C M Y K MAY 5, 2014 Continues on page 18 CURRENCY BUYING CENTRAL SELLING CBN Exchange rate as at 02/05/2014 109.55 -0.78 100.82 -1.12 207.0 -5.45 2,943.00 -25.00 17.11 -0.01 DOLLAR 154.73 155.23 155.73 POUNDS 259.8845 260.7243 261.5641 EURO 213.9606 214.652 215.3434 FRANC 175.291 175.8582 176.4246 YEN 1.5103 1.5152 1.5201 CFA 0.3074 0.3174 0.3274 WAUA 239.1355 239.9082 240.681 RENMINBI 24.7583 24.8387 24.9192 RIYA 41.2569 41.3903 41.5236 KRONA 28.6505 28.7431 28.8357 SDR 239.6768 240.4513 241.2258 N IGERIA, South Africa and Egypt account for about half of the African economy says new data released by the World Bank Group last week. The report which ranked global economies on the basis of the strength of their currency said that China will overtake the United States of America by the end of 2014 as the largest economy in the world. The report said that low income economies, as a share of world GDP, were more than two times larger based on Purchasing Power Parity, PPP, than respective exchange rate shares in 2011. Yet, these economies accounted for only 1.5 per cent of the global economy, but nearly 11 per cent of the world population. Roughly 28 per cent of the world’s population lives in economies with GDP per capita expenditures above the $13,460 world average and 72 per cent are below that Nigeria, S-Africa, Egypt account for half of Africa’s economy — World Bank • Global economy produced $90trn goods in 2011 • Switzerland, Norway, Bermuda most expensive economies • Malawi, Niger, Burundi, Liberia among lowest per capita • Bermuda, United States, China, Luxembourg impact citizens more average. The International Comparison Program (ICP) which released the new data said that the world economy produced goods and services worth over $90 trillion in 2011, and that BY OMOH GABRIEL, Business Editor From left: Arunma Oteh, Director General, Securities and Exchange Commission (SEC); Dr. Yemi Kale, Statistician General, National Bureau of Statistics (NBS); and Bismarck Rewane, CEO Financial Derivatives Company Ltd at the 2nd Quarter SEC Learning Series on “The Rebased GDP and its Impact on the Nigerian Capital Market” which took place at SEC’s Corporate Head Office in Abuja.
NIGERIA, South Africa and Egypt account for about half of the African
economy says new data released bythe World Bank Group last week. Thereport which ranked global economies
on the basis of the strength of theircurrency said that China will overtakethe United States of America by theend of 2014 as the largest economyin the world.
The report said that low incomeeconomies, as a share of world GDP,were more than two times largerbased on Purchasing Power Parity,
PPP, than respective exchange rateshares in 2011. Yet, these economiesaccounted for only 1.5 per cent of theglobal economy, but nearly 11 per centof the world population. Roughly 28per cent of the world’s population livesin economies with GDP per capitaexpenditures above the $13,460 worldaverage and 72 per cent are below that
Nigeria, S-Africa, Egypt accountfor half of Africa’s economy— World Bank•Global economy produced $90trn goods in 2011•Switzerland, Norway, Bermuda most expensive economies•Malawi, Niger, Burundi, Liberia among lowest per capita•Bermuda, United States, China, Luxembourg impact citizens more
average.The International Comparison
Program (ICP) which released thenew data said that the world economyproduced goods and services worthover $90 trillion in 2011, and that
BY OMOH GABRIEL,Business Editor
From left: Arunma Oteh, Director General, Securities and Exchange Commission (SEC); Dr. Yemi Kale, StatisticianGeneral, National Bureau of Statistics (NBS); and Bismarck Rewane, CEO Financial Derivatives Company Ltd at the2nd Quarter SEC Learning Series on “The Rebased GDP and its Impact on the Nigerian Capital Market” which tookplace at SEC’s Corporate Head Office in Abuja.
Cover Story
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18 — Vanguard, MONDAY, MAY 5, 2014
Continues on page 19
,
,
,,
almost half of the world’s totaloutput came from low andmiddle income countries.
Six of the world’s 12 largesteconomies were in the middleincome category (based on theWorld Bank’s definition).When combined, the 12 largesteconomies account for two-thirds of the world economy,and 59 per cent of the worldpopulation.
The PPP-based world GDPamounted to $90,647 billion,compared to $70,294 billionmeasured by exchange rates.Middle income economies’share of global GDP is 48 percent when using PPPs and 32per cent when using exchangerates.
The approximate medianyearly per capita expendituresfor the world – at $10,057 –means that half of the globalpopulation has per capitaexpenditures above thatamount and half below.
Which are the largest
economies?According to the report, the
six largest middle incomeeconomies are China, India,Russia, Brazil, Indonesia andMexico which account for 32.3per cent of world GDP, whereasthe six largest high incomeeconomies are United States,Japan, Germany, France,United Kingdom, and Italywhich account for 32.9 percent.
Asia and the Pacific,including China and India,account for 30 per cent of worldGDP, Statistical Office of theEuropean Communities(Eurostat) - and theOrganization for Economic
Cooperation and Development(OECD) - 54 per cent, LatinAmerica - 5.5 per cent(excluding Mexico, whichparticipates in the OECD andArgentina, which did notparticipate in the ICP 2011),Africa and Western Asia about4.5 per cent each.
China and India make uptwo-thirds of the Asia and thePacific economy, excludingJapan and South Korea, whichare part of the OECDcomparison. Russia accountsfor more than 70 per cent of theCIS, and Brazil for 56 per centof Latin America.
South Africa, Egypt, andNigeria account for about halfof the African economy.
Which countries are the most
expensive?The report stated that going
by the Price Level Index (PLI)which is the ratio of a PPP to acorresponding exchange rate,the most expensive economiesin GDP terms are Switzerland,Norway, Bermuda, Australiaand Denmark, with indicesranging from 210 to 185. TheUnited States ranked 25th inthe world, lower than mostother high-income economies,
including France, Germany,Japan, and the UnitedKingdom.
Twenty-three economiesare showing a PLI of 50 orbelow. The cheapesteconomies according to thereport, are Egypt, Pakistan,Myanmar, Ethiopia and LaoPeople’s DemocraticRepublic, with indicesranging from 35 to 40.
Which countries are the
richest and poorest in percapita terms?
According to the WorldBank, the five economies
with the highest GDP percapita are Qatar, Macao SAR,China, Luxembourg, Kuwait,and Brunei. The first twoeconomies have more than$100,000 per capita. Eleveneconomies have more than$50,000 per capita, whilethey collectively account forless than 0.6 per cent of theworld’s population. TheUnited States has the 12thhighest GDP per capita.Eight economies – Malawi,Mozambique, CentralAfrican Republic, Niger,Burundi, Congo, Dem. Rep.,
Nigeria, S-Africa, Egypt account for halfof Africa’s economy — World Bank
Continued from page 17
The report further statedthat “at 27 per cent,China now has thelargest share of the
world’s expenditure forinvestment (gross fixed
capital formation)
Business Enterprise is the Answerfor Change in Nigeria Part 2
Another factor that must be overcome is the fact that most entrepreneursin the country reside within the city of Abuja. Business enterprise needs tobe spread about the country rather than in just the city. When starting atechnology-based business an entrepreneur can reside anywhere in thecountry that there is an internet connection and operate a business. However,other sectors are in need of entrepreneurs as well.
The improvements
Huge strides have been made in the last few years to try to tackle themany endemic problems which assail the country with political
and economic stability being seen as the key weapons in attacking thecorrosive influence of corruption. Whether the actions being taken on theground now lead to dramatic improvements in levels of transparencyand levels of corporate governance remain to be There have been anumber of improvements that is allowing Business enterprise to grow. Ifthese improvements continue and more are created, then Nigerian canescape its third world status and become an emerging economy.
The improvement includes:
Entrepreneurs are able to control their own lives and can lives and can obtain security for their families without government
interference.The Nigerian government has
now made it possible for Nigerianproducts to be shipped to Europeand the United States. If anindividual wants to manufacturejewellery and sell it online, they cannow market to U.S. and Europeancustomers.
Entrepreneurs in Nigeria arebeing offered tax incentives, such asnot having to pay so much in taxes.Increased price ceilings also serveas a great incentive.
Modern technology is finding itsway into Nigeria culture, makingthe country self-sufficient in thetechnology sector.
Although there are still barriersto break through, there is nowhereto go but up. Business enterprise isthe way in which Nigerian willbecome a developed nation.
Opportunities
There are opportunities out there to help those looking to break intobusiness venture. Venture capital can be obtained via
foundations, trusts, and NGOs. It is just a matter of researching andfinding these funding opportunities.
Established in December 1999, the Small and Medium EnterprisesEquity Investment Scheme (SMEEIS) instructed all Nigeria’s banks toput 10% of their pre-tax profit in order to invest in small and mediumsized business of their own. As of 2006, only 26% of this funding had beenused. This shows that money is there.
Nigeria also has an organization that is similar to the United State’sSmall Business Administration (SBA). The Nigerian organization is TheSmall and Medium Scale Industries Development Agency (SMEDAN).It is very young, but working on providing entrepreneurs with funding.
Skills and Ideas Development Initiatives (SKIDI) is an NGO that ishelping entrepreneurs realize their dreams in Nigeria so that they canobtain the freedom that they desires within their life. That is both financialfreedom and the ability to be with their family. There is a specific focus onrural and suburban Africa, especially since rural areas do see morepoverty. The poverty rate in Nigeria in rural areas stood at 40% in 2001.That was compared to the 35% in urban areas where more businessestend to exist.
How business enterprise helps
It is easy to just say that business enterprise is the answer for change inNigeria, but other than the fact that enterprises is the answer for
change in Nigeria, but other than the fact that entrepreneurs are givenmore freedom, it is important to evaluate other factors. For instance:
More tax money flows into the government, allowing for moreopportunities to be made available to Nigerians and for more programmesto be implemented that will work on reducing the poverty rate.
Jobs are created. In the United States, there are 2 to 3 new jobs createdper small business that is opened. It has been determined that the figuresare quite similar in Nigeria. More jobs also mean more tax money andspending that stimulates the economy.
These are the factors that make any economy operate. Money has tokeep flowing in order to keep money in the pockets of citizens.
The Nigerianorganisation isThe Small andMedium Scale
IndustriesDevelopment
Agency(SMEDAN).
From left: Mr. Tope Adeniyi, Chief Executive Officer, Mansard Health Limited; E. Olu-wabunmi Olapade-Olaopa, Professor of Surgery / Director, PIUTA Ibadan Centre and Pro-fessor Ayotunde Ogunsehinde, Acting Provost, College of Medicine, University of Ibadan ata cheque presentation by Mansard to the Pan-African Urological Surgeons Association'sInitiative for Urological Training in Africa (PIUTA), Ibadan Centre, University of Ibadanand University College Hospital, Ibadan, Oyo State.
CMYK
Vanguard, MONDAY, MAY 5, 2014 — 19
Continued from page 18
Comoros and Liberia – have aGDP per capita of less than$1,000.
Which countries devote the
most spending that directlybenefit individuals?
The World Bank reportdisclosed that “a generalmeasure of material well-beingof each economy’s populationis measured better by actualindividual consumption percapita. It said that a measure ofall expenditures in the economythat directly benefit individuals rather than by GDP per capitais more revealing of the impact
of government policy onindividuals. By this measure,the five economies with highestactual individual consumptionper capita are Bermuda, UnitedStates, Cayman Islands, HongKong SAR, China, andLuxembourg, respectively. Theworld average actual individualconsumption per capita isapproximately $8,647.
Investment expendituresThe report further stated that
“at 27 per cent, China now hasthe largest share of the world’sexpenditure for investment(gross fixed capital formation);followed by the United States
at 13 per cent. India, Japan andIndonesia follow with 7 percent, 4 per cent, and 3 per cent,respectively. China and Indiaaccount for about 80 per cent ofinvestment expenditures in theAsia and the Pacific region.Russia accounts for 77 per centof CIS, Brazil for 61 per cent ofLatin America and Saudi Arabiafor 40 per cent of Western Asia.
According to the report:“Under the authority of theUnited Nations StatisticalCommission, the 2011 round ofICP covered 199 economieswhich is the most extensiveeffort to measure PurchasingPower Parities (PPPs) across
countries ever.”ICP 2011 estimates benefitted
from a number ofmethodological improvementsover past efforts to calculatePPPs.
The ICP’s principal outputsare PPPs for 2011 and estimatesof PPP-based gross domesticproduct (GDP) and its majorcomponents in aggregate andper capita terms. Whenconverting national economicmeasures (e.g. GDP), into acommon currency, PPPs are amore direct measure of whatmoney can buy than exchangerates.
ICP implementation was led
and coordinated by the ICPGlobal Office, hosted by theWorld Bank, in partnership withregional agencies overseeingactivities in eight geographicregions: Africa, Asia and thePacific, Commonwealth ofIndependent States (CIS), LatinAmerica, the Caribbean,Western Asia, Pacific Islands,and the countries of the regularPPP program managed by theEurostat and OECD). Inaddition, two “singleton”economies, Georgia and Iran,participated in bilateralexercises with partnereconomies, without being partof any regional comparisons.
Cover Story
Economic rent seekers holddown Nigeria’s progress
that have been a clog in thewheel of progress of theNigerian nation; men andwomen whose source of wealthhas mainly been fromeconomic rent. Majority ofthose at the conference undernormal circumstance wouldnot make it. They have livedas parasites, sucking theirhost – Nigeria- dry. They havebeen stealing the nation’sresources. Knowing this, theyhave vowed never to let statescontrol their resources. They,like their sponsors, seeNigeria as their farm yard.Because oil was found inNigeria, mineral resourceswere conferred on the federalgovernment so that those whohave access to political powercan expropriate it for theirbenefit. It is not for the benefitof Nigerians, but for selfishinterest of the few who havepolitical access. This grouphas continued to perpetuatethemselves.
The struggle to control theoil wealth of the nation
has been an issue between thenorth and the south. TheNigeria Governors’ Forum(NGF) sometime in 2011raised a committee of six,headed by Governor BabatudeFashola of Lagos State, toreview the revenue formulaand submit itsrecommendation. The Lagoshelmsman said that thecommittee recommended anew formula: FederalGovernment (35 percent), the36 state governments (42percent) and the 774 localgovernments (23 percent). Thecurrent revenue formula givesthe Federal Government 52percent, states 26.72 percentand the local governments20.60 percent. The formulawas not accepted by the
powers that be. Last week, theissue raised its ugly head andcaused another heated debateat the ongoing nationalconference. The supposednorth stood against resourcecontrol and asked that the 13percent given to oil-producingstate be slashed to five percent.Who are these northerners?Who do these people speakfor? Is it the north that hasbeen so very deprived thatthese self-seeking individualsare talking about? Where hasthe money they have gotten sofar from revenue allocationbeen appropriately applied forthe benefit of the averageAlmajirai? It is when it pleasesthese rent seekers that they talkabout the north. Can thesemen look at the global bestpractice in a federating state?
Professor Adobe Adedeji, aneminent economist, in hisbook, ‘Nigerian FederalFinance, Its Development,Problems and Prospects’, saidthat federal finance, incontrast with unitary finance,is a triple division of resourcesbetween the federal authority,the regional or stategovernments, and the localauthorities. A study of federalfinance therefore involves thistriple relationship. But themost important characteristicsof federal finance are to befound in the financial statusof the ‘intermediate’ politicalentities, the states or regions,
,,
Yes in Nigeria, there isrevenue, expenditure and debtin public finance. Thequestion is; what are thesources of revenue in publicfinance in Nigeria? Up tillnow, about 90 percent of publicfinance is from oil. What aboutother natural resources that aresaid to abound in the country?In every state of thefederation, there are largedeposits of mineral resourcesthat when developed, can earnthe country more money thanoil, yet nothing is being done.
Is it normal for the control ofland across the country to bevested in the governors whilethe mineral deposits in thesame land are in the hands ofthe federal authority? If youneed a mining lease, you takepermit from the FederalGovernment but when youneed land to build or developstructures, you obtainCertificate of Ocupancy fromthe state government.
