financial vanguard october 21 edition

CMYK

OCTOBER 22, 2012

FG worried on use of dollar as secondcurrency in Nigeria's market—CBN to stop cash dollar sales to BDCs

The federal Government isworried by the use of dollar asmeans of payment or legal

tender in the local market in Nigeria.The practice is seriously affecting thevalue of naira as most Nigerians are fastlosing confidence in the local currencyas a store of value.

The naira is the only legal tender inthe country but in most parts of Nigeria,Lagos and Abuja in particular, lands aresold in dollars, prices of some productsare denominated in dollars, school feesare quoted in dollars and hotels chargeand collect dollars for rooms and otherservices. In Japan and other developedcountries, payments for any localtransactions are done in the localcurrency unit; their nationals insist onpayment for goods and services in localcurrency.

Reacting to reporters question on theuse of dollar in Nigeria local marketCBN Governor Mallam Sanusi LamidoSanusi said that the dollarisation of theNigerian economy is of serious concernto the President, the Central Bank ofNigeria, the Economic managementteam and every body and that the CBNis coming up with a policy to stop thepractice.

He said that as a first step, the CBNwill soon stop the cash sale of dollarsto Bureaux De Change, where membersof the Nigerian public usually maketheir purchases of dollars in cash tomake transactions within the country.

Mallam Sanusi Lamido Sanusi at thejoint briefing to mark the end of the2012 IMF/World Bank Annual Meetingswith Dr Okonjo-Iweala in Tokyo Japansaid that the idea of introducing the N5,000 note was to check mate the practiceof the movement of huge funds aroundthe country in dollars. Sanusi whoseproposal to introduce the N5, 000

currency note into the Nigerianmarket was halted by the federalgovernment following heavy criticismagainst the move, said theintroduction of the N5, 000 note wasto check the dollarisation of theNigerian economy by providingNigerians with heavy cashtransaction and a higherdenomination.

His words, “The dollarisation of theeconomy is a big problem for all of usand it is something that we are goingto walk towards taking stopping. Onemajor plank of solving the problemof dollarisation was the N 5, 000 note,because that is one of the reasonpeople go for dollars, and that is thereality; if you have inflation over along time; if you have haddevaluation over sometime; yourcurrency, because the naira is not justa medium of exchange but also a storeof value, if your currency loses itsposition as a store of value, you havea problem.

“People carry $10, 000, that is N1.5

Continued from page 18

BY OMOH GABRIEL &EMMA UJAH, just backfrom Tokyo Japan

CURRENCY BUYING CENTRAL SELLING

CBN Exchange rate as at 19/10/2012

112.86 +0.44

92.08 -0.02

158.85 +0.25

2,475.00 +37.00

19.74 -0.05

DOLLAR 154.76 155.26 155.76

STERLING 248.2969 249.0991 249.9013

EURO 201.8225 202.4746 203.1266

FRANC 166.9652 167.5046 168.044

YEN 1.9531 1.9594 1.9657

CFA 0.2905 0.3005 0.3105

WAUA 238.5634 239.3341 240.1049

RENMINBI 24.7437 24.8241 24.9045

RIYAL 41.2671 41.1405 41.5338

KRONA 27.0531 27.1405 27.2279

SDR 238.7947 239.5662 240.3377

Cover Story

CMYK

,

,

18 — Vanguard, MONDAY, OCTOBER 22, 2012

million in their pockets.Seventy per cent of the dollarspeople buy from the BDCs isnot for transactions outsideNigeria. They move dollarsfrom one part of the country toanother. In fact, from one partof Abuja to another.

“In a brief case, you can carrya $100, 000. That is about N15million. Now part of the logicfor introducing higherdenomination is to providegenuine high-value cash userswith a note that is a store ofvalue as a first step towards ourattempt to eliminate the use ofdollar to move cash aroundbecause the dollar has becamethe second national currency”.

The CBN boss who revealedthat even President GoodluckJonathan was worried over thedevelopment said that underthe new policy to beannounced shortly,transactions between the apexbank and BDCs, on the one

FG worried on use of dollar as secondcurrency in Nigeria's market

hand, and between BDCs andtheir customers would be doneonline.

He explained further thatthose who honestly need tomake payments outside thecountry would have therecipients paid directly from thebank accounts of the BDCs ortake the option of buyingtravellers’ cheques. Accordingto him, “we are worried aboutit. The president is worriedabout it. We are all worriedabout it and we are comingwith a fresh policy to stopselling cash dollars to BDCs.

“We will credit theiraccounts. If you want to payfor medical bills abroad, yougive the hospital account. Ifyou want to pay school fees,you do transfer like everybodyelse.

“If you want to travel, youbuy travellers’ Cheque or getmoney on your cards, insteadof people moving around with

Debt ManagementOffice (DMO) has

called on all tiers ofgovernment to ensureeffective management of debtsto fast-track economicdevelopment.

Dr Abraham Nwankwo,Director-General of the Office,made the call when the SenateCommittee on Local andForeign Debts visited theoffice on over sight function.

“We continue agreeing withthe National Assembly, withthe people of Nigeria but the

dollars. But what ishappening now is that if youwant a N2 million transaction,you have to carry bags of nairacash. And this was part of thelogic of bringing in a higherdenomination for people whodo high-volume cashtransaction to reduce theamount of paper money theycarry along.

“I am glad that you askedthat question because youare now beginning to thinkabout some of the concernsthat we have as managers ofthe economy because youhave to print so much papermoney and it is becausepeople don’t want to carry somuch papers in cash thatthey are carrying dollars andwe cannot let it continue tohappen. In America youcannot transact business withPounds Sterling. You cannotand we will deal with it. It willstop”.

DMO tasks state, local govts oneffective debt management

most important thing is forthese borrowed monies andun-borrowed monies to beused well, effectively,efficiently with minimumlinkages; and something toshow for it. The mostimportant thing as you haveimplied is when statesborrow, let them make gooduse of what they borrowbecause if states borrowmoney that will be repaid over40 years.

“And they use it to build aroad; of cause, the road does

not last for five or seven yearsif they are well maintained,so future generations will stilluse the road.”

Nwankwo said that theDMO had continued to offeradvice to state governmentsas it concerned their debtmanagement, adding that allthe debt profile of states of thefederation had be re-constructed. According tohim, the DMO will announcethe states domestic profile bythe end of the year after

The words ‘youth’ and‘ restiveness’ havebecome so commonly

used together in the lastcouple of years that it seemsto have taken on a life of itsown. In the last decade andmore there has been aproliferation of cases all overthe country and indeed theworld, of youth agitationswhich have tons of peopledead and valuableinfrastructure as well aspersonal properties lost anddestroyed.

A sustained protestationembarked upon to enforce adesired outcome from aconstituted authority by anorganised body of youths, fitsthe label of youth restiveness.It is also a combination of anyaction or conduct thatconstitutes unwholesome,socially unacceptableactivities engaged in by theyouths in any community.

It is a phenomenon whichin practice has led to a nearbreakdown of law and order,low productivity due todisruption of productionactivities, increasing crimerate, intra-ethnic hostilities,and harassment ofprospective developers andother criminal tendencies.

This scourge has beenaround for a long time and itlooks as though it is defyingsolutions. Maybe thequestion that needs to beasked is what is trulyresponsible for thisexpression of dissatisfactionby the youth? Have theircomplaints over the years notbeen heard or attended to? Isthere more to the killings anddestruction than just drawingattention to the needs theywant met? Are the youthstrying to draw society ’sattention to themselves morethan the issues they appearto be fronting? These andmore are the questions wewould try to tackle head ontoday.

In Nigeria for instance, theNiger Delta region which isunarguably the bedrock ofthe oil industry in Nigeriapermeated the news for alengthy period of time as theyouths of that region triedvarious means of gettinggovernment and oilcompanies to pay attention totheir dire conditions of livingand alleviate their sufferingssince according to them, theresources which is buildingthe nation is flowing fromtheir land so by virtue of that

Youth restiveness andunemployment in nigeria: Theway out part 1

they should also bepartakers of its benefits.This strife led to a rise inkidnapping andvandalization of oilpipelines as well as othervices that were beingperpetrated. After a periodof years, the Nigeriangovernment intervened andthe Amnesty program wascreated to help deliver someof the promises whichgovernment had made tothe youths in those areas.

The baton was soonhanded over to the EasternNigeria. Increase in the rateof armed robbery attacks,kidnappings as well as

unbridled thuggery becamethe order of the day.

Today the Northern part ofNigeria has literallyerupted with unrivalledviolence. Bomb blasts,kidnaps and killings ofNigerians and others havebecome the prevailingtrend. Despite beefing up ofsecurity in these areas, theproblems still looms. Thissituation begs the questions,‘’what is the government ofthe day willing to do to puta permanent end to theseproblems.

STATISTICSThe National Population

Commission (NPC) has saidthe country’s population hasrisen from the 140,431,790it was five years ago whenthe last national headcountwas taken, to 167,912,561 asat October 2011.Thisrepresents an annualpopulation growth rate of5.6 million people.

The Ministry of YouthDevelopment, said recentlythat there are 68 millionunemployed youths inNigeria.

It is aphenomenonwhich inpractice has ledto a nearbreakdown oflaw and order,low productivitydue todisruption ofproductionactivities


Continues on page 19

From left: Project Director, Isee Expo, Dr. Obinna Awiaka, Registrar, Nigerian OptometricAssociation, Dr. Sam Edu Ntem, Director, Blindness Protection Programme, Lagos State Ministryof Health Dr. Funmi Sokunbi and Vice Chairman, Isee Expo Dr. Nkem Okoroafor, at the 5thInternational Optical Exhibition and Conference, at Muson Centre Onikan Lagos…PHOTO;Kehinde Gbadamosi

CMYK

Vanguard, MONDAY, OCTOBER 22, 2012 — 19

Cover Story

At the just-concludedI n t e r n a t i o n a lMonetary Fund/World

Bank Group AnnualMeetings, all the financeministers of the world and thegovernors of central banks metto assess the state of theworld’s economy and financesso that each country will getto know what is happeningand take adequate measuresto either protect its economy oradopt measures to foster itseconomic growth in the contentof trends and developmentsaround the world. This is themajor reason of the annualmeetings. It was also a venuewhere nations seek advice onhow they can manage theireconomies in the context of theglobal environment and manyshared experiences.

Nigeria was represented atthe meetings by the FinanceMinister, Dr. Ngozi Okonjo-Iweala and CBN Governor,Mallam Sanusi LamidoSanusi. From the variousseminars, papers anddiscussions at the meetings, itwas clear that there was highlevel of uncertainty in theglobal economy. Severaldiscussants submitted thatthere may be further slowdown of the global economydescribing the gains so farmade as very fragile.

Two central themes came onboard the discussions - that ofravaging disaster wreakinghavoc across the globe as aresult of climate change andthe need to build into nationalplanning, disastermanagement; and the urgentneed for nations to build bufferto contain external shock in theevent of economic recessionand for managing disasterswhen they do occur.

While these issues tookcenter stage in Tokyo, Japan,

Nigeria, a nation of sharing,what a nation!

President Goodluck Jonathanpresented the 2013appropriation bill to theNational Assembly. The billhas since generated heateddebate especially on whatshould be the rightbenchmark for crude oil price

for the 2013 budget proposalbefore the National Assembly.In the current budget debateas to the rationale for using$75 as benchmark price forcrude instead of $80, it ispertinent that Nigerians takecognisance of what is goingon globally, in order toposition the nation for

economic development to takeplace. It must not bepersonalised and it should notbe about who wins theargument. It should be aboutwhat is good for Nigeria in thecontext of present realities.

If the budget benchmark ismoved from $75 to $80, thequestion to ask is; whatadvantage will the ordinaryNigerian derive from it?Moving the benchmark to $80or more, will not in any wayincrease the revenue accruingto the nation. If Nigeriaproduces two million barrels perday and sells at theinternational market for $100per barrel, the revenuegenerated will be $2 billion.That the budget is based on $75will only mean that Nigeria willspend $75 from every $100earned and save $25. If thebenchmark is moved to $80 perbarrel, Nigeria will spend $80of every $100 earned and save$20. What this means is that theexecutive arm of government issaying ‘let us save an extra $5now that prices are good’ whilethe National Assemblymembers are saying ‘no, spend

$5 more now and save less.’It also means increasing theamount available for sharingamong the three tiers ofgovernment from the commonpool. There is no increase inrevenue generation into thefederation account.

As it is in economic history,a poor country caught inpoverty trap will always wantto consume every kobo itearns while those climbingthe ladder of wealth wouldalways save part of theirincome. It is from savings thatfunds are released forinvestments to be madewhether at household,corporate or national level.Without savings, noinvestment can take place.Nigeria needs to save nowinstead of squandering whatit earns now on subsidy thatis fraught with corruption.

A budget oil benchmarkprice of $75/barrel for the 2013period is below current worldmarket prices and based onmoving averages of the worldoil price, allowing foruncertainty in world oil pricemovements. The question is

what the extra amount will bespent on? Already, the budgetis 72 per cent recurrent and 28per cent for projects that willbenefit the common man. Willit not be better for Nigeriansto focus on areas whereadditional revenue will begenerated from? Why are weso fixated on sharing and noton baking the proverbialnational cake?

The bigger the cake, thelarger will be eachcomponent's share of it.Nigerians keep thinking thatoil price will hold firm, ofwhich there is no guarantee,nobody can guarantee that.Nigeria needs to make sure ithas alternative resources in theevent of the collapse in theprice of oil. Has the NationalAssembly given thought to thefact that the various reformsgoing on in the power sector,port, and infrastructure cangenerate much more revenuefor the country than oil? Is itnot shameful that Nigeria stillimports fuel and spendbillions on fuel import subsidy?The National Assembly shouldconvince the nation why thebenchmark should be $80outside spending more onwages, salaries andentitlement of a few privilegedNigerians in public service.

,

,

As it is ineconomic history,a poor countrycaught inpoverty trap willalways want toconsume everykobo it earnswhile thoseclimbing theladder of wealthwould alwayssave part of theirincome

necessary analysis.He said that states had been

advised not to use more than40 per cent of their monthlyallocation from the federationaccount to service debt.

He said that states had alsobeen encouraged to improveon the means to grow theirinternally generated fund asan alternative means tofinance their projects.Commenting on state of theNigerian bond in theinternational market, thedirector general said thatNigerian bond had beentrading well and had openeddoors for private sector to getbond at the internationalmarket. He said that it was theperformance of the bond thatled to the listing of Nigeria’sbond in the JP Morgan

Sovereign debt index. Nwankwo urged the

legislators to approve theborrowing programmes,saying that “we have donethe sustainability analysis andsee what the picture lookslike.

“We will make sure that wedid not get to the dangerousthreshold.” He solicited thecommittee’s support to ensurea favourable workingenvironment and improvedremuneration for its staffers.

“This is an area that we wantyou to help us in any way youcould. In 2007, as soon as Iassume this position, weworked out and got a primepiece of land at the CentralBusiness District. But wecannot develop it because ofbudgetary constrains but Ibelieve that if all the

authorities put their headstogether, the NationalAssembly, our committee, thereshould be a way to make surethat this unique institution ishelped to have its own officebuilding.’

Responding, Chairman of thecommittee, Sen. Ehigir EdoborUzamere, said that the visit was


DMO tasks state, local govts on effective debt management

basically a fact-finding one;to see how well the office hadutilised the money releasedto it in the 2012 budget.

“The DMO is performinga very important crucial andunique role in our countryparticularly in our currenteconomic and developmentchallenges. As a developing

economy, we cannot meet ourinfrastructural developmentalneeds through budgetaryallocation. Hence we have toborrow to develop ourinfrastructure.”

According to him, the DMOmust ensure effectivemanagement of debt, notingthat the committee's stand isthat the Federal Governmentshould not borrow to financebudget deficit.

He assured that the Senatewould support the DMO toenable it perform its dutieseffectively.

Also, Sen. Gbenga Obadare,tasked the office to checkconsistent borrowing andcalled for stringent measuresto reduce borrowing by stategovernments. “There is needfor them to prioritise what theirneeds are and not to borrowanyhow and leave the statesindebted,” he maintained.

The most importantthing as you haveimplied is when statesborrow, let them makegood use of what theyborrow

,

,

CMYK


Business & Economy

BRIEF

BY OLASUNKANMIAKONI AND MONSUROLOWOOPEJO

2012 BUDGET:

Lagos records 72% third quarterperformance

Governor BabatundeFashola of LagosState has disclosed

that the budget for the 2012fiscal year, pegged at N49billion has recorded 72 percent cumulative third quarterperformance.

Fashola, along with thestate Commissioner forBudget and EconomicPlanning Mr. Ben Akabueze,who briefed Newsmen afterthe quarterly budget reviewmeeting, at Aalusa, tracedthe 10 per cent drop in thirdquarter as opposed to the 75per cent recorded in the halfyear review to a number offactors he said were inimicalto budget performance.

According to the governor,“The budget is driven by thestate government budget trustwhich is poverty eradicationprogramme, sustainableeconomy and infrastructuralrenewal in Lagos. That iswhere we will continue toconcentrate on even in thefourth quarter.

“And we will concentrate onthe areas that we set out toachieve during the EconomicSummit which is PATH. Thethird quarter budgetperformed at 65 per centwhich is a drop from what was

achieved in the secondquarter which was 75 percent.It marches back to what thestate achieved in the firstquarter. With this drop, thestate now has a drop in itscumulative budget

performance which is 72percent.

“But this is not where wewant to be. During thesecond quarter, this waswhen we utilised the stateborrowing power that wascontained in the budget. Thethird quarter was challengingbecause the federalallocation has starteddropping. It accounts for therelatively lowerperformance”.

Fashola added that theeffect of the new amendedpersonal income tax whichwas signed and back dated,has begun to hit into the staterevenue.

“Those were the reasonresponsible for low budgetperformance.

Other social reasons for thedrop were that, during thequarter, there was the monthof Ramadan and during thistime, the productivity withinthe state is somehow low”.

He assured that there willbe a push back from the stategovernment during thefourth quarter to ensure thatthe state achieve more than75 per cent.

He said ,”Part of the thingsthat would be done in the 4thquarter is the erection ofmore road traffic signs acrossthe state and others. Many ofthe streets in the state arebeing light up to ensureproper illumination at night.Except for the drop in thebudget performance, the stategovernment has not relentedin its effort to constructvarious social amenities forthe residents of the stateinfrastructural renewal.”

