Investors lose N960bn in 3 months as NSE market value drops by 7.3%

CMYK

MARCH 31, , , , , 20142014201420142014

Continues on page 18

CURRENCY BUYING CENTRAL SELLING

CBN Exchange rate as at 28/03/2014

107.20 +0.75

-99.55 +0.56

171.0 -3.152,951.00 -23.00

16.86 -0.19

DOLLAR 154.74 155.24 155.74

STERLING 255.3829 256.2081 257.0333

EURO 213.4793 214.1691 214.8589

FRA 175.2236 175.7898 176.356

CFA 0.3057 0.3157 0.3257

WAUA 238.1654 238.9349 239.7045

RENMINBI 24.8557 24.9365 25.0173

RIYAL 41.2607 41.394 41.5273

KRONA 28.5941 28.6865 28.7789

SDR 238.934 239.7061 240.4781

YEN 1.5128 1.5176 1.5225

TRAINING - The Health Canada/ NAFDAC Mentorship Training Workshop took place at theNECA House in Alausa Ikeja in Lagos yesterday From left: Mr Joshua Porter, Dr Dean Smith bothCanadian Delegates , Dr Paul Orhii, DG NAFDAC Dr Monica Hemben Eimunjeze, Director, Reg-istration and Regulatory Affairs NAFDAC and Mr Bobby Chauhan, Canadian Delegate at theworkshop Px Biodun Ogunleye

Investors lose N960bn in 3 months asInvestors lose N960bn in 3 months asInvestors lose N960bn in 3 months asInvestors lose N960bn in 3 months asInvestors lose N960bn in 3 months asNSE market value drops by 7.3%NSE market value drops by 7.3%NSE market value drops by 7.3%NSE market value drops by 7.3%NSE market value drops by 7.3%

By PETER EGWUATU &NKIRUKA NNOROM

Investors in the Nigerian capitalmarket lost N960 billionbetween January and March

this year. The Nigerian StockExchange, NSE, marketcapitalisation dropped by 7.3 percent to close at N12.27 trillion lastThursday from N13.23 trillionopening at the beginning of tradingon 2nd of January, 2014.

Conversely, investors reapedmore from their investment in theglobal capital market than in Nigeriain the first three months of the year.

The NSE All Shares Index droppedby 5.2 per cent for the first quarterended March 27, 2014 from 41.329.14points it opened during thebeginning of trading in January 2014to close at 39,186.93 points on Friday.The index measures the performanceof the stock market and also reflectshow prices of stocks have moved,

which in turn determines how muchinvestors made as gainsor losses.

Capital market operators here haveattributed the current decline in stockmarket indicators to the Central Bankof Nigeria (CBN)’s tight monetarypolicies.

Findings show that global stocksperformance fared better in the firstquarter as the US Nasdaq Indexsurged by 2.95 per cent to close at4,154.20 points last week Thursday.

Similarly theStandard &Poor500 index alsoappreciated by0.8 per cent toclose at 1,855.81points onThursday from1,841.07 itopened inJanuary 2014.

However, theDow Jones whichopened at16,504.29 pointsin Januarydropped by1.2per cent to closeat 16,302.77points last week.Tokyo’s Nikkei225, whichopened at16,291.31 pointsdeclined 9.5 percent to close at14,750.00 points;Hong Kong’sHang Seng indexdropped by 6.0per cent to close

at 21.846.45 points from 23,244.87points it opened in January, whileLondon Stock Exchange’s FTSE 100index dropped by 3.2 per cent toclose at 6,518.87 points on Thursdayfrom 6,731 it opened in January.

Meanwhile, another stock marketperformance gauge, marketcapitalisation, which opened inJanuary at N13.23 trillion, dropped by7.3 per cent to close at N12.27 trillionlast week, .

Specifically, at the close of tradinglast Thursday, the Nigerian boursemaintained a bullish stance, as theAll-Share Index and marketcapitalisation gained 0.97 percent (97basis points) to close at 38,186.93points and N12.27 trillion,respectively.

Also the number of deals rose by 2.93percent and the volume of dealssurged by 78.42 percent, while the

•Global stocks record mixed performance•Operators blame CBN’s tight monetary policies•Say they’re impeding capital market growth

Cover Story

CMYK

18 — Vanguard, MONDAY, MARCH 31, 2014

Continued from page 17,

,

Nigeria is a country ofabsurd economic

realities. The 13th largestcrude oil producer in theworld and the second largesteconomy in Africa earn anestimated $2.2 million a dayin oil revenue. Yet, its GDPper capita, at just over $1,400,is among the lowest for thecontinent and 54 per cent ofits 148 million people live onless than $1 per day. Thefigures are especiallyshocking because of theabundance of naturalresources primarily oil andnatural gas, and massiveagricultural potential basedon its climate and significantrural population.

Human development datafor Nigeria has remainedpersistently bleak despite aconsiderable upturn in thecountry’s economic fortunessince 2000. The UNDP ranked

Breaking the Nigerian povertycycle through entrepreneurialrevolution Part 1

the country 80th in a povertysurvey of 108 developingnations that focussed onsevere deprivation. Theagency gave Nigeria aHuman Poverty Index of 37.3,placing it below moreimpoverished Africanneighbours with far smallereconomies like Rwanda andMalawi. Significantly, thestudy looked not just atincome destitution, but also atsecondary aspects includingeducation, access to healthcare, standard of living andlife-expectancy. More than 67million Nigerians aredocketed as poor according tostandard definitions, while 35per cent of the total populationlive in extreme poverty.

These recent trends areespecially worrying becausethey parallel a significant butcontradictory improvement inNigeria’s macro-economic

performance. Before thecurrent global financial crisisset in, Abuja had beensuccessful in wieldingsubstantial positive change inits overall balance sheetsthrough a process of re-prioritisation and economicreform since 1999. A slew ofmeasures, includingprivatisation of several steel,petrochemical, mining andport entities helped developthe non-oil sector, bring downinflation and boostinternational currencyreserves. Nigeria alsosuccessfully negotiated withthe London and Paris clubs todo away with a large part ofits foreign debt.

However, World Bankresearch confirms that evenduring periods of relativeprosperity, poverty levelsremained unabated in thebroadest sense, and actuallyworsened during successivepositive growth periods.

Between 1972 and 1980,for instance, the

Nigerian per capita incomeshot up from $1,300 to $2,900based on rapidly escalatingoil prices. A subsequentdecline in global oil revenuesdragged down per capitaincome, consumption andexpenditure to critical levels.However, Nigeria neglectedinvestment in humandevelopment projects andcontinued to pump borrowedfinances into capital-intensiveenterprises. The fallout wasthat the dramatic rise innational fortunes bypassedthe majority of Nigerians, asevident from the negligiblerise in per capita consumptionfigures for the same period.

The differential effect onpoverty levels in rural andurban areas for the coincidingperiod is equally startling.Because of a simultaneousworsening of incomedistribution, rural povertydeclined slightly while thenumber of urban poor gained.However, the worst-off werealso the worst losers, as thepopulation living in extremepoverty across Nigeriaswelled up from 10 million to14 million. The obviousexplanation behind this is thatpolicy makers sorely failed toshare the increase in wealthequitably.

The obviousexplanation

behind this isthat policy

makers sorelyfailed to sharethe increase in

wealthequitably

value of deals dipped by27.81 percent.

Sectoral performanceThe NSE weekly reports for

the review period hadaffirmed that the FinancialServices Industry (measuredby volume) led the activity,followed by the ConsumerGoods Industry and the thirdplace was the ConglomeratesIndustry.