Yet, all this while, theseeconomic rent seekers have notseen anything wrong with thisarrangement. Nigeria mustbegin to operate a truefederalism in which tax policybecomes the key fiscalinstrument. States must beallowed to develop theresources in their domain andpay tax to maintain the FederalGovernment. It should not bethat every now and then theclamour for a new revenueformula begins to disturb thepolity.
Nigeria has no defined fiscalstructure in states and has not
pursued taxation as mainrevenue source as a result of
earnings from oil
WHEN President Goodluck Jonathan agreed forNigeria to hold a national dialogue on the wayforward, many saw it as an avenue to put right
what is wrong among the federating units. But Nigerians, whowere enthused by the decision, became disillusioned when thecomposition of the dialogue was made by the ever sleep-walkingSecretary to the Government of the Federation, Anyim PiusAnyim. Pius Anyim, compiled a list of the old, the same people
which are designed to performcertain functions which in aunitary system, are assignedto the central authority.
The principles of federalfinance can therefore beinterpreted to mean theprinciples which theseintermediate political entitiesand the central authorities
should follow in their fiscaloperations. The position oflocal authorities in afederation is not appreciablydifferent from their position ina unitary state, at least so faras finance is concerned.Nigeria has no defined fiscalstructure in states and has notpursued taxation as mainrevenue source as a result ofearnings from oil.
Each level of governmenthas in the last 50 years
or so, depended solely onrevenue from sale of crudewhich is monetized everymonth and shared in a formulathat is somewhat skewed in
favour of the FederalGovernment. States and localgovernments in the federationhave abandoned theirresponsibility of generatingand developing their internalresources and only dependingon the federal allocation forpayment of salaries. Thisaberration arose from the
incursion of the military intothe polity that allocatedresources based on its conceptof its command structure.
In an establishedfederalism, the principles ofpublic finance, particularly oftaxation, have receivedattention from the earliest daysof economic analysis. Themercantilist, the physiocrats aswell as the classicaleconomists, advancedpropositions concerning taxprinciples. David Ricardo andJohn Stuart Mills recognisedthe division of the subject-matter of public finance intothree aspects – revenue,expenditure, and public debt.
20 — Vanguard, MONDAY, MAY 5, 2014
CMYK
Business & Economy
THE Nigerian Contentinitiative has received
a boost as an indigenous firm,Future Concerns Group hasinvested over N3 billion in thesetting up of a service centrefor safety and protectiveequipment used in Nigeria’soil and gas sector.
Speaking at the launch,which featured United States’safety equipmentmanufacturer, and MSAService, the ManagingDirector/Chief ExecutiveOfficer, Future Concern, Mr.Tony Oguike, said the centreis targeted at promotingFederal Government’s localcontent initiative.
According to him, the centreis an intelligent one-stop shopsafety resource, featuring bestin class brands operatinglocally within globalstandards.
He noted that the centre is acost-effective service
programme, adding instantvalue and practical content tooil sector and other sectors ofthe economy.
“Prior to now, safety andprotective equipment, whichare high dollar equipment, areused as consumables. Theycost about $6,000 each. Theywere used and thrown awaywhen faulty, thereby leadingto loss of hard earnedresources. With this centre,MSA will collect thesematerials, test and repairthem for an insignificantamount of money,” heexplained.
The decision to set up thefacility, according to him, is tofurther its goals of helping tocreate jobs, empowerNigerian youth andprofessionals and also tocreate a healthy and safe workplace.
He further stated that thecompany plans to set up aPersonal ProtectiveEquipment factory in Lekki.and also delve into the
upstream segment of the oilsector.
He declared that thecompany also plans to deployrobotic high rise cleaningsolution, the next generationoptimum solution for multi-story assets.
He said, “It was a naturalprogression to upgrade ourinfrastructure operatingsystems, inventory levels, manhours and all round posturefrom distributor to currentstate, service andmaintenance resource,ultimately to a manufacturingcompany, while maintaininga high quality time, cost-effective support service forour most valued customers.
He noted that the companyhas a clear vision and missionfor its brand, which is tocontinually upgrade andimprove its existing moduleand operating systems byinteractive techniques,learning and understandingglobal trends and its marketplace.
“We continue to seek amutually satisfactory allianceprimarily with our esteemclients, our manufacturingpartners all over the world andindeed our people, our staff,”he noted.
Also speaking, the ManagingDirector, Sub-Saharan AfricaRegion, MSA, Mr. ColinOliver, said the partnership isaimed at promoting Nigeriancontent in the oil and gassector.
He said the centre will ensurethat in the near future, thecompany will continue to growits support base in Nigeria,using the opportunitiespresented by the partnership.
He disclosed that ethics andintegrity, the core values at theheart of its business were takeninto consideration whenconsummating thepartnership, adding that it isimportant to it to set up apractical and sustainablebusiness base in Nigeria toserve its clients in Nigeria andother parts of the world.
ACTING ExecutiveChairman of the
Federal Inland RevenueServices (FIRS), Alhaji KabirMashi, has said that the servicerecorded a shortfall of N140billion in revenue collectionin the first quarter of the year.Speaking at the operationalmanagement meeting of itsEastern Region in Owerri onWednesday, Mashi said thedrop in revenue was recordedin the non-oil tax.
He said the service realized atotal non-oil tax of N418 billionbetween January and March asagainst the target of N558billion. According to him, thenon-oil collection dropped fromN155 billion in January to N133billion in February and furtherdown to N130 billion in March.
“These results are notimpressive and we must doeverything possible to ensurethat we reverse this negativecollection trend,” he said.Mashi said the current focus ofthe Federal Government was toraise non-oil revenue to the levelof making up for any shortfallfrom oil revenue. He said theservice also needed to justifythe support it had been gettingfrom the government.
He urged the staff to focus ondeliberations on service deliveryand maximizing the tax revenuepotential in their areas ofoperation. He explained that theprogramme was based on eightkey initiatives which includedauditing, arrears and debt
enforcement, tax exemption,evasion of rental taxes andtaxing high net worthtransactions. Others wereregistration, filing and utilizingcommunications as a means ofenhancing compliance.
Mashi said the service hadconducted a nationwide valueadded tax and withholding taxaudits and that the results hadstarted coming in.
“We will be proactive inreviewing returns as they comein and following up to ensure
that taxpayers pay up theirassessments within the timeallowed in our laws.
“Thereafter, we will follow upthe audit returns withoutallowing a backlog to pile up,”he said. Earlier in his address,the Coordinating Director ofField Operations Group at theFIRS, Mr Ajayi Bamidele, saidthe service would strive tocollect N700 billion revenue inthe second quarter to make upfor first quarter ’s poorperformance.
He presented the analysis ofthe non-oil collection reportfrom the six departments of theservice, particularly from theEastern Region and South EastZonal Government Businessoffice.
He said that from theanalysis, the Eastern Regionwas top in performance with 62per cent, with Owerri areaoperations recording the bestperformance with 110 per cent.
Bamidele said his office hadadopted the development ofstandard check list for fieldoffices to ease response toheadquarters, monitoring visitsand fast tracking conclusion ofaudit cases as measures toensure high performance ofstaff members.
A lecturer at theUniversity ofA b u j a ,
Professor Ekhator Eghe, hascalled on the FederalGovernment to establish acommission that wouldcheckmate the challenges ofunemployed Nigerians andgive adequaterecommendations. Eghe,who was speaking at aroundtable meeting of theSouth-South ProfessionalWomen Association, SSPWA,in Abuja, stressed the needto employ long and shortterm measures to tackleunemployment.
While delivering a paperentitled, 'Unemployment inNigeria, Effects on YoungWomen and the Way Forward'he stated that, thoughunemployment was ascourge affecting both maleand female, women were theworst hit due to lack ofeducation and training.
His words; “Thiscommission is to make acomprehensive assessmentand submit periodical reportson the employment situationto the Presidents, Governorsthe States House of Assemblyand the National Assembly.
“The various short and longterm measures of thegovernment have miserablyfailed to solve theunemployment andunderemployment mainlybecause of high growth rateof population and low levelof economic growth rate.However unemployment canbe reduced if there is a rapideconomic developmentthrough the growth ofprimary, secondary andtertiary sectors. When thereis proper coordinationbetween economic planningand employment policy.”
Earlier, the representativeof the Nigeria LabourCongress, ComradeFrancisca Nweke, urgedgovernment to address theimbalance between men andwomen, fight against sexualharassment and rape andpromote training and re-training for capacity buildingof women.
FIRS records N140bn shortfallin Q1 revenue collection
Nigerian Content Initiative gets N3bn boostBy MICHAEL EBOH
Unemployment:Don callsfor jobcommission
By SUCCESSUZOKWE
*FROM LEFT: Dr Sonny Kuku, president, Bank Directors Association of Nigeria (BDAN), SirSteve Omojafor, Chairman, Zenith Bank Plc, Mustafa Chike Obi, Chief Executive Officer, AssetManagement Corporation of Nigeria (AMCON), and Dr, Biodun Adedipe, Chief Consultant, B.Adedipe Associates Limited, at the BDAN Symposium held in Lagos.
Vanguard, MONDAY, MAY 5, 2014 — 21
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Business & Economy
O U T S O U R C I N Gcompanies in Nigeria
are asking the FederalGovernment to delegate tenpercent of jobs in theministries, departments andagencies (MDAs) to them tohandle in order to boostemployment and growth ofthe sector in the country.
Outsourcing is delegatingsome of company ’soperations to anothercompany for a fee.
Dr. Austin Nweze, PresidentAssociation of OutsourcingPractitioners of Nigeria,AOPN, disclosed this duringan induction and investitureceremony organised by theassociation for new membersin Lagos.
He said that the sector hasthe potential to turn aroundthe Nigerian economy, citingIndia as an example, “It wasoutsourcing that turnedaround Indian economy.India in 1990/91 wastechnically declared bankruptby the World Bank becausethey had less than 900 milliondollars in their foreignreserve but throughoutsourcing in 1999 duringthe Y2K bug, India's economymade a big turn around forgood.
“Some Indians in theDiasporas came in to Indiaand established businessesand companies like Microsoftand General Electricoutsourced most of their jobsto India. We all know thatsome Indians were primaryschool teachers in thiscountry, some of them hadPhD and did all kinds of oddjobs in Nigeria but where arethe Indians today? Today,outsourcing has opened thedoor for India; India is a netexporter of CEOs in the world;most multinationals in theworld are run by Indians.Recently, Microsoft has anIndian as its new CEO. It isto show how importantoutsourcing is to everyeconomy,” he said.
He disclosed that currently,member companies employabout 20,000 to 30,000 peopleand others 15,000 people.
“It is a good start becauseby 2050, the services industrywill provide 80 percent of jobsglobally. That was a projectionfrom the ITC, InternationalTrade Center."
FOR ease of shipmentfrom country to
country, the Nigeria CustomsService has commenced a newvehicle transit regime forautomobiles being importedinto the country fromneighbouring countries likeBenin, Cameroon, Chad andNiger Republic beginning withBenin Republic and SemeBorder as area of pilotimplementation.
The new policy which is a fallout of a March 26, 2014 meetingof Directors-General ofCustoms of the five proximatecountries held in Abuja, and inline with the Transit Code, willsee all Nigerian boundvehicles imported from theaffected countries beinghanded over to the NigerianCustoms by the country’scustoms administration afterdue clearance.
The scheme which hasfeatures of accountability,transparency and easypersonal evaluation andmonitoring will have namesof officers responsible fortransfers and receipts ofmanifests/vehicles from bothcountries . It will also indicatelocation of formal handing andtaking over of importedvehicles on transit
Speaking at a ceremony toflag off the scheme, WillyEgbudin, Customs AreaController of Seme Command,applauded the untiring effortsof the Comptroller-General ofCustoms, Abdullahi DikkoInde, CFR for his vision andhigh level professionalism inbringing the scheme to fruition According to Egbudin,regional security, facilitation ofgenuine trade and improvingon the existing synergiesbetween Nigeria Customs andother customs administrationssharing common borders withthe country are expected to beenhanced under the newregime. He added that It willlead to an interstate effort in thefight against smuggling andboost the revenue beinggenerated from vehicleimportation into Nigeria.
The flag-off ceremony whichwas conducted by the NigerianAmbassador to Benin Republic,Ambassador LawrenceOlufemi Obisakin andwitnessed by officials ofgovernment agencies ofNigeria and Benin as well asstakeholders was ushered inwith some fanfare.
Obisakin said that the feat isalso being achieved because ofthe fraternal tie between
President Goodluck EbeleJonathan of Nigeria and hisBeninoise counterpart, YayiBoni has become strongeradding that the bilateralrelations can only get better.
Obisakin added that the eventis not just special but also agreat milestone for countriesgovernments, business menand entire citizenry. He saidthe importance of such anepoch making event cannot beover emphasized as history,according to him was beingmade.
‘’The official handover of
MINISTER of Transport, Senator IdrisUmar has said that the on going
construction of the Lokoja River port is nowabout 56 per cent completed.
Senator Umar who led a team of official ofthe Federal Ministry of Transport on aninspection visit to the new construction site ofthe Lokoja in-land River Port, said that theport when completed will further enhancethe activities of the newly commissionedOnitsha River port
The minister urged the contractor handlingthe project, Interbau West Africa Limited tohasten the completion of the project in recordtime.
Also at the inspection visit was the Governorof Kogi State, Captain Idris Wada. TheManaging Director of Nigerian InlandWaterways Authority (NIWA), Hajia InnaCiroma took both the Minister and theGovernor round the construction site.
The minister explained that the construction
of the Lokoja In- land Port and other in-landports such as Onitsha and Baro would helpthe utilization of the dredged lower Nigerchannel in terms of the loading and dischargeof cargoes also maintained that economicactivities in the country would be seriouslystimulated.
Senator Umar who expressed satisfactionwith the high quality of job executed so farexpressed confidence in the contractor,Interbau West Africa Limited whom theminister acknowledged to have done well inthe rehabilitation of the Onitsha ultra-modernRiver Port, and promised to look into therequest for the variation of the bill ofquantities by the contractor once the requestgets to his office.
In his own remarks, Kogi State Governor,Captain Idris Wada thanked the FederalGovernment for constructing the Lokoja In-land River Port which he said would boosttrade and commerce not only in his state butthe entire country considering the centrallocation of Lokoja.
imported vehicles by the BeninCustoms Service to theirNigerian counterpartrepresents the palpable resultsof several years of bilateralrelations’’
For this we have to thank Godfor the friendly and fraternalrelations existing betweenPresident Goodluck Jonathanand his Benin Counterpart,President Boni Yayi as well asthe diplomatic and customsservices of both countries’’Obisakin said.
Responding to questions fromnewsmen, the ambassador said
that Seme border is strategicfor many reasons includingbeing sited between twocommercial capital cities ofCotonou and Lagos, whichmakes it the busiest landborder in West African subregion.
‘’This is a furtherdemonstration of our statusas the number one economy in Africa with a drive towardsindustrialization andreaching to other countries inthe sub region through BeninRepublic.’’ Obisakin said.
Customs at Seme borderand Benin Republic will havean important role in gettingindustrialized goods shippedfrom Nigeria to other WestAfrican countries, theAmbassador added.
From left: Mr.Sunil Kumar, Director, CE, EBT& IT Samsung Electronics West AfricaLtd;Kate Henshaw, Brand Ambassador Samsung; Brovo Kim, MD Samsung Electronics WestAfrica Ltd and Mr. Parikshir Chandna, Head, Consumer Electronics Samsung at the Sam-sung Product Launch /media Parley event held in Lagos
22 — Vanguard, MONDAY, MAY 5, 2014
Banking & Finance
The dollar rose the mostin six weeks against a
basket of major peers after agovernment report showedemployers boosted payrolls inApril by the largest amount intwo years and the jobless rateplunged.
The greenback gained to thehighest level in almost amonth versus the yen asnonfarm payrolls increased288,000, compared with aforecast of 218,000 in aBloomberg survey of 94participants. Emerging-market currencies dropped onspeculation the employmentgains will speed the timetablefor the Federal Reserve topare monthly bond-buyingand raise interest rates. Ameasure of market volatilityrose from almost a seven-yearlow.
“The numbers lookgenuinely solid in everyrespect, so the dollar higheracross the board seems like aperfectly reasonablereaction,” Adam Cole, head ofGroup of 10 currency strategyat Royal Bank of Canada, saidby phone from London. “Themarket is bringing froward itsexpectations for Fedtightening, or at least hasmore confidence rates willrise in the U.S., so the dollaris rising as a result.”