The NEPAD Business Group Nigeria held its 2nd Annual General Meeting ( AGM) andAward Ceremony at Federal Palace Hotel Lagos. From left: Chief Chris Ezeh, ChairmanFidelity Bank Plc; Deputy Gov. of Anambra State Engr. Emeka Sibeudu, representing Gov.Peter Obi of Anambra; Dr Edozie Aroh Commisioner for Youth & Sports and Chairman ofNEPAD BusinessGroup Nigeria Mr Goodie Ibru. Photo By Diran Oshe

Say mergers have never benefited shareholders

Cornerstone, Linkage merger: over20,000 shareholders oppose move

By ROSEMARY ONUOHA

Over 20,000shareholders ofLinkage Assurance

Plc have warned the Boardand Management of thecompany to discontinue anymerger plan with CornerstoneInsurance Plc, saying that thepurported merger plan willnot benefit shareholders.

According to theshareholders, mergers andacquisitions in the countryhave always been to thedetriment of shareholderswhose investments arealways reduced drasticallyafter the reconstruction ofshares must have takenplace.

Accordingly, theshareholders vowed that theywill no longer fold their handsand watch their investmentsfilter away in the name ofmergers and acquisitions.

According to them, thereforms introduced by theGovernor of Central Bank ofNigeria Mallam Sanusi

Lamido Sanusi which forcedsome banks to be nationalisedwhile others were capturedthrough hostile acquisitionleading to massivedepreciation of investorsholdings, will no longerhappen again as they areready to go to any extent toprotect their investments.

The shareholders poured outtheir anger at the 18th AnnualGeneral Meeting of LinkageAssurance Plc held in Lagoslast week.

Addressing shareholders atthe meeting, President of theProgressive ShareholdersAssociation of Nigeria, Mr.Boniface Okezie advisedLinkage Assurance Board todo a rights issue as againstmerging its operation withthat of another company.

According to him, withalmost N1 billion in freshfunds coming from a majorinvestor in the company,Bayelsa State Government andanother N1 billion expectedfrom the Nigeria DepositInsurance Corporation, NDIC,being proceeds of previous

rights issue that was trappedin the rested Allstates TrustBank Plc, the company doesnot need any merger forsurvival.

He also advised the boardto do a right issue, assuringthat shareholders would bemost willing to take up theirrights in the companyaccordingly.

Also speaking on the issue,another shareholder, Mr.Nona Awo threatened thatshareholders would not allowthe company’s Board to rail-road them into a mergerarrangement of 30:70 infavour of Cornerstone, addingthat minority shareholderswould definitely move againstit.

Also, President of theNigerian ShareholdersSolidarity Association, Mr.Timothy Adesiyan said thatshareholders were not afraidof merger but warned thatshareholders would not closetheir eyes and allow the boardto enter into mergerarrangement with CornerstoneInsurance which he describedas a dwarf.

The NigerianAssociation ofChambers of

Commerce, Industry, Minesand Agriculture (NACCIMA),has said that plans are beingmade to revamp the Nigerianeducational system,especially at the technical andvocational level.

In a parley with pressmen,National Vice President andChairman, NACCIMAcommittee on technicaleducation,Mr. MichaelAdesina, said technical andvocational education inNigeria is deteriorating andhas resulted in poorproduction quality and hasprovided an excuse for foreigninvestors to bring into thecountry thousands of lowerand middle level technicalmanpower, thereby deprivingthe nation of job opportunitiesfor its youths.

According to him,NACCIMA has taken uponitself this wake-up call byorganising a Two-DayNational Education Summit,tagged “ Vocational Educationas Driver for EconomicDevelopment and JobCreation” to address anumber of burning technicaland vocational issues ofconcerns, with a view torestoring the lost glory of oureducation system.

“The purpose of the summitis to create an effective forumfor Public-Private dialogue toaddress the dearth oftechnical and vocationaleducation graduates withappropriate training , whichis largely responsible for pooroperation and maintenance ofinfrastructure in the country,particularly in areas such asthe telecoms, power operation& maintenance, industrialmachinery operation &maintenance, mechanizedagriculture/ Agribusiness,construction, oil & gas,tourism & hospitality, watersupply, transportation, etc.The growth and success ofthese sectors are very dear tothe chieftains of private sectoroperations” he said.

He said the summit wasintended to get relevantstakeholders from the publicand private sectors of theeconomy together tobrainstorm on the challenges/problems of technical andvocational education inNigeria and proffer the wayforward in line with thetransformation agenda of thefederal government.

NACCIMA setto revamptechnicaleducation forjob creation

BY NAOMI UZOR

CMYK


BRIEFS

Business & Economy

The Ikeja branch of theM a n u f a c t u r e r s '

Association of Nigeria, MAN,has urged the FederalGovernment to take steps toharmonise the checklist of itsvarious Ministries,Departments and Agencies,MDAs, to eliminate incidenceof multiple visits to factoriesand duplication of duties.

The Association’sChairman, Rev. Isaac AdeAgoye, who made the call inhis welcome speech at the45

th Annual General

Meeting of the Association inLagos, said “the governmentneeds to urgently andseriously consider putting inplace a mechanism that willbring down the cost of doingbusiness and enhancecompetitiveness.”

Besides, he stated thatsteps must be taken to ensurea reduction in inflation,foreign exchange and interestrate through formulation ofgood monetary policies by the

Stories byNKIRUKA NNOROM

Develop export-orientedpolicies, FG told

Nigeria should embarkon an export-oriented strategy to

manufacturing if economies ofscale are to be reconciled withthe relatively small domesticmarkets, says Fabian Ajogwu,a Senior Advocate of Nigeria,SAN, and Managing Partner,Kenna & Associates.

He made the remark whilepresenting a paper themed,‘Doing Business in Nigeria:Fiscal, Legislative andJudicial Challenges’, at thejust concluded 42nd AnnualConference of the Institute ofChartered Accountants ofNigeria, ICAN.

He noted that in creating thebalance, “government’sintervention, if at all needed,ought not to be directedtowards protectionism, butaimed at export niches.”

He stated that withadequate infrastructure andpolicies in place, productioncosts would invariably bereduced and economies ofscale achieved.

Ajogwu stated that withrelatively very littlemanufacturing activity goingon in Nigeria, it was difficultto reap economies of scale inproduction, adding that apartfrom rising costs of productionas a result of lack of adequateinfrastructure, the anti-tradepolicies of the governmentmay have raised internationaltransport costs compared tothe declining trend in Asiaand other parts of the world.

“In addition to the above

problems, is the perception ofAfrica’s investmentenvironment as beingrelatively a high-risk area,especially when comparedwith Asia. Africa is prone totwo types of risks – policy

changes and shock.“Successive governments

have changed policies withalmost a zero degree ofpredictability and confidenceamong businessmen, mostlyin response to donor

conditionalities seen as theprice for relying on aid.African economies are alsomore susceptible to economicshock arising from the termsof trade and climate thanother economies, mostlybecause of its traderestrictions and also over-reliance on export of primarycommodities whose prices areoften affected by internationalevents, for instance cocoa,rubber or oil price decline inthe international market.

“Nigeria being an oildependent economy istherefore more vulnerable tothese external shocks. Bothshocks and policy changesalter relative prices, andvolatility of prices discouragesirreversible investment infavour of liquidity,” he said.

He, however, remarked thatthe history of policy failuresand economic collapse do notnecessarily mean thatcountry’s ailing economycould be revamped, sayingthat countries like Ugandaand Indonesia have beenthrough worse economiccrises, yet had managed toembark on reforms armed atscaling the hurdles necessaryfor economic recovery orgrowth.

According to him, Nigeriacan get things right bycreating a minimum adequateeconomic environment foreconomic recovery. This, itcan do by stabilizing themacroeconomic environment,and then getting the pricesand other incentive policiesright.

From right: Mr. Abiodun Ogunkoya Managing Director, Nigerian Bag ManufacturingCompany Plc (BAGCO); Mrs. D. B. Adewale, Head Teacher, Akinsemoyin Primary School ,Mr. Korede Okusanya, Company Secretary, BAGCO at the commissioning of a boreholedonated to the school.

MAN Ikeja branch urges FG toharmonise checklist of MDAs

federal government, whilealso advocating a check on theinflow of fake, sub-standardand contraband goods into thecountry.

Lamenting the slow pace ofgrowth in the manufacturingsector, he said thatgovernment’s efforts attransforming themanufacturing sector duringthe year recorded marginalsuccess as a result of themagnitude of accumulatedchallenges in the economyand poor implementation ofpolicies in the past.

He stated that at 52 years ofnationhood, the country wasstill grappling withunemployment, insecurity,high level of crime and abjectpoverty due to failure of thereal sector.

He said, “Themanufacturing sector did notfair well in 2012 as a result ofunfriendly businessenvironment and theperennial problems associated

with the real sector.“In the last few years, a

large number ofmanufacturing companieshave closed shopsnationwide. The ever busyindustrial estates are nowshadows of their past glory.”

He noted that for the nationto rise above all its challengesand join the league ofdeveloped nations, themanufacturing sector must beempowered, while businessesand products must beencouraged to be ofinternational standard.

In his address, the MANPresident, Chief KolaJamodu, said that theinability of the government toextract optimum benefits frominternational tradeagreements has compoundedthe unfriendly investmentclimate in the nation,resulting in smuggling,dumping, unemployment anddwindling foreign directinvestment.

Japan’s JX tobuy 60,000tonnes LNG inspot market

JX Nippon Oil & EnergyCorp said it would buy

60,000 tonnes of liquefiednatural gas (LNG) on the spotmarket, aiming to expandsales in a domestic marketshifting away from costlier andmore polluting oil. This wouldbe the second attempt by JXNippon Oil, Japan’s toprefiner, to buy LNG via a spotcontract. Its first purchase wasearlier this year, moving intoa market dominated by powerand gas utilities. In April, itimported 60,000 tonnes ofLNG from Nigeria, taking thedelivery at its only importterminal in Mizushima,western Japan, which isjointly operated withChugoku Electric Power Co,a company spokesman said.JX Nippon Oil plans to startoperation of a new LNGimport terminal in Hachinohe,northern Japan, in April 2015,where it aims to take in about700,000 tonnes of LNG a year.The company has alreadysigned long-term LNGcontracts starting from 2015 toimport 300,000 tonnes a yearfrom Australia’s Gorgon LNGproject operated by Chevronand 200,000 tonnes a yearfrom Shell Eastern Trading.

Islamic financebody hires newCEO ahead offirst issuance

The International IslamicLiquidity Management

Corp (IILM), a companybacked by central bankslocated mainly in Asia andthe Middle East, hasappointed a new chiefexecutive ahead of its firstissuance due within the nextfew months. The KualaLumpur-headquartered IILMhas delayed its first issuanceof short-term sukuk, or Islamicbonds, twice since it beganoperations last year. Thecompany, which aims to helpsharia-compliant banksmanage liquidity and createa liquid cross-border marketfor Islamic instruments, saidthat Rifaat Ahmed AbdelKarim would take over aschief executive, replacingMahmoud AbuShamma whowas hired in February 2011 ona three-year tenure.


CMYK

Banking & Finance

Will Nigerians acceptcoins again?

BRIEFS BY KAYODE AMOLEGBE

Coins used to be visible

in economic activitiesin the country. From the pre-independence period whenthe first set of coins wasintroduced to the mid-1990s,coins were generallyacceptable and wide used forpayment of goods andservices. But gradually, coinsbecame less visible andacceptable. Today they arealmost extinct.

This is in spite of the effortsof the Central Bank ofNigeria (CBN) in the lastseven years to revive publicacceptability of coins. Whilesome blame the seeminggeneral distaste for coins asa legal tender on theheaviness of the metals usedto produce them, somebelieve it is because theamount denominated incoins cannot buy anything.But despite these factors,what can government do tomake Nigerians accept anduse coins. "Nothing!" Thatwas the response of majorityof the people that spoke toVanguard.

“If the prices of goods andservices can come down, thecoins would be spendable.But I do not think the coinswill have value again,” saidMr. Bernard, a commercialtricycle rider.

“There is nothinggovernment can do aspeople do not accept coinsagain. Maybe the moneythey want to use toimplement the N5,000should be invested insomething else and leave theother currencies as notes,”said, Miss Elizabeth, astudent of University ofAgriculture Abeokuta,UNAAB.

“I do not foresee coinscoming to this generationagain. So, I do not thinkgovernment can doanything; there is no stateof coins that comes back thatis useful again. They havemade coins to be useless, sowhat are they going to do?Besides, people do not wantto carry coins in theirpocke," declared Mr.Ezekiel , a commercialtricycle rider.

“People do not like coins.There is nothing they cando. Some people do notappreciate coins; maybethey can take it back topapers,” maintained Ola, astudent of IbadanPolytechnic.

“In my own opinion thereare no ways coins can beaccepted? Looking at ourcoins, i t cannot becompared to other

countries'; our own is asheavy as a stone. So forsomeone l ike me to becarrying coins; I do notthink there is anythinggovernment can do. Talkingabout government reducingthe prices of goods andservices, it depends. As faras I am concerned, lookingat the denomination theywant to convert into coins,I bel ieve people thatpatronise pure water willaccept coins,” stated Mr.Okoye Omonlove.

“I think the coins are veryheavy money to carry about.They should just abort thecoins stuff; let just face it theway we are and forget aboutthat N5,000 note,” saidAdora, a student of NnamdiAzikwe University.

“There is nothing coinscan buy as at now. Thereshould be price control, thatis the only way out in myown opinion, becausewithout price control; justlike the issue of pure water,nobody can get pure waterfor five naira and exceptgovernment can mandatethe manufacturers to do so.

,

,

There is nothing coins canbuy as at now. Thereshould be price control,that is the only way out inmy own opinion, becausewithout price control; justlike the issue of purewater, nobody can get purewater for five naira

And before government canmandate manufacturers,definitely they must controlthe import duties becausemanufacturers will complainabout import duties, andwhenever import duty is highdefinitely the governmentcannot mandate them. But ifthe government can beatdown the import duties, thendefinitely government cantell them to beat down theirprice. I think that is the onlyway coins can be in thesystem,” Mr. Samson, adriver, opined.

“There is nothinggovernment can do for thecitizen to accept coin. “I donot think there is anythingthe government can do.Because, first, coins is heavyand it is not easy to carry inyour pocket; we do not needcoins,” said AyobamiSalami, a secondary schoolgraduate.

‘There is nothing thegovernment can do; thecoins have no value again.They should scrapit,’declared Mrs. Temitope,Administrator, ENEDANursery and Primary school)

“Coins are a legal tenderI will accept it. But the thingis that our society has notreached the level wherecoins can be used, most ofthe people that could usethem, the market people,they are not literate enoughto know the purpose ofcoins. And again this ATMmachines would not be ableto dispense coins, sogenerally there is noeconomy that does not havecoins, because coinsmoderate inflation. If youbuy something maybe N2.30kobo or 2.3 kobo they shouldgive you a change but theydo not do so in Nigeria. Itis either N10, N 20, N5; N50is even difficult to find, sothat is the challengebecause they have to get around f igure for everypurchase you make, so itincreases inflation in a way.In our society it is not easyto implement policies theway they are formulated;there are too manyintervening factors that wedo not take intoconsideration when makingthe policy. So what thegovernment can do is,maybe, they shouldpublicise and make peopleunderstand that coins isimportant and they shouldrely on the judgment of thepeople to accept coins. Andagain that banks to dispenseand accept the coins;because when you paypeople with coins they willbe able to accept it,” saidChris, a Journalist.

Chicken Republic, asubsidiary of Food

Concepts Plc, said that it isputting measures in place toretain a leading role in thequick food service business inview of increasingcompetition, especially thatfrom expected foreignentrants in the industry.

This came even as thecompany said it is planningto expand its brand beyondthe shores of Nigeria to nicheAfrican markets, includingIvory Coast, Cameroun,Ghana and Sierra Leone withGhana serving as the hub ofAfrican expansion.

Addressing the press onsome of the strategic plans,at the company’s Head Officein Lagos, the Chief OperatingOfficer, Mr. TundeOgunrinde, said part of themeasures was to ensure thatit continued to delight itsnumerous customers both inthe quality of products offeredacross the outlets and acommitment in maintainingtheir ambience.

“We are aware of thecompetition in the industry;more companies are comingin, including those frominternational market, but weare not afraid of thesecompetitions. We are fullybullish and aggressive inwhat we want to achieve.

“Part of what we are doingis to ensure that we continueto listen to our customers;meet their needs andcontinuously improve thequality of our services. For us,the future is really bright,” hesaid.

Nigeria forexreserves hit 32-month high of$42bn

Nigeria’s foreignexchange reserves

jumped to $42.02 billion byOctober 17, the highest in 32-months and an increase of3.11 per cent, month-on-month, latest figures from thecentral bank showed.Nigeria’s forex reserves werelast around this level onFebruary 17, 2010 when theyhit $42.22 billion. The reserveswere at $40.75 billion atmonth ago.

Chicken Republicstrategises formore competitiv-eness, eyesinternationalmarket


CMYK

Banking & Finance

Cost of funds in theinterbank moneymarket fell last week

following the inflow of N277billion statutory allocationfunds which lifted marketliquidity by over 200 per cent.

Meanwhile, economicexperts have said that themacroeconomics indicesfavour a reduction in themonetary policy rate, but thepossibility of such reduction isslim this year.

Earlier in the week, themarket experienced hugeoutflow of liquidity to fundforeign exchange andtreasury bills and FGN bondpurchases. This prompted costof funds to rise by about 200basis for short tenuredborrowing, with cost ofOvernight borrowing rising to14 per cent from 11 per centat the start of business onMonday while that of 7-Daysborrowing rose to 14.1 percent from 12.25 per cent.

But on Wednesday, theinflow of N277.4 billionprompted interbank interestrates to fall by over 300 basispoints. Interest rate onOvernight borrowing fell by333 basis points to 10.25 onThursday from 14 per cent onTuesday. It however roseslightly on Friday to 10.375 percent. Similarly interest rate on7-Days borrowing fell by 279to 11.12 per cent on Thursday.On Friday it dropped furtherto close at 11.04 per cent.Reflecting the impact of theinflow, idle funds in the

South Korea’s won led aweekly advance in Asian

currencies as signs of animprovement in the globaleconomy brightened theoutlook for the region’sexports and spurred demandfor emerging-market assets.