Operators reactions:Speaking on the market

performance for the firstquarter under review,Diekola Onaolapo,Managing Director/CEO,Eczellon Capital Limited, abusiness and financialadvisory firm, said thatdespite the favourableoutlook for the market at thebeginning of the year, therehas been a considerablepressure on the market sincethe beginning of the year.

According to him, themarket witnessed a myriad ofchallenges both foreign anddomestic in the last threemonths as current Year todate YTD, figure stands at -9.84 percent.

He stated that the combinedeffect of the United StatesGovernment’s gradualwithdrawal of its stimuluspackage (US tapering on itsQuantitative EasingProgramme by US $10 billion)and the outcome of themonetery policy committee(MPC) meeting in Januaryboth sent shock wavesthrough the market, addingthat some foreign portfolioinvestors dumped their

shares ‘hot money’ in theNigerian market for moreattractive and less riskypositions in more stablemarkets.

“This was in no wayexclusive to Nigeria as itaffected all the emergingmarket economies with theworst hit being Argentina,” headded.

He emphasised that theoutcome of the MPC meeting,which resolved to increase theCash Reserve Ratio, CRR, onpublic sector funds to 75 percent from 50 per cent had aneffect on the Exchange rate asit dipped by 3.21 per cent inthe following week andplunged to -0.34 per cent. Hesaid that this added to thepalpable uncertainty ofNigeria’s economy.

“The suspension of theGovernor of the Central Bankalso contributed to the dip inequities prices in the market.The All Share Index plungedby 1.47 per cent at theannouncement of thesuspension which led to afurther fall of 4.46 per cent inthe banking sector index, anevent which furtherexacerbated the marketdynamics highlighted aboveaffecting the Bond Market.This also gave a push to aseries of sell-offs by foreigninvestors,” Onaolapo stated.

Corroborating his view, Mr.Johnson Chukwu, ManagingDirector/CEO, Cowry AssetManagement limited, said theNigerian capital market hasbeen largely bearish in thefirst

quarter of the year with theindex and marketcapitalisation losing about10.04 per cent and 9.71

percent respectively year-to-date as at March 19,2014.

He noted that thedevelopment was at variancewith the return of 47.2 percent posted by the market in2013, while attributing thelacklustre performance tofactors both within andoutside the Nigerianeconomy.

“One of these factors isNigerian’s declining foreignreserves, which is currentlybelow $38billion and theattendant heightening ofprospects for Nairadevaluation or at leastdepreciation.

“The clear risk of currencydevaluation has not onlydiscouraged foreign portfolioinvestors from makingfurther investments inNigerian equities but has ledto the exit of investors whosefunds are not African orfrontier market focused,”Chukwu said.

“The second factor is themuch expected tapering ofQuantitative Easing by theUS Federal Reserve whichstarted in December 2013.With $20billion already takenoff the amount of monthlymortgage-backed securitiesand treasury bills purchases,the era of cheap money isgradually coming to an end.

Portfolio investors who,borrowed cheap in US toinvest in Nigeria and otheremerging markets are nowunwinding their emergingand frontier marketsinvestments and re-balancing their portfolio infavour of US financial

Investors lose N960bn in 3 months as NSEInvestors lose N960bn in 3 months as NSEInvestors lose N960bn in 3 months as NSEInvestors lose N960bn in 3 months as NSEInvestors lose N960bn in 3 months as NSEmarket value drops by 7.3%market value drops by 7.3%market value drops by 7.3%market value drops by 7.3%market value drops by 7.3%

Continues on page 19

AWARD - From left: Mr. Paul Wilson, Managing Director, Brian Munro Limited and Mr.Abayomi Ajao, Marketing Manager, presenting the overall National Distributor Awardgift of a Brand New Kia Sportage car key to Mr. Onyenanu at the Distributors awardnight held in Lagos

CMYK

Vanguard, MONDAY, MARCH 31, 2014 — 19

Business & Economy

,,

When in August 2009 Sanusi Lamido Sanusi intervened in five troubledbanks in the country; many saw it as a rescue mission. But I saw itdifferently. I whole-heartedly supported Sanusi cleaning up the toxic

assets in the industry. Beyond that, I disapproved of his taking over of somebanks that were still liquid at the time of the intervention. Sanusi did not separatethe individuals from the institutions. If some of the bank executives contravenedthe banking rules, the CBN or the law enforcement agencies are at liberty todeal with such individuals. As it happens so often in developed democracies,

The very sadthing thathappened thenwas waiversgranted tobillionaires. Atthe time, the linkbetween Sanusi,Lai Alabi andBukola Sarakiwas not so clearto Nigerians.Now that SanusiLamido Sanusihas openlyacknowledgedthat Saraki washis classmate,the picture ofwhat happenedto the rescuedbanks isbecomingclearer

Revisiting rescued banks’ grant of waiversto billionaires: What redress is possible?

companies that infringe onregulatory guidelines arefined heavily and in somecases, their chief executivesare prosecuted and jailed.

If Sanusi at the time hadrelieved the chief executives ofthose banks of their jobs andmade them to face the law, hewould have been a hero. Buthe did not stop at removingthe chief executives, he wentahead and took over the banks.That was what many did notsee that behind the scene,there were unseen handsguiding some of the well-targeted decisions. When someof us saw through what washappening and said so, thecountry never took our wordsfor certain. One of the very sadthings that happened then waswaivers granted to billionaires.At the time, the link betweenSanusi, Lai Alabi and BukolaSaraki was not so clear toNigerians. Now that SanusiLamido Sanusi has openlyacknowledged that Saraki washis classmate, the picture ofwhat happened to the rescuedbanks is becoming clearer.Now, if Saraki is Sanusi’sclose friend and Lai Alabiworked for Saraki, then theconnection and the subsequentchain of actions that led to theliquidation of some of thebanks is emerging in veryclear terms.

For those of us who reportedthe crisis recall with nostalgiathat Intercontinental Bank’sinterim management thenheaded by Lai Alabi hadgranted waivers to the tune ofseveral billions to somecompanies alleged to beassociated with Saraki. Thesedebtors were close to the theninterim management put inplace by the CBN Governor.The explanation then was thatin order to recover fully the

principal of their non-performing loans, themanagement of some of thetroubled banks startednegotiations with key debtorswho applied for forbearance.

In the madness of the time,Intercontinental Bank grantedwaivers to a debtor who owedthe bank N11 billion andapplied for 70 per cent waiver.Also, another customer whoowed the bank N1.5 billionapplied for forbearance andgot about N500 millionwaiver. The debtor was billedto pay N1billion but what wassaid to have reached thebank’s vault was N800million. The balance of N700million was given as waiverto the debtor.

In another instance, acustomer who owed N7.5billion was said to have hadhis entire indebtednesswritten off.

The suspended CBNGovernor, Mallam LamidoSanusi, when questioned byreporters at the 2009 IMF/World Bank meeting inIstanbul, Turkey, said that theCentral Bank will not getinvolved in the day-to-dayrunning of the troubled banks.He said that the onus ofrunning the banks was in thehands of the managementsand the boards.

It was clear from thebeginning that what washappening in the industry atthe time was not normal asbankers were worried thatthough it is normal for a long-standing non-performing loan

considered lost written off thebooks of a bank to be so treated,most of the banks bailed outby CBN had no functionalboards to grant such waivers,leaving the decision to theManaging Directors, some ofwhom were acting as soleadministrators.

The discretion applied bythose chief executives was notin the interest of reviving theailing banks but to pander tothe interest of those whoappointed them. In normalcircumstances, it is only theaccumulated interest andpenalty that are built into aloan term that can be grantedas waivers, not the principal.

