per cent, as investorsexchanged 1.461 billion sharesvalued at N10.14 billion in20,322 deals, in contrast to aturnover of 878.53 millionshares valued at N9.907 billionin 11,633 deals in thepenultimate week. TheFinancial Services sector wasthe most active during theweek under review with 1.1billion shares valued at N6.89billion exchanged by investors

in 12,030 deals.Volume in the sector was

largely driven by activity inBanking sub-sector, with761.22 million shares valuedat N6.70 billion in 11,311deals. Shares of Zenith BankPlc was the toast of investorsin the sub-sector, recording163.99 million shares valuedat N2.53 billion in 1,421 deals,followed by First Bank Plc witha turnover of 103.003 millionshares valued at N1.38 billionin 3,058 deals, and AccessBank Plc recording 70.86million shares valued atN546.09 million in 941 deals.

BY MICHAEL EBOH &RITA OBODOECHINA

Mansard InsurancePlc, formerlyGuaranty Trust

Assurance Plc , hasannounced a profit after taxof N902 million in its halfyear ended, June 30, 2012,financial performance.

According to a statement bythe company, its profit after taxappreciated by 63 per centfrom a profit after tax of N555million recorded in the sameperiod in 2011.

The company recorded grosspremium income of N7.89billion, rising by 29 per centfrom N6.10 billion recorded inhalf year 2011; net premiumrevenue of N2.39 billion, upby 26 per cent from N1.90billion recorded in 2011 and

Mansard Insurance declares N902m half year profit

profit before tax of N1.03billion, rising by 38 per centfrom N743 million in half year2011.

The company said theimprovement in its premiumincome is as a result of its focuson key products and marketsegments, its continuous effortto control underwriting costand its conservative approachto underwriting policies.

It further stated that thesignificant appreciationrecorded in its bottom line wasdue to growth achieved on allits income lines and itsimproved operationalefficiency.

Speaking on theperformance of the company,Tosin Runsewe, Chief ClientOfficer, Mansard, said, thecompany is putting in placemeasures to ensure that it

continually churns outimpressive performances tillthe end of the year, leveragingon the gains made in itsinvestment portfolio and in theexpansion of its retaildistribution network.

He said, “We begin the yearwith the strategic intent ofcompleting our transition to aleading independentinsurance company inNigeria. We also set out tosustain our growth by focusingon key products and certainmarket segments whileexpanding retail distributionpoints.

“These impressive numbersare a testament to the successof our strategy. With 63 percent growth in profitabilityachieved against a backdropof improvement in ourunderwriting performance,

impressive and sustainablegrowth in invest income andgreater cost optimization,Mansard Insurance hascontinued its development asa leading independentunderwriter in Nigeria.

“Given the positive outlookfor the rest of the year, we hopeto meet our profit forecast for2012.”

Also speaking, RashidatAdebisi, Chief FinancialOfficer of the company, said,“We are proud to announcethat we are the first insurancecompany operating in Nigeriato have a complete set offinancial audited andpublished in line with thedictates of the InternationalFinancial ReportingStandards, IFRS.

“This is another milestone inour history and a validation ofour leadership position in theindustry.

Access Bank’sCRO appointedRIMANPresident

Access Bank’s Chief RiskOfficer,(CRO), Dr.

Gregory Ovie Jobome, hasbeen appointed as thePresident of Risk ManagersAssociation of Nigeria(RIMAN), an industry body ofrisk professionals comprisingboth institutional andindividual members in thefinancial services sector.

By this appointment, Gregwill steer the affairs of theassociation for the next oneyear and help in attaining itsobjective of building andsustaining a credible riskmanagement environmentthrough proactive advocacy,capacity building, knowledgesharing and promotion of highprofessional standards in thecountry.

Speaking on hisappointment, Greg said “It isan honor to accept these newresponsibilities at RIMAN. Mycolleagues in the executivecouncil have performedexcellently in repositioning theAssociation and I amdelighted to have thisopportunity of working withthem to entrench best practicein risk management functionin Nigeria.”

Managing Director/Chief Executive

Officer, Bank (EBL), AhmedKuru said the bank hasoverhauled its operationalchannels and invested heavilyin personnel to serve everycustomer of the bank efficientlyand satisfactorily.

Kuru, who addressedhundreds of customers of thebank at the capacity-filledSharon Hall, GRA Onitsha,during the bank’s customerforum, affirmed that, “Ourbank is now a strong financialinstitution with asset base inthe excess of N200 billion andin the last one year, we havespent a lot of time andresources put suitableinfrastructure in place just toserve you better. We havesharpened the system andhastened our speed of servicedelivery because we value ourrelationship with you.”

The Managing Director/Chief Executive Officer furtherexplained that Bank theCustomer fora across thecountry to interact withcustomers and stakeholders onways that would be mutuallybeneficial.

Enterprise Bankrestatescommitment toefficient service

By LAZARUSIBEABUCHI

Vanguard, MONDAY, SEPTEMBER 3, 2012 — 27

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2012

28 — Vanguard, MONDAY, SEPTEMBER 3, 2012

CMYK

Interview

’

’

Mr. Wale Oluwo, an economist,

is the Managing Director,Investment Banking division of BGLSecurities Limited, one of the leadingindependent investment and researchcompany in Nigeria. In this interviewwith Financial Vanguard, he said thatrestructuring the naira is least ofNigeria’s problem. He counseled thatrather, the money intended to utiliseon such project should be channeledto smoothening the cashless policyinitiative. EXCERPTS:

Let me start by asking you what youmake of the CBN’s plannedintroduction of N5,000 bill andredenomination of some lowercurrencies to coins?

I think it is not an issue we shouldbe discussing at this time. We havemuch more bigger problems to tackleand printing the higher denominationof N5,000 and redenominating otherones will not in any way improve theeconomic situation we are in. Now, weare in a very grave situation and a lotof us don’t know that. Now, youcannot implement monetary policywithout implementing them throughefficient market. As it is, a lot of themarkets have collapsed. The equitymarket collapsed about four years ago.About one and half years ago, thebonds market has partially collapsedsuch that almost half of the FederalGovernment Bonds are not beingtraded at all. So, you have a situationwhere you are implementing monetarypolicies and markets are not efficient;you cannot allocate resources, youcannot set prices that clearthemselves, you have market makerswho cannot make the market. You arenot dealing with that and you arecoming to Nigerians to say ‘look thisis the time to increase thedenomination to five thousand naira.’What is wrong with the one thousandnaira we have presently? Who iscomplaining? So, I totally reject thispolicy and I think it is high timeMallam Sanusi repents very quicklyof this and if he does not, let thePresident call him to order. I think thisis happening because when Soludowanted to do redenomination, he wasstopped by the Presidency. So, theCBN is not bigger than Nigeria andno matter the autonomy CBN has, itis still answerable to the President andto the people of Nigeria. It is importantthat at this time, we should put a stopto this proposal.

You said that it is time the Presidentcalls him to order, but Sanusi hasalready said that he has the backingof the presidency. So, how do wereconcile this?

That depends on the information hemade available to the President. ThePresident is just a human being.There is some information you makeavailable to him that will make himaccept what you have brought to him.It is also possible that subsequentinformation will come to light,especially now that the thing has cometo public domain, and a lot experts, alot analysts and stakeholders are nowbringing different perspective to thesame issue and as the President gets

Naira restructuring is unnwill not improve Nigerian

By NKIRUKA NNOROM

the benefit of this new information, thatmay likely put him in a position toreconsider whatever he has signedbefore.

Do you share Sanusi’s view thatrestructuring the naira will enhancethe cashless policy initiative?

I don’t think so. I don’t think thereis coloration at all between the

cashless policy that we areimplementing and this five thousandnaira note. I believe that the cashlesspolicy itself even makes it unnecessaryto have this five thousand naira notebecause we are trying to engender aregime where people can do businesswithout carrying cash. So, the moneyhe is going to use in reprinting andredenominating currencies thatprobably nobody will use, he shoulduse that money and invest in all theseelectronic payment system. If he saidwe should go cashless and majorityof Nigerians have believed him that itis the right thing to do, everyinvestment and money at his disposalshould be deployed in making thatprocess smooth and less cumbersome;supporting the private sector that havethe infrastructure and the backbonethat will sell the cashless transaction,not investing additional money in cashprinting. It is absolutely contradictory.For me, this goes deeper than the waythe general public is looking at it. Wehad a debate about a month and halfago about the level of autonomy weshould allow the CBN to have. Thisaction of Sanusi has brought thatdebate to the fore. I think the Senateallowed itself to be intimidated by thearticulate presentations of Sanusi,Asiwaju Tinubu and otherstakeholders- Ciroma and the rest ofthem. Ordinarily, what was at stake

during that debate was not really theautonomy of the CBN. What CBN didwas to cleverly clothe everythingunder the cloak of autonomy andstarted crying that they wanted to stripit of its autonomy. That was not correct.I know the CBN will waste money intwo ways now.