The Bloomberg-JPMorganAsia Dollar Index, whichtracks the region’s most-active currencies, rose 0.2percent this week andtouched 117.87 yesterday, thehighest level since February.The won completed its bestweek of the month and theyuan had an 11th week ofgains, the longest winningstreak since March 2008.India’s rupee fell for a secondweek as the governmentreported this year ’s fastestinflation.

China’s factory production,retail sales and fixed-assetinvestment accelerated inSeptember, data showedyesterday. Retail sales in theU.S., the world’s biggesteconomy, increased 1.1percent in September whilehousing starts climbed 15percent to a four-year high,reports showed this week.Europ’s leaders committed totheir goal of creating a euro-area bank supervisor by year-end, according to officials ata European Union summit inBrussels ending today.

“The September data wasclearly stronger thanexpected,” said Nizam Idris,head of Asian fixed incomeand foreignexchange atMacquarie Bank Ltd. inSingapore. “The growthmomentum will continue. Still,we are at a very early stageof the recovery so it’s too soonto expect” faster gains inAsian currencies includingthe yuan.

The won appreciated 0.7percent this week to 1,103.45per dollar in Seoul, accordingto data compiled byBloomberg. The yuan rose0.22 percent from Oct. 12 to6.2535 after touching a 19-year high of 6.2446 yesterday.Taiwan’s dollar climbed 0.3percent from a week ago toNT$29.286.

The won touched 1,102.50on Oct. 17, the strongest levelsince 0ct. 31, 2011. SouthKorea’s economy probablyexpanded 1.7 percent in thethird quarter from a yearearlier, the least in threeyears, a Bloomberg surveyshowed before data next week.

“The won was strong thisweek on positive data fromthe U.S., but it seems someoverseas investors arecovering their short positionson the dollar,” said Lee JungHyun, a Seoul- basedcurrency trader for IndustrialBank of Korea. (024110) Ashort position is a bet an assetwill decline in value.

BRIEF

Asian currenciesgain in week onrecoveryoptimism

*Macroeconomic indices favour reduction of MPR but-Experts

BY BABAJIDEKOMOLAFE

Cost of funds falls as N277bnstatutory allocation boost marketliquidity

market rose by over 200 percent to N335.998 billion fromN98.334 billion.However, theimpact of the inflow and thesurplus liquidity might wanethis week due to outflowsthrough foreign exchangeand treasury bills purchases.

Experts comment onSeptember inflation figure

Commenting on theSeptember inflation figuresreleased last week by theNational Bureau of Statistics(NBS), analysts at theFinancial DerivativesCompany (FDC) said that thefurther decline in inflationrate to 11.3 per cent from 11.7per cent in August as well asother macroeconomic indicesfavours a reduction in theMPR, which is the benchmarkinterest rate.

“All pointers are in favourof a cut in the MPR. However,we are of the view that the 12per cent per annuum.monetary policy rate is hereto stay for the rest of 2012,with moderate cuts in early2013 if macro-economicindicators maintain positivetrend”, they said in thecompany ’s bi-monthlyeconomic and businessupdate issued on Friday.

Similarly, Razia Khan ofStandard Chartered BankGroup said that decline ininflation, “will give someencouragement to thoseexpecting the eventualresumption of monetaryeasing from the CBN”

Last year the CBNcommenced measures totighten money supply in orderto arrest rising inflation.Among other things, the apex

bank raised the MPR six timesfrom 6.0 per cent to 12 percent. It also reduced banks’ability to create loans byraising the amount of assetsbanks must keep as cashnamely the Cash ReserveRatio (CRR) to 12 per centfrom 2.0 per cent.

Reflecting the impact ofthese measures, the inflationrate has been on thedownward trend since the lastmonth. Meanwhile, themeasures also restrictedaccess to credit and increasedcost of credit in the economy,prompting private sectoroperators to call for relaxationof money supply.

According to the FDCreport, “a quick look atNigeria’s currentmacroeconomic score cardshows inflation moderating,external reserves growth of26.9 per cent (year to date) to$41.99 billion, a strongexchange rate with a 2.02 percent year-to-dateappreciation to N157.42 perdollar at the inter-bankmarket, declining interestrates and slowing growth of6.28 per cent (in Q2). TheCBN governor mentioned thehigh core inflation index andweak global growth prospectsas some of his reasons (andthe MPC’s) for keeping themonetary policy rate at 12 percent per annum, while stillkeeping an eye on othermacroeconomic indicators.Notwithstanding, if theimpact of the excessive floodswanes in subsequent months,leading to a furtherdeceleration in inflation, theCBN may be forced to reduce

the MPR by at least 25 basispoints in November.”

Khan, who is RegionalHead of Research, Africa,Global Research for theStandard Chartered BankGroup echoed the samesentiments. “First, assumingnothing else changes,inflation is likely to continueto decelerate in the monthsahead as tight money supplyhas more of an impact. Thismay be blurred, a bit, by theimpact of recent flooding, butthat should not be a majorconsideration overall. It is nogame changer for coreinflation, where the trendremains encouraging. Withofficial projections of only 6.5per cent growth in 2013(healthy by anyone’sstandards, although moremodest than the growthNigeria has reportedly seenpost-crisis), hopes for counter-cyclical policy - specificallymonetary easing - mayincrease.

“There are two issues withthis. Nigeria’s externalvulnerability and dependenceon oil earnings means thatthe overriding aim must stillbe to increase foreignexchange reserves, boostingexternal buffers. If this canbe done comfortablyalongside monetary easing,so be it - but given theweakness of the monetarypolicy transmission, and theimperative to take action nowin order to smoothen futurespending, Naira stability,allowing for foreign reservesaccumulation will remain theoverriding priority.”

Economic Indicators

Average Nigeria Interbank Offered Rates (NIBOR)

BRIEF


CMYK

Corporate Finance

The Managing Director,Red Star Express Plc,Mr. Sule Umar Bichi,

in this interview withVanguard, as part ofactivities to mark thecompany’s 20

th anniversary

spoke on the company’sperformance in the stockmarket, challenges in theindustry, successes and otherissues affecting the economy.Mr Bichi has been in RedStar Express since 1998 whichis about 15 years now. Hejoined Red Star Express asHead of Finance and wentthrough the GeneralManager position toExecutive Director andPlanning and now theManaging Director.

Excerpts:

How has Red Star Expressperformed in the stockmarket?

Red Star Express Plc waslisted on the Nigerian StockExchange in November 2007.If you are following the trendof the capital market, thatwas around the time when theNigerian capital market wasbubbling in 2007 and 2008,while early part of 2008 wasthe peak. Thereafter, theglobal financial crisis came upin 2009 which started inEurope and then the entireglobal capital market startedshaking and this is not onlyin Nigeria but globally. Ithink in 2008, the marketdropped more than 25 percent. The following year2009/2010, it went down themore. Red Star Expressshares came to the market byintroduction in 2007 at therate of N4 per share. It wentthrough the ups and downbut as at today, I think despitethe downturn, it is trading atsome where between N3.44and N3.50 or there about. Ifyou compare the N4.00 andN3.44, it has done relativelywell. Its performance is notbad because most of theshares sold at the Exchangehave dropped more than 20per cent now. I rememberthere are some shares sold forN8.00 per share and are nowselling less than N5.00 today.So it is like that globally giventhe meltdown, but whatinvestors in the market arelooking for is consistency inpaying dividend and priceappreciation of shares. Thecore performance of thecompany is in terms of profitand quality of profit. Thestock market is graduallystabilizing and we have beenpaying dividends; at leastour dividends have not beengoing down. In the last threeyears, we have been payingabout 30 kobo to 50 kobo pershare and the shareholdersand the market are watchingand are seeing that we areconsistent in payingdividend. I learnt recentlythat when the market markerswere introduced by theNigerian Stock Exchangerecently, it identified our

We have declared profit, dividendconsistently for 3 years—Red Star Express MD

… Seeks road rehabilitation

BY PETER EGWUATU

GT Bank reportsmixed tolackluster Q32012 results—FBN Capital

FBN Capital has statedthat Guaranty Trust Bank

(GTBANK) Plc's third quarterresult for 2012 wasuninspiring following declinein some of its performanceindicators.

While commenting onGTBank’s third quarter resultreleased by the NigerianStock Exchange (NSE) lastweek, the FBN CapitalResearch team, said,“Although earnings were upstrongly on a year-on-yearbasis, with Profit Before Tax(PBT ) and Profit After Tax(PAT) growing 21 per centyear-on-year and 81 per centyear-on-year respectively,both net interest income andnon-interest income weredown, by 19 per cent and 63per cent respectively. As such,profit before provisionsdeclined 34 per cent quarter-on-quarter basis toN33.5billion. The latterovershadowed a decline inopex of 39 per cent quarter-on-quarter basis such thatPBT fell 25 per cent quarter-on-quarter to N21.9illion. PATwas down 22 per centquarter-on-quarter toN19.8billion. Compared withour estimates, the results werebroadly below expectations.”

FBN Capital further said, “PAT missed our estimate by 16per cent; both interest incomeand non-interest incomecontributed to the negativesurprise. After delivering astellar Q2 performance,largely on the back of a verystrong non-interest incomeresult, we had expected Q3results to show a modestdecline in profits. GT Bankmanagement signaled to thiseffect on the Q2 2012conference call; although nofirm guidance was provided,there was an indication thatthe run-rate in non-interestincome through half year waslikely to be closer to the Q1result of N11.6billion than theN17.9billion in Q2. We hadassumed N14billion. As such,the N6.7billion wassignificantly weaker thanwhat the market would havebeen looking for, to ourminds. We appreciate thelumpiness on this line but the63 per cent quarter-on-quarter is quite unusual; wewould be looking for someexplanation frommanagement on this point.”

shares as part of the sharesthey will be working with. So,you can see the extent towhich we have been acceptedin the market, even thoughwe have not gone to raisecapital from the market, butwith the response I get I amsure if we do, we are going toget positive response.

Are you planning to cometo the capital market to

raise money?We will come to the market

to raise fund when we need itto boost our investment.There are a lot ofopportunities for us and whenthey materialize, we will cometo the capital market. We donot put the cart before thehorse. We have to get thebusiness before we can ask forpublic money to invest .If we

,

,go to the market and get themoney and we do not havewhere to put them, then it isnot the best. So, once we comeout for something, we willdefinitely come to the capitalmarket, and we believe thecompany has great potentialbecause opportunities are justopening for logistic service.We have just started becausethe economy is growing; thatis how the logistic service willgo and fuel the growth of oureconomy.

What challenges are RedStar facing in the industry?

The challenges we arefacing in the industry are ininfrastructure. When I sayinfrastructure, I am talkingabout the road network withinthe country, the ports, airports,power, particularly the

provision of electricity. WhenI say road, it is because weconnect all the cities in thecountry and we use vehiclesthat ply on the road. When theroads are bad, and are notmotorable, you find that thelevel of wears and tears areso much and the risk ofhaving accident is higher. Sowe want particular attentionto be given to the roadnetwork. The port, particularlythe airport, as we all know thecourier service is time boundwhich requires very quickconnection to the air, andunfortunately, not all airportsare opened at night, so youfind out that you only have tomake use of the networksduring the day but if we canmake them functional 24hours, it means we can moveitems even in the night andthat is what is happening allover the world and thendeliver as early as possible inour locations. Not only that,the airline industry is havinga lot of issues, the services arenot there because you find outthat most of the airlines arenot in the air, they are not onthe ground, you will see thatit is very few domestic airlinesthat are still working. Thereis the need to look at thisbecause if this is done, it willimprove the efficiency of ourindustry. The power sector isanother one sector that needsto be looked at, by nature ofour job, we need power 24hours and not only in onelocation but in all locations.The government incollaboration with the privatesector should come togetherto see to the improvement ofthese challenges that we arefacing.

What are you doing interms of brand

awareness?On brand awareness, we

have normal strategy ofreaching out, though we arenot very good inadvertisement, but we havea lot of avenue to reach outto our customers. We aredoing some kind of things tokeep our customers throughthe services we provide, andwe have marketingarrangements that includebringing our customerstogether. The customers’forum like I said before areall aimed toward keeping ourbrand alive. We alsoassociate ourselves with thepress, both print andelectronic, not necessarily inso much advertisement but inmany other ways we cancollaborate.

The power sector is anotherone sector that needs to belooked at. By nature of our job,we need power 24 hours andnot only in one location but inall locations

Mr. Sule Umar Bichi


CMYK

Corporate Finance

BRIEFS

Impressed by the latesttechnology at the Ibeseplant of Dangote

Cement, the Raw MaterialResearch and DevelopmentCouncil has called for apartnership with the cementcompany in the area of rawmaterial sourcing anddeepening of the localcontent policy of the FederalGovernment.

A five-man managementteam of the Council led by itsDirector-General, EngineerAzikiwe Peter Onwualu,which visited the six-millionton per annum capacity IbeseCement Plant in company ofthe President of the LagosState Chapter of Associationof Small Scale Industrialists,Mr. S.T Kuti-George touredthe plant and laudedentrepreneurial spirit of

From left: Mr. Bola Adeeko, Chief of Staff/Head of Corporate Division, Nigerian Stock Exchange (NSE); Mr. Jalo Waziri,Executive Director/Head, Business Division, NSE; Mr. Sule Umar Buchi, MD/CEO, Red Star Express and Mr. Muyiwa Olumekun,Executive Director, Red Star Express during a visit by Red Star Express officials to the NSE in Lagos. Photo by Sylva Eleanya.

Investment value on NSEappreciates by N2.7bnBY MICHAEL EBOH

A marginal increasewas recorded in investors' holding on

the Nigerian StockExchange, NSE, last week,as the value of listed equitiesappreciated by N2.71 billion.

The improvement wasoccasioned by gains in theshare prices of highlycapitalized companies,which sustained the indicesdespite losses recorded in theshare prices of majority of thelisted equities.

In the week under review,27 companies recorded shareprice gains while 46companies recorded declinesin their share prices.

Equities’ value,represented by the marketcapitalization, rose by 0.03per cent to close the week atN8.697 trillion, from N8.695trillion at which it opened theweek.

The All-share index alsorose by 0.03 per cent, as itgarnered 8.5 basis points toclose the week at 27,296.35points, from 27,287.85 pointsat which it opened.

Nestle Nigeria Plc recordedthe most share price gain,rising by N59 to close at N684per share from N625 pershare at which it opened; PZCussons Nigeria Plc followedwith a gain of N4.98 to closeat N30 per share, whileChemical and AlliedProducts Plc garnered N3.64to close at N31.19 per share.

Other share price gainersinclude: Seven-up Bottling

Company Plc N1.95, DangoteCement Plc N1.50, FlourMills Nigeria Plc N1.01, DNMeyer Nigeria Plc N0.92,University Press Plc N0.73,UACN Property DevelopmentCompany Plc N0.50 and BetaGlass Company Plc N0.47among others.

On the other hand,Guinness Nigeria Plcrecorded the most share priceloss, dropping by N16.60 toclose at N265 per share, fromN281.60 per share at which it

opened the week; TotalNigeria Plc followed with aloss of N5 to close at N125 pershare and Nigerian BreweriesPlc shed N3.15 to close atN138.85 per share.

Other share price losersinclude: Okomu Oil Palm PlcN1.69, Ashaka Cement PlcN1.65, Unilever Nigeria PlcN1.50, Oando Plc N1.24,Lafarge Wapco Plc N1, CutixPlc N0.85 and CementCompany of NorthernNigeria Plc N0.60.

Equity trading, however,declined in the week underreview by 14.88 per cent, as aturnover of 1.859 billionshares valued at N16.350billion was recorded in 28,383deals, in contrast to thepreceding week’s turnover of2.184 billion shares valued atN17.495 billion in 27,786deals.

The Financial Servicessector dominated the activitychart (measured by turnovervolume) recording thehighest trading volume of1.422 billion units of sharesvalued at N10.579 billiontraded in 17,662 trades,representing 76.50 per cent,64.70 per cent and 62.23 percent, of the volume, value andnumber deals executed on thestock market during the week.

Local content: RMRDC seekscollaboration with Dangote Cement

Alhaji Aliko Dangote,Chairman of the CementCompany.

Speaking at the end of theplant tour, the DirectorGeneral of RMR&DCexpressed delight at the visit,saying it was an eye openerindeed, “much revealing aboutthe activities of the DangoteGroup”.

Given the exploits ofDangote Cement in thecement industry with thelatest technologies deployedin the excavation of rawmaterials for productionwhich is more environmentalfriendly, Engr. Onwualusought for the collaboration ofhis agency with Dangotegroup in the areas of rawmaterial sourcing, researchand development anddeepening the local content

policy.The agency, under the

Federal ministry of Scienceand Technology he said wouldbe ready to partner DangoteCement in researching intoareas through which gypsumcould be discovered in largecommercial quantity,processing it to acceptablepurity of over 90 per centand pushing for Federalgovernment interest inopening up the gypsumbusiness as commerciallyviable business entitiescapable of attracting massivegovernment infrastructure inthe sector “This way, morejobs will be created with theintermediate industries thatwill come up instead of thewholesome import of thisraw material from outside thecountry”, he stated.

Access Bankrecords N39bnQ3 profit

Access Bank Plc pre-taxprofit for the first nine

month to September morethan doubled to N39.11billion ($248.48 million),compared with 18.07 billionnaira in the same period oflast year, the bank said onFriday.

Gross earnings jumped to162.27 billion naira in thesame period, from 86.32billion last year.

Access Bank acquiredrescued rival Intercontinentallast year and merged theiroperations.

The bank’s shares rose 3.3percent to 9.40 naira on thelocal bourse on Friday.

Wema Banklaunches onlinegame

In an industry wheredigital marketing

strategies have largelychanged the process ofCustomer acquisition,engagement and Service,Wema Bank, has scored yetanother first with the launchof an online social game,SharpSule, in partnershipwith Nigerian social techstartup, Maliyo Games.

Sharp Sule, the first everfacebook app for Africanthemed casual games, is afun and interactive gamethat brings excitement andreal value to its players.

Through this launch,Wema Bank also becomesthe first financial institutionin Nigeria to foray intosocial gaming - riding onthe heels of its equallysuccessful hosting ofNigeria’s first fully onlinereality competition, ‘TheWriter ’, in partnership withthe widely read blog,tncng.com.

The Sharp Sule interactivegame follows the story of aregular guy, Sharp Sule,who works hard to earn aliving by riding hismotorbike on the streets ofLagos, Nigeria.

He aspires to run a biggertransportation business,earn more money andupgrade his status.