It was abnormal that at a timewhen the Economic &Financial Crimes Commission,EFCC, was busy recoveringdebts from chronic debtors, themanagement of the troubledbanks started to give waiverswithout the approval of anylegally constituted board byshareholders. In the ordinarycourse of doing business,money fully provided for asloan loss when recovered goesto beef-up the capital orshareholders’ funds which thenon-performing loan hasgrossly eroded. What onefound disturbing at the timewas the fact that the caretakermanagement ofIntercontinental Bank haddisclosed that the bankrecovered over N78 billion outof the N142.644 billionprovisions for loans and otherknown losses, stating that thewaivers the bank granted to

debtors was in line with theexisting policy in the bank toencourage debtors to pay.Explaining the situation, LaiAlabi had said: “When loanshave become bad as they are,when the underlyingsecurities have virtually beentotally eroded as we havenow, then there is a need togive someconcessionsin order toencouragesuch debtorsto pay, thatis exactlywhat we didand this isthe practicein all banks- both inNigeria andworldwide.” T h e r eexisted suchpolicy onw a i v e r sbefore thep r e s e n tmanagementa s s u m e doffice, thiswas thenpresented tothe creditcommit teew h i c hrefined ita n dpresented itto the boardw h i c happroved it.But we arecontest ing

with serious issue of moles inthe bank, what these peopleintended to achieve was tomalign the bank, frustrate theprogress we have made forthe purpose of serving certaininterest.

”Most of the figures givenout are distorted. Forinstance, in some cases the

amounts theyare asked to payexclude thevalues of sharethe loans wereused topurchase. Also inmost cases, thewaivers took intoconsideration,wrong debits,penalty chargesand other entriesin dispute; weneed to have inmind that oureffort has so faryielded a rewardof about N80billion since theintervention.”

Now that it is inthe publicdomain thatsome of theactions werepremeditated tohelp a friend getwhat he hadcraved for butcould not get inthe ordinary runof business, whatredress ispossible for thoselost five banks?

instruments,” he added. OutlookCommenting on the outlook

for the second quarter, theEczellon boss said, “We expecta positive recovery from thefirst quarter dip; this positionis supported by the recentimpressive earnings postedand record dividend paymentof some quoted companies.With high expectations fromother companies yet to releasetheir audited accounts, we arepositive of a market recovery.”

“A foray of primary marketissues is expected to set thetone for rest of the year, as themarket has been viewed as

viable platform to raise longterm funds,” he added, sayingthat the de-mutualisation ofthe Nigerian Stock Exchange,capital issues by indigenousoil companies and likelyapproach of the market bythe power companies wouldadd to the expected positiverun in the second quarter.

He further stated that therebasing of the GDP by theNational Bureau of Statistics(NBS) will also lead to anoptimistic outlook for theeconomy, adding that therebasing would push thenominal output to about $400billion.

“The implication of this isthat public debt will contract,

improving the capacity of theNigerian state to increase herborrowing. We believe thiswill spur more of domesticborrowing than externalborrowing, hence the issue ofcapital market instruments.”

Unlike Onaolapo, Chukwustressed that the bearish runwill likely continue in thesecond quarter as some of thefactors that impededperformance in the first are yetto ebb.

His words: “The two criticalfactors that contributed to thebearish equities market in firstquarter 2014 seem to beworsening. While Nigeria’sforeign reserves is recordingaccelerated rate of decline, the

US Federal Reserve isexpected to further reduce themonthly asset purchases by$10billion to $55billion at theirMarch 2014 meeting.”

Consequently, he said thatthe Nigerian equities arelikely to record further pricedeclines as local fundmanagers particularly thePension Fund Administrators,PFAs, who should have filledthe gap created by the exit offoreign portfolio investorsseem to have stepped to thesidelines waiting to see howlow the market can get orhoping to buy when stockprices drop to their supportlevels.

In his review of the market

performance for month ofMarch, Bismarck Rewane,Managing Director, FinancialDerivatives Company, FDC,said the Nigerian StockExchange was off to a roughstart in the month with Year-to-Date, YTD, return decliningto 4.28 percent from 1.83percent, while marketcapitalisation declined by 2.30percent to N12.71trillion fromN13 trillion.

The month, he said, closedin the negative in 11 out of 18trading days. He added thatthe banking stocks werebiggest casualties declining by7.34 percent; consumer goodsand conglomerates sectorswere also affected.

Investors lose N960bn in 3 months as NSE market value drops by 7.3%Investors lose N960bn in 3 months as NSE market value drops by 7.3%Investors lose N960bn in 3 months as NSE market value drops by 7.3%Investors lose N960bn in 3 months as NSE market value drops by 7.3%Investors lose N960bn in 3 months as NSE market value drops by 7.3%Continued from page 18


CMYK

Business & Economy

*BRIEFING - From left: National Competitiveness Council of Nigeria (NCCN)Associate; Ms. Nihan Siriklioglu; MD/CEO; NCCN; Mr. Chika Mordi; and the SeniorAdviser, Economic, NCCN; Ms.Nneka Ekwuozor; at a Press conference held by theNCCN in Lagos.

The Food andA g r i c u l t u r eO r g a n i s a t i o n

(FAO) says the best way toattract youths to agricultureis for African governmentsto evolve fiscal policies thatwill allow them to haveaccess to finance.

Mr Bukar Tijani, FAO’sAssistant Director-General,Regional Representative forAfrica, expressed thisopinion during interviewwith News Agency ofNigeria (NAN) in Tunis.

Tijani urged Africanyouths to take advantage ofthe positive developmentbeing recorded in theagriculture sector.

He said: “we have someof the best economieswhich are agriculture-driven, not just mineraldriven. So, it is really timefor the youths to look atwhat and what we have. Itis not the governments inNigeria or othergovernments in Africa thatwill employ the youthsdirectly. It is the jobs thatwill be available in theagriculture sector. When weare talking aboutagriculture, it includes thecrops sector – horticulture,livestock, and fishery(aquaculture) and forestproducts.”

The immediate pastMinister of State forAgriculture noted that inNigeria and many otherAfrican countries,commercial banks are now

How African govts canattract youths toagriculture — FAO

willing to give loans to farmersat single digit interest rate aswell as demanding minimumor no collaterals.

He noted that governmenthas removed tariffs and otherexcise payments on agriculturalequipment to encouragefarmers and other peopleengaged in agri-business.According to him, theparticipation of 51 out of 54African countries with theattendance of 47 ministers is an

indication of the commitment ofleaders to harness theabundant potential in the sector.

“We have a lot of concernsbecause the agriculture sectorholds a lot for our economies.”

He pointed out thatagriculture contributesabout 40 percent of the GDPin many African countries,noting that opportunitiesabound in horticulture, cassavaand rice production.

Others are fruits and

vegetables markets as well asthe value chains in smallruminants, poultry, and allproducts of poultry and dairyproduction. The FAO assistantdirector-general underscoredthe fact that ICT could bedeployed in the agriculturesector for many uses.

“When we talk about ICT inagriculture, people are lookingat information, research, andmarket price, kiosks and wherebest prices are and besttechnologies they can use.

“In Nigeria, we think there isan excellent opportunity and abig trend where youths canform business groups and theycan be service-oriented in termsof giving service formechanisation, seed, fertiliser,extension services, amongothers.” He advised youthsclamouring for governmentjobs to have a re-think. “Whenyou look at the public or civilservice, you will find out that itis choked, but our youths arethinking that they will go intogovernment and work. Thework is not in the government,it is outside the government.”Tijani commended PresidentGoodluck Jonathan and theMinister of Agriculture, DrAkinwumi Adesina, for theachievements so far recordedin agriculture.