The first way is that we will wastemoney printing five thousand

naira that is completely unnecessary.On the other hand, we are going towaste money changing somecurrencies to coins. For the past 30years, Nigerians have abandonedcoins. What is the benefit of coins toNigerians? Why will the Nigerianperson want to spend coins? There isno automated machine that acceptscoins. There are no direct PoS servicesthat accept coins and coins are heavy.We must understand money within thecontext of the definition of money.Money is supposed to be a store ofvalue, a medium of exchange. So, ifyou want to exchange your goods formy own, you need money. That moneycan be ordinary paper, it can be acomputer, and it can be gold. It doesnot matter because money is notdemanded for its own sake; it isdemanded for the sake of what it canbuy in terms of goods and services. If

notesdo yocoinstime the tidownSo, ypeopprintiunnecashl

Youaversthe Cattitufutur

Tclear,you recoinsit befopeopcoinsbank‘pay mCBNand bcoinsNigecoinsorienon itshaveemplas a rThenneed naturtime y

I think it is not anissue we should bediscussing at this

time. We have muchmore bigger problemsto tackle and printing

the higherdenomination of

N5,000 andredenominating otherones will not in any

way improve theeconomic situation

we are in.

•Wale Oluwo...For the past 30 years, Nigerians have abandoned coins. Whatis the benefit of coins to Nigerians?

•Wale Oluwo

CMYK

Vanguard, MONDAY, SEPTEMBER 3, 2012 — 29

Interview

’’

’

’

necessary waste,s' lot —Oluwos can act as medium of exchange, what problemou have with that? Why must it be coins? Thes revolution will come at a later date and by theit comes, it will be clear to everybody that this isime to embrace coins. So, you cannot force coinsn people’s throat. They will continue to reject it.ou are going to waste money printing coins thatle will not use, and we are going waste moneying five thousand naira notes that is absolutely

ecessary at this time that we are preaching aless economy.

u raised an important issue of Nigerians beingse to coins usage. I don’t know what promptedCBN’s decision, but do you see a change inude among Nigerians towards coins in the nearestre

The problem is not with Nigerians; the problem is

with the CBN. Nigerians have made their positionr, ‘we don’t want coins at this time.’ It is eitherespect that view or you waste your money printings that definitely will not be used. They have doneore and banks were directed that instead of payingle with only notes, they should pay some of it in

s, but it did not work. Come on! I cannot go tok and you pay me coins, I have the right to sayme with notes, I am better with it.’ It is either the is telling us that they want to print these coins

be spending them there or they want to print thes for Nigerian people to use when in actual fact,erians have shown that they are not interested ins. So, what is the use? They are not ready to re-ntate themselves. The coins evolution will comes own when productivity has increased, when wee a bumper economy that is stable, whenloyment has come, when prices have come downresult of increase supply of goods and services.

n that is when coins will come back, you don’tto force or encourage people. It will just come

rally and they will be looking for it, because eachyou buy something, there will be change to collect

billion is for everything.It is a lot of money, honestly. N40

billion can do a lot in helping thecashless policy to go smoothly. Wehave tried it only in Lagos. For theCBN to deploy this cashless thing allover Nigeria, particularly thosedifficult places in the North where youdon’t have a lot of people who areeducated, that is where you need alot of the infrastructure to reduce theprocess to the level that such peoplecan understand in order to flow withit, rather than using the money to printnotes and coins when you should bepushing it to the cashless activity.

Some people are already expressingfear that the move will trigger offmore inflation. Do you also share thatopinion?

Not necessarily! Not necessarily!!There is no coloration between

where you print higher denominationof currency and inflation. That is thetruth. We must start from the definitionof inflation itself. Inflation is where toomuch money chases little goods. If weunderstand inflation like that, and youprint five thousand naira, is it goingto keep goods out of circulation thatwill make it inflationary or is it goingto increase the quantum of money incirculation? Those are the two basicprocesses by which that action can beinflationary. It is either that the newmoney that you are printing or the newcoins that are not there is taking goodsaway from the economy or it isincreasing the money in circulation.That is why I said I can’t see anycoloration. The amount of money inthe system which you can categoriseas M1, M2, M3, cash and demanddeposit and all of that, by the time youadd them together, the fact that we areprinting N5,000 notes is not going toincrease that quantum, because we aregoing to withdraw some and replacethem with five thousand. The samewith the notes they are changing to

coins, we are going to withdraw thosenotes and replace them with coins.So, it is a swop.

I cannot see any inflationaryimplications that will go with it.

Even if you say that prices will startfrom probably fifty naira, it is a fallacybecause when you still go to buy yourpetrol, the meter is still going to bereading on basis of one kobo or tenkobo. If the price of something issupposed to be ten naira, it does notmean that the person that is sellingthat thing will increase the price tofifty naira because that is where thedenomination of notes starts from. No,what is going to happen is that youare still going to use your note to buyfive of such item that is ten nairaeach. So, let’s separate all theseeconomic issues and not bring ininflation into something that is notinflationary. We must understand thedefinition of inflation to be able torelate it to what is happening. It willnot be inflationary in any way. Whatis inflationary is if we start to printmoney and we don’t swop it, then itwill be inflationary or if we don’tproduce enough and we have toomuch money chasing few goods, thenit will be inflationary.

In that case, what do you think isthe likely implication to the economyand to Nigerians?

I think the implication is that it willinduce a psychological scenariowhere people will begin to think that,probably, the value of the currency isgoing down. It is not real, it is justpsychological. People will think thatnow we are having higherdenomination, it will now mean thatthe value of naira relative to dollar isgetting weaker. That imagination willnow trigger a movement in the supplyor demand for dollars because if that

imagination makes people to doubt theintrinsic value of their own currency,then they might take flight to the dollarand they now believe that dollar isstronger; ‘it is better I keep my assetsin dollar.’ At that point, the naira willbegin to lose its quality as a store ofvalue and what is imaginary can nowbecome real. It is an assumption, it isnot apparent. It is not an expected eventbut it is an event that might trigger anactual event. It is just like when peopleare at the stock exchange and they wakeup in the morning and say, ‘this LeverBrothers shares will likely go down.’You know it is not real. They are notsaying that based on any fact; they havenot looked at the accounts of thecompany, they have not looked at thefacts behind the figure and nothing hasshown that it will go down.Psychologically people just think ‘ahthis thing may go down’ and thatpsychology can start spreading asrumour and you know what willhappen? People will say, ‘I don’t wantto hold this because it may go down’and they start to sell, before you knowit what happens? The price of the shareswill start to go down. So, what is notreal has triggered a real direction. So,that is what I see in this thing. If peoplebegin to perceive it as evidence that

naira is getting weaker, they mightbegin to take position in dollar and thatin effect might now turn around to makean imaginary event to become a realevent. The impact of that you cannotseparate it now because you need a lotof econometric model to be able toanalyze how that will cascade into theentire economy, but we are not in thatposition now.

As an economist, I am not going totake a position that is not backed up byfacts.

Perhaps, you are saying that the CBNGovernor did not do his research well,because I can recall he said the policyis also a tool to tighten inflation

No! I think the only motivation theCBN has put forward that appearsfactual is the fact that Sanusi said thatNigeria is being blackmailed. I want tobelieve that it is the only reason whythis is happening. If it is all these otherthings like inflation, he should show usthe data. It is based on that data thatwe will appraise what he has put onthe table. What I believe based on hiscomment is that Nigeria is beingblackmailed. The people who producethe ink that they use in printing thenaira notes are now saying that unlessthey give them that contract to continueto print for Nigeria, they will not makethat ink available to any other contractorthat is going to do the job. You knowMallam Sanusi is a very nationalisticperson and can be very stubborn too.So, I think he would have said, ‘no,Nigeria will not continue to give youthis contract because you areblackmailing us. As a result of that, wewill change this currency and what ismaking us to have the need to use yourink, we will remove it and go andpatronize other vendors.’ So, based onmy limited information, I think that isthe major rationale for wanting to dothe exercise.

and there will be no coins. Thenpeople will say, ‘bring back the coins.People are cheating me; each time Ibuy something, they will withhold mychange because there are no coins. Bythe time I added everything together,I have already lost one hundred naira.’People are going to be sensitive tothat. So, it will be a process ofevolution. You cannot force people touse coins and I think Mallam Sanusiwill have to understand that.

Do you see the country attainingthat state of evolution you spokeabout any time soon?

Yes, we will get there in the nearestfuture, but that will be when we areable to get our economy right byreducing the role of government in theeconomy gradually and allowing theprivate sector to unleash their capacityand potentials on the economy. Look,it is all about supply side. It is all aboutmore supply. We cannot be tired ofincreasing supply because it isincrease in supply that brings downthe price of goods and services and itis the private sector that can increasesupply. So, I don’t understand why wesay coins are important at this time,honestly. I have not seen the numbers;I don’t know what this is going to costus…

(Chips in) N40 billion N40 billion! Oh my God! That is a

lot of money. N40 billion to printN5,000 notes? What about the coins?(Chips in again) I think the N40

The cashlesspolicy itself

even makes itunnecessary tohave this five

thousand nairanote becausewe are tryingto engender aregime wherepeople can do

businesswithout

carrying cash

The coins evolution will come on itsown when productivity has increased,when we have a bumper economythat is stable, when employment hascome, when prices have come downas a result of increase supply of goodsand services.