The aim of the game is toavoid obstacles on the busyroads– cars, traffic officials,and more– whilst collectingcoins in the process that willtranslate to points in thegame as well as real cash.The game, which issimplistic in nature,presents an immersiveexperience for players fromthe beautiful backgroundmusic to the really hilarious‘Ye!’ scream that SharpSulelets out when he crashes intoa vehicle.


CMYK

Ph

arm

ace

uti

cals

Ek

oco

rp P

lc5.0

55.0

51,0

00

5.3

15.3

10.0

688.5

0E

va

ns

Me

dic

al P

lc1.3

61.2

0355,2

60

1.4

50.7

00.0

00.0

0F

idso

n H

ea

lth

care

Plc

1.3

01.2

3517,8

38

3.2

00.8

30.2

73.0

7G

laxo

Sm

ith

kli

ne

Co

nsu

me

r N

ig39.0

039.0

07,0

50

23.1

12.5

88.8

8M

ay

& B

ak

er

Nig

eri

a P

lc1.7

11.6

5229,7

65

5.6

13.6

10.2

19.0

5N

eim

eth

In

tern

ati

on

al P

ha

rm1.4

31.2

4528,5

00

1.9

60.9

50.0

814.1

3N

ige

ria

-Ge

rma

n C

he

mic

als

Plc

8.5

98.8

51,9

27

12.9

10.9

50.0

00.0

0P

ha

rma

-De

ko

Plc

3.0

23.0

210

020

04.2

80.0

00.0

0

ICT

Co

mp

ute

r B

ase

d S

yst

em

s10

8C

ou

rte

vil

le I

nve

stm

en

t P

lc0.5

00.5

01,2

00,0

00

0.5

20.5

00.0

510.0

0

Co

mp

ute

rs a

nd

Pe

rip

he

rals

Om

ate

k V

en

ture

s P

lc0.5

00.5

0691,5

50

0.5

00.5

00.0

412.5

0

IT S

erv

ice

sN

CR

(N

ig)

Plc

13.7

713.7

721,8

00

9.3

13.2

56.4

91.4

3T

rip

ple

Ge

e a

nd

Co

mp

an

y P

lc2.4

12.4

120

03.5

93.2

50.0

00.0

0

ICT

Tele

com

mu

nic

ati

on

sS

tarc

om

ms

Plc

0.5

00.5

02,3

07,6

92

1.4

70.5

00.0

00.0

0

IND

US

TR

IAL

GO

OD

SB

uil

din

g M

ate

ria

lsA

sha

ka

Ce

me

nt

Plc

19.5

017.8

5578,4

80

30.0

012.0

01.5

97.8

6B

erg

er

Pa

ints

Plc

8.0

18.0

137,6

50

12.5

78.1

01.7

14.9

7C

AP

Plc

27.5

531.1

9203,8

30

43.9

815.1

61.7

68.8

8C

em

en

t C

o. o

f N

ort

he

rn N

ig. P

lc6.5

55.9

5155,8

54

15.4

94.1

61.8

02.3

1D

an

go

te C

em

en

t P

lc118.5

0120.0

0378,0

41

132.5

195.0

08.0

113.1

7F

irst

Alu

min

ium

Nig

eri

a P

lc0.5

00.5

01

0,3

74

0.7

50.5

00.0

00.0

0D

N M

ey

er

Plc

2.0

12.9

3117,3

56

3.5

11.0

20.0

00.0

0L

afa

rge

WA

PC

O P

lc57.5

056.5

040,4

00

48.0

536.5

81.0

542.8

6P

ort

lan

d P

ain

ts &

Pro

du

cts

Nig

Plc

3.1

53.2

91,0

00

5.2

85.1

10.3

614.1

9P

ain

ts &

Co

ati

ng

s M

an

ufa

ctu

rers

1.9

51.9

82,9

00

3.3

60.5

10.1

82.8

9P

rem

ier

Pa

ints

Plc

10.9

310.9

31,0

00

13.4

010.9

30.0

00.0

0

Pa

cka

gin

g/C

on

tain

ers

Avo

n C

row

nca

ps

& C

on

tain

er

2.0

91.9

955,4

84

6.9

15.9

40.1

539.6

0N

ige

ria

n B

ag

s M

an

ufa

ctu

rin

g C

om

pa

ny

1.9

11.8

12,3

57,5

39

3.6

01.4

70.1

99.1

6

To

ols

an

d M

ach

ine

ryN

ige

ria

n R

op

es

Plc

8.2

67.8

510,0

00

8.6

98.2

60.0

00.0

0

NA

TU

RA

L R

ES

OU

RC

ES

Ch

em

ica

lsB

OC

Ga

ses

Plc

5.6

95.6

913,3

40

9.2

06.8

00.9

37.3

7

Me

tals

Alu

min

ium

Ex

tru

sio

n I

nd

Plc

10.5

510.5

55,0

00

12.3

910.7

00.1

385.7

7

No

n-M

eta

lic

Min

era

l Min

ing

Mu

ltiv

ers

e P

lc0.5

00.5

03,8

00

0.5

00.5

00.0

00.0

0

Pa

per/F

orest

Pro

du

cts

Th

om

as W

ya

tt N

ig.

Plc

1.3

81

.38

1,0

00

1.3

81

.38

0.0

00

.00

Pro

cess

ing

Sy

setm

sC

ha

ms

Nig

eri

a P

lc0.5

00.5

013,8

70

0.5

00.5

00.0

00.0

0

Ele

ctro

nic

an

d E

lect

rica

l P

rod

uct

sC

uti

x P

lc2.2

01.3

528,7

90

2.5

01.6

20.1

313.1

5N

ige

ria

n W

ire

& C

ab

le P

lc0.5

00.5

81

5,0

00

2.5

82.5

80.0

00.0

0

Mo

rtg

ag

e C

arr

iers

, Bro

ke

rs a

nd

Se

Ab

be

y B

uil

din

g S

oci

ety

Plc

1.4

41.4

42,0

00

1.5

11.3

30.0

528.8

0U

nio

n H

om

es

Sa

vin

gs

an

d L

oa

ns

0.5

00.5

01,0

00

0.9

90.5

00.0

00.0

0

IND

US

TR

IAL

GO

OD

SP

ack

ag

ing

/Co

nta

ine

rsA

bp

last

Pro

du

cts

Plc

3.9

83.9

86,8

88

3.9

83.9

80.0

00.0

0B

eta

Gla

ss C

o. P

lc9.5

310.0

0154,7

28

15.5

812.7

13.9

03.2

6G

reif

Nig

eri

a P

lc13.2

813.2

810

015.0

313.9

70.0

00.0

0N

am

pa

k N

ige

ria

Plc

4.3

04.3

029,1

98

4.3

03.6

01.2

23.5

2P

oly

Pro

du

cts

(Nig

) P

lc1.0

51.0

520

01.8

61.0

50.1

76.1

8S

tud

io P

ress

(N

ig)

Plc

2.9

22.7

884,3

11

2.9

22.9

20.0

741.7

1W

.A.

Gla

ss I

nd

. P

lc0.6

60.6

62,7

49,3

40

0.6

30.6

30.0

00.0

0

OIL

AN

D G

AS

En

erg

y E

qu

ipm

en

t a

nd

Se

rvic

es

Ja

pa

ul O

il &

Ma

riti

me

Se

rvic

e0.6

20.6

02,4

85,0

71

0.9

7

1

.87

0

.87

0.1

66.0

6

Inte

rgra

ted

Oil

an

d G

as

Se

rvic

es

Oa

nd

o P

lc12.5

011.2

82,6

70,6

38

78.9

727.9

96.9

54.1

7

Pe

tro

leu

m a

nd

Pe

tro

leu

m P

rod

uct

sA

fric

an

Pe

tro

leu

m P

lc20.5

020.5

082,1

91

37.1

00.5

04.9

37.4

0B

eco

Pe

tro

leu

m P

lc0.5

00.5

020

00.7

00.5

00.0

00.0

0C

on

oil

20.7

920.7

920,6

49

32.6

05.7

16.0

2E

tern

a O

il a

nd

Ga

s P

lc2.2

82.2

082,0

00

5.5

93.8

90.6

76.9

9F

ort

e O

il N

ig P

lc10.2

010.2

5105,1

83

Mo

bil

Oil

Nig

eri

a P

lc115.0

0115.0

017,7

54

163.5

0141.0

013.3

211.1

1M

RS

Oil

Nig

eri

a P

lc30.6

830.6

830

02,1

00

63.8

63.3

219.2

3T

ota

l Nig

eri

a P

lc130.0

0125.0

04,3

21

240.0

0195.5

011.9

117.0

7

Ho

spit

ali

tyT

an

tali

sers

Plc

0.5

00.5

050

539,0

00

SE

RV

ICE

SA

fro

med

ia P

lc0

.50

0.5

03

3,0

00

0.7

20

.51

0.0

41

2.7

5A

uto

mo

bil

e/A

uto

Pa

rt R

eta

ile

rsIn

car

Nig

. P

lc1.9

71.9

724

04.3

31.9

7 0

.00

0.0

0R

T B

risc

oe

Plc

1.7

71.8

9129,3

89

3.6

51.3

00.1

68.1

9

Co

uri

er/

Fre

igh

t/D

eli

ve

ryR

ed

Sta

r E

xp

ress

Plc

3.3

03.1

0452,5

00

3.6

72.6

50.5

44.9

1E

mp

loy

me

nt S

olu

tio

ns

C &

I L

EA

SIN

G P

LC

0.5

00.5

012,1

50,1

43

1.6

40.9

00.0

811.2

5

Ho

tels

/Lo

dg

ing

Ca

pit

al H

ote

l6.5

06.6

080

040

03.0

00.2

234.0

9Ik

eja

Ho

tel P

lc1.1

41.0

992,0

00

2.0

71.3

30.6

92.1

2

Me

dia

/En

tert

ain

me

nt

Da

ar

Co

mm

un

ica

tio

ns

Plc

0.5

00.5

0312,0

00

0.5

00.4

80.0

00.0

0

Pri

nti

ng

& P

ub

lish

ing

.A

cad

em

y P

ress

Plc

3.1

03.4

110,7

68

3.6

83.1

70.2

612.1

9L

ea

rn A

fric

a P

lc2.1

12.0

19,3

08,8

92

Lo

ng

ma

n N

ige

ria

Plc

4.2

04.2

04,3

22

8.0

04.6

00.0

00.0

0U

niv

ers

ity

Pre

ss4.1

04.8

3572,3

62

6.8

23.6

00.1

327.6

9

Ro

ad

Tra

nsp

ort

ati

on

Ass

oci

ate

d B

us

Co

mp

an

y P

lc0.5

00.5

081,2

32

0.8

00.5

00.0

00.0

0

Sp

eci

ali

tyIn

terl

ink

ed

Te

chn

olo

gie

s P

lc4.9

04.9

020

5.1

54.9

00.0

00.0

0

Tra

nsp

ort

-Re

late

d S

erv

ice

sA

irli

ne

Se

rvic

es

an

d L

og

isti

cs P

lc2.1

62.4

63,0

00

2.7

81.5

70.5

14.2

2N

ige

ria

n A

via

tio

n H

an

dli

ng

Co

mp

an

y5.0

05.9

0289,8

53

11.7

56.5

00.8

08.7

5

Op

en

ing

Clo

sin

gQ

ua

nti

tyYear

Year

P.E

Pri

ce

NP

rice

NTra

ded

Hig

hL

ow

E.P

.SR

ati

o

Oil

an

d G

as

an

d P

rod

uct

sP

etr

ole

um

Pro

du

cts

Ca

pit

al O

il P

lc0.5

00.5

05,0

00

1st

fT

ier

Se

curi

tie

sA

GR

ICU

LT

UR

EC

rop

Pro

du

ctio

nF

TN

Co

coa

Pro

cess

ors

Plc

0.5

00.5

01

50

,00

00.6

40.5

00.0

150.0

0O

ko

mu

Oil

Pa

lm P

lc35.7

034.0

161,2

36

24.5

814.5

37.9

42.7

7P

resc

o P

lc14.9

814.9

2533,4

91

8.3

06.4

01.8

04.3

7

Liv

est

ock

/An

ima

l Sp

eci

ali

tie

sL

ive

sto

ck F

ee

ds

Plc

1.5

61.7

05,7

37,0

00

0.6

60.4

80.0

415.0

0

CO

NG

LO

ME

RA

TE

SD

ive

rsif

ied

In

du

stri

es

A.G

. Le

ve

nts

Nig

eri

a P

lc1.5

01.5

7105,5

61

2.5

41.4

50.2

85.1

8S

CO

A N

ige

ria

Plc

5.5

25.4

226

48.2

85.5

20.3

515.7

7Tr

an

sna

tio

na

l Co

rpo

rati

on

1.1

41.1

829,6

24,6

20

1.8

20.5

00.2

23.6

4C

he

lla

ram

s P

lc5.8

15.8

110

07.6

06.4

30.3

120.7

4U

AC

N P

lc40.5

040.3

0175,4

38

42.5

028.7

07.0

34.1

4

CO

NS

TR

UC

TIO

N/R

EA

L E

ST

AT

EN

on

-Bu

ild

ing

/He

avy

Co

nst

ruct

ion

Ju

liu

s B

erg

er

Nig

Plc

31.0

031.0

040,2

20

62.2

632.9

6

3.2

610.1

1R

oa

ds

Nig

eri

a P

lc10.6

010.0

752

08.2

83.0

13.6

62.2

6

Re

al E

sta

te D

eve

lop

me

nt

UA

CN

Pro

pe

rty

De

ve

lop

me

nt

11.0

011.5

0620,0

75

20.1

511.5

91.6

67.3

3

Re

al E

sta

te I

nve

stm

en

t Tru

sts

Sk

ye

Sh

elt

er

Fu

nd

s100.0

0100.0

02,0

00,0

00

100.0

097.0

011.7

58.5

1C

ON

SU

ME

R G

OO

DS

Au

tom

ob

ile

/Au

to P

art

sD

N T

yre

s &

Ru

bb

er

Plc

0.5

00.5

020,0

00

0.5

00.5

00.0

00.0

0

Be

ve

rag

es-

Bre

we

rs/D

isti

lle

rsC

ha

mp

ion

Bre

we

rie

s P

lc3.8

03.8

05

0,0

00

4.6

32

.23

0.0

00

.00

Gu

inn

ess

Nig

eri

a P

lc281.6

0265.0

0332,7

81

255.0

0186.0

012.1

219.9

8In

tern

ati

on

al B

rew

eri

es

Plc

13.1

912.8

3106,7

84

7.1

05.2

30.3

516.2

9N

ige

ria

n B

rew

Plc

142.0

0138.8

5776,3

91

100.0

072.5

04.5

022.2

2P

rem

ier

Bre

we

rie

s P

lc0.8

90.8

91,0

00

1.0

10.9

30.0

00.0

0

Be

vera

ge

s-N

on

-Alc

oh

oli

c7

-UP

Bo

ttli

ng

Co

mp

an

y P

lc39.0

040.9

56,2

27

51.4

9,3

9.0

03.7

013.9

2

Fo

od

Pro

du

cts

Da

ng

ote

Flo

ur

Mil

ls P

lc8.2

08.2

03,3

67,5

66

19.9

04.3

10.5

416.9

1D

an

go

te S

ug

ar

Re

fin

ery

Plc

6.1

25.8

13,1

58,6

41

16.2

04.0

20.7

114.3

8F

lou

r M

ills

Nig

eri

a P

lc65.0

066.0

1355,5

56

95.0

057.0

04.5

016.8

9H

on

ey

we

ll F

lou

r M

ill P

lc2.6

82.5

01,5

66,3

19

6.6

02.3

10.2

616.9

2N

ati

on

al S

alt

Co

. Nig

Plc

6.0

25.9

1510,6

67

6.7

03.8

00.7

35.7

5U

TC

Nig

eri

a P

lc0.7

60.7

3564,1

83

0.8

80.5

00.0

68.8

3

Fo

od

Pro

du

cts-

- D

ive

rsif

ied

Ca

db

ury

Nig

eri

a P

lc30.0

029.9

01,3

52,2

43

29.2

010.1

70.2

837.5

7N

est

le N

ige

ria

Plc

625.0

0684.0

0346,4

48

470.0

0367.8

315.9

427.9

6

Ho

use

ho

ld D

ura

ble

sB

eta

Gla

ss C

o P

lc10.0

310.0

322

515.5

812.7

13.9

03.2

6N

ige

ria

n E

na

me

lwa

re P

lc36.1

934.3

910,6

20

42.6

636.1

91.6

122.4

8V

ita

foa

m N

ig. P

lc3.5

23.5

7582,7

42

6.7

54.7

80.7

07.3

4V

on

o P

rod

uct

s P

lc2.8

82.8

811,9

23

3.6

72.6

60.0

00.0

0

Pe

rso

na

l/H

ou

seh

old

Pro

du

cts

PZ

Cu

sso

ns

Nig

eri

a P

lc25.0

230.0

0271,9

66

43.5

027.0

01.2

920.9

3U

nil

eve

r N

ige

ria

Plc

43.0

041.5

0119,3

99

31.2

522.5

61.3

220.4

6

FIN

AN

CIA

L S

ER

VIC

ES

Ba

nk

ing

Acc

ess

Ba

nk

Plc

9.0

19.4

014,5

47,0

02

11.1

04.2

60.8

05.8

3A

frib

an

k N

ige

ria

Plc

0.6

40.6

4646,6

08

3.3

90.6

40.0

00.0

0B

an

k P

HB

Plc

0.5

70.5

513,2

87,5

33

2.3

00.5

30.0

00.0

0D

iam

on

d B

an

k N

ige

ria

Plc

4.7

94.4

024,8

36,8

30

9.2

72.0

50.0

00.0

0E

cob

an

k T

RA

NS

NA

TIO

NA

L I

NC

OR

PO

RA

TIO

N11.9

512.0

59,7

44,9

15

4.3

01.6

50.2

825.9

1F

ide

lity

Ba

nk

Plc

2.3

42.1

34,8

05,4

07

3.2

01.2

00.2

26.6

8F

inB

an

k P

lc0.5

00.5

01,0

00

9.5

00.0

00.0

0

0

.00

Fir

st B

an

k o

f N

ig.