From left: Chief Representative, Middle East and African Regional Office, Institute ofInternational Finance (IIF), USA, Mr. Wolfang Engel; Group Managing Director/Chief ExecutiveOfficer designate, Skye Bank Plc, Mr.Timothy Oguntayo; Director, Global Events, IIF, Mr.Abdesattar Ouanes; and the Head, Corporate Planning and Strategy, Skye Bank, Mr. TajudeenAhmed, during the visit of the IIF team to Skye Bank recently
BY BABAJIDEKOMOLAFE
Current exchange rate policy portendsmore risk to economy
The exchange ratepolicy of using theforeign reserves to
defend the naira beingpursued by the Central Bankof Nigeria (CBN) portendsmore risk to the economy.
Chief Executive Officer,RTC Advisory ServicesLimited, Mr. Opeyemi Agbajemade this assertion at the Bi-monthly Discourse of theFinance CorrespondentsAssociation of Nigeria(FICAN) held last week inLagos.
“The risk of the policy wehave followed is that it makesit mandatory that one day wewould do a massivedevaluation that then distortsthe economy and causestructural problems”, he said.He advised the incomingGovernor of the Central Bankof Nigeria (CBN), Mr.Godwin Emefiele to changecourse and pursue a flexibleexchange rate policy
“It does not make sensiblepolicy to use the reserve todefend the naira. We areusing foreign reserves tocreate billionaires ormillionaires illegally at ourown expense.
Anytime you do a rate thatis different from the market,you are subsidising those whobuy dollar because anybodywho buys dollars from RDASis receiving a subsidy of N10to N15 from the Nigeriangovernment.
“Anybody that issues asubsidy should have strategic
reasons for doing so, but whoare we subsidising? We aresubsidising the school fees ofall the people in schoolsabroad. We are subsidisingthe holiday of everybody whochooses to go on holiday, weare subsidising the corruptionof anybody who steals moneyand transfers it abroad. We aresubsidising wine andChampaigne, all theconsumption we do. Nowthere is some good elementof the subsidy, industries thatimport raw materials andcreate jobs or anybody that isimporting for otherwise
productive purpose. But whatis the proportion of theproductive purpose to thetotal consumption of dollars.So I don’t support the CBN’sdetermination, as espousedunder Sanusi and supportedby most Nigerians to protectthe naira at the expense ofour reserves and at theexpense of our commonpatrimony, because it iscollective subsidy to capitalflight. It does not makeeconomic sense.
“Yes we have achievedinflation at 7 percent, butthere is a debate about the
cost. And exchange rate is oneof the costs, and the subsidywe provide is one of the costs.
“My advice to the incomingcentral bank governor is totake a little bit of flexibility inrelation to the exchange rateeven at a cost of a one offinflation pressure. I think wecan still keep inflation below10 percent. I will rather someflexibility in exchange rateand 9.0 percent inflation forinstance than depletingreserves perpetually andsending the wrong signal tocurrency speculators andencouraging moral hazard”.
WAIFEM calls for modern fiscal policy forecastingstrategies
BY UDEME CLEMENT
The Director General,West African Institute
for Financial and EconomicManagement (WAIFEM),Prof. Akpan Ekpo, hascalled on finance expertsand legislators in Nigeriato embrace modern fiscalpolicy forecastingstrategies, revenue andexpenditure models, inorder to reposition thenation’s economy forgreater growth.
He made this assertionin Lagos in his openingremarks, at the one-dayvalidation workshop onfiscal policy forecasting,revenue and expendituremodels, organised byWAIFEM for officials ofMinistry of Finance and
legislators.He said the workshop is to
help legislators and expertsin the Ministry of Finance togather inputs needed formodern day forecasting andrevenue models needed totransform the economy. Thishe said would help to validateand improve on the existingmodels of forecasting andrevenue generation in thecountry.
He said, “The existingmodels in the Ministry ofFinance need adjustment tobe on track with global trendnecessary for rapid economicdevelopment and revenuegeneration techniques.
Forecasting is quiteimperative in economicdevelopment because itwould help the government totackle the persisting problemof unemployment in thecountry. Forecasting may not
be exact but would be closeto expectations in handlingthe tasks of growing theeconomy at a larger scale. Wemust do our best as economicexperts to convince thepoliticians to look at waysthey can move the economyforward”
He went on, “The CentralBank of Nigeria (CBN) andNational PlanningCommission (NPC) havebeen consistent in puttingmeasures in place to embracecurrent economic models andforecasting strategies. Otherministries should do the samein order to achieve holisticeconomic growth anddevelopment in all sectors ofthe economy.”
Also speaking, the leadfacilitator, Prof. MichaelNyong, from University ofCalabar, who madepresentation of models on
macro-economics, revenueand forecasting, stressedthat Nigeria’s economyneeds growth with stability,as well as revenue forecastrelevant to tackle fiscaldeficit.
He said, “The fiscalauthorities in the countryadopt a strategy of businessas usual and capitalexpenditure that follows aparticular historical trend,which is not boostingrevenue generation in non-oil sectors of the economy.The authorities should becautious of the size of thetotal expenditure whiledetermining capitalexpenditure to strike abalance in the system.Doing this would enhancedevelopment in non-oilexport sector, especially inmanufacturing.”
NDIC reviewsstrategic planto enhanceperformance
The Nigeria DepositInsurance Corporation
(NDIC) has expressed itsdetermination to continuouslyreview its five-year strategicplan with a view to not onlyremain relevant in itsoperating environment butalso to effectively dischargeits mandate.
NDIC’s Managing Director/Chief Executive Officer,Alhaji Umaru Ibrahim saidthis in his opening remarksat the NDIC two-day StrategyReview Retreat with thetheme: “Repositioning NDICfor Operational Excellence”held at Reiz ContinentalHotel, Abuja last weekend.
Ibrahim pointed out that the2011-2015 strategic planmarked a departure from thetraditional approach theCorporation adapted in itsfirst strategy in 2007 with theintroduction of balancedscore card, performancemanagement system,p e r f o r m a n c e - b a s e dbudgeting and developmentof early warning system.
Dollar recordssix weeks high
CMYK
Vanguard, MONDAY, MAY 5, 2014 — 23
Banking & Finance
AGM - From left: Managing Director/Chief Executive Officer, Enterprise Bank Limited,Mallam Ahmed Kuru, the bank’s Board Chairman, Sir. (Dr.) Ogala Osoka MFR andCompany Secretary/Legal Adviser, Mrs. Olufunke Olakunri, during the 2nd Annual GeneralMeeting (AGM) of the bank in Lagos.
BY BABAJIDEKOMOLAFE
*Earn N1.8bn interest on deposits with CBN
Banks’ total assets fell byN115bn in FebruaryThe total assets and
liabilities of banks inthe country fell by
N115 billion to N24.29 trillionin February. This representeda 0.5 percent decline whencompared with the total assetsof N24.41 trillion recorded inJanuary.
The decline was howeveroccasioned by 16.1 percentdecline in the net foreignassets of banks during themonth.
Meanwhile banks earnedN1.8 billion from depositskept with the Central Bank ofNigeria (CBN) through theStanding Deposit Facility(SDF).
The CBN disclosed this inits monthly economic reportfor February. The reportstated, “Total assets andliabilities of the deposit moneybanks (DMBs) amounted toN24, 292.8 billion, showing adecline of 0.5 per cent belowthe level at the end of thepreceding month.
According to the report thenet foreign assets of thebanking system fell by 8.3percent to N7.557 trillionfrom N8.23 trillion in January.
The net foreign assets of theCBN fell by 6.2 percent toN6.07 trillion from N6.47trillion in January while thatof the banks fell by 16.1percent to N1.49 trillion fromN1.77 trillion in January.
On the other hand, banks’lending to the economy rosemarginally by 2.2 percent inFebruary. The CBN statedthat, “At N12, 343.4 billion,banks’ credit to the domestic
economy rose by 2.2 per centabove the level in thepreceding month. Thedevelopment was attributed tothe 2.6 per cent increase inbanks’ credit to the privatesector, which more than offsetthe 4.9 per cent fall in banks’credit to the FederalGovernment during thereview month.
“Total specified liquid assetsof the Deposit Money Banks(DMBs) stood at N5,945.9
billion. At that level, theliquidity ratio fell by 1.1percentage point below thelevel in the preceding monthand was 15 percentage pointsabove the stipulated minimumratio of 30 per cent. The loans-to-DMBs’ Credit to thedomestic economy rose by 2.2per cent above the level in thepreceding month. Depositratio, at 55.5 per cent, was 2.0percentage points above thelevel at the end of the
preceding month, but was24.5 percentage pointsbelow the prescribedmaximum ratio of 80.0 percent.”
The report also showedthat banks depositedN4.953 trillion with theCBN through its StandingDeposit Facility (SDF),earning interest income ofN1.8 billion.
Single digit inflation rate unsustainable beyond 2014BY JONAH NWOKPOKU
A financial consultant, Dr.Biodun Adedipe of B.
Adedipe Associates Limitedhas said that the current singledigit inflation which hoveredbetween 8.0 percent and 7.8percent in the first quarter of2014 is not sustainablebecause of the expectedincreased spending that willbe occasioned by the 2015general elections.
He stated this whiledelivering a paper on, ‘TheImpact of Asset ManagementCorporation of Nigeria on theNigerian economy ’ at asymposium organised byBank Directors Association ofNigeria in Lagos.
According to him,“Throughout 2013, inflationremained single digit,recording its highest level of9.5 percent in February 2013.In similar trend, inflation fromJanuary to March 2014maintained single digit of 8.0
percent, 7.7 percent 7.8percent respectively. Whilethis, along with otheraggregate statistics, is goodfor macroeconomic stability ofthe Nigerian economy, thereis likelihood that it may notbe sustained to the end of theyear and into 2015, aspoliticians and their partiesincrease spending towardsthe State and Federalelections scheduled for 2014and 2015.”
Adedipe also said thatdevaluation of the nation’scurrency, the Naira isunavoidable this year due topersistent pressure on thevalue of the currency.
He said, “Persistentpressure on the value of thenaira that began in the fourthquarter of 2013 continued intothe first quarter of 2014.Consequently, the premiumon the official exchange rateof the Central Bank’s DutchAuction System (DAS) at theparallel market (Bureau de
Change) has widened to10.43 percent, which isconsiderably above therecommended limit of 5.0percent in the first quarter of2014 and has become anincentive to round-tripping.
“When taken along with thesoftening external reservesfrom $43.61 billion at the endof 2013 to $37.9 billion inMarch 2014; weakeningaccretion to reserves caused
by oil theft and productionlosses, unrelenting highimport propensity andsuspected capital flightwhich is evidenced by thedampening of the stockmarket, the highexchange rate premiummakes the devaluation ofthe Naira in 2014inevitable.”
He also noted that,“Increasing debt stock hasalso become worrisome,especially as it is difficultto tie the mounting debtsto specifics in terms ofprojects and programmes.Total debt stock (externaland domestic) as atDecember 2013 stood atN10.04 trillion ($64.5billion) of which N1.37trillion and N8.67 trillionwere external anddomestic debt respectively.This represents a 21percent increase fromN7.93 trillion ($50.91billion) in June 2013.”
FCMB recordsN5.6bn profit inQ1 2014
,
,
FCMB Group Plc hasannounced a profit
before tax (PBT) of N5.6billion for the first quarter of2014.
The financial resultsreleased by the Group showedthat profit before tax rose by15 percent from N4.8 billionin first quarter of 2013 (Q12013).
The Group said, “Theimproved earnings growth inQ1 2014 was in spite of thechallenging regulatoryenvironment. Net revenuerose 16 percent to N22.3billion over prior year, due togrowth in earning assets,improved funding cost andthe growing contribution ofretail banking activities,which compensated for thedecline in commissions onturnover (CoT).
In the first quarter of 2014,deposits grew nine percentyear-on-year to N687.3billion, aided by 22 percentgrowth in current and savingsaccounts, while fixed depositsdeclined. Consequently, thebank’s funding mix hasimproved, with current andsavings accounts nowaccounting for 75 percent oftotal deposits, and resultingin reduction of cost of funds. Loans and advances alsogrew 50 percent year-on-yearto N493.7 billion. This growthwas supported by our retailbusiness that witnessed a 90percent loan growth, from thesame period in 2013, toN105.4 billion in Q1 2014.
Asian currenciesstrengthened last week,
led by the South Korea's Won’sadvance to a five-year high,as data signalled a continuedrecovery in the region’seconomies and on bets U.S.borrowing costs will remainlow.
South Korea reported itsMarch current-accountsurplus was the biggest in fivemonths, Taiwan ’s grossdomestic product growth beatforecasts and China ’smanufacturing rose in Aprilfrom the previous month,figures showed this week.The Federal Reserve saidApril 30 it’s likely to keep thebenchmark U.S. interest rateclose to zero for a“considerable time” after itsstimulus program ends, anda separate report showed theworld’s largest economybarely expanded last quarter.
South Korea'sWon leads asAsian currenciesappreciate
Persistentpressure onthe value ofthe naira thatbegan in thefourth quarterof 2013continued intothe firstquarter of2014
24 — Vanguard, MONDAY, MAY 5, 2014
CMYK
Corporate Finance
From Left: Mr. Rilwan Belo-Osagie, MD/CEO, FSDH Merchant Bank Limited; Mr. Osaro Isokpan, Chairman and Mrs.Oyindamola Ehiwere, Company Secretary at the FSDH Merchant Bank Ltd AGM in Lagos.
payment solutions is likely tocontinue growing at aCompound Annual GrowthRate, CAGR, of five percentuntil 2018. The likelihood ofdemand growth will arise fromthe ongoing implementationof the Central Bank ofNigeria’s cashlite policy,increasing financial inclusionand digitalisation ofcommerce, presentingopportunities for technologysolution providers in our lineof business,” he added.
Speaking on why thecompany did not declaredividend this year, Richardssaid, “Thank you for yourpatient so far and we do notwant to push that patient sohard; the truth is that we havehad challenges in ouroperations in the past fiveyears, it was a mistake on ourown part and we want to ownup to that. We concentrated alot on federal government
review.Richards, who expressed
optimism that the results willbe better in the coming year,added that to achieve thislevel of performance in 2013,Chams embarked on somebusiness initiatives,including; national identityproject, payroll automatedproject for the Osun State andidentity management forAnambra State among others.
“Chams Plc undertookprojects of significant financialimport in the local identitymanagement and transactionpayments space in 2013.Before now, specifically 2008,your company startedcommitting resources toinvestment in infrastructurefor identity management andtransaction payment to makeit the market leader in thisemerging industry.
“The demand for identitymanagement and transaction
CHAMS Plc has recordedN3.44 billion turnover,
representing 21.3 percentincrease, compared to N2.84billion recorded in 2012.
The company recorded aprofit after tax of N188.5million, 115.3 percentincrease, compared to N87.5million in the last financialyear, while its earnings pershare improved to seven kobo,more than twice what wasposted the previous year.
Addressing shareholders atthe30th Annual GeneralMeeting, AGM, of thecompany in Lagos, Mr.Ayodeji Richards, Chairman,Chams Board of Directors,stated that its shareholdersfunds improved by fivepercent from N4.5 billionrecorded in 2012 to N4.7billion in the year under
business and that was becausewe hold the national identitycard project dearly.
“But we have challenges onthe project, wanted to do allwithin our capacity to ensurethat the project is successful. Asbusiness men, we have done alot of investment, but waiting forthe government to dot the I andcross the T.
“Two years ago, we decidedthat we will have to do thingsthat will enable us to makereturns to our shareholders, sowe did a restructuring and arepositioning to change ourbusiness model. This hasstarted to yield dividend in thelast two years. 2009 through2011 we recorded successiveloss, thank God in 2012 weposted a profit and in 2013, itsuperseded the performance of2012. With what we have onground now, they are verygood, positive and robust.
Chams records 21.3% increase in turnoverBy WILLIAM JIMOH
THE Global ShapersCommunity, GSC, has
concluded plans to host over 100young Chief Executive Officersat the World Economic Forum,WEF, in Abuja next week.