•Wale Oluwo...What I believe basedon his comment is that Nigeria is beingblackmailed.

30 — Vanguard, MONDAY, SEPTEMBER 3, 2012

CMYK

Vanguard, MONDAY, SEPTEMBER 3, 2012 — 31

CMYK

BRIEFS

Homes & Housing Finance

Closed PMBs: NDIC set tosettle claims of customers

Stories byYINKA KOLAWOLE

The Nigeria DepositI n s u r a n c eCorporation (NDIC)

has concluded arrangementsto settle claims of depositorsand creditors of the 24primary mortgage banks(PMBs) whose licences wererecently revoked by theCentral Bank of Nigeria(CBN).

A statement from the officeof the Director, ClaimsResolution Department ofNDIC noted that it hascompleted arrangement tocommence the verificationand payment of depositorscreditors the mortgage banksfrom 6thAugust, 2012.

“Members of the public arerequested to note that mostof the closed PMIs had longceased to render service totheir affected customers andcould not forward thestatutory monthly reports tothe supervisory authoritiesdespite repeated demandsincluding paid newspaperadvertisements by the CBN.As a result of thoseinfractions, the CBN recentlyrevoked their licensesconsequent upon which theNDIC commenced theprocess of settling the claimsof the depositors andcreditors of the banks.

“In pursuance to the above,all depositors and creditorsof the 24 under-listed closedPMIs are required to presentevidence of their depositclaims at any NDIC office forprocessing. These includesavings passbooks,withdrawal slips, chequebooks, fixed/term depositcertificates, statements ofaccounts and other relevantdocuments as proof ofaccount ownership or any

creditors’ claim against the

closed PMIs. For those whowish to collect deposits onbehalf of individuals andcorporate bodies, properwritten authorisation andidentification will be requiredwhich must be endorsed bysignatories to the account,”the statement added.

The mortgage banksinvolved include: AccalaimHomes and Loans; AllwellSavings and Loans; CB

Homes Savings and Loans;Coastal Homes Savings andLoans; Credence Savings andLoans; Crest MortgageSavings and Loans; EstaportBuilding Society; Future ViewMortgages; Guardian TrustSavings and Loans; HomeTrust Savings And Loans and;Horizon Building Society.

Others are: ImaniSavingsand Loans; Mars HomeInvestment Savings and

Loans; Melrose Savings andLoans; New Capital Savingsand Loans; Niger HouseBuilding Society; OmonoBuilding Society; OwnersHome Savings and Loans;Perennial Building Society;Primrose Savings and Loans;Sakkwato Savings and Loans;Secure Savings and Loans;Urban Shelter Savings andLoans and; Peak Savings andLoans.

It would be recalled that theCBN said the licences of themortgage banks were revokedbecause they have effectivelyclosed shops, having ceasedto carry on the business forwhich they were licensed fora continuous period of sixmonths. This, according to theapex bank, is in contraventionof Section 12 of the Banks andOther Financial InstitutionsAct of 1991 and Section 20(iii)of the Guidelines for PrimaryMortgage Banks in Nigeria.

Specifically, they were saidto have failed to meet CBN’sstipulated 30-days deadlineto show proof of theirexistence and/or evidence ofoperations in the immediatepast one year. “In the courseof the recent examination ofall licensed PMBs carried outby the CBN, most were notfound at their last knownaddresses. In addition, theseinstitutions have failed torender monthly returns to theCBN for at least sixconsecutive months, incontravention of Section 58(1) and (4) of the BOFIA,1991.”

Expert urges mass housing design to suit‘real’ masses

The case has been madeto design mass housing

programmes in the countrythat will truly suit the ‘real’Nigerian masses.

Muhammed Sani of theInstitute of EconomicDevelopment in Abuja, madethe case in a statementparticularly addressed to theFederal Capital Territory(FCT) administration. Henoted that the only way tocheck issues of illegal landacquisition and illegalconstruction in FCT is for theadministration to redesign itsmass housing programme toaccommodate those hereferred to as “the realmasses”.

Sani said there is need tomake the process of landallocation in Abuja less

cumbersome and lessexpensive. According to him,“the process of obtaining landfrom the FCT is cumbersomeand very expensive. Anapplicant has to fill a form andpay a non-refundable fee ofN100,000. This application isnot automatic and mostly notforthcoming. The poor are theworst hit as there is noprovision for them in themaster plan of Abuja.Therefore, they have to resortto doing the illegality, buyingland from the Gbagyikingsand indigenes.”

He further observed that the19 villages penciled down fordemolition by the FCTadministration were juicyareas because of theirproximity to the city centre,“The non-indigenes prefer

them and so also the FCTadministration therefore it isa fight between the mightyrich and the poor,” he said.

Sani noted that while thedemolition plan was in order,considering the fact that thepeople occupying the landbought them illegally and hadno titles to claim them, theFCT administration despite itsenormous responsibilities,ought to have stopped thenon-indigenes fromdeveloping the land, addingthat those whose houses wereto be demolished would berendered homeless.

“The way out of thisrigmarole is for the FCTadministration to be sincereand call a spade a spade. TheFCT mass housing schemeshould be redesigned toaccommodate the real masses.

Kwara suspendsimplementationof urbanisationlaw

Kwara State governmenthas put on hold the

implementation of thecontroversial UrbanisationLaw 2009, which empowersthe state government toacquire lands in the publicinterest.

Governor AbdulfatahAhmed announced thesuspension in Ilorin, via astatement by his SpecialAssistant on Media andStrategy, Dr Femi Akorede,citing people’s opposition tothe law as the reason for thesuspension.

He said governmentdecided to allow the statelawmakers to review the lawin the interest of the people,adding that the Ministry ofHousing and the Bureau ofLand had been directed tostop implementing the law,pending its review by thelawmakers.

According to the governor,members of the public shouldnot entertain any fear andmisgiving about the law sincethe lawmakers will review thelaw before its application. Hesaid his administration waswilling to suspend the law inorder to give room forcontributions from majorstakeholders on thegovernment land policy.

Borrowers get$13.6bn inforeclosuresettlement

Detached houses in a private estate

Mortgage borrowers inUS have received

roughly $13.6 billion in reliefas part of a $26 billionsettlement reached inFebruary between state andfederal government officialsand five of the country ’sbiggest banks overforeclosure abuses, accordinga report compiled by amonitor for the deal.

According to the monitor,the information for the reportwas provided voluntarily bythe financial institutionsinvolved in the settlement.The report noted that thebanks have granted $10.6billion in consumer relief toborrowers between March 1and June 30, 2012.

In addition to that, roughly28,000 borrowers wereoffered and have begun aprogram where banks reducethe amount owed by troubledborrowers, known asprincipal reduction. As partof that the borrowers havereceived $3 billion inpotential relief, said JosephSmith, the monitor of theNational MortgageSettlement.

32 —Vanguard, MONDAY, SEPTEMBER 3, 2012

CMYK

BRIEF

Insurance

In order to enable peopleof low income access

insurance covers, theNational InsuranceCommission (Naicom) iscoming up with guidelinesthat will extend insuranceservices to the poor at acheaper rates.

The National InsuranceCommission said that thecommission will licence anyfirm that is willing to partakein the micro insurancescheme, while microinsurance products will besold through cooperativesocieties, microfinancebanks, among others to thepoor Nigerians.The aim, is to enhanceinsurance penetrationespecially in the rural areas,where underwriting firmshave done little to capture.It is equally expected toincorporate those who areunable to buy the traditionalinsurance into the insurancesystem.

With about 20 millionpotential subscribers,NAICOM said that it is expecting N60 billion frommicro insurance products.Chief Yemi Soladoye,consultant to NAICOM saidthere is the need forcollaboration betweenCentral Bank of Nigeria(CBN) and Naicom to sellmicro insurance throughmicrofinance banks inNigeria, adding thatmicrofinance market has a lotof potential customers ofmicro insurance products.

He stressed that about twomillion people currentlymicro insurancepolicyholders, stating thatbecause the poor are morevulnerable to risks, they needinsurance more than thewealthy Nigerians.

Soladoye said that 75 percent of Nigerians live inrural and semi-urban area, aready-made market for microinsurance to thrive. Soladoyesaid,

“This is an avenue to sellmicro insurance. Theproduct penetrates areas thetraditional insurance cannotget to and that are why it is agood platform to increaseinsurance penetration in thecountry.”

Speaking on access toinsurance, he noted that thecurrent insurance companiesfailed to appropriately utilisethe market potentials whichwas why insurance is notexpanding, explaining that there should be collaborationbetween banks andinsurance companies toexpand outreach throughbanks’ outlets.