Plc

17.0

017.0

144,8

87,1

49

16.1

27.9

51.3

46.9

6F

irst

Cit

y M

on

um

en

t B

an

k P

lc3.6

23.4

92,3

43,2

99

8.3

03.6

00.6

96.2

0G

ua

ran

ty T

rust

Ba

nk

Plc

20.5

020.3

018,2

13,1

14

20.5

011.6

41.6

1

8.7

4N

PF

Mic

ro-F

ina

nce

Ba

nk

Plc

1.0

71.0

756,0

00

1.7

80.0

00.0

00.0

0In

terc

on

tin

en

tal B

an

k P

lc0.7

00.7

073,2

00

1.7

80.8

70.1

85.4

4O

cea

nic

Ba

nk

In

tern

ati

on

al P

lc1.1

51.1

591,0

00

13.5

00.0

00.0

00.0

0S

ky

e B

an

k P

lc4.0

54.3

08,3

00,6

17

10.1

73.9

00.8

55.0

7S

pri

ng

Ba

nk

Plc

0.8

8 0

.88

1,0

06,0

32

2.1

80.7

30.5

05.4

4S

tan

bic

IB

TC

Ba

nk

Plc

7.3

07.3

01,1

06,9

90

11.3

86.3

00.5

414.8

1S

terl

ing

Ba

nk

Plc

2.0

01.8

38,0

75,6

67

2.9

10.9

50.2

24.6

8U

BA

Plc

5.5

05.2

19,6

07,2

49

11.7

02.1

70.1

319.2

3U

nio

n B

an

k N

ig.

Plc

8.0

17.9

9897,6

94

5.3

81.9

67.5

90.2

8U

nit

y B

an

k P

lc0.5

40.6

28,8

40,5

28

1.9

20.5

00.1

14.8

2W

em

a B

an

k P

lc0.5

20.5

720,9

00,9

66

1.7

50.5

21.3

40.4

3Z

en

ith

Ba

nk

Plc

18.3

518.2

042,8

41,3

54

16.7

011.4

51.5

77.8

3

Insu

ran

ce C

arr

iers

, B

rok

ers

an

d S

ect

or

AII

CO

In

sura

nce

Plc

0.8

00.7

01,5

08,9

73

1.0

60.5

00.0

95.5

6C

on

tin

en

tal

Re

insu

ran

ce P

lc0.8

80.8

21

,10

1,0

00

1.2

00.8

50.1

010.2

0A

fric

an

All

ian

ce I

nsu

ran

ce0.5

00.5

01,0

00

0.5

00.5

00.0

00.0

0C

orn

ers

ton

e I

nsu

ran

ce C

om

pa

ny

0.5

00.5

07,1

00

0.5

00.5

00.0

00.0

0C

on

soli

da

ted

Ha

llm

ark

In

sura

nce

0.5

00.5

0100,0

00

0.5

00.5

00.0

68.3

3C

ust

od

ian

an

d A

llie

d I

nsu

ran

ce P

lc1.4

71.4

0621,7

00

3.5

12.0

00.4

34.8

8E

qu

ity

Ass

ura

nce

Plc

0.5

00.5

04,5

00

0.5

00.5

00.0

00.0

0G

old

lin

k I

nsu

ran

ce P

lc0.5

00.5

040,9

82

0.6

90.5

00.0

00.0

0G

rea

t (N

ig)

Insu

ran

ce P

lc0.5

00.5

02,0

00,0

00

0.5

00.5

00.0

00.0

0G

ua

ran

ty T

rust

Ass

ura

nce

Plc

1.5

51.6

01,6

98,4

75

0.9

50.9

50.0

817.2

5G

uin

ea

In

sura

nce

Plc

0.5

00.5

020,0

00

0.5

00.5

00.0

00.0

0In

terc

on

tin

en

tal W

ap

ic I

nsu

ran

ce P

lc0.6

10.6

11,1

72,7

78

0.5

00.5

00.0

00.0

0In

tern

ati

on

al E

ne

rgy

In

sura

nce

Plc

0.5

00.5

01,0

62

0.5

00.5

00.0

00.0

0In

ve

stm

en

t a

nd

All

ied

Ass

ura

nce

0.5

00.5

01,6

70,8

90

0.5

00.5

00.0

225.0

0L

AS

AC

O A

ssu

ran

ce P

lc0.5

00.5

06,5

03,0

00

0.5

00.5

00.0

68.3

3L

aw

Un

ion

& R

ock

In

sura

nce

Plc

0.5

00.5

020,5

90

0.5

00.5

00.1

05.0

0L

ink

ag

e A

ssu

ran

ce P

lc0.5

00.5

04,8

18,5

94

0.5

00.5

00.0

00.0

0M

utu

al B

en

efi

ts A

ssu

ran

ce P

lc0.5

00.5

0110,0

00

0.5

00.5

00.3

61.3

9N

EM

In

sura

nce

Co

. (N

ig)

Ltd

0.5

70.5

25,4

13,1

57

0.5

00.5

00.3

61.3

9N

ige

r In

sura

nce

Co

. P

lc0.5

00.5

01,8

22

0.9

00.5

00.0

150.0

0O

AS

IS I

nsu

ran

ce P

lc.

0.5

00.5

040,0

00

0.5

00.5

00.0

150.0

0P

rest

ige

Ass

ura

nce

Co

. Plc

0.5

00.5

0528,6

84

2.5

01.9

00.1

46.4

3R

eg

en

cy A

llia

nce

In

sura

nce

0.5

00.5

06,0

66,5

00

0.5

00.5

00.0

316.6

7S

ov

ere

ign

Tru

st I

nsu

ran

ce0.5

00.5

060,0

00

0.5

00.5

00.0

77.1

4S

taco

In

sura

nce

Plc

0.5

00.5

050,0

00

0.5

00.5

00.0

00.0

0S

tan

da

rd A

llia

nce

In

sura

nce

0.5

00.5

013,0

00

0.5

00.5

00.0

00.0

0U

NIC

In

sura

nce

Plc

0.5

00.5

01,0

00

0.5

00.5

00.0

00.0

0U

niv

ers

al

Insu

ran

ce P

lc0.5

00.5

0100,0

00

0.5

00.5

00.0

00.0

0

Mo

rtg

ag

e C

arr

ier,

Bro

ke

r a

nd

Se

cto

rA

so S

av

ing

s a

nd

Lo

an

s P

lc0.5

00.5

010

00.5

00.5

00.0

00.0

0R

eso

rt S

av

ing

s &

Lo

an

s P

lc0.5

00.5

02,3

00,0

00

0.5

00.5

00.0

00.0

0

Oth

er

Fin

an

cia

l In

stit

uti

on

sC

rusa

de

r (N

ige

ria

) P

lc

0.5

00.5

01,1

00,0

00

0.6

10.5

00.0

00.0

0D

ea

p C

ap

ita

l Ma

na

ge

me

nt

& T

rust

Plc

2.0

22.0

260,0

00

2.0

22.0

20.0

00.0

0R

oy

al E

xch

an

ge

Ass

ura

nce

0.5

70.5

12

20

,00

00.6

60.5

00.0

316.6

7

HE

AL

TH

CA

RE

Me

dic

al S

up

pli

es

Mo

riso

n I

nd

ust

rie

s P

lc5.4

65.1

950,0

00

10.5

49.5

20.0

00.0

0H

ea

lth

care

Pro

vid

ers

Un

ion

Dia

gn

ost

ics

& C

lin

ica

ls S

erv

ice

s0.5

00.5

0300,0

00

0.5

00.5

00.0

00.0

0

Op

en

ing

Clo

sin

gP

rice

Pri

ceQ

ua

nti

tyYear

Year

P.E

.

Company

(N)

(N

)Tra

ded

Hig

hL

ow

E.P

.S.

R

ati

o

Ca

pit

al M

ark

et

Sto

ck

Ma

rket

Rep

ort

as

at

Fri

day,

Octo

ber

19,

2012


CMYK

Insurance

BRIEFS

L-R: Mr. Lateef Omoladun, a new inductee and Managing Director of KOB Insurance BrokersLimited receiving letter of admission from the President of the NCRIB, Barrister Laide Osijo,during the induction of new Insurance Brokers in Lagos, recently

Brokers to underwriters: Showdocumentary evidence of withheldpremiums

By ROSEMARY ONUOHA

Insurance brokers underthe auspices of theNigerian Council of

Registered InsuranceBrokers, NCRIB, havecharged underwriters to showdocumentary evidence ofwithheld premiums fromunderwriters.

The charge is coming on theheels of growing allegationsagainst brokers by insurersthat the high rate ofoutstanding premiums in

their books are as a result ofbrokers’ refusal to remit somepremiums they collected fromclients.

President of NCRIB, Mrs.Laide Osijo who challengedthe underwriters to comeforward with their evidencesaid “The allegation isunfounded. We have askedunderwriters that havedocumentary evidence tobring them out, so that we cando reconciliation. That wasthe advice we also gave theNational InsuranceCommission, NAICOM. TheCommission wrote us and we

replied by telling them to askunderwriters to showevidences of premiumswithheld by brokers. I wouldnot say that brokers do not err,but brokers in the past aredifferent from those practicingnow.”

Osijo however said that thecouncil would partner withNAICOM on its planedvalidation of debts alleged tobe owed by brokers.

Osijo, said that the councilsuggested the idea to validatethe debts to NAICOM, addingthat brokers in recent time arestriving to be ethical and

professional and wouldnever engage in anythingthat would attract sanction.

She said: “We suggestedthe idea to validate acclaimeddebts to NAICOM. Theunderwriters have beenaccusing brokers of with-holding premium which isnot true. The underwritersoften claim that the premiumshave been paid and thatbrokers are with-holdingthem. But the truth is thatmost of the premiums arereceivables that are not yetcollected, especiallygovernment accounts.Because the debit notes arewritten by brokers, it isassumed that the money iswith brokers.

“The allegation isunfounded. We have askedunderwriters that havedocumentary evidence tobring them out, so that we cando reconciliation. That wasthe advice we also gaveNAICOM. The commissionwrote us and we replied bytelling them to askunderwriters to showevidences of premiumswithheld by brokers. I wouldnot say that brokers do noterr, but brokers in the past aredifferent from thosepracticing now.”

“Brokers of these days areafraid of being sanctioned;hence, they abide by rules.So we are trying to practiceprofessionally and ethicallythese days, and I can boldlyboast of that. Why wouldanybody accuse somebodyfor no just cause? It is unfair.If it is possible underwriterscan go to the insured toconfirm if the premiums havebeen paid, instead ofaccusing brokers unjustly.But that may be going to theextreme for there is nocontract between the insuredand the underwriter. Sincewe bring the business, weshould be allowed thefreedom of contract.”

Law Union posts N4bn GPI

By RITAOBODOECHINA

Law Union and RockInsurance Plc has posted

a Gross Premium Income,GPI, of N4.20 billion for thefinancial year endedDecember 2011.

The figure represents a fourper cent increase from the2010 figure of N4.046 billion.

Addressing shareholders atthe company’s 43rd annualgeneral meeting in Lagos,Chairman of the company,Mrs. Adenike Adeniran saidthat earned premium stood atN4.181 billion and was 11 percent higher than N3.770billion recorded in 2010.

She noted that investment

income for the period stood atN228.63 million as againstN261.6 million in thepreceding year. However,claims incurred (net ofrecoveries) reducedsignificantly by 21 per centfrom N792.2 million incurredin 2010 to N653.72 million in2011.

According to her,management expenses stoodat N619 million havingincreased significantly fromN490 million in 2010 in linewith an increase charge forrepairs and maintenance costfollowing an increase in costof maintaining the leaseholdproperties due to fireoutbreak, increase in cost ofmaintaining pool cars,significant spending on

information technology,adjustment to salary scalesand increase in cost ofalternate power in line withdeteriorating power situationin the country.

She added that provision fordoubtful debt rose significantlyby 56 per cent in 201,accounting for the reduction inthe profit before tax by 44 percent from N384 million in 2010to N170.6 million in 2011.

Meanwhile, the Chairmansaid that the company plansto undertake a reorganisationof its staff and reduction ofmanagement overheads.

According to her, the moveis part of the strategy for thecompany to grow its businessas it intends to block allfinancial drain pipes.

She said, “Whilst blockingall financial drain pipes,aggressive drive forcollection of outstandingpremium, penetration of oiland gas, strong bancassurance relationships, andpartnership of other agencyplatforms are part of thestrategies to be implementedby the company”

“Introduction of newproducts, efficient ITsystems, including improvedwelfare, prudent andprofitable investmentsystem, continuedmaintenance of relationshipwith insurance brokers aswell as a drive for retailbusiness, includes thestrategies to beimplemented”.

Insurers urgedto repositionoperations

Worried by the spate ofcapital flight from the

insurance industry, Chairmanof Niger Insurance Plc, Mr.Bala Zakariya’u has urgedinsurance operators toreposition their operations tobe able to underwrite bigrisks locally.

The calling is coming on theheels of the trend wherebymany of such risks are cededto foreign insurers, leading tocapital flight.

Zakariya’u who stated thisin Lagos said that structuralweakness in the industrymeant that most of the largeinsurance business was stillbeing written by foreigncompanies, as such insurancepractitioners shouldreposition themselves to tapinto the developmental effortsof NAICOM so as to correctthe structural imbalance.

He said that NAICOM isforging ahead with itsdetermination to deepen themarket through its MarketDevelopment andRestructuring Agenda,MDRI, to meet the N6 trillionpremium target on vision2020 roadmap. Part of thestrategy is the enforcement ofcompulsory insurance whichhas been on since 2011.

Social mediaposes risk tocompanies

The speed of social mediaand its lack of

accountability make it moredifficult to manage the risk ofonline attacks, the AonAdvanced Risk FinanceConference has heard.

Aon Risk Solutions AustraliaPlacement Director IanDavidson says threats havespread beyond clients’ ownbusinesses.

“In the past clients lookedat what they were doing; nowthey are looking at suppliersand joint venture partners,from where they are gettinginput,” he said.

Davidson said the inactionof companies has alsobecome an issue “if you areseen to be not doingenough”.

Social media attacks canescalate quickly and areharder to manage because theoutlets do not have the checksand balances of traditionalmedia and corporations havenot been able to buildrelationships with them. Mr.Davidson says it can be hardfor clients to determine whois responsible for the risks.


Housing Finance

Stories byYINKA KOLAWOLE& MIKE EFFIONG

BRIEFS

Stakeholders set to floatNigeria’s first mortgagerefinance coy

STAKEHOLDERS in the

mortgage banking andhousing finance sector inNigeria have concluded plansto float the first mortgage re-finance company in thecountry, known as NigerianMortgage Corporation(NMC).

President of MortgageBanking Association of Nigeria(MBAN), Mr. AbimbolaOlayinka, disclosed this in hiswelcome address at the2nd

MBAN Housing Financeand Investment conference andExhibition (MBAN-HOFEX)held in Lagos, last week.

He disclosed that the majorstakeholders involved in theproject along with MBANinclude both local and foreignbodies such as FederalMinistry of Finance, FederalMinistry of Lands, Housingand Urban Development,Central Bank of Nigeria(CBN), World Bank/IFC,International FinancialInstitutions (IFIs).

He added that PISONHousing Company Limitedhas been formally appointed asthe Project Manager/Advisorfor the NMC, in line with themandate received by MBANfrom World bank/IFC and IFIs.

He however did not state whenthe company will take off.

Olayinka noted that becauseof the key role mortgagebanking plays in the provisionof affordable housing inNigeria, MBAN decided toorganise HOFEX as an annualevent to bring products andservices nearer to and in theminds of the public, and toassure Nigerian that their homeownership dreams can actuallybecome reality. According tohim, to promote consumer

credit education for the sector,MBAN has been liaising withTrade and Professionalassociations in Nigeria such asNigerian Institution of EstateSurveyors and Valuers(NIESV); Nigeria BarAssociation (NBA); NigeriaUnion Journalists (NUJ);Nigerian Institute of Architects(NIA); Lagos Chamber ofCommerce and Industry(LCCI); Real EstateDevelopers Association ofNigeria (REDAN) on key

issues relating to the sectorsuch as the Land use Act 1978.

“The maiden edition ofHOFEX held last year was ahuge success with tremendousgoodwill and support receivedfrom our stakeholders, and thishas propelled us to ensuringcontinuity of the programme onannual basis. It is gladdeningto note that the statutoryregulatory/apex bank incollaboration with MBAN, is setto finally wind-down theconsolidation/reforms of oursector in April 2013, we are veryoptimistic and our stakeholdersshould rest assured that postconsolidation, they wouldwitness a new dawn in themortgage banking sector inNigeria,” he stated.

Declaring open the occasion,Lagos State Governor, Mr.Babatunde Fashola, who wasrepresented by Commissionerfor Housing Lagos state, Mr.Bosun Jeje, assured Lagosiansand investors who want to dogenuine business in the stateof government’s protection atall times. He said that thegovernor is passionate aboutmaking affordable housesavailable for 18 millionLagosians. He expressed hopethat the event will help tosustain the cordial relationshipexisting between the state andMBAN while wishingparticipants fruitfulinteractions.

He expressed hope that theevent will help to sustain thecordial relationship existingbetween the state and MBANwhile wishing participantsfruitful interactions.

In his keynote address on“The Mortgage Banking /Housing Finance Sector inNigeria-A Viable Platform forWealth Creation andAffordable Housing”, CBNGovernor, Mal. LamidoSanusi, represented byMr.Okpokor Ezewu, A DeputyDirector, emphasised thatmortgage banks can helpcreate wealth by makingadequate funds available tocustomers at the right timewith low interest rate.

Demolitions: FCT warns potential homebuyers

The Federal CapitalTerritory (FCT)

administration has advisedthe public, particularly civilservants, to make adequateenquiries before buyinghouses in privately developedestates in the territory.

The advice is coming in thewake of the recentcontroversial demolition ofsome houses by the FCTA inthe territory.

Dr. Yahaya Yusuf, Director,Development ControlDepartment, FCT,advised civil servants inAbuja to make adequateinquiry before buying houses

in private estates.He said in an interview with

the News Agency of Nigeria(NAN) that some privateestate developerswere creating the impressionthat they were buildinghouses for civil servants.

“Some private developersthat are into such acts aregoing about with AbujaMunicipal Area Council(AMAC) title documents andbuilding plan backdated to2004 which are invalid. In2004, Malam Nasir El- Rufai,the former Minister of FCT,stopped AMAC fromallocating land to people, and

two years grace was given tothose with such documents toput structures on them or theirplots would be revoked,” hesaid.