Global Shapers Community isa network of hubs developedand led by young people whoare exceptional in theirpotential, their achievementsand their drive to make acontribution to theircommunities.
Speaking during a courtesyvisit to the Nigerian StockExchange, NSE, as part of thecompany’s activities to createawareness on the initiative, Mr.Yemi Babington-Ashaye, GSCDirector, said the 100 youngCEOs are coming from differentparts of Africa to profferinnovative and sustainablesolutions to Education,Entrepreneurship, Technologyand Agriculture.
“In Africa today, 40 percentof the population is under theage of 15, and also on thecontinent 70 percent of thepopulation are under the ageof 30; there is no way a decisionwill be made that it will notaffect these young ones.
WEF: GlobalShapersCommunity host100 young CEOs
By WILLIAM JIMOH
Strong consumerspending, factorydata buoy U.S.growth outlook
U.S. consumer spendingrecorded its largest gain
in more than 4-1/2 years inMarch and factory activityaccelerated last month,reinforcing views the economywas regaining steam.
Economic growth stalled in thefirst quarter after a very cold anddisruptive winter, but the dataso far point to a strong second-quarter rebound.
“The weakness in growth wesaw in the first quarter is notindicative of what is going onin the economy. Thefundamentals continue to lookpretty good, the economy hasmomentum,” said Gus Faucher,senior economist at PNCFinancial Services Group.
Consumer spendingincreased 0.9 percent in Marchafter rising by 0.5 percent inFebruary, the CommerceDepartment said. March’s gainwas the biggest since August2009 and beat economists’expectations for a 0.6 percentrise.
Union Bank ofNigeria, UBN Plc,weekend, released
its first quarter unauditedfinancial statement for periodended March 31, 2014 withsignificant decline in the keyperformance indicators.
The result prepared inaccordance withInternational FinancialReporting Standard, IFRS,requirement, filed with theNigerian Stock Exchange,NSE, showed 54 percentdrop in profit before tax toN5.0 billion from N7.7 billionrecorded in correspondingperiod in 2013.
Also, the profit after tax forthe period nose-dived byalmost the same margin,
Union Bank’s Q1 profit falls by 54%
By NKIRUKA NNOROM declining by 56 percent fromN7.8 billion in 2013 to N5.0billion in the review period.
The gross earnings atN26.0 billion, was13.08percent decrease fromN29.4 billion incorresponding period in2013, while the interestincome stood at N20.7billion as against N18.8billion in 2014.
The bank’s total assetswent down to N958.6 billioncompared to N997.3 billionreported in thecorresponding period in2013. The total asset positionas December 31, 2013 stoodat n1 trillion.
Cash and cash equivalentswas down 29.74 percent toN101.1 billion from N143.9billion in March 2013, the
customer deposits alsodeclined to N466.4 billionfrom N482.7 billion,representing … percentdecrease.
However, the bank’sshareholders’ equity grew toN197.3 billion as againstN192.2 billion in December2013, showing an increase of2.65 percent. Net loans andadvances to customers grewby 29 percent, rising toN220.5 billion from N170.7billion as at n March 2013.
The bank also achievedsome level of efficiency in itsoperations as the operatingexpenses decreased to N14.7billion, a 3.29 percentincrease over N15.2 billionachieved in first quarter in2013.
The bank said in statement
that it is currently undertakingbranch optimizationprogramme, saying that 13branches are being refit, whileanother 53 will be completedbefore the end of the year.
It added that previouslyupgraded branches arealready yielding financialupsides and positive NetPromoter Scores (NPS),adding that divestment of fourportfolio companies are almostcompleted and awaitingregulatory approvals.
Commenting, GroupManaging Director/ ChiefExecutive of Union Bank,Emeka Emuwa, said: “UnionBank has maintained itsprofitability and is deliveringagainst key operationalmetrics supporting ourstrategy.
CMYK
Vanguard, MONDAY, MAY 5, 2014 — 25
Corporate Finance
From left: Mrs. Bunmi Akinde, Senior Partner (Advisory); Colin Daley, Partner, FinancialServices (Advisory) and Yemi Saka, IT Risk (Advisory) all of Ernst & Young, EY, at the unveilingof EY Latest Report on Consumer Banking in Lagos.
Dangote Cement laments highcost of production, pays N7dividend
Dangote Cement Plchas decried the highcost of production,
which it explained hasresulted to the rise in theprice of cement in thecountry, even as it rewardedshareholders with adividend of N7.00 per sharefor the financial year endedDecember 31, 2013.
Speaking at the company’s5th Annual GeneralMeeting, AGM, in Lagos,the chairman, Alhaji AlikoDangote, said “ We never
envisaged that the cost ofproduction will rise to thisextent when we said that theprice of cement will fall , butas you can see, foreign exchange rate has gone up,the same with the price ofgas, and diesel . We evenconstructed some of the roadsour vehicles ply, all in a bidto make sure we continueproduction. We will continueto do our best to ensure thatwe sell our productmoderately; after all, theprice of our cement isrelatively cheaper whencompared to our competitors.
You can now order ourproduct through yourcomputers. We hope toincrease our market share inthe short term by increasingthe level of direct-to customerdeliveries and competing onproduct superiority.”
Continuing, he said“Between eight to 10 weeks,our company will pump innine million tons of cementrepresenting a growth of 45percent to the market. Wewant to serve ourshareholders by giving youbetter returns on yourinvestment. Trading remains
robust in the country, andwe have experienced asolid start to the year withdemand up in all regions.We have embarked on aninitiative to improve thestandard of cement sold inNigeria and our belief isthat 42.5 strength cementis the most appropriate forgeneral use. We areworking closely withindustry consumers suchas block makers to ensurewidespread education asto its use.”
Meanwhile, theshareholders who spokeat the AGM commendedthe Board of Directors andmanagement for theimpressive resultsrecorded during the yearunder review.
The shareholders’association leaders, suchas Dr. Farouk Umar, ChiefTimothy Adesiyan, ChiefSola Abodurin, Mrs. BisiBakare, among otherscommended Dangote forits contribution towards thegrowth of the company aswell as the economy.
According to them, “Dangote Cement has donewell. The company ispaying us a dividend ofN7.00 per 50 kobo share,an increase of about 133percent from what it paidlast year. The company’sturnover improved fromN285 billion to N371billion in the financial yearunder review. The samefor profitability; itincreased from N146billion in the previous yearto N210 billion. So, we arevery happy for theperformance and hope toget higher dividend comenext year.”
Dual listing: UBA Capital pledges support to oil, miningfirms
By NKIRUKA NNOROM
UBA Capital Plc haspledged to support
companies in oil & gas andmining sectors that areseeking to raise capitalfrom local and internationalsources to enable them doso with ease and to alsoembrace dual listing.
The Managing Director,Investment Banking at UBACapital, Wale Shonibare,made the pledge at ameeting hosted by thecompany to discussrequirements and theadvantages of dual listingfor companies in oil & gasand mining industry inthree major internationalstock exchanges - theJohannesburg StockExchange (JSE), theLondon Stock Exchange(LSE), and the TorontoStock Exchange (TSX) aswell as the Nigerian StockExchange (NSE).
At the meeting wereofficials of the three major
international exchanges,who highlighted theirunique product and serviceofferings for companies toraise capital and attractlisting. Specificrequirements for listingswere highlighted as well asdetails of the differentcountry’s regulations withthe advantages of duallistings fully enumerated.
Speaking at the event,Shonibare said: “UBACapital Plc is well-positioned to assist clientsachieve their capital raisingobjectives especially insupporting fast growingmining companies and theiroil and gas counterparts toraise the much neededequity capital from local andinternational sources wheresuch capital might be moreeasily accessible than inNigeria due to the specialistknowledge and experienceof our investor base in thoseregions.”
Also speaking at theevent, Oluwatoyin Sanni,Group CEO, UBA Capital
Plc, said, “Today’s event isonly one in a series ofongoing initiatives tosupport the capital raisingaspirations of Africanissuers whilstsimultaneously creatingattractive and accessibleinvestment opportunities forinvestors.
We shall continue topartner with credibleregional and internationalinstitutions as we pursueour strategic intent to buildAfrica ‘s leading integratedfinancial services group”.
Darko Hajdukovic, SeniorManager, Primary Marketsfrom the LSE, disclosed thatthe LSE has a longexperience of l istingcompanies from Africa. Themain market of theExchange currently has 42listed African companieswith total marketcapitalisation of $239billion.
He observed that theLSE’s experience helpsAfrican companies seekinglisting to, “de-risk the
process and enhancetheir valuation”.Hajdukovic said thatLondon offers a very costeffective option amongmajor stock exchanges.
Also speaking at theevent, TamsinFreemantle, BusinessDevelopment Managerfrom the JSE disclosedthat 86 companies listedon the JSE have duallistings. She alsodisclosed that the JSE hasbeen able to achieveaverage market liquidityof between 40 and 50percent since 2010.
Also speaking about theopportunities offered bythe Toronto StockExchange (TSX), GrahamDallas, Head, BusinessDevelopment, Europeand Africa, said that theTSX is the number oneexchange in the world bythe number of listed oiland gas companies aswell as listed miningcompanies.
commitment to food sufficiencyand security in Nigeria bydonating additional N30million to its food researchcentre at the University ofIbadan.
With the new donation, FMNhas committed a total sum ofN60 million to theestablishment of the FlourMills Food Research Centre,having made an initial grantof N30 million to the institutionlast year.
Mr. Paul Gbededo, FMNGroup Managing Director,who made the donation whilereceiving a delegate led byUniversity of Ibadan, UIDeputy Vice Chancellor(Academics), Prof. IdowuOlayinka, at FMN’s newCorporate Head Office inLagos, said the company wasdelighted to partner with UI inthe food research initiativewhich would help to seekmeaningful solutions to post-harvest losses in major cropsgrown in Nigeria and assistsustainability in foodproduction.
He disclosed that FMNGroup had invested over N220billion in its agro-alliedbusinesses which extend tolarge scale cultivation of sugarcane, cassava, corn, soybeansand oil palm in addition toexpansion of animal feedproduction in different parts ofthe country.
A llianz (ALVG.DE)shareholders will
publicly press its topexecutives this week to addressthe underperformance of itsPimco fund management unitin the hope that the Germaninsurer will look more closelyat management problemsthere.
Several top 10 shareholderstold Reuters last month theywanted Allianz to step upoversight of Pimco, which islosing billions of dollars inoutflows from its flagship bondfund after a public falling outbetween its founder, BillGross, and its co-chiefinvestment officer, MohamedEl-Erian, that caused the latterto quit.
Fund manager, UnionInvestment, Allianz’s 10thlargest shareholder, accordingto Thomson Reuters data, toldReuters on Friday that it haddecided to go public with itsconcerns at Allianz’s annualgeneral meeting in Munich.
Shareholders togo public withPimco worriesat Allianz AGM
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Sim Capital Alliance Plc 103.50 103.50 103.50 103.50 10.56 9.71Stanbic IBTC Bank Plc 23.00 23.00 96,303 15.69 10.64 0.87 18.03UBA Capital Plc 2.25 2.14 4,522,749 1.41 0.03 0.21 6.71
Opening ClosingPrice Price Quantity Year Year P.E.
Company (N) (N) Traded High Low E.P.S. Ratio
Capital Market Daily Stock Market Report as at Friday, May 2, 2014
Vanguard, MONDAY, MAY 5, 2014 — 27
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Micro FinanceCommodity index
April 25- May
From left: Mark Hedderwick, Director UAC Restaurants Limited, Darren Hele,CEO Famous Brands, Larry Ettah, Group Managing Director, UAC of NigeriaPlc, Derrick Van Houten Managing Director, UAC Restaurants, during the 2014UAC Restaurants Franchise Conference in Lagos.
OXFORD and Cambridge Club ofNigeria has identified skill
acquisition as a key to becoming asuccessful entrepreneur in a competitivemarket like Nigeria.
Speaking at a business forum in Lagos,Chief Executive Officer, EventfulLimited, Mrs. Yewande Zaccheaus, saidthat entrepreneurs must be capable ofrecognising opportunities around them,while finding internal inspiration tosolving problems.
She advised future entrepreneurs tothink outside the box, have passion forwhat they do and embrace risks. Hesaid, “To become a successful businessowner in a competitive market likeNigeria, I urge our upcomingentrepreneurs to acquire education andadequate experiences before going into business.
Meanwhile, the Minister of Trade andInvestment, Dr. Olusegun Aganga isexpected to grace the OxbridgeBusiness Forum in Abuja by May thisyear, while Governor of Lagos State,Babatunde Raji Fashola (SAN), will bethe guest speaker at the club’s SpringLecture 2014.
IN commemoration of the World safety at work day, Total Nigeria Plc
has launched an initiative called “MrSafety” to address anticipated anomaliesin it's stations nationwide.
The company also reiterated itscommitment to better service delivery,in line with the initiative backed with aMr Safety Reflective Jacket.
Safety at work day is a day set asideevery year to promote the prevention ofoccupational accidents and diseases atwork sites.
Speaking at the world safety at workday/launch of mr safety, held in Ijoraservice station, Lagos, ManagingDirector, Total, Mr. Alexis Vovx, said thatthe programme is an awareness raisingcampaign intended to refocus attentionon the need for best practices in alloperations with particular attention onits occupation safety and health.
Tagged “Speak Up,” Vovx said that thisyear’s theme is a call to the realisationthat there are so many unsafe situationsin trying to play safe around the workplace, saying, “We encourage everyoneto speak out. We must desire to give asense of responsibility to everyindividual in the company andemphasize personal values to the safetyof our organisation through theassurance of a safer work place for all
staff/dealers/customers and neighbours. Safety is everyone’s business and weall must be totally committed to it.
“To reduce probability of accident inour work places is important that everyemployee report all unsafe issuesobserved in their work place and bydoing that we can educate and ensuresafety.”
He explained that mr safety will bedevoted to feedbacks on anomalies, nearmisses, enforcing good practices.
According to him, “We recognise safetythrough the reflective jacket and we areobserving it in all our service centres.
“The implementation of mr safety inour service stations is fully in line withdirective we received and this will bethe pillar of the safety culture in thestation, he (mr safety) will also be theone devoted to the objective of safetycontrol during the service-stationoperations.
“We don’t have much accident, ourmajor safety risk is on transportation buttoday we have safety measures in all ourstation and depots. Sometimes theremight be attacks, but we have aprogramme where we train customerattendant on how to deal with everycustomer and how to prevent fire withextinguishers,” he said.
Are you saying there is nolull in the industry followingOduah’s exit consideringthat you are a supervisoryminister?
Being a supervisoryminister doesn’t make meless effective. I have themandate of the President toensure the ministry worksand that is what I’m doing. Ihave already started bycontinuing theimplementation of theaviation roadmap because itis part of the transformationagenda of Mr. President andapproved by the FederalExecutive Council (FEC),which I’m a part of. Theaviation roadmap as you areaware, is a comprehensiveblueprint on how to transformthe Nigerian aviationindustry into a modern,viable, profitable andsustainable one.
The roadmap gave birth tothe upgrade of all 22 federalairports, building of fivebrand new moderninternational terminals to belocated in Lagos, Abuja,Kano, Port Harcourt andEnugu. Works on theterminals have started andwould be completed by 2015.The roadmap also definedthe future of perishable cargoterminal in Nigeria. Already,16 of those terminals areunder construction and mostof them, if not all, should becommissioned by 2015.
The roadmap also talkedabout the concept ofaerotropolis — a concept
that would turn airports inLagos, Abuja, Kano andPort Harcourt into businesshubs offering world classservices in travel/tourism,entertainment, commerce/industry and lots more.Recall that our aviationindustry was in total neglectfor over three decades.Most of the infrastructurewere dilapidated and thequality of services was justas poor. Safety standardswere a source of worry.Even the standard oftraining at the Aviationcollege had reducedremarkably. But whenPresident GoodluckJonathan came, he madethe aviation industry acritical component in histransformation programme.
He had to do that because anation with a poor transportindustry, especially theaviation sector, can’t reallyprogress; the nation can’talso optimize its fullpotentials. This thoughtprocess gave birth to theapproval by the president ofmassive upgrade ofinfrastructure in the aviationsector. It also gave impetusto the upgrade of servicedelivery by governmentagencies in the aviationsector comparable to otherparts of the world and mostimportantly, the raising ofsafety standards in theindustry.