“Any policy that is belowN3, 000 is categorised undermicro insurance. And with 20million microfinancecustomers, a sum of N60billion is being projected,” he

NAICOM projects N60bn from Micro Insurance

By ROSEMARYONUOHA

said. Delivering his address at

the Insurance seminar forInsurance Correspondents inCalabar, Cross Rivers Statelast week, Mr Fola Daniel,commissioner for Insurancesaid the development of microinsurance market is indeed,one of the objectives of theMarket Development andRestructuring Initiatives(MDRI) of the commission.The commissioner said his

commission has put in placea draft guideline for microinsurance business inNigeria. “The draft is beingexposed to the industry,experts and otherstakeholders for their inputsand contributions before thefinal draft will be drawn andsubsequently released to themarket. We also intend tocollaborate with otherrelevant regulatory agenciesin this drive,” he said.

This, he said will developinsurance market at thegrassroots and by extension,increase the sector ’scontributions to the GrossDomestic Product (GDP) ofthe nation. Daniel stressedthat micro insurance holdsgreat potential for developingthe insurance sector inNigeria taking intoconsideration the populationsize of the country.

Standard Alliance life As-surance Limited, SA

Life, says it plans to increaseits capital base in order to beable to meet future obliga-tions and drive growth.

The Chairman of the compa-ny, Mr. Olorogun O’tegaEmerhor, stated this duringthe company’s 12th annualgeneral meeting held in La-gos.

He said, “It will be a proac-tive measure to put plans inplace to increase our author-ized and paid up capital in theensuing year in order to beable to meet future obliga-tions and drive growth”

The Chairman said thatwith their strength, strategiesand with the planned injec-tion of additional capital, thecompany will be well posi-tioned to carve unparallelnitch for its market place, add-ing that the resultant effect ofthis is a robust profitabilityand dividend consideration tostakeholders.

He noted that the compa-ny’s focus on aggressive mar-

SA Life to shore up capital base

keting continues to pay off asreflected in the appreciableincrease in gross premiumwritten in the year.

Its gross premium incomegrew from N1.6billion in 2010to N2.157 billion; this repre-sents a growth of 30 per centover the prior year 2010.

According to him, the com-pany paid a total claim ofN3.818 billion (group lifeN913.75 million, individuallife N6.258 million and de-posit administration N2.898million.

He said,” our continuedstrategy to have balanced mixproduct sale equally affectedour investment linked prod-ucts sales, there was declinein growth from N4.155 billionin 2010 to N2.647 billion in2011”

This represents 57 per centreduction in 2011 over 2010performance, there was alsodecline in interest and otherinvestment income byN263.5 million which is 28per cent and the continueprovision for diminution invalue of our investments.

However he said, notwith-standing the external oper-

ating constraints, the compa-ny reported operating profitfor the year 2011 of N493.03billion losses in 2010, aris-ing from the prudent man-agement expenses and un-derwriting expenses duringthe year.

He disclosed that the busi-ness and regulating envi-ronment will remain chal-lenging in 2012 with theadoption of IFRS, ERM andSolvency ll, adding that allthis will increase costoperation.

However he said, “Theyare all welcome develop-ment that will ensurecompanies in Nigeria adoptinternational best practicesthereby opening window forboth local and foreigninvestors.

He assured shareholdersthat the management is un-beatable about impressiveresults by the company, inthe coming years, as thecompany has fullyprovisioned for its impairedinvestments and as itcontinues with its prudentmanagement and aggressiveservice marketing strategies.

The National InsuranceCommission (NAICOM)

has pledged to support any ef-fort from insurance operatorsaimed at development of micro-insurance in Nigeria.

The Commission stated thatunless microinsurance businessis given adequate attention, itsexpected contribution to the na-tion’s gross domestic product(GDP) from the insurance sec-tor will not be achieved.

The commissioner for insur-ance Mr Fola Daniel who statedthis at a Seminar organised forinsurance correspondents withthe theme “Making InsuranceWork for All: The MicroinsuranceInitiatives” in Calabar, CrossRiver State, noted that the Com-mission has appealed to insur-ance operators in Nigeria to de-velop microinsurance with aview to develop insurance mar-ket at the grassroots.According to him, the commis-sion has put in place a draftguideline for microinsurancebusiness and that the draft isbeing exposed to the industry,experts and other stakeholdersfor the inputs and contributionsbefore the final draft is releasedto the industry.

On its part, Daniel disclosedthat NAICOM recently conduct-ed a nationwide diagnosticstudy of microinsurance in col-laboration with GIZ, a GermanAgency for Sustainable Devel-opment and Access to InsuranceInitiatives (AII) and its local con-sultants.

The NAICOM boss added thatthe group was divided intosmaller teams and each teamassigned to a specific region ofthe country. The reports turnedin by the various teams havebeen received by NAICOM andit is being reviewed and analy-sed so that the commission cando the needful, he noted.

Daniel maintained that micro-insurance holds great potentialfor developing the insurance sec-tor in the country, taken into con-sideration the fact that the pop-ulation size of the country givesan added advantage to the in-surance industry to grow itsmarket.

The development of microin-surance is indeed one of the ob-jectives of the Market Develop-ment and Restructuring Initia-tives (MDRI), a project of NA-ICOM designed to increase thepremium being generated by thelicensed insurance companiesand make meaningful contribu-tions to the nation’s economy.

*From left: Mr. Austin Enajemo-Isire, MD/CEO, Olorogun O'tega, Chairman and Mrs. OmololaOshiafi, Director at the annual general meeting of Standard Alliance Life Assurance Ltd heldin Lagos. Photo by Sylva Eleanya.

Microinsurancewould promoteinsurance develop-ment —NAICOM

By RITA OBODOECHINA

By ROSEMARYONUOHA

Vanguard, MONDAY, SEPTEMBER 3, 2012 — 33

CMYK

Pilots at Air France-KLMhave backed proposals to

alter their contracts andworking conditions as part ofthe airline’s three-yearrestructuring plan aimed atreducing operating costs anddebt.The SNPL union, whichrepresents more than two-thirds of the pilots, said 67 percent of its members had vot-ed for the plan.The agreement reached withpilots does not include jobcuts, but does featurevoluntary transfers withbonuses to Air France-KLM’slow-cost arm, Transavia. Thevote comes after ground staffat Air France-KLM alsoapproved similarrestructuring measures,leaving only cabin crews inopposition.

New investors forNigeria's aviation industry

BRIEFS Stories byLAWANI MIKAIRU& DANIEL ETEGHE

The Nigeria aviationsector will soonwitness new influx of

investors as the Federal Min-istry of Aviation is currentlyin talks with potential inves-tors that have indicated inter-est in investing in the sector.Managing Director of the Ni-gerian Airspace Manage-ment Agency (NAMA), Engi-neer Mazi Nnamdi Udoh,who disclosed this to news-men last week, said arrange-ments are in top gear to ab-sorb newer airlines into thecountry.

Speaking at the SpecialGeneral Meeting of NationalAssociation of AeronauticalEngineers (NAAE) held atthe Nigerian Civil AviationAuthority’s (NCAA) Annex,Murtala MuhammedInternational Airport, Lagos,he said the interest beingindicated by the investorswas a fallout of the road showembarked upon by theMinistry of Aviation and topofficials of the agencies in thesector to some countriesabroad.

He said: “The issue is allabout the management ofthose airlines, that is why inthe spirit of transformation,we are now helping those air-lines and new ones to comeback to business and also pro-vide them with an enablingenvironment so that those air-lines will not go undergroundagain. And that is why wealso embarked on a road showto various counties and theresponse has been enormous.We hope in the next one year,the issue of how many airlineswe have in Nigeria will be a

thing of the past. There are alot of airlines that are coming,they are already asking forregistration."

Asked if the decline in do-mestic operators has impact-ed the revenue generation ofthe agencies in the sector,Udoh stated that the revenuegeneration of the agencieshas improved despite the re-duction in domestic opera-tors. He said the passengertraffic in the airports havegrown from what was obtain-

able last year, adding thatthe chunk of revenue gen-erated by the agencies isfrom foreign carriers in thesector.

“Generally, the more thepassengers carried by in-ternational f l ights, themore they pay. The revenueactually is foreign-drivenfor us and for FAAN. We areactually not feeling the im-pact of the reduction of do-mestic passengers. It alljust means more frequen-

cies for those that are oper-ating. But one thing youmust notice also is the gen-eral growth in the charterservice which we are alsolooking at to capture whatis there. If you go round thecountry, you will see a lotof private jets. So the im-pact of that is not visible,that is why we have to cap-ture it at this level and re-store growth in domesticoperation.”

Murtala Mohammed International Airport, Lagos, Nigeria.

Dana crash: Air traffic controllers faultOjikutu’s claims

The National Air TrafficControllersAssociation, NATCA,

has debunked the claims byRtd Group Capt John Ojiku-tu that there were irregulari-ties in the handling of Danaill-fated plane crash of June3rd, 2012 by the air traffic con-trollers on duty saying thatsuch statement was mislead-ing and unprofessional.

The group affirmed that itsofficers on duty complied withthe provisions and regulationsof the International CivilAviation Organisation (ICAO)Docs. 4444 (PANS-ATM),Annex 11 (Air TrafficServices), Nigerian CivilAviation Regulations (2009)and other approved local airtraffic control instructions inforce in the airspace andairport concerned on the daythe Dana Air crash occurred.