“Nigeria has been mentionedvery loudly in the sense that itis among one of the countriesthat is leading and has one ofthe fastest growth inaquaculture. It is also amongthe countries that are veryfocused on the employment ofyouths in terms ofe n t r e p r e n e u r s h i p /agribusiness. Nigeria is beinglooked at as a country wherelessons can be learnt by somany other countries.

The National CompetitivenessCouncil of Nigeria (NCCN) has called

for collaboration between private and publicsectors on competitiveness, in order toachieve efficient environment for doingbusiness in the country.

Also, as part of activities scheduled for thefirst year of its operation from inaugurationin February 2013, it announced a businessoutreach event to introduce the Nigerianbusiness, diplomatic community and keyindustry players to the council’scompetitiveness agenda, as well as facilitateopportunities for collaboration towardstransforming business productivity in thecountry.

Speaking at a media parley, inauguralCEO, NCCN, Mr. Chika Mordi, describedcompetitiveness as the aggregation of allsocial, economic and environmental factorsincluding institutions and policies that are

NCCN calls for private publicsector collaboration onc o m p e t i t i v e n e s s… organises business outreach

critical to enabling a country to reach itseconomic potential.

Mordi recalled that Nigeria ranked 147 outof 189 on the “2014 World Bank’s Ease ofDoing Business Report,” saying, “this simplymeans that when measured against 189global economies, many of whom are alsoAfrican, our environment is more challengingfor starting and growing businesses. Nigeriahas one of the most entrepreneurial peopleon earth and a large domestic market. Poorcompetitiveness shackles our potential.”

To this end, he said that sustainable growthand poverty reduction can only come aboutby market led growth.

He said, “We need to build a businessfriendly environment to combat the problemof unemployment and secure our prosperity.However, a high productivity environmentcan only be realised when the private andpublic sector come together to implement anagenda for competitiveness, to bridge the gapbetween opportunities and supportinginfrastructure, bureaucracy and policies.

By PROVIDENCE OBUH

AU says commoncurrency willpromote inclusivegrowth in Africa

Director for EconomicAffairs, Commission of

the African Union (AU), DrRene N‘Guettia, says there isneed for Africa to adopt acommon currency to ensureinclusive growth in thecontinent.

N‘Guettia said this at theongoing 7th Joint AnnualConference of Ministers ofEconomy and Finance andEconomic Community of Africa(ECA) in Abuja. He said thatthe aim of the summit was toensure the establishment ofAfrican monetary fund as partof efforts to ensure a singlecurrency to promote tradeamong African countries.

He, however, commendedthe achievement of ECOWASin promoting free movement ofpersons, saying it was thebiggest achievement of thecommission.

N‘Guettia stated that theAfrican Union had tried tomotivate the countries andother regions to replicate theachievements of ECOWAS intheir regions. “Because weknow that without freemovement, nothing canhappen, we cannot develop orindustrialise the continent ifAfricans cannot move freelyand we cannot develop Africantrade if Africans do not havefree movement,” he said.

CBN cashlesspolicy takes off inJuly in Akwa Ibom

The Central Bank ofNigeria (CBN) says its

cashless policy will take off inAkwa Ibom with effect from July1. The Acting Governor ofCBN, Dr Sarah Alade,disclosed this at a three-daysensitisation seminar in Uyo.She described the policy as“the best monetary optionpolicy, but long overdue inNigeria”.

Alade, represented by Mr.Okafor Nwokoro, ActingBranch Controller of CBN inUyo, said that the objective ofthe policy is to reduce cashpayments and encourageelectronic transactions in thecountry.

She said that the new policystipulated a charge for cashwithdrawals or deposits that areabove N500, 000 for individualsor N3 million for corporateentities. The acting CBNgovernor said that thepolicy commenced in Lagos,Ogun, Anambra, Rivers, Abia,Kano State and the FCT on July1, 2013.


CMY

Business & Economy

Standards Organisationof Nigeria hasapproved Dangote 3X

latest brand of Portlandcement, saying it meets therequirements for constructingresidential and commercialhomes.

Lagos State BricklayersAssociation and theAssociation of HousingCorporations of Nigeria(AHCN) have also endorsedthe product which comes in50kg bags and marked 42.5R.The three X stand for extrastrength, extra life and extrayield.

These are whatrepresentatives of the trioorganisations said separatelyabout the product during thepre-media launch in Lagos.

“SON has certified theproduct for having met therequirements of 42.5R,” saidMr. Onipade Adeoye. Withthis new product, we willcollaborate with Dangote tomake sure the product is usedby our members’ pan-Nigeria,” said Toye Eniola,spokesperson for AHCN.

Similarly, Abel Olusegun,President of the BricklayersAssociation Lagos, said: “Weare happy with theintroduction of the newproduct and we are going touse it.”

Devakumar Edwin, theGroup Managing Director ofDangote Cement Plc,disclosed that the product isthe first among three newcement products the companywill be introducing into themarket over the next fivemonths.

On the difference betweenthe 42.5R and the regularcement, he explained: “Theadvantages of the 42.5R gradeof cement over the 32.5 gradeare that it gives a finer finishto the concrete work. Whenmixed, the 42.5 grade hasfewer air-pockets andtherefore adheres better andhas a longer life. Also,because of its higher strengthcharacteristics 42.5 gradecement gives higher yieldthan 32.5 to users insituations where strength isnot a crucial factor,” he said.

The Honorary Adviser to theChief Executive/President ofDangote Group, Engr JosephMakoju, said the cementindustry which produced lessthan two million metric tonsof cement in 2002, has movedfrom self sufficiency to

SON, other stakeholders endorseDangote 3X cement

By JUDE NJOKU &FRANKLIN ALLI

become a net exporter of theproduct.

Noting that the industry hasmoved from a sellers’ marketto a buyers’ market, Makojusaid manufacturers must nowgo the extra mile to meetcustomers’ demands forhigher grade of cementproducts.

Oare Ojeikre, Group Chief

Marketing Officer, said theproduct was designed inresponse to industrystakeholders’ clamour for astronger grade of cement tostem the rising occurrence ofcollapsed buildings in thecountry due to the use of thelower 32.5R grade of cementin block molding and otheraspects of building

constructions. He alsonoted that with therecently establishedNigerian MortgageRefinancing Company,there will be need formore cement usage in thecountry as the country ishaving 17 millionshortages of housingunits.

APM Terminals Nigeria has said,though volatile, container

throughput in Nigeria is expected to growat an average annual rate of 8 to10percent during the next ten years, withgrowth in Eastern Nigeria beingsomewhat higher.

Disclosing this at the stakeholders’forum tagged “Challenges of CargoClearance at the Ports”, organised by theLagos Chamber of Commerce andIndustry (LCCI), Director, A.P. Moller,Mr. Neil Fletcher, said though volatile,container throughput in Nigeria isexpected to grow at an average annualrate of 8 – 10 per cent during the nextten years, with growth in East Nigeriabeing somewhat higher, adding thatconsidering current growth rates,majority of existing facilities will be shortof capacity during the period.

“We currently operate two containerterminals in Nigeria, Apapa in LagosState and West African ContainerTerminal in Rivers State. Last year wedecided to invest $135 million inincreasing capacity in Apapa and lastweek we’ve decided to invest anadditional $30 million in upgradingWACT. That aside, comparing what we

Container throughput in Nigeria togrow at 10% — APMT

By NAOMI UZORexpect the volume growth to be for thecoming years with the ability ofourselves and our competitors, webelieve that by 2017, demand willoutstrip supply. We have invested over$220 million on equipment,infrastructural, development, processautomation, local employee trainingand safety” he said.