Safety is critical because asthe pilots would say, there isno parking space in the air.So one safety snag can cause
unimaginable consequences thus,we take safety critical in the sector.Safety is critical to me and I willnever compromise on it. We arealso committed to growing thesector to a profitable one. Recently,the GDP was rebased and Nigeria’seconomy is now worth $510 billion,the largest in Africa and 26thglobally. Good news but how muchdid aviation contribute to thatfigure, about N200 billion annuallybut the industry can contribute overN500 billion to the GDP annually ifdeveloped further. This is ourtarget in 2015 perhaps by 2020, theaviation sector should becontributing N1 trillion annually tothe nation’s economy annually andsupport well over 500,000 directand indirect jobs. The futureindeed for the industry is bright, Ican tell.
Talking about the rebased GDP
Since the removal offormer minister of
Aviation on 12th ofFebruary, 2014, you’veheld sway as thesupervising minister ofaviation, how has theexperience beenconsidering the crisis thatrocked the industry beforeyou came in?
Mine is to hold theministry and ensureeverything is workingperfectly until a substantiveminister is appointed. Thatis the much I’m doing andthe experience has beenfine though, challenging.The aviation ministry iscritical to our nationalprogress thus; it must behandled with great care.My brief is to see to theprogress of the aviationsector as a supervisingminister so there wouldn’tbe a lull. The US FederalAviation Authority justaudited our aviationindustry as a criticalprocess for us to maintainour Category One status.That process went onsmoothly despite nothaving a substantiveminister and we are hopefulwe will retain our CategoryOne status as we metmajority of the critical areasassessed.
I’ve startedimplementing theaviation road map— OrtomThe recent removal of the Minister of Aviation,
Princess Stella Oduah saw the appointment of ChiefSamuel Ortom as the supervising Minister forAviation. Chief Ortom fielded questions fromAviation reporters on the recent developments in theaviation sector especially the recent recommendationby the Steve Oronsanye panel that some aviationparastatals should be merged.Excerpts:
•Chief Samuel Ortom
By LAWANIMIKAIRU
Vanguard, MONDAY, MAY 5, 2014 — 29
Interview
and the aviation industry, whatdoes it have in store for us?
The rebased GDP is positive forNigeria. But like the Coordinatingminister of the economy, Dr.Ngozi Okonjo-Iweala hasexplained, the rebased GDPdoesn’t mean we don’t haveeconomic challenges that must beaddressed and should beaddressed. The new GDP onlygives us a better picture of thesize of our economy and how thevarious components arecontributing to the growthtrajectory. This is significantbecause it would allow the variouscomponents of the economy tocompete in terms of valueaddition. For instance, theaviation sector can betterappreciate its value and retool itseconomic offering for betterprofitability.
Yes, we have challenges as a
nation but let’s celebrate ourlittle successes whereverthey occur. Also, with therebased GDP, Nigeria canmarket herself better. Forinstance, if I’m selling theaviation sector to local andinternational investors, I canconvincingly explain howtheir investments can beprofitable because theNigerian economy is on thegrowth trajectory. There isjust no way other sectors ofthe economy would grow inisolation of the aviationsector. It’s just not possible.People must travel totransact certain businessesas not all deals can be fixedvia emails or telephones. Youmust also travel for tourismand other socialengagements.
Thus, with more economicprosperity, it goes withoutsaying that the aviationsector would boom as well. Ialso make bold to say, asmore foreign investors areattracted to Nigeria becauseof the new size of theeconomy, some would investin aviation. In fact, we arealready positioning tobenefit from these investorshence the infrastructureupgrade at the airports andother infrastructure we arebuilding across the country.
These airports underconstruction, when
will they be completed andcommissioned?
We are hoping they wouldall be ready by 2015, allthings being equal. Besidesthe five brand newinternational terminals, justabout 15, out of the 22 arestill being done. In fact, outof these 15, five are almostready for commissioning andthe remaining 10 may beready before December orthereabouts. Work is inprogress on the airports andthe 14 cargo terminals. Ihave started inspecting theprogress of work done andthe facilities across theairports to ensure the
airports are delivered ontime and to specification. Sofar, I have visited Enuguand Owerri.
I also visited Kaduna andAbuja. I will also be visitingLagos and some other stateswhere we have projects on-going in the coming weeks.We are not leaving anythingto chance. The immediatepast minister had said, therewill be no abandonedproject in aviation sector. Ican also assure that, therewill be no abandonedproject in the aviationindustry. I’m not the type toabandon laudable projectsof my predecessors becausethe projects are for thebenefit of Nigerians and notfor the individual minister.
My children will benefitfrom the system tomorrow,just like your children andevery other Nigerian. Weare building an enduringculture and a system thatworks irrespective of who isthe minister. We must learnto build institutions, notindividuals.
What about safety andsecurity?
Security and safety of ourairports are very importantto us. In all the airports thatare being done, safety is acritical component. You maynot get to see the safetyinfrastructure but it’s there.I may not be obliged to tellyou all of our safety andsecurity procedure forsecurity reasons, but I canassure you it is robust.However, you would agreethat we’ve moved from atradition of one full bodyscanner at our airports totwo scanners now in Lagosalone. In MurtalaMuhammad Airport, Lagoswe also have five screeningmachines that detect metals,explosives and other
banned substances. Wehave several metal detectorsin the other airports andother security infrastructure.Don’t forget, we are comingfrom decades of decayedand neglected industry,fixing it won’t be a tea party.It is a painstaking processand it will take time too. Ithink Nigerians should be alittle patient with us. Yes, wemay not have met allexpectations, but we canonly do better. Our target isto ensure international bestpractices.
Recently, the FG issueda white paper on
the Steve OronsayeCommittee whichrecommended that NiMET,NCAA and NAMA bemerged into one. The FGapproved therecommendation. Aviationstakeholders havecondemned the approvalarguing that it would be abad precedent in theindustry and Nigeria mayrisk sanctions from ICAO.Is government worriedabout these concerns?
The Steve OronsayeCommittee, I believe,considered all options andconsulted widely with therelevant stakeholders evenin the aviation industrybefore making therecommendations.Government has also lookedcritically at the proposal andconsidered it in the interestof the sector to approve theproposal. The merger, Ibelieve, will improveefficiency and reduce wasteand overhead cost in theaviation sector. However,the President has set up animplementation committeeto see to the merger process.I don’t believe thegovernment would go allout to implement policies
that would hurt the aviationindustry. The governmentconsiders the aviationindustry very critical totransforming the economy,thus it wouldn’t jeopardizethat with aviation-hurtingpolicies. Let’s trust thegovernment to do what isright. This government is alistening one, if at any pointthe government considersthe merger detrimental, itwouldn’t hesitate to rescindits decision.
Any challenges so far sir?You call them challenges, I
call them opportunities tomake a difference in thesector. In whatever I do, Istrive for excellence so I canleave a place better than Imet it. So, whatever it is thatis lacking in terms ofinfrastructure is anopportunity, even for privateinvestors to step in and fillthe gap. This governmentwelcomes private investorsin the sector and we areready to support them inwhatever way possible.
But some critics say, thisgovernment isn’t investor-friendly. How can youcorrect this impression?
That is far from the truth.Recall in February, justbefore the immediate pastminister left the cabinet, sheheld stakeholders' andinvestors' meeting atOriental Hotel in Lagos.The engagement was heavyand it lasted for about aweek. During theengagements, including thebuy-in for staff of theaviation industry, theminister and heads of all theaviation agencies took time toexplain the vision of theindustry, the investment areasin the industry and theopportunities that lay aheadfor staff and the private sector.Will a government which isanti- investor do all those? No.
During those intensiveengagements, discussion lineson investments areas wereopened and we are continuingengagements on that. Imaintain, and you can takethis to the bank, we areinvestor-friendly and norational mind can discredit oursincerity of purpose. Thereare several investment areasthat have been developedand are still beingdeveloped like airportfacility management, duty-free development, shoppingmalls at the terminals,restaurants, perishablecargo processing facilities atthe perishable cargoterminals, new airlines etc.The opportunities for theprivate sector players arealmost limitless. I willwelcome all investors and sowill Mr. President.
,
,•Chief Samuel Ortom...The government considers the aviation
industry very critical to transforming the economy, thus it wouldn’tjeopardize it with aviation-hurting policies
Thisgovernmentwelcomesprivate investorsin the sector andwe are ready tosupport them inwhatever waypossible.
30 — Vanguard, MONDAY, MAY 5, 2014
CMYK
Homes & Housing Finance
THE Federal Governmentis set to employ the use
of biometric technology totackle house racketeering,whereby the rich andinfluential buy up houses builtby government and re-sell atexorbitant prices to the lessprivileged.
Minister of Lands, Housingand Urban Development, Mrs.
Giving an insight into theexisting and on-going projectsand partnership withdevelopers, Olayinka added:“Some of these estates includethe Teju Royal Garden Estatein Okokomaiko, which hasover 600 housing units of oneand two bedroom terracebungalow, three bedroomssemi-detached and threebedrooms fully detachedbungalows. Apart from theaccessibility of the estate dueto the current development ofthe Lagos-Badagry ExpressRoad as well as the proposedRail track to link Marina Lagosend, the price of the houses arevery affordable.”
He said other projects thatthe bank is involved in include:Dreamville Estate, Owode –Ibese road, Ikorodu, which hasover 120 housing units invarious stages of development;
NIGERIA’s assetmanagement group,
Assets & ResourceManagement CompanyLimited, ARM, has unveiled itsiconic Lakowe Lakes on May 1,2014.The Lagos New towndevelopment project has beenmodeled after other globallysuccessful urban developmentprojects. With the plan to fullyintegrate a self sustainingmunicipality that willincorporate first classinfrastructure, Lakowe LakesGolf and Country Estate, a 308Hectare developmentoverlooking a 55 hectare man-made lake is designed as anexclusive, secure and serenehaven to provide a newdestination, high-endresidential neighborhoodlocated on the Lekki-Epe Axis,some 25 minutes outside thebustling city of Lagos. It featuresa pristine 18-hole beautifullymanicured golf coursedesigned by PGA Professionaland golf course architect, RobertO’Friel, with a completeclubhouse that affords a luxuryand secured gated communitywith other sports facilities suchas a swimming pool, squash,tennis and badminton courts.
Akon Eyakenyi, disclosed thisduring an inspection tour of theministry’s prototype housingscheme in Suleja, Niger State.
She said government willdeploy the technology to curbsharp practices in the allocationof houses, expressingoptimism that the strategy willlead to significant reductionthe housing challengesconfronting majority ofNigerians. “We are trying to putup a system where we willensure that no more than one
person will have access to oneunit so that it can spread to allpersons. I want to guaranteeNigerians that under thisdispensation, an individualwill be entitled to only onehouse,” she stated.
The minister noted that the102-unit housing estate, madeup of 3 units of threebedrooms, 44 units of twobedrooms and 32 units of onebedroom apartments, are beingdeveloped under the PublicPrivate Partnership (PPP)
scheme.Eyakenyi explained that the
three-bedroom apartmentswould be allocated tocontributors to the NationalHousing Fund (NHF) for N5.8million, while the two-bedroomand one-bedroom houses areto cost N4.7 million and 1.8million respectively.
In a related development,the housing minister said thefederal government, incollaboration with the privatesector, is expected to deliverabout 10, 000 housing units toNigerians before the end of theyear.
Speaking at an event recentlyin Abuja, she stated: “InFebruary, the Presidentlaunched the NigeriaMortgage Refinance Company(NMRC) Scheme and as wespeak, we have about 14 statesthat have indicated interest tobe a part of this scheme. We’reall aware that housing is amajor problem and it’s absurdthat people work 35 years andat retirement still live in rentedaccommodation. Arrangementsare in progress and in the nexttwo months, they will start upthe project and before the endof this year, 10, 000 housingunits will be delivered toNigerians.
“Other than thegovernment’s contribution inthe housing sector, we are alsonegotiating with developers ona public private partnershipapproach where thegovernment will give land andyou will have the developerand mortgage bank come in sothat it will help Nigerians andcivil servants to acquire it andit will become their own.”
States axis through mortgages.These, according to him,include the currentdevelopment of the ResortEstate Ofada, with over 400housing units, tastefullyfinished 2 and 3 bedroomterrace bungalows, whichNigerians will be able to accessat affordable prices. Headded that work is also ongoingat the Resort Pearl Garden inSangotedo, which will have atleast 80 housing units.
The RSL boss stated furtherthat in the bank’s bid tostrengthen its position in thehousing sector, it is partneringwith a lot of developers ineither financing their projectsor providing mortgagefacilities to the off-takers ataffordable interest rates.
RESORT savings andloans (RSL) Plc says it
plans to intensify efforts toensure more Nigerians haveaccess to affordable housing.
Managing Director/ChiefExecutive Officer of themortgage bank, Mr. AbimbolaOlayinka, in a statement,confirmed that the bank hasbeen able to bridge the gap inthe housing deficit nationwidea little by creating over 4,000housing units in recent times.He said there are plans by thebank to further improve on thisin order to put smiles on thefaces of more Nigerianfamilies.
Olayinka said RSL, in thefirst half of 2014, plans to makeavailable over 2,753 housingunits in the Lagos and Ogun
Dabis Royal Estate off AllenAvenue, Ikeja; South-drift inLekki; Gracious Gardens,among others.
Other ongoing projects in theother parts of the country,according to him, are: JedoMass Housing Estate, inUshafa Bwari area council,with over 1,000 housing unitsunder construction; MahfasSunshine Estate, Kurudu,Abuja, with over 500 housingunits completed and over 1,000units in various stages ofcompletion. Others are ResortCourt, Karu; Kubusa GardensEstate; Orchards Estate,Lokogoma; Von Garden CityEstate and; Shelter view,Maraba in Abuja.
The intention, according toOlayinka, is for Resort Savingsto create at least 5,000 housingunits in Abuja and its environsthrough mortgage creation.
FG tFG tFG tFG tFG to taco taco taco taco tackle house rackle house rackle house rackle house rackle house rackkkkkeeeeettttteeringeeringeeringeeringeeringwith biometricswith biometricswith biometricswith biometricswith biometrics*To deliver 10,000 units by year end
March, according to the latestfigures from the Bank ofEngland. The number ofmortgages approved in Marchfell to 67,135, down from 69,592in February.
The February figure was itselflower than January ’s.Mortgage approvals have nowfallen by 11.9 percent in thepast two months.
The figures, which are thelowest since October 2013,came as some surprise toexperts. They will also supportthose who argue that the UK isnot in a housing bubble, as theyshow mortgage offers arerunning at half the level theywere during the last housingboom.
Approvals peaked at 133,000a month in November 2003.
One possible explanation forthe fall in lending is that banksand building societies mayhave tightened up on lendingprocedures even before theMortgage Market Review(MMR) rules came in at theend of April. Under MMR,lenders have to scrutiniseborrowers more closely, to checkthey can afford the loan inquestion.
*Mr. Degri Emmanuel ...I don't know what else I would doif not theatre.
Mr. Degri Emma-nuel is theM a n a g i n g
Director/Chief ExecutiveOfficer of Treasure HouseEntertainment, a filmproduction outfit based in Jos,Plateau State. In this chatwith Vanguard recently, thegraduate of Theatre Arts fromthe University of Jos saysinsecurity has greatly affectedthe business. Excerpts:
According to DegriEmmanuel, Treasure HouseEntertainment came intobeing in 2005, offeringskeletal services but went intofull operation in 2011. "Wehave done a lot of productionsthat are performed beforedignitaries, productionsgeared towards politicalissues, productions that treatthe present insecurity issue inNigeria; productions that dealwith matters botheringNigeria," he said.
Before setting out on hisown, Degri had worked withJos Repertory Theatre andsays that the owner of thetheatre, Mr. Patrick-JudeOteh, contributed to what hehas become today.
A man of many parts, Degrisays apart from acting andproducing films, he also
would do if not theatre.Theatre arts has been a betterpart of my life. I have
of a production thatchampioned the whole aspectof HIV/AIDS epidemic in theearly days. Ford Foundationfunded us to do that under theJos Repertory Theatre, thesame way the NationalAgency for the Control ofAIDS, NACA, did on HIV/AIDS and drug abuse, we didall that. I just completed amovie production titled LegalClinic, a job by Sound City."