In a statement signed by thePresident and GeneralSecretary of NATCA, HaskeJibrin and Martin Akujuobirespectively, the ATC mem-

bers insisted that the ATC of-ficers on duty complied withthe provisions of the ICAODocs. 4444 (PANS-ATM), An-nex 11 (Air Traffic Services),Nigerian Civil Aviation Reg-ulations (2009) and other ap-proved local air traffic controlinstructions in force in the air-space and aerodrome con-cerned.

According to the statement,the provisions above includ-ed the emergency responseprocedures approved and pub-lished for use by Duty Air Traf-fic Controllers in MurtalaMuhammed Airport Lagos inthe event of aircraft accidents.NATCA further questioned theprofessional competence andexperience claimed by Capt.Ojikutu on the grounds thatinformation available to theAssociation does not indicatethat the said Rtd. Group Capt.Ojikutu holds any valid AirTraffic Controller licence,though he trained andobtained a certificate in AirTraffic Services, which was a

prerequisite for further on-the-job training that leads tothe award of a Civil Air Traf-fic Controller licence.“The onus therefore, lies onhim to furnish his listenerswith his licence number, rat-ings held and aerodromes ofvalidation during his historic26 years sojourn as an airtraffic controller as he hasposted before the public.“His phraseologies as report-ed by the media houses donot in any way define him asan air traffic controller that heclaims to be. For example, hiscall for the tape transcript ofconversations held betweenthe pilot, Lagos and Kanocontrol towers shows that hedoes not understand the ar-chitecture, division of respon-sibilities, and transfer of con-trol procedures within theNigerian airspace, neither didhe demonstrate any knowl-edge of Accident Investiga-tion Standards and Recom-mended Practices (ICAO An-nex 13), as manifested in hiscall for unrelated air trafficcontrol/pilot conversations

tape transcript, for a timeframe that will neither aid in-vestigation nor give any fur-ther clue as to the potentialrole of air traffic control insuch an accident,” part of thestatement reads.

NATCA also warned againstutterances on the crash as thebody charged with the re-sponsibility was carrying outits investigation. According tothem, the main objective of anaccident investigation is “pre-vention of future-occurrence.”

They debunked the claimthat there were gaps in thetape transcript, stressing thatmodern air traffic controller/pilot conversation tape record-ing which NAMA employedwas digitalized and tamper –proof while recording timeswere captured during eachactive transmission, the idleperiods were also captured,adding that for the purposesof investigation, the activetransmission times were lis-tened to, while the idle peri-ods bearing no messages wereignored.

FAAN to evacu-ate illegal truckowners soon

The Federal AirportsAuthority of Nigeria,

FAAN, has indicated its readi-ness to evacuate all illegaltaxi cabs and truck owners op-erating within the airport vi-cinity soon.

This is coming just as theManaging Director of FAAN,Mr. George Uriesi, recentlyset up a committee on thetraffic situation at the airport.The committee has submittedits report to him for approvaland appropriatei m p l e m e n t a t i o n .General Manager, Public Af-fairs, FAAN, Mr. Akin Oluku-nle, who spoke with our cor-respondent pointed out thatthe current traffic jam at theairport, most especially at thehajj and cargo areas of theairport, will soon be a thingof the past. Olukunle de-scribed the bottleneck on theroad as an eyesore and as-sured that the management ofFAAN would ensure thatthose who have no businessto do at the airport were re-stricted from gaining accessto the complex.“The issue of congestionespecially of the fuel tankersis a concern to us. We areworking on that. I can tell youthat FAAN is workingseriously on the congestion atthe airport, most especiallythe yellow buses that are notsupposed to be there andhave turned that place to theirabode. We have discussed iteven at the managementlevel that whatever they aredoing right now is illegal."

Air France-KLMpilots back re-structuringplan

Aviation

34 — Vanguard, MONDAY, SEPTEMBER 3, 2012

People in Business

Mr. KelechiChioma is theSenior Facilitator

at Protégé Centre, an outfitwith the vision and missionof teaching scrabble inschools. The 2006 AppliedBiochemistry graduate ofNnamdi Azikiwe University,Awka and 2010 graduate ofSamsung Real Dreams (anafter school developmentprogramme), spoke with Fi-nancial Vanguard recently inLagos and said he decided totake scrabble to schools be-cause he discovered it willhelp the pupils/students im-prove their grasp of the En-glish Language and subse-quently, their understandingof other subjects. Excerpts.

According to Mr. KelechiChioma, he started playingscrabble after his secondaryschool education. “I firstplayed scrabble after I fin-ished writing the West Afri-can School Certificate exam.I was staying at home sleep-ing, eating, discussing withfriends while waiting forPHCN to bring light so wecould watch television andmost times, we were disap-pointed. I was becomingbored. One day, I went to visita friend close to my house,and I saw them playing scrab-ble. I took interest in thegame. That was the first timeI played the game and I fellin love with it. It is a remark-able game. We played almostevery day and it became socompetitive. Because wewanted to do well in thegame, we had to study thedictionary and learn newwords. It impacted me re-markably as a person becauseany time I played it, I learntnew words. I was more like awalking dictionary because Ialways beat my friend whowas also very good and veryintelligent; therefore, I had toconstantly learn new words.I started with the A wordsuntil I got to the Z words.”

Practice, they say, makesperfect and so as he contin-ued the game, he discoveredsome patterns in the Englishlanguage. "For example, un-til recently, you could nothave a Q word without a U soas I played the game, I dis-covered that there are someexceptions. It helped myspelling, vocabulary andthinking.”

Upon graduation from theuniversity, he did his one yearcompulsory national youthservice in Taraba State wherehe taught chemistry.

While in the university,Kelechi said he played scrab-ble once or twice and after hisyouth service, he went backhome, saw his old friends whohad also finished school, andthey started playing the gameagain.

“I was playing scrabble oneday with a friend of mine andI said to him, “this game hasreally impacted us, don’t youthink we should encouragechildren in primary and sec-

Scrabble can improve oureducational standard remarkably—Kelechi Chioma

BY EBELE ORAKPO

ondary schools to play thegame?” He said it was a goodidea but will involve a lot ofwork like writing proposalsand convincing school owners.I said let’s do it, but he was notinterested anyway, he wantedto make money faster than Iwas thinking. I took the boldstep and started sending pro-posals to schools. I sent about20 or so but did not get a sin-gle reply,” he said.

Not one to be discouraged bywhat he saw as a temporarysetback, he continued his mar-keting job which involved con-vincing people to build websites for their organisations anduse bulk SMS solutions. “I waspassing one day and sawChrisland Schools. I decided totake the proposal to them.When I got there, I submittedthe proposal at the gate be-cause they did not allow me to

enter. It was when I went for afollow up that I met my teach-er in secondary school whowas a guidance counsellorthere. We exchanged pleasant-ries and I told her why I wasin the school. She invited meto her office and guess what Isaw? Stacks of scrabble board!I asked what she was doingwith them and she said theywere trying to introduce thegame in the school and weresearching for someone to han-dle it,” he said.

It was like a dream cometrue. "I decided to teach herand she said since I could playvery well, I should come atbreak time and teach the chil-dren. Two months later, I quitmy job, I wanted somethingelse. I went back to see her.She took me to the head teacherand said I will be taking thescrabble class. We did the test-

run for about two months. Thechildren really liked it so sheencouraged me to do a propos-al to the managing director ofthe school, telling her that weshould start effectively in theschool and here we are.”

On whether scrabble reallyhelps children educationally,he said, "Scrabble can help im-prove our standard of educa-tion remarkably. The standardhas fallen both at the basic andhigher levels and to get itright, you have to go back tothe basics. For instance, whenI was learning physics in sec-ondary school, to most of mycolleagues, it was a challengebecause of the language bar-rier. The textbooks were writ-ten in English, sometimes veryold English so if you read thetextbook, you have to translateit twice unlike someone whosefirst language is English. I amaware that in places like Chi-na, France, Germany and In-dia, textbooks are written intheir native languages so thatbarrier is not there and that iswhy they do very well in sci-ence/ technology because theyunderstand it just the way itis. So we have a peculiar case.We have to break that barrierif we are going to do well. Soeither we begin to write ourtextbooks in our local lan-guages or Pidgin Englishwhich I don’t think is feasible,or we improve our pupils' En-glish language vocabulary ata very rapid pace. We have toimprove the pupils’ vocabulary

so that they can understandthese subjects better. When Iwent to the university and de-cided to read again those text-books I was reading in sec-ondary school, I understoodbetter because I knew moreEnglish then. So if we canbridge that gap, I think we willhave better science, arts andEnglish students because theirvocabulary will improve and itwill affect every other area ofour academic life. That is whatscrabble does, it builds vocab-ulary, it’s fun and enjoyable.If you bring it to the class fromas young as age one and keepplaying it, and get familiarwith spellings, words, andcheck up the meanings etc.,before they know it, their vo-cabulary would have improvedand they will understandmaths and sciences much morethan we did in our own time."

The former head of market-ing in an IT consultancy firmsaid they have been able to in-troduce the game in about 13private and 30 public schoolsin Lagos with the hope of go-ing to other parts of the coun-try.