He disclosed that thirty years fromnow, Nigeria will have close to 250million people living in the country andthat this will create additional burdenon the major city centers and increasepressure on its roads and rail network,adding that significant planning andinvestment must be made to prepare forthe future.

“While Nigeria’s population has andis expected to grow significantly overtime, the amount of cargo transportedvia rail has deteriorated significantly.As the population continues to climb,this will lead to urban sprawl and furtherpressure on existing major city centers.This means higher imports and exportswhich will put even more pressure on theexisting road network, which isunsustainable. Significant investmentmust be made to rehabilitate Nigeria’srailway system in order to meet thegrowing hinterland demand,” he said.

Minister of Agricultureand Rural Develop-

ment, Dr AkinwunmiAdesina on Friday warnedillegal fishing trawlers op-erating in Nigeria's watersto stop their activities.

Adesina gave the warn-ing during the inspectionof seized vessels by theNigerian Navy under thesupervision of the FederalDepartment of Fisheries(FDF) in Lagos.

The seizure of the ves-sels, belonging to Mid At-lantic Nigeria Ltd., was or-dered by the minister atBrawa Ports because thecompany had not renewedits licence to fish in 2014.

''Every vessel in the Ni-gerian waters must carryalong its valid licence tofish in the sea. It is suchcompanies as Mid Atlanticthat drive away our fisher-men from our waters andcreate unemployment. Youmust comply with the lawbecause the days of illegalbusiness in our waters areover," Adesina said.

The minister said thatthe company was adopting"illegal manner" to fish,leaving just a little for oth-er fishing companies tofish. Adesina said that MidAtlantic was in the habit ofthrowing back to the waterdead fishes which was aserious offence. He or-dered the arrest of the sev-en Chinese officers of thecompany. Commenting onthe arrest, Ms. Folake Ar-eola, Director of FDF, saidthat the vessels were askedto go and anchor, but wentahead to fish.

Areola said the vesselowners had been chargedto court, adding that thepenalty for such offencewas a fine of $250,000 oneach vessel or confiscationof the vessels.

Mrs Bunmi Ogungbe,Chief Fisheries Officer ofFDF, also said that thecompany's l icence wassupposed to be renewedevery year before theycould be allowed to fish.

Mr Lucky Germa, Oper-ations Officer of Mid At-lantic confirmed that thevessels were asked not tofish.

Agric Ministerorders illegalfishing trawlers tostop operations

*Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina, with the man-ager of one of the seized fishing boats and some officials of the ministry in one of theseized fishing boats, at the Kirikiri fishing terminal, Lagos, on Friday.


CMYK

Banking & Finance

Nigeria FinancialI n t e l l i g e n c eUnit has

charged the managementof bureaux de change(BDC) to put in placemeasures that will protecttheir businesses frommoney launderingactivities.

NFIU official, Mr.Anthony Enwereji gavethis charge in Lagos at atraining organised by theAssociation of BureauxDe Change Operators ofNigeria (ABCON) for itsmembers

In a presentation titled,“Overview of the MoneyLaundering ProhibitionAct 2011 as amended andPrevention of TerrorismAct 2011 as amended,”Enwereji said, “ForBureau de Changebusinesses to managetheir risk so as to ensurethat their businesses is notare not used as a vehiclefor money laundering, themanagement of theBureau must ensure thatpolicies and proceduresare in place todemonstrate the steps thebusiness has taken tosafeguard against theserisks. Policies andprocedures shouldinclude identification andverification requirements,

*SEMINAR - From left: Mr. Ledum Mitee, chairman, NEIT & member, PresidentialCommittee on Crude oil Theft; Prince Haruna Momoh,Managing Director, Product andPipeline Marketing Company, a subsidiary of NNPC; Dr Emmanuel Uduaghan,Governor of Delta State; Mr Niyi Ayoola-Daniels, President, International Institute forPetrolum,Energy Law & Policy, with Dr Philip Mshelbila,General Manager,Communication, Shell Petroleum Development Company of Nigeria Limited andInemo Samiama, Country Director, Stakeholder Democracy Network at the 2014Nigeria Oil and Gas Finance seminar held at Nicon Luxury Hotel Abuja. PHOTO BYAKEEM SALAU.

Protect your businessagainst money laundering— NFIU charges BDCs

By BABAJIDEKOMOLAFE

monitoring of businessrelationships, suspiciousactivity reporting, internalcontrols and systems,compliance controls andarrangements and the abilityto determine if transactionsare linked.”

He emphasised the need fortraining of BDC as a critical

step to protect their businessfrom the activities of moneylaunders. He said, “Bureaude change businesses musttake appropriate measures toensure that all agents andtheir employees are trainedso that they are aware of therelevant provisions of the CJA2010. At a minimum, the

training should includeensuring that employeesreceive appropriate guidanceto enable them to recogniseoperations which may berelated to money launderingand terrorist financing as wellas instructing them on how toproceed in such cases.Training also needs to be keptup to date so as Agents areaware of the changingbehaviour and trendsamongst money launderersand terrorist financiers.”

Speaking in the samemanner, ABCON President,Alhaji Aminu Gwadabe in hisopening speech, warnedBDCs to avoid being used byunscrupulous persons toperpetrate crimes like moneylaundering and financing ofterrorism. He said: “You willrecall that between Januarylast year and last weekend,the apex bank revoked thelicences of over 400 BDCsdue to one contravention orthe other.

While the revocationindicate that the apex bankwould not spare any operatorfound wanting, it is also awake -up call to BDCs, to payincreased attention to theiroperations and ensure thatthey are not found wantingwith respect to any of theregulatory requirements.Most importantly, BDC mustconduct necessary duediligence of clients inaccordance with regulatoryKnow Your Customer (KYC)Principle. This is to avoidbeing used by unscrupulouspersons to perpetrate crimeslike money laundering andfinancing of terrorism.”

The Central Bank of Nigeria [CBN]’scashless policy got a boost at the

weekend when the management ofSystemSpecs, the Nigerian software-housegiant behind Remita, offered waiver to theNigeria Computer Society [NCS], whichafford over 10,000 members of the societythe opportunity to remit their annual duesthrough Remita.

With this development, NCS individualmembers would issue standing orders viaRemita to their respective banks, and thebanks would remit the various payments toNCS’ bank accounts.

To demonstrate its commitment towardsensuring that NCS members fully embracethe electronic remittance initiative incompliance with the CBN’s policy,SystemSpecs has waived its normal standingorders fees for NCS members for the 2014annual dues.

The Managing Director/CEO,SystemSpecs, John Obaro explained that,“With this gesture, our objective is obvious.We want to reduce people’s need forhandwriting cheque. We want to reduce theneed to make payments using physical cash.For routine payments like membership fees,

SystemSpecs offers e-payment waiversto NCS members on Remita

subscription payments etc, you do not haveto keep writing cheques all the time.Individuals can use Remita to hand-write acheque normally or issue standing orderpayments. These are what the CBN’scashless policy is about”.

According to NCS president, ProfessorDavid Adewunmi, the NCS-SystemSpecsstrategic partnership would assistorganisations to identify, support innovationefforts and build capacities to help “realizethe huge potential in Africa’s fledgingmarket.”

Remita is a robust, integrated electronicpayment platform deployed by banks,governments and corporate organizations forelectronic payment, collection and payrollprocessing. It helps corporations andindividuals to seamlessly adopt e-paymentpractice, which is the cardinal objective ofthe CBN’s cashless policy.