Yusuf said that in view of thedevelopment, civil servantswere advised to getclarification from FCT beforemaking payment for offersfrom private developers.

He cited the case of theestate with massive housesbelonging to a privatedeveloper in Kyami on AirportRoad that was demolished forfailing to heed notices servedby FCTA for it to stop work onthe estate.

A mansion in an exclusive Abuja neighbourhood

Ogun seeksCDAs’ supporton townplanning

Community DevelopmentAssociations (CDAs) in

Ogun State have beenadvised to collaborate withthe government inenlightening the populace onthe need for strict adherenceto town planning regulations.

Permanent Secretary,Bureau of Urban and PhysicalPlanning (BUPP), Mr. TaiwoMegbope, gave the chargewhile addressing some CDAsin Sagamu during theBureau’s ‘Build Right’sensitisation programme.

A statement by theInformation Officer, BUPP,Adeyinka Ogundaini, quotedMegbope as reminding theCDA officials that townplanning laws are againsterecting structures beneathhigh tension power lines, onland designated for majorroad projects and onwaterways and drainagechannels to prevent flooding,among other things.

He said the programme wasorganised to sensitise thepeople on the need to adhereto town planning regulations,warning that those whocontraven them would havetheir structures demolished.He enjoined the CDAs tosensitise their members tovisit the nearest townplanning offices in their areasfor clarification, adding thatthe government derives nopleasure in pulling downstructures.

UK mortgagelending drops

Mortgage lending in theUK was lacklustre in

September, sliding by 10percent compared with theprevious month whenborrowing for home buyersreached a two-year high.

The Council of MortgageLenders (CML) said lendingtotaled £11.6 billion lastmonth, which is also 15percent lower than a year ago,despite a recent boost to theavailability of mortgagedeals.

An £80 billion funding forlending scheme waslaunched by the governmentat the beginning of August tokick-start the flow of credit,which has resulted in anincrease in the choice ofmortgages. But the CML saidthere have been recent signsof demand softening and lastmonth’s fall appears to reflecta drop off in housing marketactivity.


Housing Finance

Workers in Abuja havecontinued to groan

under the burden of highrents in the Federal CapitalTerritory (FCT).

Some of the workers whospoke to the News Agency ofNigeria (NAN), complainedof pains and psychologicalburden associated with thepayment of exorbitant houserents in the territory.

Mr. Akubor Yahyah, a civilservant who resides inKubwa, a satellite town in theFCT, said that he pays aboutN400,000 for his one-bedroom flat. He said thatfailure to pay his rent beforeexpiry would mean that thelandlord or the agent wouldgive the house to anotherperson willing to pay twoyears rent. He called on theFederal Government tointervene in the matter byputting in place a rent controlpolicy to check the excessesof landlords.

Mr. Muhammed Ahmed, aresident of Wuse 2 and a civil

Stories ByYINKA KOLAWOLE

BRIEFSOcean surge: Expert charges V.Iresidents on safety

In the wake of the oceansurge that recentlyravaged the coastline of

Lagos State, landlords andresidents of Victoria Islandhave been urged to take moreresponsibility in ensuring thesafety of the highbrow island.

A renowned realtor, Mr.Bode Adediji, gave thecharge in a recent exclusiveinterview with Vanguard. Henoted that by virtue of theirstatus in society, they canform a pressure group thatcannot be ignored bygovernment.

“I will like to lay somemeasure of blame at thedoorstep of property ownersin that particularenvironment. For upwards of40 years now, this is oneregion that has set the pacecontinually in property valueappreciation, capital value,and rent generation capacity,much more than most otherpremium locations in citieslike Abuja and Port Harcourt.Until the late Mrs. OyeWilliams set up the VI andIkoyi Residents Association(VIRA), no single concertedeffort could be traced to anyperson or companies tosalvage VI. Landlords andtenants in VI, who by virtueof what they do look likeeven who is who in Nigeria,should do more to work as apressure group and joinhands with both the LagosState and Federalgovernments in finding apermanent solution to theeffect of the ocean surge onthe VI environment andproperty,” he asserted.

Prompted on whatgovernment can do to arrestthe situation, Adediji who isalso the immediate pastPresident of the NigerianInstitution of EstateSurveyors and Valuers(NIESV), said governmentshould roll out the requiredengineering solution whichinvolves a lot of investment.In so doing, he noted, “cantransform a larger expanse ofthat environment into a firstclass real estate asset arenaand through which thefunding for that engineeringinvestment can berecouped.”

On the safety of VictoriaIsland in the face of the oceansurge, the chairman of BodeAdediji Partnershipremarked that VI is relativelysafe. “In terms of myknowledge regarding thecycle of ocean surge in VI inthe last 31 yrs, I will say that

VI is relatively safe to a largeextent. Also, as aninternational real estatepractitioner, who has had theprivilege of visiting othercountries with similarexperiences and exposures,I will certainly say that VI issafe but with a big caveat thatin all those other countrieswhere the certainty of thecoast line is stronger and

safer, they have not donethose things that should havebeen left undone, and theyhave not left undone thosethings that ought to havebeen done.

“Where you see a seriousminded country, any time aparticularly strategicenvironment show somevulnerability concerning theissue of mother nature,

proactive man-made effortsusually provide assurancesand safety nets, all of whichare unfortunately lacking inour clime. I can expatiatefurther that the fury of oceanworld-wide is known andpredictable. For example, oneof the most exciting coastalfront and beach area anybodywould like to go is MiamiBeach.

Abuja workers groan under highrent

servant, said that he paysN1.3 million for his two-bedroom flat.

According to him, the rentwas N800,000 in 2010 but itwas increased last December,stressing that the incrementwas a burden. Ahmed who isa father of four, noted that asa civil servant, the heavy rent,school fees and othernecessities had made itdifficult for him to havesavings.

As for Mrs. PreciousAkingbade, a single mother oftwo, she said that she wasforced to pack to Keffi, inNasarawa State, because shecould no longer pay for herone-bedroom flat at Wuse.Akingbade, who works at oneof the federal parastatals,said she was payingN750,000 before it wasincreased to N1.5 million,forcing her to move to theneighbouring state. “I waspaying N750,000 when theagent suddenly told us thatthe landlord has increased

the rent to N1.5 million. Withtwo kids to cater for in thiskind of expensive place, Ihave to move to Keffi,Nasarawa State, where life ischeaper. I plead withgovernment to find solution tothese shylock landlords andtheir agents in Abuja,” shesaid.

Miss Zainab Momoh, anewly-employed civil servant,urged the government toreview its housing policy. “Ijust finished my nationalyouth service and I gotemployment where l servedand was posted to the FCT.Now, I am not sure I can copewith the house rent here withmy salary unless they wantme to steal. How can anyonebe paying N250,000 for asingle room in a place likeKuje where there are no socialamenities. It is so frustratingto see few people live wellwhile others suffer becausethey don’t have money, it’snot as if one is not working,”she lamented.

Possible effect of ocean surge

SA bank toboost Nigeria’sreal estate withN39.5bn

South Africa’s secondbiggest financial

services company, FirstRand,has concluded plans to investN39.5 billion into theNigerian real estate sector.

The bank said it isconsidering real estateinvestment across major Westand Southern African market,particularly, Nigeria, Ghanaand Angola.

In an e-mailed statement,Michael O’Malley, Directorof Johannesburg-based RMBWestport, said the money willbe used to supply the strongdemand for high-grade retailand commercial property.“Nigeria, Ghana and Angolahave been earmarked as keyjurisdictions in which todevelop retail andcommercial property. Overthe past decade, Africaneconomic output has morethan tripled, which is one ofthe many reasons we believethat Africa today holds thegreatest overall investmentpotential for all frontiermarkets globally,” he said.

A report said that anincreasing proportion ofAfrica’s population is movinginto urban areas as economicgrowth quickens, with housesand malls being built in majorcities including Accra, Abujaand Luanda, the capitals ofGhana, Nigeria and Angolarespectively.

US mortgagerate falls tonear-record low

Average US rate on a 30-year fixed mortgage has

fallen to near its record lowset earlier this month.

The rate on the most popularmortgage dipped to 3.37percent from 3.39 last week,mortgage buyer Freddie Macsaid. Two weeks ago, the ratereached 3.36 percent, itslowest level on records datingto 1971.

The average rate on the 15-year fixed mortgage, oftenused for refinancing, set arecord low of 2.66 percent,down from last week’s 2.7percent. “Mortgage ratesremained more or lessunchanged this week ashome construction builds upsteam,” said FrankNothaft,vice president and chiefeconomist, Freddie Mac.

The average rate on the 30-year loan has remained below4 percent all year. And rateshave fallen even further sincethe Federal Reserve startedbuying mortgage bonds inSeptember to try to encouragemore borrowing andspending.

30 —Vanguard, MONDAY, OCTOBER 22, 2012

CMYK

BRIEFS

ICT

En d - t o - e n d

telecommunicationssolutions provider,

Ericsson, has flagged-off its

annual apps competition andawards for young mobile apps

developers. Developers, start-

ups and anyone who has an

idea for a great app, now havethe opportunity to enter and

win as this year there will be

a global competition and

several regional competitions.First prize is EUR 25,000,

second prize is EUR 10,000

and third prize is EUR 5,000.The Ericsson Application

Awards give participants and

their team the opportunity to

gain a foothold in the appindustry while also earning

recognition and making

contacts within the telecom

industry.This year there will be two

Ericsson flags-off annual mobile applicationawards

Kamar-Abass, Country Manager, EricssonNigeria

STORIES BYPRINCE OSUAGWU

categories; one for studentsand one for small andmedium-sized enterpriseswith fewer than 100employees. The theme for thisyear’s ompetition is “Apps forCity Life”, in support ofEricsson’s vision for aNetworked Society in which– through a combination ofmobility, broadband, thecloud, applications andservices – anything andeverything is connected.

Teams need to develop anapplication based on theAndroid platform thataddresses the theme. Lastyear’s winner in the companycategory was a mobile health-care app developed in Kenya.First prize in the studentcategory, meanwhile, wasawarded to a painting andchatting app developed in

China. Finally, am e d i c o - s o c i a lplatform that

provides access tomedical informationdeveloped in Egyptwon the Technologyfor Good prize. In all,143 teams from morethan 50 countries tookpart and a total of 242ideas, videos andapps were submitted –twice as many as in theprevious year.

This year, severalprizes will beawarded in eachcategory whichincludes: First place:EUR 25,000, Secondplace: EUR 10,000,Third place: EUR5000 and Fourth andfifth place: certificates

The Nigerian flagsystematically wentup to the rooftop of

the Birchwood Hotel andConference centre inBoksburg, Johannesburg,South Africa, last week, whensome Nigerian secondaryschool students drawn fromRivers, Benue and AkwaIbom held their own and wonfour awards at the EskomExpo for Young scientists.

The projects that won theawards for the Nigerianstudents,competed againstover 600 projects by studentsfrom South Africa and otherAfrican countries.

The students weresponsored by renownedtechnology company, Intel, aspart of its efforts to improveinterest in science educationand technology.

Calvary Arrows SecondarySchool, Gboko won a specialaward for innovation andnovelty in Engineering. Thisschool located in a ruralcommunity developed amulti-powered lawn mowerthat can be powered byelectricity, batteries or solarenergy. They smiled homewith two thousand Randprize money. This is asideanother silver medal in themechanical, aeronautic andIndustrial Engineeringcategory. Niger DeltaScience College PortHarcourt won a bronze medalfor their investigation on anautomatic multi-phaseselector with a generatingplant while CommunitySecondary School Aka Ufot inAkwa Ibom state won anotherbronze medal for their work

Nigerian students win 4awards at South Africanscience fair

in producing plasticmaterials from simple cassavaextracts.

Corporate Af fairsmanager of Intel, OsagieOgunbor reacting to thefeats, said that theperformances of thestudents val idate therelentless nature of theNigerian spirit in the faceof daunting infrastructural

challenges especially inthe Educational sector. Hesaid that besides flyingNigeria's flag high in foreignland, the students had alsodone Intel Nigeria proudfor its investment not onlyin sponsoring them to thefair but also organizing theannual National sciencefair for al l secondaryschool s tudents in

partnership with Shel lPetroleum DevelopmentCompany.

The Eskom Expo for youngscientists is over 30 yearsold and about the biggestscience fair for secondaryschools in South Africa.Intel International also hasa Science and EngineeringFair (ISEF), which holdsannually in the UnitedStates.

Oracle boostsNigerianbusinesseswith SRM suit

Chief Executive Officer ofOracle, Mr Larry Ellison

last week announced that theOracle Social RelationshipManagement (SRM) Suitehis company has introduced tobusinesses in the country, willenable Nigerian companies tolisten, engage, create, Marketand analyze interactionsacross multiple socialplatforms in real-time.

Besides all these functions,the suite also provides forusers, a holistic view of theconsumer.

Oracle Social RelationshipManagement Suite isintegrated with Oracle’senterprise applications,including Oracle FusionMarketing, Oracle FusionSales Catalog, Oracle ATGWeb Commerce, and OracleEnterprise Resource Planning(ERP), allowing organizationsto use social to transform theircorporate business processesand systems.

ALL FOR ITU: From right: Executive Vice Chairman, Nigerian Communications Commis-sion (NCC), Dr. Eugene Juwah; Hon. Minister for Communication Technology, Mrs. OmobolaJohnson and Director, Regulatory & Government Affairs, Etisalat Nigeria, Mr. Ibrahim Dikkoat the Etisalat Nigeria stand during the International Telecommunication Union (ITU) 2012Conference, held in Dubai recently.

MainOne listsin IDC-G globalfootprints

Nigeria’s broadbandcable company

MainOne, was last weeklisted among members of theInternational Data CentreGroup, IDC-G’s, globalfootprints.

IDC group is the first globaldata centre alliance andMainOne’s addition into thealliance represents a debut ofWest Africa into the globalfootprint of the group.

Announcing the listing,Executive Chairman ofInternational Data CentreGroup, Mr Guy Willner,described MainOne’s CEOMs Funke Opeke, as “anexemplary visionary who hasmade a great impact on theAfrican market, especially inNigeria. We cannot be morepleased to have such a majorplayer in West Africa onboard,”

Responding, Opeke saidthat “the alliance with theInternational Data CentreGroup will create knowledgesharing platforms which wecan leverage to strengthen ourdata centre operations in WestAfrica. In addition, thebusiness networkingopportunities will help raisethe awareness of thetremendous opportunities fordata centre operations in WestAfrica”.


Aviation

Ahead of the plannedautomation of all the

aviation agencies by theFederal Government,Managing Director of theNigerian AirspaceManagement Agency(NAMA), Engr Nnamdi Udohhas assured employees of theagency that such automationwill not lead to loss of jobs.

Assuring the staffs during ameeting of the National Unionof Air Transport Employees(NUATE), NAMA branchEngr. Udoh said that he wouldnot be a party to signing anydismissal letter of any of hisworkers.He however imploredthe workers to work togetherin harmony as that was theonly sure way to move theagency forward as well asbring progress.

According to him, NAMAhas continued to forge aheadin spite of all criticismsstressing that the agency wasbased on solid foundation andstrong focus of itsmanagement.

“Automation will never leadto job losses in this agency. Iwill not be party to signing anydismissal letter of any of myworkers” he said.

While appreciating Engr.Udoh for his gesture, thePresident of the NationalUnion of Air TransportEmployees (NUATE)Comrade SafiyanuMohammed said the uniondoes not have anymisunderstanding with themanagement of NAMAadding that there was onlybreakdown in communicationbetween the duo.

Aviation workers, Minister bickerover automated revenuecollection

Stories ByLAWANI MIKAIRU

The Joint Actioncommittee of the AirTransport Services

Senior Staff Association ofNigeria,ATSSSAN, andNational Union of AirTransport Employee, NUATE,have drawn the attention ofthe public to what they allegedare offences of the AviationMinister, Princes StellaOduah.

The unions alleged that theminister single-handedlyconcessioned the automationof "supposedly revenuecollection of the parastatalsunder her ministry, withoutrecourse to other agenciessaddled with theresponsibilities of ensuringinternational best practices."And that their interventionsaved the parastatals andindeed Nigeria about Onehundred million US Dollarthat would have been stolenby these elements.’’

But in a swift reaction, theMinister through her SpecialAssistant, Media,Mr Joe Obidebunked the allegations ofthe unions and said that theunions were consulted andwere fully involved in theprocess of automation ofrevenue collection at theagencies.

According to Mr Obi, ‘’Onthe automation of revenuecollection at the agencies, it isa huge lie, and in fact,mischievous on the part of theunions to insinuate that theMinister single-handedlyordered the exercise. To besure, the unions were fullyinvolved in series of meetingson the subject-matter afterwhich they unanimously gavetheir endorsement to theinitiative which, it must be re-emphasised is aimed atplugging the haemorrhagingleakages in the system.’’ ‘’ MrObi further said it is false ‘’that a certain $100 milliondollars may have been savedthrough the intervention ofthe unions with respect to theautomation procedure.’’

The unions raised alarmabout what they call ‘’ invasionof the industry with men andwomen of various shades ofdoubtful characters who arebeing distributed like breadinto offices which some of themare unfit, unprepared andunqualified to occupy.’’Though they admit that thegovernment has theprerogative of transferringand or redeploying staff toother agencies within theindustry, but they condemn invery strong terms, ‘’theunscrupulous andunwholesome invasion of ouragencies by locusts andgrasshoppers who are beingcompensated by the Ministerof Aviation for theirinvolvement in the neighbourto neighbour campaign andthrough sheer politicalpatronage’’

They further alleged that theMinister has a penchant forundue interference in the dayto day running of the aviation

BRIEFS

,

,

The aviation sector should besaved from in- fighting as thesafety of air travellers could beaffected. A work force that isunhappy cannot perform theirduties diligently. Consideringthe delicate nature of theaviation industry, aninappropriate action or inactionon the the part of staff on dutycould compromise safety

agencies. And that theirmembers who have beenexamined, tested, interviewedand found suitably qualifiedto become management staffand awaiting approval lettersand or promotion letters to

these higher offices havebeen denied because of recentredeployment and promotionsin the ministry. According tothem ‘’ some unqualifiedelements are being decoratedwith the toga of General

Managers without theprerequisite experience,expertise, skills andqualification as stipulated inthe public service rules and orthe subsisting Conditions ofService in the variousagencies. To add insult to analready sore wound, theMinister of Aviation hasapproved that a fresh four yearold University graduate,without any sense of publicservice duties, be made aGeneral Manager whereas ittakes about twenty to twentyfive years to attain theprestigious title of a GeneralManager in this industry’’

But the Minister hascountered this by saying theunion members are employeesof the Federal governmentand have to abide by servicerules .