Apart from the annual Wini-fred Awosika Scrabble Tourna-ment for Schools and the Pro-tégé Scrabble League, Kelechisaid they organise scrabblecompetitions in schools too."Protégé Scrabble League ba-sically celebrates the anniver-sary of scrabble which was in-vented over 60 years ago," hesaid.

Mr. Kelechi Chioma...Scrabblehelped my spelling, vocabularyand thinking

*Pupils enjoying a scrabble class

’

’

We have to break that barrier if weare going to do well; so either webegin to write our textbooks in ourlocal languages or Pidgin Englishwhich I don’t think is feasible, or weimprove our pupils' English lan-guage vocabulary at a very rapidpace

Vanguard, MONDAY, SEPTEMBER 3, 2012 — 35

Micro-Finance

Ospoly MFB bosshinges high interestrate on money cost

Stories byPROVIDENCE OBUH

The Managing Director,

Osun State Polytechnic(Ospoly) Microfinance Bank,

Mr Femi Fapohunda has said that thehigh interest rate charge byMicrofinance Banks (MFBs), are as aresult of the high cost of money in themoney market.

This is in line with complaintsgathered from customers as well assmall scale business operators who areaggrieved over the high interestcharged on loans. These loans rangefrom four per cent to ten per centdepending on the bank involved.

Fapohunda, said “There is no wayinterest rates of MFBs will not behigh. Cost of money in the moneymarket is also high. So you cannot takemoney from the money market,depositors’ money that you are alsopaying high interest on and give it outby way of loan at a very low interest.

“So they can not but complainbecause you are not also giving themfree money; you are giving themmoney that you collected fromdepositors at a very high rate too.”

Meanwhile, Fapohunda in aseparate interview with FinancialVanguard, disapproved claims thatMFBs rely on loans from commercialbanks to fund their businesses.

He stressed that it is the other wayround as commercial banks are beingfunded by deposits from customers ofthe banks or shareholders fund.

According to him, “it is a wrongassertion to believe that microfinancebanks rely on commercial banks. Werely on our customer’s deposits not oncommercial banks, majority of us donot take loan from commercial banks.

“I am saying it categorically, 90 percent of MFBs don’t accept loan fromcommercial banks for the funding oftheir businesses, they fund theirbusiness through deposits fromcustomers, not from commercial banks.“In fact it is the other way round,commercial banks look for depositsfrom MFBs.”

Asked if interest rates charged ondeposits from commercial banks areamplified, he explained that the banksfollow due process on charges ondeposits. “There is what we callminimum deposit rate, deposit ratesgenerally are negotiable.”

On Ospoly MFB’s recapitalization,he said that the bank is aimingtowards attaining the status of a statemicrofinance bank, stating that peopleare depositing money, therefore,“before December, we would haveattained over N100 million capitalbases.”

Continuing, he revealed that theloan portfolio in Osun State is wellover N3 billion spread over 15,000 ar-tisans and small scale businesses,adding that the association has add-ed value to people’s life in the stateand also improved on its GDP.

“We have been doing a lot especial-ly for market women, traders, salaryearners, small scale business men andwomen have been benefiting frommicrofinance in the state. Not at Os-poly alone, but the state association,the National Association of MFBsOsun State. We are vibrant. In fact,we have been in the forefront of mi-

crofinance policy in Nigeria.”Speaking on the clamour for exten-

sion of the recapitalisation date forMFBs by the Central Bank of Nigeria,CBN, he said policies become bindingonce they are introduced.

“Once it is a policy, you can only pleadfor time, but more often, policies arenever changed no matter the situation.This is CBN’s policy and they are thechief regulator in collaboration withthe NDIC. We don’t have a choice, weneed to comply, if there is no control,there wouldn’t be a vibrantmicrofinance subsector.

Foreigninvestors to growNigeria's SMEs

International investors,especially the United States Gov-

ernment have shown interest in thedevelopment of the Nigerian Smalland Medium Enterprises, as a resultof their importance to economicrecovery.

To this end, the Nigeria-AmericaChamber of Commerce (NACC) isseeking to grow the sector with a $2billion (N310bn) worth investment.

The National President, NACC, Mr.Sam Ohuabunwa who disclosed theinvestment plan said that theinvestments were being madeavailable to support both theagricultural and SMEs sector becauseall over the world small and mediumenterprises hold the economy.

“Our mission is to develop businessopportunities, trade and investmentswhereby we train people, empowerthem, give them skills to start theirown businesses and then providegoods and services as a tool fordevelopment. Ohuabunwa pointedout that the two billion dollar grant isalso being provided to promote wideruse of solar and green energy bySMEs, saying, “Electricity is a majorissue in Nigeria, many businesseshave folded up owing to inadequateelectricity supply. Operational costhave escalated by at least 30 percentas small and medium businesses runon personally sourced poweralternatives and generators fuelled byhydrocarbons costing so much perlitre, therefore contributing todifficulty in scaling up businesses.

To avoid non-performance of thefund, he said that only legitimateSMEs registered in accordance withNigerian laws would qualify for thegrant. “The U.S. Government is al-ready working with civil societygroups and a few Nigerian commer-cial banks for the proper disbursementof its grant,” he stated.

Meanwhile, he said that the U.S.Export and Import Bank was alsomaking funds available to prospectiveNigerian agro-allied entrepreneurswho might want to make use of U.S.technology. It would be recalled thatPresident of the United States ofAmerica, Senator Barrack Obama, inthe US-Nigeria Trade and InvestmentForum, organised by Nigerians inDiaspora Organisation,said Nigeria isthe world’s next economic successstory, a discovery he said was one ofthe major reasons why his governmentwas committed to helping the countrybuild strong democratic institutions.

36 — Vanguard, MONDAY, SEPTEMBER 3, 2012

CMYK

Vanguard, MONDAY, SEPTEMBER 3, 2012 — 37

38 — Vanguard, MONDAY, SEPTEMBER 3, 2012

Appointments & Promotionsvicahiyoung@yahoo.com 08033348923

BRIEFS

FCMB namesKalu Group Head,CorporateCommunications

FIRST City MonumentBank Plc , FCMB, has

appointed Mr. IkechukwuInnocent Kalu as the bank’sHead, CorporateCommunications.

Ikechukwu with over 19years experience in BrandManagement andCommunications across theBreweries andTelecommunications sectors,was until recentlyManagingPartner, Customer PassionPoint Limited in Dar esSalaam, Tanzania.

He has also worked withMTN Nigeria as SeniorManager, Channel andRegional Marketing; ZainNigeria as Head, MarketsSegments, and ZanzibarTelecommunications Limited,Tanzania as MarketingDirector.

As Head, CorporateCommunications, Ikechukwuwill be responsible fordeveloping and executingbrand strategies and activitiesto ensure, the bank maintainsand enhance brand presencein the market; ensuringresearch on products, andretail segments in order tohave data to plan meaningfulcommunication andcampaigns to increasesegment penetration andcustomer acquisition.

He will also oversee andcoordinate activities ofCorporate CommunicationsDepartment.

Kalu holds a Bachelorsdegree in BusinessAdministration from theUniversity of Lagos, ExecutiveMBA in Marketing from theUniversity of Nigeria, PostGraduate Diploma inMarketing from the Universityof Leicester and is also amember of the CharteredInstitute of Marketing,

DN Meyer Plc,manufacturers and

marketers of paint products inNigeria, has honouredProfessor Wale Omole, formerVice Chancellor of ObafemiAwolowo University, OAU,Ile-Ife and the Chairman ofStrategy, Finance andGeneral Purpose Committeeof the company, as he attains70 years.

Speaking at an event to markthe celebration, Chairman ofDN Meyer Plc, Sir RemiOmotoso, said the companywas committed to raisingindustry standards andrewarding excellence inNigeria.

He said “At DN Meyer, weare totally committed andpoised to inspire creativity,raise industry standards toglobal level and rewardexcellence. We are here todayto celebrate Professor Omoleat 70 years as well as expressour profound gratitude to himfor the meritorious serviceand navigation of DN Meyeraffairs as the Chairman of itsStrategy, Finance andGeneral Purpose Committee,

DN Meyer celebrates Omole at 70

*From left: The celebrant, Professor Wale Omole, (OFR); his wife, Mrs. Sade Omole andChairman of DN Meyer Plc, Sir Remi Omotoso (MFR)during the birthday dinner organised byDN Meyer Plc in honour of Professor Omole at 70 at the Southern Sun Hotel Ikoyi, Lagos,recently.

since the past eight years.” “Omole is a great Nigerian

who has inscribed hisfootprints on the irrevocablesands of time. As Chairman,Strategy, Finance and GeneralPurpose Committee, heinitiated and executed manyinnovative projects that

resulted in strategictransformation of ourcompany. We are grateful tobe associated with him.”

Otunba Niyi Adebayo,former Governor of EkitiState, who presented thetoast, lauded Omole for hisoutstanding contributions to

the country, especially theeducation sector where heserved as a Vice Chancellorof OAU and chaired manynational and internationalcommittees. “This toast is to agreat man, an achiever andstrategist with indelible trackrecords!”