The solution helps organizations and banksto comply fully with the CBN’s guidelineson end-to-end electronic payment of all formsof salaries, pensions, suppliers and taxes inNigeria. Users can make payments intoaccounts in commercial banks, micro-financebanks, mortgage banks and mobile wallets.

ICAN moves toattract youths toaccountancyprofession

The Institute ofChartered Accountants

of Nigeria (ICAN) hascommenced an initiative aimedat attracting young people intothe accountancy profession.

Tagged “Catch Them Young(CTY),” the initiative involvesholding awarenessprogramme in secondaryschools across the country toeducate them on theimportance of the accountancyprofession as a career choice.Last week, the CTY was heldin Keke Senior High School,Agege, Lagos state, with 300students drawn from thesixteen secondary schools inthe Agege Education Districtattending.

Addressing the students,President of the Institute AlhajiKabir Mohammed said that theobjective of the programme isto catch the young ones andmentor them into theaccounting profession and alsoto motivate them and teachthem the various principles bywhich people becomesuccessful in life.

Mohammed who wasrepresented by Chairman,Education and Training, ICAN,Mr. Rasaq Jayeola, explainedthat three districts in Lagos andother places like Abakaliki,Enugu, Owerri, Port Harcourt,Ijebu Ode, have enjoyed theinitiative which started threemonths ago.

Bank of Agriculturecomputerisesoperations,introduces mobilepayment

The Bank of Agriculture(BOA) has computerised

its operations. Thecomputerisation programme ispart of the strategic vision ofthe current management toreinvent and position BOA asthe foremost self-sustainingDevelopment FinanceInstitution (DFI) in Africa.

The computerisationprogramme will afford thebank’s clients the opportunityto access cutting edge realtime banking services acrossthe different platforms offeredby the bank across its 201outlets.

The computerisationinitiative makes it the firstNigerian DevelopmentFinance Institution (DFI) witha retail orientation tocomputerise its operations atall levels.

CMYK


Banking & Finance

LITERACY - From left: Regional Director, South-east/South-south of First City MonumentBank (FCMB) Limited, Mr. Okey Ezeala (first left); the Deputy Managing Director of the Bank, Mr. Segun Odusanya (third left); the Principal of Community Secondary School, Aka Offot atUyo in Akwa Ibom State, Mr. Jehu J. Obobikpe (fifth left) with some students of the schoolduring the Financial Literacy programme organised by FCMB for the students. The eventtook place at Uyo in Akwa Ibom State.

BY BABAJIDEKOMOLAFE

The Central Bank ofNigeria (CBN) has

introduced electronicreferencing to quickenprocess of opening bankaccounts.

To open current accountswith banks, prospective bankcustomers are required toprovide two referees. Thisreferees must have currentaccount with either that bankor any other bank. Where the

CBN introduces e-Referencing toquicken account opening process

references provided arecustomers of another bank,the bank will have to send thenames of the reference to theirbanks for confirmation beforecompleting the accountopening process. This isusually done by sending theaccount opening forms to thebanks to confirm if thereferences provided areindeed their customers.

According to the CBN,“Besides high illiteracy leveland low confidence in theFinancial System, a major

reason for this relatively smallnumber of account holders inNigeria is the inter-bankreference bottleneck whichmakes it difficult for newaccounts to be openedspeedily. At times, theprospective bank customersget frustrated and eventuallyabandon the process ofopening a bank account.

“The Nigeria Inter-BankSettlement System (NIBSS)Plc, in fulfilment of itsshared- service mandate andin conjunction with the

Committee of Heads of BankOperations (CHBO) hasagreed to develop anelectronic reference (e-Reference) portal, such thataccount opening processes ofNigerian banks can be fast-tracked with regards to inter-bank referencing.”

The Electronic referencesystem involves the sendingof account openingdocuments electronicallyamong banks through aninternet based portal createdand operated by NIBSS.

In a circular announcing theintroduction of the newsystem, Director, Bankingand Payments System, Mr.Dipo Fatokun explained, “Thee-Referencing system is a webbased automated documentmanagement system,designed to process customersaccount references, and iscapable of eliminating theinefficiencies of the old waysof manual referenceprocessing system. Theimplementation of thissolution ensures that inter-bank references becomefaster, more efficient andtraceable, by both thepresenting andreceiving banks. It is alsodesigned to enhancecompliance with the existingKnow Your Customer (KYC)directives. The e-ReferencePortal, which is hosted byNIBSS requires that receivingbanks respond to inwardreferences within three (3)working days.”

BY MICHAEL EBOH

Lacks of funding,i n a p p r o p r i a t e

government policies andinadequate infrastructurehave been identified as themajorfactors hindering thefacilitation of internationaltrade in Nigeria.

Diji Atoyebi, Head, Smalland Medium Enterprises,SME, Desk, Access Bankdisclosed this at the bank’sBusiness Banking Powerforum on international trade inLagos. He noted thatinadequate requirements forcapital financing, substandarditems and policy corruption atthe formulation andimplementation stages havenegatively affected import andexport trade in Nigeria.

FCMB adoptsschool forfinancial literacy

First City MonumentBank (FCMB) held an

in interactive session onFinancial Literacy with thestudents of CommunitySecondary School (CSS), AkaOffot, Uyo, in Akwa IbomState. The event was incommemoration of the 2014Global Money Week andFinancial Literacy Day.

The event which held onMarch 14, 2014 to coincidewith the World FinancialLiteracy day celebration, wasorganised in partnershipwith Junior Achievements ofNigeria (JAN), a financialeducation non-governmentalorganisation. Theprogramme, an initiative ofthe Banker’s Committee incollaboration with the CBN,is focused on educatingNigeria’s youth about theireconomic environment,impressing upon them theimportance of saving,entrepreneurship andfinancial creation.

Open MediaAlliance debuts asAfrica’s first ITnews network

Three technologyfocussed publications,

Technology Times, FinTech,and govTech haveestablished the first IT NewsNetwork in Africa known asOpen Media Alliance(OMA)

Open Media Alliance(OMA) is an online newscoalition to offer consumersthe widest reach and multi-channel advertisingexposures.

In order to offer itscustomers widest reach andmulti-channel advertisingexposures, TechnologyTimes, Nigeria’s leading technology publications, hasteamed up withfinancialtechnology andgovTechnology publicationsto establish the first Africa’sIT news network calledOpen Media Alliance(OMA). With its combinedofferings, OMA has thehighest number of readers,news uploads, analysis,feature stories, insights,photo news and interviews.Established in 2014, OMA isthe first truly online newscoalition to offer consumerswidest reach and multi-channel advertisingexposures.

Funding, govt policies affecting int’l trade facilitationHe noted that these

challenges, notwithstanding,the international trade sectorhave huge growthopportunities with a readilyavailable market.

To this end, he said AccessBank will guarantee safety offunds, appropriate channelservices, right pricing,financing at all levels oftransaction and partnership.

According to him, the bank’scompetitive edge is in theprompt processing andapproval of Form M, efficientelectronic channels, trainedand highly skilled workforce,competitive products andpricing, accessibility of loansand advances, financial andbusiness development advisoryservices.

According to him, Nigeria isan import-dependent country,

with statistics showing that 88per cent of the products in theNigerian market are imported.

He said, “Manymanufacturing companies relyon importations either in formof direct raw materials, semi-finished goods and ormachinery. The main partnersare China, United States ofAmerica, USA, Europe, Indiaand Belgium; these countriesaccount for over 70 per cent ofcountries of origin in importsin Nigeria.