"The point has to be madethat union leaders in theagencies are first andforemost, employees of thefederal government. They aretherefore subject to the samerules and regulationsgoverning Civil Service inrespect of transfers,redeployment, postings, etc’’.

On the ongoingremodelling of airports whichthe unions said did not followdue process; contractors areunknown and nobody knowsthe costs of the projects ,MrObi said ‘’ In order to carryeverybody along in thetransformation of the sector,the Honourable Ministerinitiated a process ofstakeholder engagements thatculminated in the AviationSector Road Map and MasterPlan. It is pertinent to mentionthat all the Aviation sectorUnions were part of thisstakeholder engagementprocess. Their views in supportof the repositioning of thesector along these lines are onrecord.’’

The aviation sector should besaved from in- fighting as thesafety of air travellers could beaffected. A work force that isunhappy cannot perform theirduties diligently. Consideringthe delicate nature of theaviation industry, aninappropriate action orinaction on the the part of staffon duty could compromisesafety.

FAAN concerned about handling oftoilet facilities by concessionaires

Federal Airports Authorityof Nigeria, FAAN, has

expressed concern over thepoor state of the toiletfacilities at some airports, asa result of concessionaires’inability to maintain thefacilities to internationalstandards.

A statement by Mr YakubuDati , General Manager,Corporate Communication,FAAN, said all concessionaireshandling toilet facilities at allairports have been directed tolive up to expectation in thedischarge of their duties, orhave their contracts reviewed.

The statement further saidthat FAAN finds itunacceptable that its brandnew facilities, meant toenhance the comfort of thetravelling public are renderedunusable, as a result of poormaintenance by theconcessionaires’ in-charge.

Aviation Minister, Princes Stella Oduah

Automation:NAMA tellsemployees notto panic

By DANIEL ETEGHE

FG seals firm inPort Harcourt forcontraveningWeights law

Mr Abeng Ovat, anofficial of the Federal

Ministry of Trade andInvestment, has announcedthe sealing of a constructionfirm, PRODECO, in PortHarcourt for violating afederal law. Ovat, theCoordinator of Weights andMeasures Department of theMinistry in Port Harcourt, saidthat PRODECO was sealed for“non compliance with Section17 of the Weight andMeasures Act, 2004``.

He told newsmen in PortHarcourt that PRODECO wassealed to serve as deterrent toothers. ``

32— Vanguard, MONDAY, OCTOBER 22, 2012

Interview

At the just concluded IMF/World Bank AnnualMeetings in Tokyo Japan, the Nigeria delegation ledby Dr. Mrs Ngozi Okonjo-Iweala had an interactive

session with the Nigeria media representatives at the ImperialHotel, Tokyo. In the company of the CBN Governor SanusiLamido Sanusi, the duo fielded questions from reporters.They spoke of the lessons learnt from the meeting, therationale for the $75 per barrel oil benchmark for 2013 budget,the effects of the dollarisation of the Nigerian economy, theWorld Bank facility waiting for Nigeria to use among others.

Increasing crude oil does not increase g

By OMOH GABRIELand EMMA UJAHwho were in Tokyo

Excerpts

What plan do you have inengaging the legislatures tosee reasons with you inmaintaining the 75 oilbenchmark?

Okonjo-IwealaOn the issue of the

benchmark, the presidentpresented the budget at thebenchmark of $75 but theHouse of Representative saidthey want it at $80 per barrel.The Senate has made nopronouncement on the issue ofbenchmark price at themoment, so I do not know thefull position of the NationalAssembly. But I believebecause what I have heardfrom the members of theSenate is that they also believethat $75 is a reasonable pricebut for the House ofRepresentative, I heard themare saying they will like tomake some inputs. They areinsisting on making inputsinto the budget. We areworking with the finance andthe appropriation committees.We have been talking to themboth in the senate and in theHouse of Representative.

Our job is to present all thelogical reasons why this is theright thing to do for theeconomy, and try to show themthat this is not out of sentimentbecause benchmark prices arenot issues one will just sitdown in a room and make up,they are based on fundamentaleconomic analysis and weactually have a model whichwe have been using to projectthe Nigeria oil benchmark overthe past two years.

So, we have to have anapproach because if you do itin an arbitrary fashion, whichmeans that at any point intime, you don’t have a base todefend why it is this numberas opposed to the othernumber.

So, we are very much readyto discuss with our colleagues.We understand the issue thatthey want; they are saying thatthey want to reduce the deficit,they want us to spend more,and we have addressed theissue of spending more. I thinkwe have given enough room,actually the figure shouldhave been $72 a barrel and togive the country the room tospend more, we adjusted themodel a little bit and came upwith $75 to allow a little bit ofa buffer, and accommodate theconcerns.

Now saying that because wedid that they will now jump itby another $5 to $80, is taking

,

,the economy in a direction andI can’t say it enough.Professionally, neither thecentral bank governor normyself advised that this isgood for the economy and youhave universally heard all theeconomic analyst in theeconomy. None of them hassaid that the $80 is the rightway to go; none that I havelistened to, from BismarkRewane to Frank Nweke Jr, allthose that had so farcommented; no one has saidthis is not the right way to go.Two things here, first you haveto listen to those who will beimpacted by the budget andwe have to listen also to basicprofessional reasons why thisshould not be done. Managingthe economy is not a popularitycontest, and there is a bit ofreason to it, that is why wewent to school to study how todo it. If anyone can just wakeup and then just manage theeconomy anyhow; that is whyeconomy is going the wrongdirection, because sometimes,something that is populace oryou think this is the right thingto do may not be the right wayto make that economy work.

The only reason why Africaneconomies are growing todayis simply because Africancountries did the right thingin terms of economic policiesin the last ten years and nowthey are reaping the rewards;so that is what I have to tellyou about our engagement

What was the secondquestion, or you want tocomment.

SanusiIf I can talk on the

benchmark, because I think wealso need to help guide someof the arguments. First of all,increasing benchmark doesnot increase governmentrevenue; government revenue

comes from how much oil yousell and at what price.Increasing the benchmarkincreases the amount of moneyto be spent and I think it isimportant to note that. Nowhow do you address some ofthese issues? First of all,historically, even when we gotthe benchmark of $75, if NNPCunder-performs in crude oiloutput, your effectivebenchmark is less than that$70 because you have alreadybudgeted how much you aregoing to spend. Okay some ofthe work that is being donenow is to make sure thatNNPC performs on output. IfNNPC produces and the bulkof the production is in deepoffshore, government earnsless, which hurts governmentrevenue. If you have leakagesfrom bunkering, that hurtsgovernment revenue and wethink we need to look at whatfinance is doing. All well andgood, increasing thebenchmark is not the solution,the solution is to block thoseloopholes and that is what Itold the National Assembly -don’t focus on moving from$75 to $80. What you arelooking at is $5 dollars perbarrel difference, you aregetting much more bystopping bunkering, by

increasing transparency andaccountability in NNPC, bypushing NNPC to meet upwith production benchmarksand by renegotiating the fiscalterms of the oil companies aswell.

If you look at FIRS,diversifying the revenue baseof the government, increasingall revenues sources— fromthe port reforms; all of thesethings are bringing in muchrevenue than just increasingthe benchmark because thatbenchmark simply reducesthe amount of saving byspending it today. The secondthing to remember is, theytalk about infrastructure andthe needs of Nigeria, there isnot enough money ingovernment to meetinfrastructure. You achievemuch more by creating anenvironment that allowsprivate investment to come inby trying to intermediate, sayall the money you have inpension funds into theseinfrastructure requirements,so people should not just saythat the government balancesheet is only source of financefor the economy.

Capital expenditure may be20 per cent of the budget, butif you put in enough reformsto attract money for every $1the government puts into theeconomy, you can get $5 or 6of private capital into theeconomy and these are thekind of things that I think aseconomist, we need to belooking at. These are thequestions you need to beasking in terms of what arethe reforms taking place thatare likely to result into thiskind of inflow.

Nigeria is not attractingenough foreign

investment, what is the trueposition?

Sanusi: Now, the point you

made about investment. Nigeria hadthe highest level of foreign directinvestment among African countriesthis year. We got 25 per cent of alldirect flows into Africa, we keep thenumbers, we keep them at the CentralBank because we are hearing aboutwhat is hot money, what is stablemoney; we don’t want to havecurrency crisis. If you ask Sarah, shecan give you today, as at today on aweekly basis, we have the totalamount of foreign funds that hascome in and into what areas. Withwhat is happening to power, withinfrastructure reforms, we wouldn’tget money into those areas, so wewouldn’t get FDI; FDI will come oncethe reforms move on and people likethe stability and they like the yieldand they like the returns, so it is notcorrect that Nigeria is not attractingforeign investment. Nigeria is gettingthe lion share of FDI into Africa. WhatI feel is important is to get that FDIinto the right areas, the areas theCBN is promoting - power,infrastructure, the structural changesthat we want to achieve.

These are the kinds of argumentsthat we need to put up so that wewouldn’t get bogged down withincrease benchmark from $75 to $80.

,

,

First of all, historically, evenwhen we got the benchmark of$75, if NNPC under-performs incrude oil output, your effectivebenchmark is less than that $70because you have alreadybudgeted how much you aregoing to spend

I think we have given enoughroom, actually the figure shouldhave been $72 a barrel and togive the country the room tospend more, we adjusted themodel a little bit and came upwith $75 to allow a little bit of abuffer, and accommodate theconcerns

Okonjo-Iweala


Interview

e oil benchmark pricese government revenue

,

,There is no magic that adding $5per barrel you have some immediatesolution. It doesn’t solve theproblem of quality of spending, itdoesn’t solve the problem ofattracting foreign investment, in factit may make it worse, and it mayhurt our credit rating. We’ll be seenas irresponsible when everybody isdoing austerity we are spending;when everybody is saving, we arethrowing it away. It might hurt ourcredit rating and increase the costof borrowing for us.

The question of thedollarization of the Nigerian

economySanusi: The dollarisation of the

economy is a big problem for all ofus and it is something that we aregoing to work toward somehow, butone major plank of that dollarisationwas the N5000 Note because one ofthe reasons people go for Dollar andthis is the reality, if you fightdevaluation over sometime, theNaira is not just a medium ofexchange, its still of store value. Ifyour currency loosescompetitiveness as a store of value,you have a problem. You want tocarry people, carry $10,000 that is

N1.5 million in your pocket.70 per cent of the dollar thatpeople buy from outside arenot for transaction outsideNigeria; they move the dollarfrom one part of the countryto another. In fact, from onepart of Abuja to another part,and in a brief case you cancarry hundred thousanddollars, that’s N50 million.Part of the logic for reducinghigh denomination is toprovide genuine high valuecash users with a note that isa store of value as our firststep towards our attempt toeliminate because the dollarhas become the secondnational currency. We are allworried about it and we havebeen coming out to makepolicies where we are goingto stop selling cash toother…create the account, ifyou want to pay for medicalbills abroad, give the hospitalaccount, if you want to payschool fees, do transfer likeeverybody else, if you want totravel, do travelers checksand get the card, instead ofall these people movingaround with dollars. But then,what will happen, you wantN3 million transaction, youhave to carry two bundle ofyou know this part of the logicof bringing in a higherdenomination for people who

do high value cashtransactions to reduce theamount of papers and why doI ask that question, it isbecause you are nowbeginning to see some of theconcerns that we have asmanagers of the economybecause we have to print somuch paper and its becausepeople don’t want to carry somuch load that they arecarrying dollars, that is partof the reasons why they arecaring dollars and we cannotlet it happen in America. Youcan’t just go and transact withPounds Sterling, you cannotdo it…but we will deal withit, it will stop.

What are we taking awayfrom these meetings?

Okonjo-IwealaFirstly, the global economic

environment is still uncertain.The Eurozone has contracted,America’s recovery is fragile,therefore countries have totake care to build buffers,particularly countries that aregrowing like Nigeria has totake care to build up somebuffers as some safeguardnow. We are already doing itthat is the good news. That iswhat CBN Governor is talkingabout; the collaborationbetween fiscal and monetarypolicies. You know on themonetary policy side he isdoing what he needs to do inreaction to what the fiscalauthority do. If we spend toomuc,h he has to protect anddefend the naira and fightinflation, so he has been

doing that. On our own side,we have been trying to beprudent, that is how I will putit because I believe we havealso given quite enough roomfor spending. Like thegovernor said, the quality ofspending is important so weare taking away the messagefrom this place. Build thebuffers; channel yourspending into the right areasso that you can get impactand the impact we are lookingfor in Nigeria is the creationof jobs because we just do notwant to grow. We want thosesectors like agriculture, weare channeling resources intoagriculture, intoinfrastructure, and even tohuman development in otherto make sure that we growinclusively, meaning we alsotarget those who are at thebottom line of the ladder andgenerally, we are getting anendorsement for theseapproaches. The thirdmessage is on disastermanagement and reduction,we are also getting themessage that we should buildinto our economicdevelopment approach. Youknow the issue of how toprevent and manage disasterand the Japanese havewritten a paper for everybodybecause of the disasters theyhave had, and they gave alead paper where they talkedabout the approach for doingthis and we have also takenaway that message fromthere. Giving a slot, first thingis letting the internationalcommunity know that wehave had flood disasters andthat Mr. President is doingeverything to try and help usdeal with this issue with ourown resources and that, thosewho will also want to supportus are welcomed to do so.

SanusiI think one issue the

minister mentioned now isthat we have just met with theWorld Bank team, and we aregoing to meet with the IMFand this is not something tobe discussed publicly. I thinkone of the things we feltconsistently is that they feltthat we are doing the rightthing. We are actually doingthe right thing at this point intime and I think we shouldcontinue to do exactly whatwe are doing. I think it is animportant message in form offeedback using Nigeria as anexample for what other Africacountries should be doing.

You heard her when she saidit publicly in her speech andthis is the message wecontinue to repeat privatelythat they have encouraged usto continue to do what we aredoing and I think it isimportant for opposition backhome to understand that thosewho are in this field, that aresaying what we are doing isthe right thing and for them,they should at least trust thejudgment of the people. Whenthey said, ‘look what youpeople are doing is the rightthing, we encourage you tocontinue doing it.

The dollarisation of theeconomy is a big problem forall of us and it is somethingthat we are going to worktoward somehow, but onemajor plank of thatdollarisation was the N5000Note

Sanusi I think one of the things we felt consistently is that they felt that we are doingthe right thing

CMYK


CMYK












CMYK


Business & Economy

“Why is it that theprinciples of economics whichwork anywhere else in theworld don’t work in Nigeria”,asked President IbrahimBabangida, IBB, out ofexasperation in the 1990s. Inmy letter to the GuardianEditor, my reply to IBB, wassimple. The principles ofeconomics presumed that thepeople adopting them arereasonable and honest.Nigerians are neitherreasonable nor honest”. Westill are the way we wereduring IBB’s government.AMCON is another testimonyto the fact that measures andpolicies which have producedoutstanding resultsworldwide fail in Nigeriabecause those placed incharge collude withdishonest people toguarantee failure. The AssetsManagement Corporation ofNigeria, AMCON which wasestablished in July 2010,when trillions of bank loansbecame toxic, similar to theTroubled Assets ReliefProgramme, TARP, in the US,during the global financialcrisis, has failed to turn thefortunes of Nigerians aroundbecause the funds providedfor AMCON operations haveagain fallen into the handsof the same dishonest peoplewho made AMCONinevitable in the firstinstance. Consequently,banks have no funds to lend,domestic investment hascome to a halt and jobs arenot being created – whilegovernment officials lie aboutit.

The Nigerian Governmentis one organization whichoperates according to thecounsel of not letting yourright hand know what yourleft hand is doing. A signshould be placed on the frontentrance of every Ministry orgovernment agency sayingSituation Normal, EverythingFouled Up, SNEFU. Secrecyis even strictly maintainedbetween agencies and theirsupervising Ministries. Many

AMCON, Bank lendingand jobs –2,

,readers, with not even longmemories, would recollecthow one Minister announcedthat his Ministry had created1.3 million jobs. When Iraised an objection, it turnedout that the figures originatedfrom a bank supervised by theMinister. When contacted, thebank reported back that only300,000 jobs had beencreated. Even that claim couldnot be substantiated. Lying,with a straight face, is rapidlybecoming the trademark ofmany officials of theJonathan administration.

AMCON is the latest ofthe many agencies ofgovernment which we

establish for theaccomplishment of a lofty aimbut which soon becomebogged down in corruptionand endless probes.Meanwhile its original

mission, which is to buy toxicloans from banks, and tonegotiate with the debtors,more like dead beats, toaccept more lenientrepayment terms, oncondition that they will thenrepay, as and when due, forthe funds to be returned to thepool for lending to newventures. Almost all the toxicloans were incurred by largecompanies owned by peopleclose to the corridors ofpower. Small and mediumscale enterprises accountedfor next to nothing among thetoxic loans for two reasons.While banks, for reasons soonto be disclosed, don’t wastetime perfecting the loanagreements with small scaleenterprises and very speedilymove to recover their loanswhen necessary, they seldommove against the“billionaires” whose

companies have taken loans.Yet, it is the BIG businesseswhich continue to attractloans from banks.Furthermore, on account ofdeliberate corrupt practices,loans to habitual bad deadbeats are never fullyperfected. Thus when theydefault, the bank has a toughtime collecting. Anothervariation of the scam is for thedirectors of the banks,especially the ManagingDirectors, to lend to their owncompanies, or those of theirrelatives. When those loansbecome toxic nobody cancollect. That was made clearin the Cecilia Ibru case andthe same pattern is repeatingitself in all the cases nowgoing on in court. Invariably,funds, meant for lending tohundreds of thousands ofhonest small businesspeople, are taken out of thebanking system by a fewpeople who don’t pay back.

AMCON became necessarybecause the Central Bank ofNigeria, CBN, underProfessor Soludo, allowedbanks to siphon funds out ofthe banks for illegal andcorrupt practices. It is onlynow that the CBN and theNational Assembly, whichshould have been performingtheir statutory oversight andsupervisory functions, arenow paying attention. That isakin to bolting the ranch gateafter all the cows have fledbecause, once again, publicfunds have, throughdeliberate corrupt practiceshave been allowed todisappear into private non-productive pockets.