NOI Polls hasannounced the

appointment of Ms. OgeModie as its new ChiefExecutive Officer.

She takes over from NdubisiAnyanwu, who was thepioneer Managing Directorand CEO, a position he heldfor over five years, up until theend of July 2012.

Before her appointment,Modie has served as thecompany’s Chief OperatingOfficer, a role which saw hersuccessfully managing thecompany ’s day-to-dayoperations and re-positioning its strategicengagements with itsbusiness clients for greatervalue.

As a corporate financeexpert, Modie has managedmultiple acquisitionassignments (valued at overUSD 20 million) working withtop-level executives in theNigerian and West Africanfinancial services sectors.

She holds a Master ofBusiness Administration fromthe Cranfield School ofManagement and a BSc Honsin Economics from theUniversity of Nigeria Nsukka.

Modie joined NOI PollsLimited with a careerspanning over 13 years as amanagement consultant,working in private, public andnon-profit sectors in Africaand the UK. Her experiencecovers corporate finance,Strategy Consulting andMSME Finance &Development.

NOI Polls appoints Modie CEOShe has been involved in

various notable projects, oneof which was thedesigning and developing ofa business incubator under aWorld Bank assistedprogramme. The new CEO isalso an expert at businessstart-up and operations andwas actively involved in

setting up an insurancecompany for one of the topthree Nigerian banks.

NOI Polls is an opinionresearch organisation inNigeria that provides timelyand relevant information onpeople’s perspectives on avariety of social andeconomic issues.

The organisation wasfounded in November 2006 byDr. (Mrs.) Ngozi Okonjo-Iweala, CoordinatingMinister of the Economy &Nigeria's Hon. Minister ofFinance. Her goal was toestablish a premier opinionresearch firm in Nigeria,which periodically provided abarometer of public opinionon a range of social andeconomic issues.

CHIEF Executive Officer, of Novelpotta Y&R, the

Nigerian office of the globaladvertising network, Young &Rubicam Brands, CeleyOkogun, has bagged a PhDin Organisation andManagement, withspecialisation in leadershipfrom Capella UniversityMinneapolis, Minnesota,USA .

This attainment is the climaxof 24 months of courseworkand 18 months of dissertationresearch fieldwork with title:A Phenomenological Study ofthe Emergence of Leadershipamong Female SecondarySchool Principals in Nigeria.

The study which tookOkogun across several citiesin Nigeria to interview femalesecondary school principals,focused on secondaryeducation, gender, and theemerging roles of femaleleaders in the school systemhistorically dominated bymen.

Okogun, Y&R CEO, bags PhDIn his speech, the President

of Capella University, ScottKinney, singled out Okogunfrom the 800 graduands forhis courage, resolve andacademic brilliance.

He said; “Allow me to sharea very brief story about aCapella Learner with you.

Celey Okogun is a learner inthe School of Business andTechnology; and he will bereceiving his PhD inOrganisation andManagement, leadership injust a few minutes. Celey is abusinessman in theadvertising industry.

*Centre: Dr Celey Okogun being decorated by ScottKinney, President of Capella University,Minneapolis, Minnesota, USA.*Mr. Ikechukwu Innocent Kalu

Advertising, Media & Marketing

CMYK

Vanguard, MONDAY, SEPTEMBER 3, 2012— 39

Stories byPRINCEWILL EKWUJURU BRIEFHow LG’s battery LED

TV lifts viewershipThere is nothing as frus-trating as having apower outage that in-

terrupts one’s viewing pleas-ure and makes one lose someimportant scenes of aprogramme. It takes someminutes to start a generator,that is if there is a generatorand fuel in its tank.

But LG Electronics has cometo the rescue by introducingthe world’s first battery LEDTV into Nigeria, that is its32LS3800. The product will nodoubt save TV viewers muchfrustration and anxiety.

Even though the LG TVoperates on electricity, it hasa long-lasting battery thatensures TV viewing is notunnecessarily interrupted.The LG Battery LED TV comeswith exciting features thatmake for a superlative enter-tainment experience. It isportable and easy to carrywhich makes it convenient forit to be moved from one placeto the other.

This feature ensures that thefun and entertainment is notlimited to indoor settingsalone as it can also come inhandy for alfresco gatherings.Apart from watching favour-ite TV programmes, the32LS3800 battery TV alsocomes with a USB slot whichenables consumers to watchDivx Movies from their flashor external hard drives..Amongst various features ofthe LG Battery LED TV hasan in-built surge protector forlong lasting durability andbetter performance againstpower surge; the batterywhich comes in handy duringpower outages has long lifeas it can last the duration of a

football match.Speaking at the launch in

Lagos, Mr. Dave Shin, Gen-eral Manager, Home Enter-tainment Division, LGElectronics, said the producthas come to solve the problemexperienced by TV viewers asa result of the constant poweroutage that households andbusinesses in Nigeria expe-rience’.

Also speaking, Mr. Moham-ed Fouani, Managing Direc-

tor, Fouani Nigeria Limitedsaid, “Owing to our unflinch-ing commitment to makingavailable to our consumersonly products that would en-able them achieve their aspi-rations and dreams of thegood life, we would stop atnothing to continually enrichthem with products of tech-nological innovations, stylishdesigns and mostimportantly, giving themvalue for money spent.”

Further, Fouani said that theultimate aim for the launch ofthe LG Battery TV is to en-rich family time which is wan-ing as a result of the powerinterruptions. “It is our beliefthat it will create a uniqueplatform for individuals to berejuvenated and realise ut-most relaxation and enter-tainment with their families,friends and loved ones any-time, anywhere,” he added.

Wonder Promo: MTN targets customers'hearts …Offers aeroplane

Not for its large reach-out, but for the con-s i s t e n t

modernisation of its networkand reward schemes. MTNNigeria with its UltimateWonder promo is targetingcustomers' hearts with anaeroplane offer.

Aside trying to hit the bull’seye, the company is planningfurther increase in its marketshare. The promo no doubthas increased MTN’s share ofvoice in the market, whilst itattempts to cement its relation-ship with customers.

The offer is not the only rea-son for the promo, but the on-going modernisation of thecompany’s network and ratesslash and the recent dolingout of $1.3 billion tomodernise its Nigeria phone

network remains another bidto expand its capacity andimprove the quality of serv-ice to give subscribers opti-mum satisfaction and value.The project is part of its in-vestment and budget for 2012.

However, for effective han-dling of the modernisationproject, the company has con-tracted Chinese ZTE Corp,Ericsson AB (ERIC) and Hua-wei Technologies. These areleading telecom firms whosecredentials transcend multi-nationals.

According to the NigerianCommunications Commission(NCC), 48 per cent of thecountry’s 100 million mobile-phone subscribers use theMTN network being one ofthree largest telecom compa-nies in Nigeria. This is a large

share when population is con-sidered. Aware of that mag-nitude, the responsibility hasnot been left untendered. Thatis why MTN has consistentlyshoved up value initiatives tostrengthen its status as wellas expand its customer base.

The promo includes the ul-timate prize of a CESSNA182T airplane. Customerswho recharge up to N3,000from now till October wouldqualify to participate in thegrand draws that will be heldin Lagos to choose the even-tual winner. This winner ei-ther takes the aircraft or optsfor the cash equivalent.Besides, there are cash prizesfor other lucky customers. Onehundred customers will havethe opportunities to winweekly cash N150,000 and a

weekly star prize ofN2,000,000 for the entire threemonths starting from August,with the mere condition ofN200 recharge for the entirepromo duration.

Recently, MTN came upwith new value offerings thatshattered call costs, reducingcall rates by about 40 per centon all MTN packages likeMTN SuperSaver, Family &Friends, MTN Pulse & MTNPay Go. MTN also introduceda new package called MTNSmooth talk. This was createdto meet the needs ofcustomers who want flat ratesfor calls to all networks. MTNBooster is also back. This wasre-introduced to offercustomers ultra low call rateseither via weekly or monthlysubscription. MTN Zone isnot left out with discounts ashigh as 99 per cent on callswithin the MTN Zone.

Agrikexposhifts toOctober

Organisers of theAGRIKEXPO, 151

Products Limited and TheNigeria British Chamber ofCommerce (NBCC) havepostponed the agric exhibi-tion scheduled for September2012 to October 9 to 11, 2012.

Mr. Henry Iwuno, Market-ing Manager, 151 ProductsLimited, said the decisionbecame necessary in the lightof several requests from ma-jor industry captains, keyF&B distributors, exhibitingcompanies, institutional/reg-ulatory stakeholders most ofwhom have asked for moretime for preparation and lo-gistics.

In the words of Mr. OkleEzbe, President of the Balo-gun Market Association(BMA), the change in dateis a welcome developmentconsidering that many of theparticipants have already ex-pressed a strong desire to at-tend the event, but are cur-rently away on annual holi-days until much late Septem-ber.

OYSAA givesnew look tostate secretariat

The Oyo StateGovernment through the

Oyo State Signage andAdvertising Agency (OYSAA)has given a new look to theOyo State landscape with anew design that projects andpromotes the image of thestate's ministries and agencieswithin the state secretariatcomplex.