Challenges:On the challenges facing
the business in Nigeria, Degrisays apart from paucity of
funds, insecurity and theadvent of Nollywood, alsopose a great challenge to thebusiness.
Funds: "Because TreasureHouse Entertainment ismajorly focused on stageproductions,(although we aretrying to do a film onHepatitis B and sickle cellanaemia, everything is readyexcept funds),and that takesme to what actually is thechallenge - funds. It's eitheryou don't have enough fundsto do a quality production;when I say qualityproduction, it is not quality inacting. You see, overseas,actors don't need to shoutbecause they have clip andlapel microphones so theyjust talk in a relaxed moodand you hear them; but here,you need to shout. You haveto raise your voice becauseyou don't have the equipmentand the money to buy them.One of my mentors has beenTyler Perry. He first startedfrom stage productions andthen later put them togetherand mass-dubbed them andpeople are watching them likea film now and that is becauseit is of high quality and youwill not be able to tell thedifference between stage andfilm- good lighting, goodsound, good everything butwe don't have that here."
Insecurity: "People nolonger come out to watchstage productions. If you wantto get light effects, who wantsto come and sit and watchproduction from 7.00pm till9.00pm in a place like Jos orin most parts of the north? InPlateau State for instance, by9.00 - 10.00pm, everybodywants to be home. Althoughpeace has returned relativelybut nobody wants to be out atnight."
Nollywood: "Also the adventof Nollywood is a majorchallenge. People prefer towatch movies in their houses.Live performance, for me, hasbeen the best, it iselectrifying, it's fun! I act onlive stage and it is not aproblem switching from stageto film. But here, every Tom,Dick and Harry gets on thefilm and wants to act whetherthey read theatre arts/ film ornot. I think abroad, I stand tobe corrected, everyone goesthrough the rudiments ofdrama and then they becomefilm actors and that is whythey are best at what they dobut here, we do not have thatculture," he said.
The outfit which he startedfrom his home, has twoemployees. Says Degri: "It isa gradual process; we mightnot be a household name yetbut in Jos City and parts ofAbuja, if you ask of DegriEmmanuel, it is a knownname so we appreciate Godfor what He is doing. We arejust taking one step at a time.Little, little drops of water willbe a mighty ocean very soon,"he enthused.
Overseas,actors don'tneed to shoutbecause theyhave clip andlapelmicrophones sothey just talk ina relaxed moodand you hearthem; but here,you need toshout; youhave to raiseyour voicebecause youdon't have theequipment andthe money tobuy them
consults for the hospitalityindustry, trains students onproduction, and sings, withtwo albums to his credit. "Myspecialty majorly is directingthough I also act. I haveparticipated in a few filmssuch as The Heir, showingright now on STV and otherstations; I have also featuredon Amstel Box Office, AMBOproduction entitled Cyndy'sNotes. Theatre, I would say,is my life; I have been able toparticipate in over 50 plays. Ihave participated in and alsodirected plays such as Prof.Wole Soyinka's The King'sHorseman, Ola Rotimi's TheLion and the Jewel and anadaptation of the all-timeprose written by the late Prof.Chinua Achebe, Things FallApart in which I played therole of Okonkwo. I have beenable to play major rolesbecause I have passion forwhat I do.
"I don't know what else I
consul tedf o rNasarawaS t a t eTroupe forover fouryears andwe havealways beenable to takethe goldmedals," hesaid.
In 2005,while stillwith the JosRepertoryTheatre, hehad theprivilege oft ravel l ingoutside thec o u n t r y ."We did ajob with theB r i t i s hCouncil. Sowe were inthe UK fortwo weeksstaging aplay wewrote calledOur House.And then at h e a t r eg r o u pbased inG l a s g o w ,S c o t l a n d ,also camehere anddid aproduction,"he stated.
HIV/AIDSepidemic:
"I havebeen a part
CMYK
Vanguard, MONDAY, MAY 5, 2014 — 33
“Stock Exchange lostN780bn in turbulent Q1”,PUNCH, April 22, 2014.
The report by SimonEjembi went on todisclose that “the
Banking Index fell by 16 percent in the first quarter of thisyear; more than any sectoralindices, in what some analystssay is the worst performanceby the Exchange in 10 years.”Those who might find thisresult startling, especiallythose who lost some money onaccount of this report, havethemselves to blame. Icertainly was not surprisedbecause I had expected it. Inthe first week of November2013, I had warned ourreaders, in my SUNDAYVANGUARD column,FRANKLY SPEAKING, to beprepared for another round oflosses on the Nigerian StockExchange in 2014. Andleading by example, I hadcalled on my Stockbrokers tooffload some shares – mostlybank shares. It was a wisedecision and it will becomewiser as we move into 2014.Banks and their shares are,once again poised to take abeating on the Exchange.
April had been just asturbulent as any month sincethe year started. The reportsby listed companies, which
Revisiting the Nigerian StockExchange —1had excellent 2013 had beenreleased. That has had theeffect of pushing up shareprices. There has also been anew listing which increasedthe aggregate. Additionally,the rules had been slightlyamended to allow some shareprices to move up or downwith only 5000 shareschanging hands. All thesehad affected the performanceduring the month in ways westill don’t understand fully.
However, what should be ofinterest to investors is the factthat the pattern of reportingyear-end results had notchanged very much and thatwas the core reason why thepresent losses were predictedlast November. Nigeriancompanies listed on theExchange follow the sameroutine annually. ByNovember, and in some casesas early as October, the Boardand Management of thecompanies already knowwhether or not they areheading for a successful yearor not. Year-to-date actual
results compared withbudgets and forecasts for theyear already reveal thesituation in which thecompany will find itself byDecember 31. There are onlythree possible outcomes –better than expectations, juston the mark and belowexpectations – all thesewithout taking intoconsideration the creativeaccounting methods that arefrequently employed toachieve ostensibly goodresults. Then, themanagement games start.
budgets very quickly closetheir books at the end ofDecember and start preparingtheir Annual Reports andAccounts. With or withoutcreative accounting, theyknow they have a good reportto give. Thus annually, thefirst results to be released arethose of the first category ofcompanies – those who hada successful year. This yearis not therefore an exception.
The next batch of resultscomes from those on theborder line. This could meanthat the turnover target wasachieved but profit estimateswere down or vice versa.Because most investors onlylook at the profit anddividends declared, adequateturnover which wouldordinarily have resulted inlow profits and no dividendswould call for the figures tobe “massaged” a little bit tomake them acceptable toshareholders. This requires alot more time to prepare. So,as general rule of thumb, if acompany has not released itsAnnual Reports and Accountsby end of April, of thefollowing year, then, it isprobably safe to assume thatit is in category two or three.
The real problems are thosein category three – those whohad relatively disastrousresults; turnover is way down;
profits are low, or losses hadbeen incurred and there isreally nothing to cheer aboutin the results. These are thefirms which take forever to filetheir reports; some takingalmost the whole of thefollowing year to do it. TheNigerian Stock Exchange,NSE, and the Securities andExchange Commissions,SEC, are forced to step inbefore some of these firmswould act. That has againprovided another rule whichwe use to determine thedirection of things – evenwhen the results have notbeen released. The longer ittakes a listed company to fileits returns the more likely thatthe news is bad.
That, however, is not all.Policies announced by theFederal government, duringthe year, especially by theCentral Bank of Nigeria,CBN, invariably impactaggregate performance in theeconomy on a broad front.Furthermore, despite thesteps taken to reduce theinfluence of banks in the AllShare Index, they stillconstitute the biggest sector.When banks are in trouble;everyone is in trouble. At themoment, the banks are stillreeling from the effects of theCBN’s policies introducedlate last year. New measureshad since been introducedwhich will make 2014 adifficult year for banks for theirclients and which will erodeprofits by increasing cost ofgoods with little opportunityfor sellers to increase prices.
Irrespective of what thebanks do, they are facing avery difficult year ahead. Andso is the Stock Exchange….
Managersare like kidsgoing homewith theirreport cardsat the end ofthe term.The kid,who camefirst, rusheshome; theone whocame lastreluctantlydrags hisf e e thomewards.Companieswhich hadachieved, orare likely toa c h i e v e ,r e s u l t sbetter than
Savers card international,owners of the Savers club
card said its partnering EcobankTransnational Incorporated tore-launch its premium discountcard.
The Savers Club DiscountCard which comes as aReloadable Card has all thefeatures of a standard ATM cardwith all the CBN approvedsecurity features.
The Savers Club Cardpowered by Interswitch isusable on all ATMs, MobileApplications and POSTerminals in over 1,500Merchant locations all overLagos.
The Savers Club Card grantscard holders discounts onpurchases up to 40 percent inover 1,500 merchant locations in
Discount centres include supermarkets,eateries, hotels, Spas, restaurants,boutiques, Laundromats, salons, bookshops,Hospitals, clinics, electronic shops, auto-garages and car shops just to mention a few.
The Savers Club cards can be bought inany branch of Ecobank in Lagos in what thecompany’s Business Development Manager,Nnenna Ejiogu referred to as its pilot phaseof the partnership with Ecobank.
In an innovative twist to the re-launch ofthe Cards, Savers Card International alsopartnered with three leading insurancecompanies to bundle the card with anelectronic Third party Motor Insurance packcalled the Gogo pack.
By this bundle, any buyer of the GoGopack automatically has both a “self-ServiceThird party motor insurance cover “ and theSavers Club Card to enjoy discounts in over1,500 merchant locations in Lagos.
,
,However, what should be of
interest to investors is the factthat the pattern of reportingyear-end results had notchanged very much and thatwas the core reason why thepresent losses were predictedlast November
34 — Vanguard, MONDAY, MAY 5, 2014
CMYK
Tax Matters
Collectionprocedure (2)Interest & Penalty for Late PaymentThe interest is not an alternative to the penalty.
Interest is for late and deferred payments whilepenalty is charged for late payment of tax. Interestis therefore charged in addition to the penalty incases of late payment.
Self-AssessmentPenalty starts to count from the due date of
payment but interest starts to count from a dayafter the due date of payment.
Government AssessmentsPenalty is charged from the date the assessment
was issued but interest is reckoned from a dayafter the assessment was issued.
Example 4A company was served a notice of amended
assessment for N500,000 to replace a disputedgovernment assessment on 1st May, 1992. The taxremained unpaid till 31st October, 1992.
Comment
PENALTY FOR LATE PAYMENT
Note:1/5/92 to 31/10/92 6 monthsPenalty = 6/12 of 10/100 of 500,000 =N25,000
InterestDue date of payment - 01/05/92Day of Reckoning - 02/05/92Interest rate - 20% per annum02/05/92 to 31/10/92 - 183 days.
Deferred Payment: Interest & PenaltyWhen a company arranges with the Service to
defer the tax due, interest is chargeable butpenalty may not be imposed if the application isapproved. The interest is calculated on reducingbalance basis.
Interest on Payments in Excess of ApprovedInstalments
When a taxpayer seeks to pay the tax due in anumber of instalments greater than that approvedfor self assessment as specified above, interest ispayable on the excess number of payments, alsoon reducing balance basis.
Example 5XYZ Limited, with 31st March, 1993 as the due
date of payment of the self-assessment, hasapplied for the payment of the tax due amountingto N100,000 in ten equal monthly instalments.
Commenta.) Since the company is entitled to six
instalments in the current year of assessment, thefirst six payments terminating on 31st August,1993 will not attract interest.
However, interest will be charged on thebalance of four months on reducing balancebasis as follows:
Default in Payment of Approved InstalmentsWhen a company defaults in the payment of the
instalments as approved, the concession standscancelled. Interest starts to count from the datethe default occurs. The calculation of the interestis also on the reducing balance basis.
Interest on ArrearsAs from 1st January 1991, arrears of tax are to
carry interest at commercial rate. The interest is inaddition to the annual penalty and both are to becharged annually.
Lateness in Filling Application for InstalmentPayments
Where a company is late in applying forinstalment payment arrangement, interest shouldbe charged from the date of reckoning (a day afterthe due date of payment) to the date ofcommencement of the payments. The accruinginterest should be added to the tax and spreadover the number of instalments allowable underthe circumstance.
Petroleum Profits Tax (PPT)In view of the fact that transactions in the oil
industry are in dollars and the operators areallowed to keep their proceeds of sale in accountsoverseas, government has directed that theestimated tax of an accounting period under theprovisions of Section 27 of the PPT Act, 1959 shallbe made and submitted to the Service in USdollars and when payments are being made, eachmonthly payment shall be in US dollars and shallbe equal to one-twelfth of the estimated tax or ofthe fraction of the remaining months of theaccounting year for which a revised estimated taxbecomes necessary and is so estimated.
The final PPT payable, that is, thethirteenth installment, shall be ascertained asprovided for in Section 38 (4) of the same Actsuch that so much of the amount of instalments ofestimated tax that had already been paid in USdollars shall be deducted from total PPT computedin US dollars based on the annual accounts.
LitigationAs explained above, instalment or deferred
payments, as the case may be, will be approvedfor companies with convincing proof of seriousfinancial problems. However where thearrangement fails to yield the desired result, legalaction may be instituted against defaulters toenforce payment.
Withholding Taxes (WHT)Payments made to companies and certain
categories of individuals are to suffer deductionsat source as follows:
Payment of withholding tax is now in thecurrency of the contract agreement.
The individuals covered by the Federal InlandRevenue Service are the non-residents, residentsof Abuja, members of the Police & Armed Forcesand External Affairs Officers. Other individualsare under the tax jurisdiction of the State taxauthority where the individuals reside.
*The term ‘contract supplies’ covers all forms ofsupplies, deliveries, or the like throughcompetitive bidding, tenders, LPOs or otherarrangements, whether oral or written. The termdoes not cover across-the-counter cash sales orsupplies in the ordinary course of sales.
WHT on Investment Income
(i) Non-Residents: WHT on dividends,interests, rents and royalties payable to non-resident remain the final tax.
(ii) Residents: With effect from January 1992the provisions in the Act regarding thesepayments as final tax have been amended. Theyare now to be regarded as payments on account.
Remittance of WHT to Tax AuthoritiesFailure of an agent of deduction to remit WHT
within the statutory time-limit will attract:
(iii) Interest at commercial rate on the amountnot remitted by the agent,
(iv) Prosecution of the agent for default, and(v) Denial of Tax Clearance Certificate to
such an agent.
Furthermore, where the agent is a governmentministry, parastatal or department or a localgovernment, the Service may authorize theAccountant-General of the Federation in writingto deduct such tax plus interest at the prevailingcommercial rate from any allocation due to suchagency.
WHT as Tax CreditWithholding taxes are advance payments and
they can only be applied as tax credit to settle theassessment of the year to which the income thatsuffered the deduction relates. Where thewithholding tax credit exceeds the assessment fora given year, the excess may be carried forward asfuture set-off.
Refund/Set-off Where it is proved that the person who suffered
the deduction is not liable to tax or that taxwithheld is in excess of the assessed tax, theService will grant a refund or a carry-forward, asthe case may be, after the claim has beenconfirmed by tax audit process.
RATES
Vanguard, MONDAY, MAY 5, 2014 — 35
CMYK
Agric Business
Professor Sir Gordon Conway visits Alliance for a Green Revolution in Africa (AGRA)Grantees.
Modern technology can save farmersfrom poverty —Experts
BY SALIMAT GARBA
Leading agricultureexperts haveattributed hunger and
poverty tin Africa to thedecline in agriculture ,adding that growth inagriculture equates to areduction in hunger andpoverty.
According to them, thetremendous declinein Africa’s agricultural sectorin the past three decades isbecause of lack of investment,inadequate research anddevelopment, pestinfestation, poor agronomicpractices, climate change andlackadaisical attitude towardsbiotechnology in agriculture.
Sir Brian Heap, ProjectLeader, Biosciences forFarming in Agriculture(B4FA) in his words says “justby applying existing andavailable agricultural adviceand technologies, theproductivity of Africanagriculture could double ortreble. But new agriculturaltechnologies are beingdeveloped and trailed whichcould achieve even more.”
More so, Lord EwenCameron, while speaking atthe B4FA book launch eventat the House of Lords,London, stresses the need forAfrica and the world’s
continuous promotion ofimproved modern technologybecause of its ability toenhance food security that noother way can.