Unlike the Troubled AssetsRelief Programme, TARP,

which had helped to sanitiseand stabilize the US financialmarkets, AMCON has madevery little progress in thatregard and is even prone todeepen the problems in thefuture. While TARP hadrecovered $256 billion byAugust of 2011, more than the$245 billion which the USgovernment pumped into it,AMCON has failed to recoverup to half of the taxpayers’money that was devoted tothat copy-cat measure.

The reason is not hard todiscover. While the

managers of TARP, withoutexception, were people withnames and integrity toprotect, the same cannot besaid of their Nigeriancounterparts. And, whileTARP, operated in a countrywith respect for institutions,ours is a nation in whichpersons selected to manageinstitutions, especially thosecontrolling large sums, regardtheir appointments as theirown share of the nationalcake. No Nigerian institution,especially where large sumsare involved, had lasted formore than two years withouta scandal erupting. AMCONis now under suspicion of amajor scandal involving highprofile debtors who have alsobeen involved in serialquestionable financialtransactions.

Nothing points to deliberatecollusion more than the list ofthose who were recentlyblacklisted by the CBN fromobtaining bank credits untilfurther notice. Let us focus ontwo, whose names haveappeared on virtually everyscandal in this country in thelast five years. This is vitalbecause every professionalbanker or financial expertknows that one of theprincipal criteria for grantingcredit is character –which hasmany elements. But, thecardinal attribute is well-established integrity.

AMCON became necessarybecause the Central Bank ofNigeria, CBN, under ProfessorSoludo, allowed banks to siphonfunds out of the banks for illegaland corrupt practices. It is onlynow that the CBN and theNational Assembly, whichshould have been performingtheir statutory oversight andsupervisory functions, are nowpaying attention

A shipper, MrChristopher Okorie, has

advised the FederalGovernment to expediteaction on maintenancedredging of River Niger toavoid recurrence of flooding.Okorie, the Chairman, PhonicMarine Ltd., told the NewsAgency of Nigeria (NAN) in

Wamakko orders payment of salary before Sallah, sets upsubsidy fund management

Gov. Aliyu Wamakko ofSokoto State on Friday

directed the state Ministry forFinance to pay the Octobersalaries of civil servantsbefore Sallah. The directivewas contained in a pressstatement issued inSokoto by Mallam Sani Umar,the Senior Special Assistant tothe governor on Media.

It said the governor alsodirected for the payment ofN18,000 minimum wage tolocal council workers withinthe next 30 days. Thestatement said the Ministryfor Local Government andChieftaincy Affairs wasordered to liaise with the

office of the Head of Serviceto effect the payment.Meanwhile, Wamakkohas inaugurated a 13-man

committee on fuel subsidyf u n d r e i n v e s t m e n t ,under former governor of thestate, Alhaji Yahaya

Abdulkarim. He directed themto develop a plant o e n s u r e p r u d e n tmanagement of the fund and

its investment in viableprojects that would havepositive impact on the lives ofthe people.

Shipper advises FG to expedite maintenance dredging of River Niger

Port Harcourt thatmaintenance dredging,which should be quarterly,should also apply to otherwaterways.

The News Agency of Nigeria(NAN) recalled that theNational Inland WaterwaysAuthority (NIWA) said it hadcompleted the capital

dredging of the river morethan two years ago. Okoriesaid that maintenancedredging would facilitateregular usage of the river byvessels and would alsocheckmate the water level.“This is why governmentshould pay proper attentionto maritime sector and

encourage watertransportation.

The flood will not have takenus by surprise if we havebeen using vessels and boatson our rivers and seas. Wewould have known practicallythe surge of the water if wehave been conversant withthe waterways.

CMYK


Advertising, Media & Marketing

Shoprite opensin Ilorin

Shoprite, a South Africanmultipurpose retail store

group will be opening inIlorin, the Kwara Statecapital, in the next couple ofdays.

The new Shoprite outletwould be commissioned laterthis month and would belocated within the newly builtKwara Mall, which is a jointventure between Kwara StateGovernment and PersianasGroup, owners of the PalmsShopping Mall in VictoriaIsland, Lagos as well as PoloParks, Enugu.

The Store, when it iscommissioned according tothe Human ResourcesManager, Adeola Kagho willcreate sustainableemployment opportunities inthe state.

Kagho said the Ilorin outletwill create approximately 200direct jobs and over 1000indirect employment for thepeople of Ilorin and environs.

Compared to the PalmsShopping Mall outlet, theIlorin store will boast of3,700m2 shopping space, andwill also have someinternational brands such asKFC and Max Clothing asneighbours.

Apart from job creation, thestore has already begundiscussions with local farmersand suppliers to ensureefficient delivery of productsand services.

In another development,the brand, for the first timeextended its corporate socialresponsibility initiative- Help-Change-A-Life campaign tostate by donating shoppinggroceries worth thousands ofNaira to Kwara State ChildrenCentre. Presently, Shopritehas outlets in Ikeja, Surulere,Victoria Island all in Lagos,Enugu and Abuja.

DDB wins

Luerzer’s

award

DDB Lagos, a creativeadvertising agency has

again affirmed its position asone of the leading agenciesin the country, as it declaredthat it has won the Luerzer’saward.

The firm recently had one ofits creative works named‘Luerzer’s Archive print Ad ofthe week.’

Luerzer ’s Archive, theforemost advertisingmagazines in the world, hadafter a rigorous processselected DDB Lagos’ Ad overother print advert materialscollated from around theglobe.

The “Speechless” Ad wascreated for DDB’s numerousclients, Girl Hub. A non-governmental organization,Girl Hub, strongly believesthat the typical girl child inNorthern Nigeria faces seriesof social vices namely:poverty, disrespect and abuse.

Telecom industry: Marketing strategyfreak out, challenges & resilience

Stories byPRINCEWILL EKWUJURU

A look at thetelecommunicationsindustry, one will

conclude it has fared welldespite challenges inherenton achieving their objectives.History, they say, accounts forgreat leaps, endurance, andextraordinary drive. We hardlyrecognize them when it ispast, but only recognised incomparison.

Simply, resilience is theability to surviveextraordinary challenges.Challenges come in diverseforms, human or machinery.Challenges have degrees andthe Nigeriantelecommunications industryhas known a higher degree ofthat.

Overtime, thetelecommunications industrywas chaotic and restricted toa regimental portfolio whichlined the Nigeriancosmopolitans with muddledcables and poles that made aneyesore of a civilized society.

We have to remember that itwas into this unwholesomeenvironment that the GSMnetwork operators that haveinvested in the nation, puttheir resources with a couragethat has never receivedenough appreciation. MTNand others are references.

Consequently, thesecompanies were a few of thegains of Nigeria’s democracy.In a stuttering economy thatproved a challenge to thereturning titans of the nation’sdemocratic re-emergence,what was needed was a cleardeparture from the old order.

The challenges were visible.

The issue of affordability washuge (but as huge as it wasin the fixed telephony days);road networks to traverse ruraltowns to plant network mastsand maintain them wereeither unavailable or in badshape. There were also theissues of contending withtraversing the hinterlands. Insummary, penetration andsustainability were issues.Notwithstanding, MTN setout to surmount the scales ofchallenges in their degrees bya sheer ‘can-do’ spirit thatmeant, back then, the

company was prepared for thedistance.

While some of the earlystarters have witnessed aboutfive transitions, MTN hassustained its brand image,thanks to the brand’s ‘can-do’spirit, continuous networkswap outs and expansion –strong reasons it stays top.

As tricky as the map ofsurvival appears, thetestimony of those who tookthe route can never beundermined. Econet Wirelesswas sold to Vodacom, then to

Vmobile, to Celtel, Zain andAirtel. The thin line that stillsustains the network is notmanagerial competence orinnovations. It is the viabilityof the business itself whichonly the strong can hold forlong. MTN has thus proven -with an admirable strength ofsoul and force of habit – thatit is a long distance runner.

The same fundamentalobjectives that brought in theaforementioned companieshave also brought in telecomscompanies like Glo andEtisalat.

GHD: Break chain of infection —Dettol

tells kids ...targets 1.2m kids

Dettol, the flagship brandof Reckitt Benckiser

Nigeria Limited has urgedchildren to break the chain ofinfection as it embarks onHandwashing campaign inschools to mark 2012 GlobalHandwashing Day (GHD),even as it targets 1.2 millionkids.

The campaign tagged;‘Good Health in our Hands’was fused into theprogramme, “21 days to aHealthy Hands habit withDettol” and was organised tosensitize the students on theimportance of hand washingand how to wash their handsproperly, the company said.

Speaking, Mrs. OfulueEsther, Head of Primary,Queensland Academy,

Nursery &Primary School,where the hand washingdemonstration was made, saidthe school has beenundertaking handwashing inthe school, but not to themagnitude Reckitt Benckiserand Dettol have taken it.

According to her, the handwashing lesson is importantfor kids everywhere, but it’sespecially important in partsof the world where peopledon’t have easy access toclean water and toilets.

“Diseases are easily spreadfrom hand to mouth by tinygerms too small to see. Buthand-washing with soap canhelp prevent diarrhea-relateddiseases such as typhoid andcholera, and respiratoryinfections including

pneumonia and flu.” she said.Speaking on the 2012

campaign, Israel Opayemi,Chief Strategist, ChainReactions Nigeria, the PublicRelations Consultants toReckitt Benckiser, said thecampaign underlines thecommitment of the companyto the environment where itoperates.

“As a caring company, theconsumers are at the centre ofdecision-making in ReckittBenckiser. That is why all theproducts are carefullyselected in a manner that theycontinue to build brand equitythat delivers value to theconsumer at all times. So, thevarious initiatives on hygienefrom the companydemonstrate Reckitt

Benckiser's leadership ininnovation. The company ispleased to be at the forefrontby promoting the generalwell-being of the Nigerianpeople, thereby giving themmaximum protection againstgerms so they can be moreactive,” he said.

On the impact of thecampaign in the past threeyears on the brand, Opayemisaid “I think first and foremostthe greatest impact that hasbeen recorded through thiscampaign is the memorabilitytest we have conducted bygoing back to the schoolswhere the campaign havetaken place over the yearswhen we have come back toask the children, which brandcan they identify with whenit comes to hygiene and over80 per cent response we haveis Dettol."

BRIEF

Shoprite staff Ibrahim Yau (second left), Administrative Manager Shoprite, Aisha Bolakaleand the matron of the Kwara State Children Reception Centre, Hajiya Iyabo Aduke Maiyaki,the children and staffs of the centre during Shoprite Help-Change-A-Life donation to theCentre recently.

CMYK


CMYK

0817 002 3569

Omoh Gabriel - Group Business EditorBabajide Komolafe - Acting Finance EditorClara Nwachukwu - Energy EditorPeter Egwuatu - Head, Capital MarketYinka Kolawole - Snr Bus. CorrespondentFavour Nnabugwu - Insurance CorrespondentGodwin Oritse - Maritime CorrespondentGodfrey Bivbere - Maritime CorrespondentYemi Adeoye - Energy CorrespondentOscarline Onwuemenyi - Energy CorrespondentFranklin Alli - Industry ReporterMichael Eboh - Capital Market ReporterAmaka Abayomi - Money market ReporterEbele Orakpo - Energy ReporterIfeyinwa Obi - Maritime Reporter

CONTRIBUTORSPrincewill Ekwujuru - Media/MarketingNaomi Uzor - IndustryProvidence Obuh - Capital MarketLAYOUT - Graphics Department

,

,

Business Economy

In the light of the usualextended recess duringthe forthcoming Id el-

Kabir and the Christmas/NewYear celebrations, theLegislature may have,possibly less than two monthswithin which to consider andapprove the 2013 budget,which President Jonathan laidbefore the National Assemblylast week.

Instructively, in successful

economies elsewhere,budgets would traditionallybe laid before parliament atleast four months before theNew Year, to ensure thatminute details andimplications of budgetproposals would have beenthoroughly assessed withoutthe burden of time pressure. However, the NationalAssembly’s current insistenceon full implementation of the2012 budget before itsapproval of the 2013projections may suggest that,as in the past, legislativeendorsement may not comeuntil sometime in the firstquarter of 2013.

Incidentally, the proposalsubmitted by PresidentJonathan makes no apparentprovision for the payment ofcontroversial fuel subsidy;indeed, there is no indicationthat contrasting subsidyfigures from criticalgovernment agencies onsubsidy values have beenresolved. In other words, inview of subsidy payments ofover N2tn in 2012, we mayassume that Mr. Presidentmay have adroitly subsumedsubsidy payments as a firstline charge on the totalrevenue projection of N10.84trillion in 2013.

Indeed, it is not clear howthe Executive arrived at theprojected total revenue figure

Understatement of projected revenuein 2013 budget?

of N10.84 tillion, asindications of revenueinflows from governmentincome streams suggest thatthe 2013 revenue projectionsmay be grossly understated. In the first place, oil revenuetraditionally contributes over80 per cent of totally collectedfederal revenue each year;that is about N8.64 trillion of2013 total projectedrevenue. In other words,other sources of internallygenerated revenue mayaccount for the balance ofabout N2.2tn.

This relatively paltryfigure would appear to

be a contradiction of thevastly improved performanceof the Federal InlandRevenue Service (FIRS),which reports suggest mayactually surpass the N5tnthreshold this year. Incidentally, FIRS confirmedactual revenue collection of

about N4tn by third quarterof 2012; so, a 2013 projectionof N5tn total revenue shouldbe quite feasible. Inaddition, from availablereports, the Customs Servicerevenue collection has alsoexceeded N400 billion as atAugust 2012. This maysuggest that all things beingequal, we may alsoconfidently expect up to N500billion revenue contributionfrom the Customs Service in2013.

In summary, therefore, totalrevenue projection for 2013should be over N14 trillion,made up of N8.6 trillion(about $50bn) from crude oilsales, N5 trillion internallygenerated revenue and N500billion customs duties andlevies.

Indeed, NNPC’s reports ofcrude output often in excessof 2.5 million barrels withcrude prices hovering at anaverage of $100 per barrel in

spite of world economicdownturn in 2012 maysuggest that the aboverevenue projection of N8.6trillion may not be anoverstatement.

In any event, even if weaccept President Jonathan’stotal projected 2013 federalrevenue of N10.84 trillion asfairly accurate, the componentof N3.89 trillion total revenueavailable for the federalgovernment budget wouldalso seem to be a grossunderstatement. Theconstitutional revenuesharing formula of 52 percent for federal, 26 per centstate and 22 per cent localgovernments would suggestthat federal allocationsshould be a minimum of aboutN5.5 trillion, instead of N3.89trillion indicated in the 2013budget statement.

Thus, in the event thattotal federal expenditure

projection is only N4.92trillion for 2013, we may, infact, actually have a budgetsurplus of over N500 billioninstead of the apparent deficitof almost a trillion naira inMr. President’s budget 2013statement. In the light of theaverage cost of about 15 percent for such governmentborrowings, this wouldreduce the debt burden, andalso reduce debt servicecharges by over N150 billion!

Incidentally, the allocationof N591.76 billion for debtservice accounts for over 12per cent of the 2013

expenditure budget, andremains the highest sectoralallocation well above the N426billion allocated foreducation, N279 billion forhealth, and the paltry N81billion for rural developmentand agriculture (whichpresumably also includesprovision for water resources).

Pa r a d o x i c a l l y ,government’s heavy

borrowings have not broughtany commendable improvement to the welfareof Nigerians; thatnotwithstanding, thecommercial banks, whoappear to be government’sfavourite children, now postenviable profit figures, which,according to Aig Imokhuede,Managing Director of AccessBank, may exceed 10 per centof the compounded profitfigures of all European banksthis year.

In the light, however, of theapparent reluctance of thebanks to provide low-costfunds to the real sector,Nigerians may wonder aboutthe source of these huge bankprofits. The answer to this,of course, is not farfetched;why, for example, wouldanyone expect banks toabandon the juicy yields ofbetween 12 and 17 per centfor government’s risk-freeborrowings for the sake of thehuge challenges of the realsector?

SAVE TH E NAIRA, SAVE

NIGERIANS!!

In summary, therefore, totalrevenue projection for 2013should be over N14tn, madeup of N8.6tn (about $50bn)from crude oil sales, N5tninternally generated revenueand N500bn customs dutiesand levies

Akintola WilliamsDeloitte has launched

one of its most importantprojects since it took theleading role in InternationalFinancial ReportingStandards (IFRS) with theunveiling of Deloitte IFRSAcademy in Lagos, designedto help trainees toappropriately apply IFRS totheir various functions.

Israel Nnanna, speaking onbehalf of Uwadiae Oduware,Deloitte IFRS Leader andhead of faculty, said theAcademy will continue to rununtil IFRS is fullyimplemented in Nigeria.

The Academy is the platformfor finance professionals andgraduates, executives andorganisations in need ofInternational FinancialReporting Standards (IFRS)training and offers a blend oftheory and practices to enableparticipants apply the

Deloitte opens academy to maintain IFRSmomentum

standards, as well as theunderlying concepts andprinciples.

“Our approach to IFRSlearning is interactive and isbased on skills transfer. Indrafting the trainingcurriculum, we recognizedthat learning needs will varybased on individual’s role,knowledge level, experienceand industry.

"We therefore designed fourdistinct programmes to meetthe learning needs of variousclasses of people as follows,”says Oduware.

The Academy is builtaround platforms. GraduateAcademy (DGA) platform isdesigned for financegraduates to be trained inIFRS. It is aimed at assistingthem develop expertise ininternational financialreporting and have smoothtransition into the workplace.The programme is built

around the work environment.Successful incumbents areadmitted for six monthscomprising three monthsclassroom learning and threemonths of practical training.

The Professional Academy(DPA) is for preparers offinancial statements andthose who make input to thepreparation financialstatements. The programme isdivided into modules madespecific to industry andconsistent with the functionalareas within theorganisations. The DeloitteExecutive Academy isanother key platformdesigned for busy executivesto help them navigate theissues of IFRS.

”IFRS must be learned bythe executives because of thecritical role financial reportingplays in decision making.This programme is designedto assist executives to fast

track their learning process,”says Oduware who says thetraining will be run in streamsto accommodate the trainees.Oduware said that this is on-

demand training, availableentirely at the discretion of theexecutive and structured toalign with the schedule of theparticipating executive.

Date post:	22-Mar-2016
Category:	Documents
Upload:	vanguard-media-limited
View:	243 times
Download:	0 times

financial vanguard october 21 edition

Documents