OYSAA was established toregulate and control the ad-ministration of outdoor boardsand signages in Oyo State.The Director-General, Mr. Yin-ka Adepoju said the unveilingof the new billboard design ispart of its effort to improve theenvironment by introducinginnovative ideas which willfast-track the move from exist-ing conventional outdoor ad-vertising to cutting-edge tech-nology-driven media solutioncomparable to internationalstandards and best practices.

Adepoju also used the occa-sion to commend the effort ofOyo State Government underthe leadership of Sen. AbiolaAjimobi for establishing theagency claiming that this laud-able initiative no doubt has thecapacity to greatly enhance theon-going beautification exer-cise of the state’s environment,increase its revenue genera-tion drive, and facilitate eco-nomic empowerment of itspeople through job creation.

*From left: General Manager, Home Entertainment Division, LG Electronics West AfricaOperations, Mr. Dave Shin; Product Marketing Manager, Home Entertainment Division, LGElectronics, Mr. James Odejimi; and Managing Director, Fouani Nigeria Ltd, Mr. MohammedFouani, during the official launch of the LG Battery LED TV in Lagos recently.

40— Vanguard, MONDAY, SEPTEMBER 3, 2012

Omoh Gabriel - Group Business Editor

Babajide Komolafe - Acting Finance EditorClara Nwachukwu - Energy EditorPeter Egwuatu - Head, Capital MarketYinka Kolawole - Snr Bus. CorrespondentFavour Nnabugwu - Insurance CorrespondentGodwin Oritse - Maritime Correspondent

Godfrey Bivbere - Maritime CorrespondentYemi Adeoye - Energy CorrespondentOscarline Onwuemenyi - Energy CorrespondentFranklin Alli - Industry ReporterMichael Eboh - Capital Market ReporterAmaka Abayomi - Money market ReporterEbele Orakpo - Energy Reporter

Ifeyinwa Obi - Maritime Reporter

CONTRIBUTORSPrincewill Ekwujuru - Media/MarketingNaomi Uzor - IndustryProvidence Obuh - Capital Market

LAYOUT - Graphics Department

0817 002 3569

BUSINESS & ECONOMY

By NKIRUKANNOROM

The argument that theN5, 000 bill should notbe introduced because

it would spur corruption doesnot hold here because thosethat are using our currencyfor corruption have alreadymigrated to the dollarbecause the naira has lost itsvalue. The dollar has nowbecome the store of value. That is why we areintroducing a higher bill ofvalue because we don’t wantto dollarise our economy. We need to be in charge ofthe money that comes in andgoes out”.

The above passage is anexcerpt from the CBN MediaDirector’s presentation at thecommencement of asensitisation campaign on theplanned currency-restructuring program. Wemay deduce from the abovethat CBN recognises thatcorruption is facilitated bycurrencies with highdenomination/values!

We note, for example, thatthe adoption of dollars for thefacilitation of the $620,000allegedly collected as bribe byFarouk Lawan from FemiOtedola is in consonance withOkoroafor’s observation. Consequently, the N5, 000note will be introduced by theCBN to compete as theinstrument of choice againstthe dollar for such corrupt

“NAIRA HAS LOST VALUE” SAYS CBN

transaction!The CBN Media Director

also willfully provided us withthe reason why the naira fellout of favour with the public;according to him, ‘the nairahas lost value’. Regrettably,however, the reasons for theloss in the purchasing powerof the naira were notprovided. Indeed, loss in acurrency purchasing values is

Okoroafor did not say is thatunless inflationary spiral iscontained, the N5, 000 nairawill also lose value over timesuch that a N10, 000 note willbecome expedient to facilitatetransactions.

CBN also indicated thatnaira’s loss of value has ledto dollarization of theeconomy. From theforegoing, however, it is

improve naira value withoutthe recourse to higherdenominations in ourcurrency profile. Zimbabwetravelled this path andultimately inevitablyintroduced Zimbabwean onebillion dollar note, which wasonly equivalent to aboutUS$1. By the same token, theN1, 000 note, which wasalmost $9, when it was firstintroduced in 2005 has lostover 30% of its parity, such thatthe N1, 000 note is now onlyequivalent to about $6because of annual double-digit rate of inflation. So, itis evident from the above thatCBN’s inability to properlymanage money supply hasresulted over time in aninflationary spiral, which hasmade naira to lose value. Inother words, Central Bank’sfailure in monetary policymanagement is the cause ofthe so-called dollarisation ofthe economy as decried by theapex bank’s Media Director!

We have maintained in this

column for many years thatthe unbridled increase inmoney supply, whichinevitably drives inflation, isactually the result of CBN’smonthly substitution ofhundreds of billions of nairafor the dollar component ofdistributable revenue. Thus,the higher our dollar revenue,

the higher will be nairaavailability and extendedcredit capacity of the banks,and ultimately the higher willbe the spectre of excessliquidity, while inflation willcontinue to destroy our socialwelfare.

In reality, if CBN is trulyconcerned about the value ofthe naira, and its position asa currency of choice vis-à-visthe dollar, CBN must beaware that its monopoly of theforeign exchange market isinappropriate and destructiveto the economy.

The adoption of dollarcertificates for the payment ofdollar-derived revenue willimmediately transform themarket dynamics for nairaagainst the dollar such that inplace of excess liquidity, therewill now be controlled nairasupply with more dollarschasing the naira. In thismanner, the naira willbecome the currency of choiceand there will be no need forthe introduction of higher andhigher denominations toaccommodate loss ofpurchasing power as a resultof inflation or indeed theneed for the promotion of thenaira as the currency of choicefor corrupt transactions.

SAVE THE NAIRA, SAVE

NIGERIANS!!

primarily caused by highinflation rate. In thismanner, one can understandwhy the N1, 000 note canpresently only buy about 40%of its original value when itwas first introduced in 2005. The loss in value is due toannual inflation rate of over10%. Consequently, the N5,000 denomination willhopefully command thepurchasing value, which theN1, 000 note enjoyed at birth.

What, of course, Mr.

evident that the loss in thepurchasing value of the nairais the product of inflation; inother words, if we can containinflation, it will not benecessary to produce highernaira denominations. Thequestion, therefore, is how dowe restrain inflation?

Given that inflation is theproduct of too much moneychasing too few goods, wecan control money supply inthe economy, to curtaininflation and simultaneously

FIRS rakes in N524.12bn from oil, non-oil sectors in July

The Federal InlandRevenue Service, FIRS,

Friday, said it collected a totalsum of N524.122 billion worth

of taxes from both oil and non-oil related businesses in themonth of July, 2012.

The figure, according to dataobtained from the Planning,Reporting and StatisticsDepartment, FIRS, was 100per cent increase over

N302.956 billion projected bythe agency for the period.

Out of this, the Oil & Gasbusiness accounted for 57.69per cent of the total taxescollected within the period,while non-oil taxes accountedfor the remaining 42.31 percent. Available statisticsshowed that while thegovernment had targetedmonthly tax collection ofN155.452 billion from oil &gas sector, it receivedN302.373 billion instead,which amounted to 57.69 percent increase. Similarly, atotal sum of N221.749 billionwas raked in from non-oilsector, as against theprojected figure of N147.504billion, representing 42.31per cent improvement.

Under the oil & gascategory, the Petroleum Profittax which was expected toyield about N149.48 billion,ended up bringing inN301.501 billion into thegovernment coffers, whichrepresents 57.52 per cent

increase. Gas Income taxyielded N872.2 millioncompared to the targeted sumof N5.975 billion, which is0.17 per cent decline over thetargeted figure.

On the non-oil sector, theCompany Income taxattracted N133.673 billion,25.50 per cent increase overN67.295 billion targetedwithin the period, whileCapital Gains tax accountedfor 78 per cent of taxescollected from non-oil sector,as the government raked inN4.098 billion, as against itsinitial target of N245.8million. Total tax collectionsfrom Stamp Duty tax declinedby 0.19 per cent to N983million from N1.474 billionprojected. Total federationaccount (a+b) experienced84.16 per cent increase fromthe monthly target ofN224.467 billion to N441.127billion.

Under the VAT pool, thetotal value added tax

collected by the NigeriaCustoms Service on imports(NCS-Import VAT) duringthe period stood at N16.927billion, as against N20.072billion projected, while valueadded tax on non-importedgoods (Non-Import VAT)decreased to N36.984 billionfrom initial target of N46.833billion, representing 3.23 and7.06 per cent declinerespectively. This, therefore,brought the total VAT pool toN53.912 billion from N66.905billion, a 10.29 per centdecline over the projectedfigure. The EDT for the periodrose by 4.73 per cent toN24.81 billion from targetedN8.069 billion. The federalgovernment’s consolidatedaccount attracted N4.041billion, compared to projectedN2.757 billion, amounting to0.77 per cent increase whileNITDEF decreased by 0.05per cent to N233.2 millionfrom the month’s target ofN758.3 million.

In this manner, one canunderstand why the N1,000 note can presently onlybuy about 40% of itsoriginal value when it wasfirst introduced in 2005 ,

,