Cameron expresses regretsthat the financialopportunities in agriculture
are not maximally harnessedin Africa, adding thatAfricans are faced withchallenges which aresupposed to be opportunities.
“There is a lot of water inAfrica but there is littleinfrastructure for getting the
water. Thereare manyhectares ofarable landsin Africa butthere is landinsecurity.
Identifyinginvestmentin researchand trainingfarmers as
the biggest investment agovernment can make, hepoints that democracy is veryimportant in the future ofagriculture.
“What are the right seeds?How do you get hold of theright seeds? MarketInformation, mobile phones,technology and internet arevery important in democracy,”Cameron adds.
For Lord Paul Boateng, thesignificance of localagriculture should never beforgotten. According toBoateng, while building onlocal agriculture, there shouldbe adequate investment inResearch and Development
(R&D) as it is critical toagricultural development inAfrica.
He observes that the worldis presently witnessingresurgent of R&D inagriculture and that allindividual countries arebeginning to make headwayin the Maputo Declaration.
The lord, however, urgesAfrica to set its own agendathrough the UK parliamentand all other friends inScience and Technology.
Furthermore, Hon OwenPeterson, Secretary of Statefor Environment, Food andRural Affairs, UK, during thevisit of some B4FA fellows tohis office discloses that theproblem the world willencounter in feeding itself inthe next 40 years are very realand something to be preparedfor.
“At this very moment, thereare one billion people on thisplanet who are chronicallyhungry. Are we really goingto look them in the eye andsay we have proventechnology to help, but theissue is just too difficult todeal with, it is toocontroversial?”
Peterson explains that theworld population will soonmove from seven billion tonine billion and there will beeven fewer resources to feedon.
“It is our duty to exploretechnologies like GeneticModification (GM) becausethey may hold answers to thevery serious challengesahead.”
AU commends agriculture growth inthe continentBY JIMOH BABATUNDE
The Commissioner for RuralEconomy and Agriculture, AfricanUnion, Tumusiime Rhoda Peace,has said that agriculture has beenshowing a growth performance ofabout four percent per annum overthe last decade under theComprehensive Africa AgricultureDevelopment Programme(CAADP).
She said this is an indication thatagriculture and the rural sector areat the centre of the transformationagenda in the continent. Just as sheadded that public spending onagriculture in Africa has risen byover seven percent.
Speaking at the just concludedAfrican Union (AU) JointConference of Ministers ofAgriculture, Rural Development,Fisheries and Aquaculture in AddisAbaba, Rhoda Peace commendedthe efforts in the increase inspending but said much more mustbe done on the continent.
“The Decision of the AfricanUnion Assembly of Heads of Stateand Government to commemorate2014 as the Year of Agriculture andFood Security and marking the 10th
Anniversary of the Adoption of CAADP,provides us all with a unique opportunityto engage ourselves in an exercise ofhonest assessment and reflections of theprogresses made thus far.
“The lessons we have learnt, and chartclear set of goals and targets forimplementation in the next decade in acontext of transformative agenda to getrid of hunger, malnutrition and povertyfrom our continent”, she added
Rhoda Peace said following intensiveefforts by the continental body to boostthe agriculture sector through initiativeslike the Comprehensive AfricaAgriculture Development Programme(CAADP) public spending on agriculturehas risen.
But this is not time to rest, as AU-member states we must ensure we tackleall challenges in order for transformativegrowth to take place on the continent,”Mrs Tumusiime said.
Rhoda Peace said for growth to berealized through the agriculture sector,the marginalised, vulnerable, womenand young people must be taken care of.
She said since 2014 being the year forAgriculture and Food Security, moreneeds to be done to ensure that this sectorwhich employs over 75 percent of Africa’sworkers improves livelihoods andtransforms lives.
With thissolution formonetization,it is capable ofmakingNigeria aleader inAfrican mobileApp economy
From left: Public Relations Strategist of Konga.com, Ifeanyi Abraham, Konga's Head of Marketing, Gabriel Gab-Umoden,and Alhaji Mohammed Abubakar, President of NACCIMA during Konga's emergence as theMost Innovative and Impactfulretail brand in an award presented by Lagos Chamber of Commerce and Industry in Lagos.
Africa’s payment card,Verve has said that ithas developed a
solution that will help mobileapplication developers tomonetize their products andservices without goingthrough thet e l e c o m m u n i c a t i o ncompanies.
This solution called VervePayment Wallet is designed tobe integrated into mobile appsat conception stage and willprovide a payment gatewaythrough which app users andsubscribers can pay using themoney in their bank accounts.
Verve said it is partneringwith global phone maker,Nokia and software maker,Microsoft to introduce thissolution on apps on windowsphones. At the moment aboutseventeen mobile applicationswhich have been selected forAlpha DevCon, an appcontest, are already availableon windows phones, usingthis payment gateway.
It could be recalled thatmobile app developers havebeen having difficultiesplacing premium on theirapps because the telcos whoprovided the only option fora payment gateway gavestringent conditions whichmade their craft anunprofitable venture at the
end of the day.For instance, some of the
t e l e c o m m u n i c a t i o ncompanies insisted on taking60 percent of the app’srevenue leaving 40 percent tobe shared between app storeowners and the appdevelopers.
To even enter into any suchpartnership with the telcosrequired that the appdeveloper obtain a ValueAdded Service licence whichcosts up to N500, 000. This isfar beyond the reach of mostof the developers, many ofwhom are just startups.
But will this Verve PaymentWallet, which is obviously thefirst of its kind in the mobile
Feyisan Ayo-Vaughan, an18 year old 100 level
Project Management andTechnology student of FederalUniversity of TechnologyAkure, FUTA has emergedwinner of KaymuEasterBunny Hunt.
The competition which wasorganized by the onlinemarketplace Kaymu.com.ngto mark the Easter celebrationinvolved a hidden bunny onthe marketplace which usershad to find to enable themclaim the 22 inch SamsungHDTV Monitor offered byKaymu electronics seller,Foramot.
The Easter campaign beganon the 18th of April and endedon 21st of April 2014.
Speaking on the event,Managing Director of KaymuNigeria, Massi Spalazzi said,“The Easter Bunny Hunt wascreated as an entertainingand engaging medium toreward customers and itbrings us great joy to see itbeing won by not only a welldeserving customer, but ayouth. This just goes to showthat the Nigerian youths areembracing the onlineshopping culture.”
app ecosystem in Africa as faras payment is concerned, savedevelopers the trouble ofgoing through mobile networkbilling system and thus makethe App economy (apponomy)begin to contribute its rightfulquota to Nigeria’s grossdomestic product?
Verve’s Osiriame Momoduwho spoke to FinancialVanguard about the solutionsaid the Verve Payment Walletideally solves the paymentproblem for app developers.
He said since the solutionwill enable them to integratean effective payment systeminto their apps, that is all theyneed to scale theirmonetization hurdle.
He said, “This has becomeimperative since thecontribution that mobileapplication can make to theeconomy is enormous. Thepotential is huge. It is drivingthe economies of somedeveloped countries. At themoment, it is also growinghere based on just downloads.But with this solution formonetization, it is capable ofmaking Nigeria a leader inAfrican mobile apponomy.”
He explained that, “Themobile network operatorswhich have credit billingsystem would have been agood option for appdevelopers to monetize theirservices but because of the 60/40 percent sharing formula;
the developers are not keenon exploring that option. Butthis billing system does notneed them to integrate withany telecommunicationnetwork operator. Howeverfrom inception, the appdeveloper needs to integrateits payment system with thisVerve Payment Wallet and anyuser of verve card can easilymake payment for whateverservices the app is meant tofacilitate. And the charges arenot as high as that of thet e l e c o m m u n i c a t i o ncompanies. It is just 2.5percent compared to 60percent charged by thetelecoms companies.”
This maybe the beginning ofa defining moment for themobile app landscape inNigeria, nay Africa because ofthe economic motivation thatventuring into mobile appdevelopment can bring. Theimplication is that this couldresult in a boom in mobileapplication ecosystem thatwill move the apponomy fromthe current paltry $4bn it iscapable of generating at themoment to at least $20 billionin the next five years.
However challengesremain, despite some level ofsuccor this may bring to appdevelopers, the solution’sreach beyond the formalsector is very limited sinceonly the banked customerscan benefit at the moment,excluding the huge potentialof the unbanked population,who also have access to mobilephones. Also, the fact that thepayment solution is stillrestricted to Verve excludingthe vibrant market of theMasterCard and Visa alsoconstitutes a shortcoming.
,
,
BY JONAH NWOKPOKU
Nikon, Jumiapartner to boostcamera accessin NigeriaAs part of its effort to make
cameras andphotography equipmentsaffordable for aspiringphotographers, Nikon haslaunched a special bundledeals in partnership withNigeria’s online retailer,Jumia.com
Announcing this at thisyear’s Nigerian PhotographExpo and Conference,NiPHEC, held in Lagos,Michael Imomoh, BrandManager, New CreationInternational, the officialdistributor of Nikon productsin Nigeria, said the offer is ina bid to further identify withits customers and boost accessin the country.
“This special deal will bevalid on the Nikon 03100DSlR camera with the 18-55mm kit and special dealsavers across a total of 22product line to all registeredNiPHEC participants, byusing their discount codes onJumia.com to purchase itemsof choice.”
He added that, “Apart fromthe networking andknowledge opportunities atthe NiPHEC, participants hadthe opportunity to explore andexperience the power,innovative creativity of Nikoncameras at a speciallydesigned exhibition booth.”
Winneremerges atKaymu EasterBunny Hunt
Vanguard, MONDAY, MAY 5, 2014 — 37
Insurance
From left: Idu Okwuosa, Compliance Officer, Stanbic IBTC Pension; Comrade Tunji Sekoni,Organiser, TUC and Susan Oranye, Executive Secretary, Pensions Fund Operators of Nigeria at the 2014 Workers day commemoration held in Lagos.
PenCom to begin clampdown on defaultingemployers
F ollowing theamendment of thePension Reform Act
2004 by the NationalAssembly recently, there areindications that the NationalPension Commission,PenCom, may soon beginclampdown on defaultingorganisations that fail to remittheir employees’ contributionto their Retirement SavingsAccounts, RSAs.
Statistics from PenComshow that some employersdeduct pension money fromtheir employees’ salary butfail to remit same accordingly.
Addressing journalistsduring the 2014 May Daycelebration in Lagos, wherethe Pension Fund OperatorsAssociation of Nigeria,PenOp, seized theopportunity to educate andenlighten Nigerian workerson the importance ofmaintaining RSA, ExecutiveSecretary of PenOp, SusanOranye, said that the issue ofremittance has become a hugechallenge for the regulatoryauthority, Pension FundAdministrators, PFAs, andallied bodies within thepension industry.
“Remittance is a challenge,”she said “but it is somethingthat the PenCom as well as allthe different operators isfacing and they are trying tohandle, they (PenCom) iscoming out with lists ofrecalcitrant employers,” sheadded.
According to her, beyondlisting the names of thedefaulting organisations, thebody alongside PenOp andindustry operators such asPFAs and Pension FundCustodians, PFCs arefollowing up with theseorganisations and havestarted arranging seminars,interactive sessions so thatthey can find out what ispreventing them fromremitting their employees’fund.
She said employers of labourshould see adequateremittance of pension fundsof their employees andadoption of such scheme bythose that are yet to do so asa corporate socialresponsibility (CSR) to theiremployees and the society.
“The funds are for theiremployees and it can be seenas a form of CSR on the partof the employers becausewhen you are seen to belooking after your employeesin the aspect of pension, andyour employees arecomfortable, definitely theywill be loyal, because theyknow that you care about theirwelfare. And as long as they
have that mindset, they aremore loyal to you, work harder,they are more productive andthe bottomline grows,” shesaid.
Oranye, who praised thework of PenCom in the lasteight years, suggested thatthe industry still needincreased awareness andcommunications, adding,“Since 2004 till date, aboutN24.6 billion has been paid toover 84,000 retirees, no
queues, no stories.”“This is a new dispensation
and this is what we are tryingto get the workers tounderstand that this is notthe old scheme and this is notthe scheme where people lineup, cry and beg for theirmoney. The new contributorypension scheme is reallyworking, it is really focusedon the Nigerian workers, itis transparent, fully funded,and safe, so every worker
should join.”On why the PenOp chose
Workers Day to break its newcampaign, a member ofPenOp RebrandingCommittee, Idu Okwuosa,who is also a Senior Managerat Stanbic IBTC said pensionawareness is still very low inthe country despite the factthat Nigeria still holds theposition of the nation withhardest working individualon the continent.
FBN Insurance, Etisalat collaborate tocreate airtime based product
By CYNTHIA CHIMEZIE
By ROSEMARY ONUOHA
FBN Insurance Limited, amember of FBN Holdings
Plc, in conjunction withEtisalat Nigeria, has launched‘Sure4Life”, an airtime-basedinsurance product designed toincrease penetration andconsumer access to affordableinsurance products via themobile telephone.
The product will provideEtisalat customers with onemonth free life insurancecover between May and July2014
FBN Insurance designed theproduct in partnership withEtisalat Nigeria for exclusivedistribution to registeredactive subscribers on thenetwork.
Speaking during the launchof the product at FBNInsurance corporate headoffice in Lagos, GeneralManager of FBN Insurance,Mr. Segun Balogun, said thatSure4Life is a convenient andaffordable way to accesssimple life protection andmedical expense cover plansvia the Etisalat network mobilephone.
According to him, theairtime-based insuranceproduct will help driveavailability and accessibilityto a vast portion of theuninsured Nigerianpopulation. The strategicobjective is to efficientlydeploy inexpensive andsimple insurance protectionproducts across variouschannels and marketsegments.
Balogun said, “Thisinitiative also supports ouraspiration to bring thebenefits of insurance toNigerians who otherwisewould have remaineduninsured and is in line withour strategic intent to buildthe biggest retail insurancebusiness in Nigeria.
To this end, FBN Insurancehas continued to pursuestrategic opportunities inpartnership with otherfinancial service businessesand mobile network operatorson key initiatives to increasepenetration and distributionof our products, he said.
It will be recalled that FBNLife now FBN Insuranceemerged as the first
insurance company in thecountry to launch a mobiletelephone product calledPadi4Life in partnership withAirtel Nigeria one year ago.
Sure4Life is currentlyavailable on the Etisalatnetwork and enablesregistered post-paid andprepaid subscribers to accesslife insurance protectionbenefits and medicalexpenses cover (resultingfrom road accident only) ofN100, 000 upon death andN10, 000 respectively, termsand conditions apply.
To enrol for this service,subscribers are to dial*48433# from their Etisalatnetwork and follow theprompts they receive. Theplan is opened to all Etisalatsubscribers between 18 and80 years of age.
Director, Business Segmentat Etisalat Nigeria, LucasDada, said that thepartnership will bringinexpensive and easy to reachinsurance products to thebenefit of Etisalat’s growingprepaid and post-paidcustomers.
of Nigeria (ICAN) hasoutlined the basic reasonswhy student perform badlyin its professional exams,just as it awarded certificateof accreditation to 23 tertiaryinstitutions and eight tuitioncentres which satisfied itsquality control parameter foraccreditation/recognition.
Some of the reasonsinclude: poor preparation,inadequate teachingpersonnel in terms ofnumber and quality,decayed infrastructure andinstructional facilities inmany institutions, poorlyarticulated curricula foraccounting relatedprogrammes, poor libraryfacilities, among others,President, ICAN, Alh. KabirMohammed identified.
To this end, he said thatthe Council resolved toaccredit centres where itspotential registered studentscould receive appropriateand qualitative technical and
FORMER Governor ofAbia State and owner of
the defunct domestic airline,Slok Airline, Dr. Orji UzorKalu has revealed that SlokAirline will soon resume itsdomestic flight operations inthe country.
Disclosing this developmentto newsmen at the MurtalaMuhammed InternationalAirport, (MMIA) Lagos, Dr.Kalu pointed out thatdiscussions were on-goingbetween Slok Airline andEmirates Airline to revive theairline in order to serve theNigerian flying public.