“Nigeria has over 5,000exporters nationwide asrecorded by the NigerianExport Promotion Council.These companies exportvarious products ranging fromagricultural product,aluminum, chemicals,beverages and other finishedgoods.”

Atoyebi maintained thatfinancing is critical forinternational trade, asimporters, a lot ofmanufacturers and tradersrequire credit lines for theimportation of raw materials aswell as finished goods, whileexporters need to finance theproduction of the goods/commodities to be exported.According to him, the majorchallenge in financing,especially for Small andMedium Scale Enterprises,SMEs, is the issue of adequatecollateral to support workingcapital requirements.

He listed other challenges inthe sector to includegovernment regulations andlogistics challenges, which isseen in the difficulty in thetransportation of goods.


CMYK

Corporate Finance

BY PETER EGWUATU

United Bank for Africa Plchas recorded

impressive growth across keyfinancial performanceindicators, attributing it toimproved growth drive,sustained operationalefficiency and enhancedproductivity.

According to the financialreport released last week forthe 12 months endedDecember 31, 2013 andsubmitted to the NigerianStock Exchange, UBArecorded a 20.2 per centincrease in gross earnings toN264.7billion. This waslargely driven by a growth of40.4 per cent in loans andadvances as well as a 25 percent growth in the Bank’s totaldeposits. Consequently, theBank’s loan-to-deposit ratioimproved from 38.7 per centto 44.3 per cent. Theremarkable growth in loansand advances, especially inthe last quarter of the year,puts the Bank in a vantageposition for continuedrevenue growth in the comingyears.

In addition to achieving thisgrowth, UBA also enhancedits operational efficiency andproductivity with the Cost-to-Income ratio improving by 4

UBA records 20% increase ingross earningsUS high-

frequency tradingban unlikely— Nasdaq

U.S. regulators areunlikely to put rules in

place that would harm high-frequency trading (HFT) asdoing so would make tradingmore difficult and expensivefor all investors, RobertGreifeld, chief executiveofficer of Nasdaq OMXGroup said last week.

HFT is a practice carriedout by many hedge funds,banks and proprietary firmsusing sophisticated computerprograms to send highvolumes of orders at nearlight speed, executing short-term trades to make marketsor capitalize on priceimbalances. HFT makes upmore than half of all U.S.trading volume. Last week,New York state’s AttorneyGeneral Eric Schneidermansaid in a speech that U.S.stock exchanges andalternative trading platformsprovide HFT firms withunfair technologicaladvantages that give themearly access to key data.

Shares of Nasdaq, thethird-largest U.S. stockexchange operator byvolume, fell as much as 4percent during on the day ofSchneiderman’s speech, itsbiggest single-day drop sinceApril 2013.

BRIC bust fuelsinvestors rushinto frontiermarket

As investors dumpe m e r g i n g - m a r k e t

equities at an unprecedentedclip, they’re turning moreand more to frontier marketsin search of the next growthstory. No exchange-tradedfund focused on developingnations has grown faster inthe past year than BlackRockInc. (BLK)’s iShares MSCIFrontier 100 fund, whosebiggest holdings are inKuwait and Qatar. Assetsunder management surgednine-fold to $581 million,fueled by $458 million ofinflows and returns of 22percent. In contrast,BlackRock and VanguardGroup Inc.’s flagshipemerging-market exchange-traded funds have seeninvestors pull a record $26billion in the period,according to data compiledby Bloomberg. The MSCIBRIC Index is down 5.4percent this quarter, even asit is poised for its best weekof gains this week.

Shareholders ofDangote CementPlc have cause to

smile home this year as thecompany has proposed adividend of N7 per share.for the financial year 2013.

The proposed dividend bythe company would be subjectto approval of theshareholders at thecompany’s Annual GeneralMeeting (AGM) to be heldlater in the year.

Dangote Cement recordedupsurge in its sales volumeto the tune of 13.3milliontonnes leading to a 40.6 percent increase in profit beforetax over the previous year.

Hence the companydeclared a profit before tax ofN190.8 billion for the year.

The audited results of thecompany announced inLagos indicated that the pre-tax profit is 40.6 per centhigher than that of theprevious year while

per cent from 64.8 per centto 60.9 per cent. Thisimprovement was largelythrough prudent costmanagement policies,enhanced efficiency of theBank’s network and theimpact of other productivityinitiatives.

The Bank’s Profit BeforeTax grew by 7.8 per cent to

N56.06billon, representing aReturn on Equity of 21.8 percent. The Bank ended theyear with a total balancesheet size of N2.64 trillionand a total deposit base ofN2.22 trillion.

Commenting on theresults, the Group ManagingDirector/CEO, UBA Plc, Mr.Phillips Oduoza said “UBA’s

gross earnings for the year isquite impressive, withpositive contributions from allour businesses. Our Bankachieved a good result despitea challenging operatingenvironment, demonstratingthe strength and resilience ofour people and theirdedication to implementingour growth plans in 2013.”

Dangote Cement shareholders to get N7dividend per share

consolidated revenue grew toN386.2 billion, representingan increase of 29.4 per cent.

While the resultscelebrated the increase in thecompany’s sales volume, itfurther shows that theNigerian cement market grewby 15.6 per cent to nearly 21.2million tonnes.

Dangote cement attributedthe increased sales volume toits direct-to-customerdeliveries strategy anddescribed it as proving highlysuccessful accounting formore than 50 per cent ofsales. Its Obajana plant salesvolumes went up 37.2 percent while its Ibese plantrecorded 40.4 per centincrease.

Consequently, thecompany recommended adividend of N7.0 per ordinaryshare as against N3 paid outin 2012, representing anincrease of 133 per cent.Dangote Cement’s Group

Chief Executive, DevakumarEdwin expressed satisfactionat the performance of thecompany saying theimpressive run was as a resultstrategies deployed throughsound management of theprevailing economic situation.

He said; “Dangote Cementmade excellent progress in2013. As the Nigerian cementmarket grew by a strong 15.6per cent, we managed evenbetter growth of 28.2 per cent, with our revenues increasingby 29.4% to N386.2bn. Ourdirect-delivery strategy isproving very popular withcustomers and I am pleasedto report that direct-to-customer deliveries nowaccount for more than half ofour sales.

“We increased our marginsdespite continuing disruptionto our gas supply and believethat the gas distributioninfrastructure will be morerobust in 2014, enabling us toimprove our margins even

further. At the same time we arelooking at ways to diversify ourfuel supplies to mitigate theimpact of any future disruptionand reduce the cost of usingalternative fuels to gas.

“Our financial strength hasallowed us to increase ourdividend by 133 per cent to N7.0 per share and the comingyear will see our new factoriesopening across Africa as webegin to deliver on our promiseto become Africa’s leadingcement producer, generatingstrong and sustainable returnsfor our shareholders.”

Dangote Cement, which isAfrica’s leading cementproducer is a fully integratedquarry-to-customer producerwith production capacity of20.25 million tonnes in Nigeriawith three in the countryand plans to expand to 13 otherAfrican countries with newoperations beginning to comeon stream across the rest of Sub-Saharan Africa.

FORUM - From left: Managing Director/CEO,Mr. Johnson Chukwu; Chief OperatingOfficer, Nkoli Edoda and Head Corporate Finance, Victor Bisong all of Cowry AssetSecurities management limited at the Capital Market Correspondent Association(CAMCAN) March forum.

CMYK


Corporate Finance

LITERACY - From left: Carol Oyedeji, Head, Consumer Banking, West Africa, StandardChartered Bank; Oladunwo Alani, Principal, Catholic Comprehensive High School, Abeokuta;Adenrele Odukoya, Assistant Senior Girl, Catholic Comprehensive High School, Abeokuta;and Yemi Owolabi, Executive Director, Finance, Standard Chartered Bank at a financialliteracy programme organised by the bank for students in Abeokuta.