He said that both EmiratesAirline and Slok Airline werediscussing logistics at themoment stressing that as soonas the discussions werecompleted, the airline willresume its domestic flightoperations in Nigeria.
Dr. Kalu further noted thatSlok Airline was going intopartnership with EmiratesAirline as one of the bestairlines in the world stressingthat with the backing ofEmirates Airline, Slok Airlinewill do better in the domesticscene in Nigeria.
Slok Airline toresume flightoperations inNigeria
By DANIEL ETEGHE
CMYK
38 — Vanguard, MONDAY, MAY 5, 2014
Vanguard, MONDAY, MAY 5, 2014 — 39
Advertising, Media& Marketing
*From Left: Medical & Regulatory Affairs Director, Sanofi, Dr. Fifen Inoussa; representing Lagos StateHealth Commissioner, Senior Medical Officer 1/Malaria Program Officer, Lagos State Ministry of Health,Dr. Victoria Omoera, and Key Account Manager, Sanofi, Aderinsola Taiwo, during the commemoration ofthe World Malaria Day held at Sanofi office in Lagos recently.
NIGERIANS are finallyon the brink of the
cashless society that futuristsand others have forecastedyears back. Even when theCentral Bank launched amajor national campaign topersuade Nigerians andbusinesses to stop using cashand cheques in favour ofonline transactions, therewere skeptisms. Even on thisnote however, investors hadcalculated it would save theeconomy billions of Nairayearly, if there is increase inthe use of electronic paymentswith debit cards, smartphonesand online transfers.
And this became a majortendering for ad agencies topower a major marketingdrive with budget estimatedin millions.
Nigeria government set theexample by requesting theirestablishments to stop the useof cheques, since they areone of the heaviest users ofcheques. Today, an averageconsumer owns at least twocredit cards, and Nigeriansare systematically abandoningpaper bills for plastics andsmartphone.
Even businesses that reliedheavily on cash, for instance,hotels, superstores, airlinesetc — now go cashless.
The recent celebration of thefive years of Paga, a mobilepayment platform in Nigeria,gives credence to the fact thatthe cashless society hasfinally berthed.
Paga, developed on thepremise of simple and easilyaccessible payment solutionswas implemented to negatethe frustration of dealing withcash and other inadequatepayment channels; theplatform was founded by itsChief Executive Officer, TayoOviosu in April 2009.
Speaking on the company’smission, he said: “our missionis to create a service thatwould transform lives bydelivering innovative anduniversal access to financial
services for all Nigerians.With Paga you can pay for anygoods, service or send moneyto anyone with a mobilephone number or any bankaccount instantly. Businessescan also use Paga for any ofthese services and also collect
Cashless future: Paga rekindlesPaga rekindlesPaga rekindlesPaga rekindlesPaga rekindleshope with growth boosthope with growth boosthope with growth boosthope with growth boosthope with growth boost
AFTER a 13-week rigorouscompetition, Knorr
Quest Taste, a cookingcompetition organised byUnilever Nigeria Plc, produceda winner in the person of DixonOlakunbi.
He carted home a cash prizeof N2 million, a Ford Eco SportSUV donated by CoscharisMotors, and Kenwood kitchenequipment.
Following closely as thesecond runner-up was Nwando Onuigbo who got N1million cash prize andKenwood kitchen equipmentand third prize went to Olabode Akinyoola who won N500,000 and Kenwoodkitchen equipment. All othercontestants went home with aconsolatory prize of Kenwoodkitchen equipment.
For the last challenge of theseason, the finalists were toldto prepare a three-course mealwithin 1 hour, 30 minutes.Ingredients for the starterinclude catfish, garden egg,avocado, cous cous, quinoa andatarodo.
For the main, ingredientscomprised lamb, corn, breadfruit,plantain, rice, fettuccine,zucchini, pumpkin, aubergine,leeks and chocolate. To completethe three-course was dessertingredients such as mango,melon, flour and butter.
Expressing her satisfaction atthe outcome of the show, NsimaOgedi-Alakwe, Brand BuildingDirector, Foods, Unilever,Nigeria said that the winner haddisplayed skills and talentworthy to be crowned asNigeria’s best cook.
“I am extremely satisfied. I takethat from the excitement from theaudience and the winner. Shehas displayed skills and talentthat set her apart from her
contemporaries. About 14 ofthem started out when the showbegan some 15 weeks ago.Anybody could have won,” shesubmitted.
Head of jury, Dr Robertsconfessed that although he wasnot a lover of avocado but hecould not resist Dixon’sexperiment with the fruit.
According to Roberts, the finaldecision was not easy but based
Stories byPRINCEWILLEKWUJURU
Unilever delivers on Knorr Questpromise, as winner emerges
Things Customers Hate– Part 2
CONTINUED FROM LAST WEEK
Arguing with the customerWho likes to lose an argument? Not the customer. I suggest
you work hard to avoid an argument with your customers. Evenwhen you know they are wrong, it will be unwise to bluntly tellthem so. Telling them they are wrong may be perceived as an actof humiliation. It is better to explain your position tactfully, withoutsounding judgmental. Your logic may not always make sense toyour customers. Of course, you may educate them without makingthem lose face. It’s all in the approach.
Interrupting the customer (Cutting the story short!)Allow the customer to express her feelings of anger or frustration.
If you cut her short you may lose some vital information thatmight help you resolve her problems. Being allowed to expressherself also gives the customer some satisfaction and a sense ofrelief. You don’t want your customers to bottle up their anger.
Being defensive about customer complaints (“Yes, but….”)Acknowledge a complaint whole-heartedly. Apologise and
resolve the complaint. Being defensive won’t take you anywhere.After all, your few customers who complain are giving you asecond chance. Most dissatisfied customers simply walk away.Someone said that complaints are like a gift. Please accept them.
“Look, even our big customers don’t trouble us like this.”This is as good as telling the customer to take his business
elsewhere. It also denigrates the customer, making him appearunimportant. He won’t come back, unless your company is amonopoly.
Being given a take-it-or-leave-it option.Believe me, customers always have a choice. Don’t treat them
as if they had none. Only monopolies adopt this arrogant posture.But even monopolies don’t last for ever!
Forgetting a customer’s name.If you’re in business, you’d better have a damned good memory.
You must remember names and faces – especially the very regularones. People generally feel hurt when you forget their names. Ithink people love to hear their names. That’s just the way theyare wired. You can use it to your advantage.
Wrongly spelling a customer’s name.If you’re in doubt, always ask for the correct spelling. My name
is Allwell. I am not amused when some people carelessly write:Howell, Alwell or even Owell! Again, some people believe I mustbe “Allwell-Brown.” Anyway, I always tell them I’m not.
Wrongly pronouncing the customer’s nameSome of us make fun of our mistake after pronouncing a name
wrongly. It is bad enough not to know the right pronunciation;making fun of your mistake is almost unforgivable.
Attending to customers out of turnIt is not fair to attend to a customer before his turn just because
he is your relation, friend or benefactor. Doing so will alienatethose who came before him. It also smacks of corruption. Youmay want to have a separate service area for high-value customerswho require special treatment.
Fixing your eyes on the computer (or whatever else) whilethe customer is talking.
How would you take that if you were a customer? Whenever Iam confronted with the computer-age nuisance, my stock responseis to keep quiet until I get full attention. You need to maintaineye contact with your customers.
What are those things you don’t like as a customer?To share them on this page, send an email to:[email protected].
TO BE CONTINUED.
payments online fromMasterCard, Visa, or Vervedebit cards. Customers canalso receive Western Unionremittances from anywhere inthe world through their Pagaaccounts.”
Chi Limited, owners ofthe Hollandia yoghurt
national consumer promo hasproduced winners who are totravel to London and Parisrespectively.
The emergence of thewinners is in line with itspromise of rewardingconsumers who participatedin the Hollandia yoghurt‘Refresh N Win promo’ wheregifts worth millions of Nairawere won by participants.
A consumer in Benue State,Chigozie Victor, won thegrand prize of trip to Londonwhile another consumer inOyo State, Akinwole Dolapo,is to travel to Paris. Thepromo which commenced lastyear was closely monitoredand supervised by theNigeria Lottery Commissionand the Consumer ProtectionCouncil.
Managing Director of ChiLimited, Mr. Deepanjan Roy,said the Hollandia YoghurtRefresh N Win Promo was thecompany’s way of rewardingcustomers who have beenloyal in their patronage ofHollandia Yoghurt over theyears. “These customers havebeen there for us over theyears.
The youths, they say,“are the future of anynation”. In the light
of this awareness, the processof youth education anddevelopment would be toppriority on the list of objectivesfor any progressive nation. The wealth of a nationgarnered from the toil, sweatand sacrifice of its people willbe carelessly dissipated in thenext generation, if thetraining and education of itsyouth is handled with levity.
The critical questiontherefore, is whether or notour educational policies andprogrammes can produce theexpected quality of youthdevelopment that wouldensure successfulsustainability of the Nigerianproject. Private investment,wherever it occurs, willgenerally be driven by theprofit motive; consequently, ifyouth education is left solelyin the hands ofentrepreneurs, the basic rightto education may only beavailable to the small elitistclass, who can afford it. Themajority of citizens, who arefinancially challenged, willremain largely uneducated,and untrained and ultimatelybecome social liabilities, whowill retard wealth creationand probably also predicatesocial insecurity.
Nonetheless, educationseems to have been sucked inby the controversial wind ofprivatization of publicutilities.
Consequently, the numberof private primary schools hasgradually increased from aratio of, say, 1:20 publicschools to what may now be aratio of about three privateschools to every government-sponsored primaryestablishment. The productsof these private primaryschools, in turn, quicklyprovided a heavy stimulus forthe growth also of privatesecondary schools.
The death knell of apredominantly government-sponsored education sector is
Commercialization of educationand the storm aheadnow being sounded by thesteady growth of private andprofit-oriented tertiaryinstitutions nationwide;meanwhile, the graduates ofgovernment institutions arenow largely adjudged by bothpublic and private sectoremployers of labour asuneducated and anembarrassment to theinstitutions from whence theycame. Ultimately, we must bewary of a huge population ofquarter-baked youths with nojobs.
The mind boggles at thescary prospect of the impactof the disconcerting disparityof opportunities between asmall elite and a hugepopulation of impoverished,largely untrained have-nots!
Sadly, the whole structure ofyouth education in Nigeriahas now become ascommercialized as a cash andcarry supermarket. The mostdisturbing aspect of thisphenomenon is the high costof private education. In acountry where the highestpaid civil servant earns lessthan N1.5m a year and theleast paid civil servant earnsless than N100,000 annually,indications are that primaryand secondary school feesexceed N50,000 for thecheapest and over N1m forthe elitist cadres. Pray, howdo civil servants, who sendtheir children to privateeducational institutions,manage the abracadabra withtheir meagre salaries?”
The preceding is an editedexcerpt from an article, whichwas first published in August2005, with the above title (seew w w . l e s l e b a . c o m ) . Regrettably, almost a decadethereafter, the chickens arecoming home to roost. Inreality, the quality of
education in publicinstitutions has beenadversely affected byinadequate funding, as wellas political and economicfactors; for example, in spiteof United Nation Educational,Scientific and CulturalOrganisation’s best practicerecommendation for 26% ofannual budgets to beallocated to education,regrettably, for decades,education votes have hardlyexceeded 15% of annualbudgets. Worse still, therecurrent component ofexpenditure generallyconsumes the lion’s share ofthe vote, while the usual delayin passage of budgets andunbridled corruption wouldfurther reduce the possibilityof full implementation of therelatively paltry capital votefor education.
The ubiquitous dilapidatedstructures and facilities in oureducational institutions arethe inevitable products ofinadequate funding andmisappropriation of themeagre annual educationalbudgets; the protractedindustrial actions by staffunions, such as the yetunresolved 10 months oldstrike of polytechnic teachers,and the horrid regulardislocation of academiccalendars with the attendantoppressive impact on parentsare also due to inadequatefunding.
Furthermore, theinstruments of quota system
and disparate cut-off marks foradmission of students fromdifferent states intogovernment institutions isundoubtedly a monumentalinjustice; how does onerationalize the rejection of acandidate with excellentscores because of their stateof origin, while automaticadmission awaits abysmalfailures from some otherstates?
The decay in the educationsector accelerated with thereckless depreciation of ournational currency by over95%, between 1985 andtoday! The remunerationpackage for teachers inprimary and secondaryschools as well as lecturers inour universities becameinadequate to meet thesurvival needs of these ofthese cradle watchers; theresult has been a massexodus and loss of some of thebest brains in the country toforeign pastures.
Expectedly, poverty hasdeepened as severalindustries and businessescollapsed, as the nairasteadily depreciated fromstronger than 1:1 to today’sN160/$1. The promotion ofmisguided governmentpolicies and deliberate lack oftransparency andaccountability also inducedcorrupt practices with publicaccounts and also furtherwidened the gap between therich and the poor. Ultimately,the dismal quality of
education also instigated anexodus of students fromaffluent homes to expensiveeducational institutionsabroad. Conversely, whilechildren from privilegedhomes may pay over N8m($50,000) to study abroad,thousands of their indigentcounterparts constantly risktheir lives across deserts andturbulent seas to also seekgreener pastures abroad.
Ultimately, the beneficiariesof our failed educationalsystem are primarily thesponsors of local privateeducational institutions aswell as colleges anduniversities in Europe,Canada and United States. Indeed, if barely a hundredthousand youths pay anaverage of $50,000 annuallyfor tuition and livingexpenses, this would result ina minimum outflow of about$5bn (N800bn) annually (i.e.well beyond the relativelypaltry consolidated allocationof about N400bn in the 2014budget for the whole country. Sadly, the print and electronicmedia now readily tell a taleof a new scramble by foreigninstitutions to attract feepaying Nigerian students.
Sadly, however, if economicmismanagement of publicresources subsists, only afraction of our overseas-trained students will returnhome after graduation. Suchan event is fortuitously a win-win outcome for those firstworld economies, who areironically, our shylockcreditors as well asbeneficiaries of the expensivesacrifice we make for ourchildren to study abroad. Nonetheless, those sponsorsof foreign education may takecomfort in the knowledge thattheir wards are less likely tobe kidnapped or subjected tothe uncertainties and theabiding trauma of survival athome.
SAVE THE NAIRA, SAVE
NIGERIANS!
,
,Nonetheless, education seemsto have been sucked in by thecontroversial wind ofprivatization of public utilities
CBN bars debtors of closed banks from new facilitiesBY JONAH NWOKPOKU
A ll the people stillindebted to any of the
closed banks up to the tuneof N250 million have beenprohibited by the CentralBank of Nigeria, CBN fromaccessing new loans in anydeposit money bank inNigeria.
The Managing Director/Chief Executive Officer ofNigeria Deposit InsuranceCorporation, NDIC, AlhajiUmaru Ibrahim disclosed thiswhile delivering a keynoteaddress at the corporation’s2014 bank examiners’conference held in Lagos.
He said the banks havebeen notified of thedevelopment and chargedbank examiners to ensurecompliance with the newdirective.
He said the names of thedebtors will soon be madeavailable through the CBN’sCredit Risk Management
System and approved privatesector credit bureaus.
He noted that thecorporation has continued toface challenges of debtrecovery in terms of debt owedthe closed banks, some ofwhich remain unrecoveredsince 1994.
Earlier, he noted that theprimary objective of theconference is to update theexaminers’ knowledge andskills on contemporarysupervisory toolkits fordelivering the mandate ofbank supervision therebycontributing to the safety andsoundness of the insuredinstitutions.
The conference, heexplained, provided anopportunity for supervisorsand operators as well as otherstakeholders to brainstorm ontopical issues that continue toshape the nation’s financialindustry.
He further said that one ofthe banking industry reforms,the implementation of the RiskBased Supervision, has led tosignificant improvement inrisk management practices bybanks.
“Supervisory and financialreporting approaches such asmacro prudential supervision,sustainable banking,International FinancialReporting Standard, Basel II/III and consolidatedsupervision have also beensubstantially implemented inthe bid to strengthen thesystem,” he added.
He explained that, “Withoutprejudice to the foregoing,the challenges of lending inthe Nigerian environment,corporate governance, andimpact of fixed incomesecurities on the financialposition of deposit moneybanks, technologicalinnovations including mobile
money payment and theirimplication for sustainablebanking have remained