By NKIRUKA NNOROM

Commercial banksoperating in the

country will likely reportweak earnings at the end of2014 financial year followingcontinuous tightening ofbanking system liquidity bythe Monetary PolicyCommittee.

Mr. Johnson Chukwu,Managing Director/CEO,Cowry Asset ManagementLimited, expressed theposition at the Capital MarketCorrespondents Associationof Nigeria, CAMCAN, forumin Lagos.

He said that cost of fundwill also skyrocket in thenearest future as a result ofthe decision.

At the end of its meetinglast week, the MPC retainedthe Cash Reserve Ratio, CRR,on public sector deposit at 75percent, while that of theprivate sector was increasedby 300 basis points from 12percent to 15 percent.

He explained that the MPCdecision has continued toconstitute challenge to thecapital market, saying that iswhy the equities market hasgone down nine percentyear-to-date.

Delivering a paper themed,“Investment Instruments inNigerian Capital Market:risks and Benefits”, Chukwuadded that the developmenthas made the Nigerian capitalmarket less attractive thanwhat it used to be some yearsback. “With the consistenttightening of banking system

‘Banks' earnings to drop over CRRincrease for private sector deposit’

liquidity through increases indeposit money banks’ cashreserve requirement onpublic funds to 75 percent andprivate sector funds to 15percent, the availableliquidity for lending andinvestment have been greatlyreduced. “Apart from theliquidity impact, this policyhas also dampened banks'income prospects, hence thecautious outlook on banks’equities. With leaner cash forlending, banks’ lending rateshave remained high at about26 percent, which is a

disincentive to real sectorborrowing. Equities of non-bank companies aretherefore faced with bearishoutlook as business activitiesare challenged by non-availability of funds.”

He noted that the UnitedStates of America recentlystarted tapering of itsquantitative easing strategy,thereby signaling a likelyyield in its longer tenuredbonds, adding that this haskept foreign portfoliomangers on a watch out foreventual crystallization of

the opportunity, henceincreasing the volatility offoreign portfolio investments.

He further stated that theNigerian capital market is stilllacking in depth as ‘we don’thave instruments they havein other markets.’ Heexplained that complexsecurities like derivatives,Futures and options wouldrequire a lot of marketoperators’ education andinvestor enlightenmentbefore they could beembraced.

By NKIRUKA NNOROM

Analysts at ChapelHill Denham, anequity research firm,

have said that 70kobo pershare dividend declared byCement Company ofNorthern Nigeria, CCNN, forits 2013 financial year endwas better than expected.

The company, however,said that result wasdisappointing as revenueand profit fell short ofexpectation.

For the year endedDecember 31, 2013, CCNNreported 4.37 percent growthin revenue to N15.79 billionfrom N15.13 billion in 2012,while the cost of salesremained constant atN107.72 billion.

CCNN dividend declaration beats marketexpectation —Analysts

The profit before tax grew by2.58 percent to N1.97 billionfrom N1.65 billion. The profitafter tax rose to N1.42 billionfrom N1.19 billion,representing 1.86 percentgrowth, while earnings pershare rose to 113kobo from95kobo in the previous year,representing 1.48 percentincrease.

Reviewing the result,Chapel Hill Denham said thedividend declared was 115.4percent stronger thanBloomberg consensus of 33kobo, representing a dividendpayout ratio of 40.4 percentand a dividend yield of 7.4percent.

“Market reactions to theresults have been positive asthe stock has advanced by12.8 percent since the releaseof its results to close at N9.87.

In our view, this is due to thebetter than expected DPS,”they said.

However, “CCNN’s FY-13results are disappointing asrevenue growth of 4.4percent year-on-year, yoy,was materially behind our13.3 percent yoy growthexpectation and Bloombergconsensus of 9.1 percent yoy.The profit lines are alsodisappointing as EPS camein 31.0 percent lower thanour expectation.”

They explained that thedrop in both revenue andprofit was due to the slowrecovery in sales volumes inQ4-13, saying, sales growthof 13.9 percent quarter-to-quarter, qoq, to 121,369tonnes, was not enough tooffset the volume decline of

14.0 percent qoq in Q3-13.“Consequently, sales

volumes grew by 6.5 percentyoy to 515,849 tonnes in FY-13 from 484,348 tonnes inFY-12,” they stated.

“CCCN’s gross marginexpanded to 31.8 percent inFY-13 from 28.1 percent inFY-12. We believe thisimprovement was due tolower energy costs, givenmanagement’s guidance onthe acquisition of a coalgrinding mill to reduce itsdependence on Low PourFuel Oil (LPFO).

“EBIT margin alsoimproved to 13.4 percent inFY-13 from 11.9 percent inFY-12, on the back of thestrong growth of 18.2 percentyoy in gross profit and arelatively mild growth inoperating expenses.”

Access Bank toopen 50 self-servicing e-branches

BY MICHAEL EBOH

Access Bank Plc hasannounced plans to

open about 50 self-servicingelectronic branch across thecountry in the next couplemonths to simplify bankingfor its customers.

Speaking at the launch ofthe first of the self-servicingbranches, tagged, ‘AccessExpress,’ at Ikota, LagosState, Managing Director,Access Bank, Mr. HerbertWigwe, said the e-branch isan intelligent response tocustomers’ needs and isahead in terms of valuedelivery.

He said the self-serviceelectronic branch is a one-stop centre where customersare able to do bankingtransactions, which ordinarilywould have taken them to thebanking halls.

According to him, AccessExpress branch offers 24/7cash withdrawal service toAccess Bank cardholders andother banks’ cardholders.

He explained thatcustomers could enquireabout their account balance,both savings and current;deposit cash into theiraccounts without using cards.

NITDA graduates120 youths onbusiness processoutsourcing

The National InformationT e c h n o l o g y

Development Agency,NITDA has graduated a totalof 120 youths in BusinessProcess Outsourcing, BPO.

Speaking at the certificationceremony in Abuja, ActingDirector General of theagency, Ashiru Daura, saidthe youth were trained onbusiness processingoutsourcing in line withNITDA’s mandate to impactknowledge on the people.

He said that impactingknowledge is the mostimportant asset that could begiven to someone in his lifetime, assuring that theknowledge would make greatdifference in the lives of thebeneficiaries.

“We need to develop theskills and capacities of youngNigerians. The mostimportant thing you can givepeople is that knowledgewhich they can use to get job,live a very purposeful life,”he said.

26

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CMYK

Sim Capital Alliance Plc 103.50 103.50 103.50 103.50 10.56 9.71Stanbic IBTC Bank Plc 21.00 20.30 165,068 15.69 10.64 0.87 18.03UBA Capital Plc 2.53 2.50 3,845,761 1.41 0.03 0.21 6.71

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

PharmaceuticalsEkocorp Plc 3.72 3.72 162 5.31 5.31 88.50Evans Medical Plc 2.22 2.22 29,811 1.45 0.70 0.19 0.00Fidson Healthcare Plc 2.90 3.00 652,180 3.20 0.83 0.44 3.07Glaxo Smithkline Consumer Nig 70.00 70.00 18,439 23.11 2.58 2.62May & Baker Nigeria Plc 1.97 2.00 107,200 5.61 3.61 0.20 9.05Neimeth International Pharm 1.52 1.52 45,000 1.96 0.95 0.09 14.13Nigeria-German Chemicals Plc 7.36 7.36 50 12.91 0.95 0.00 0.00Pharma-Deko Plc 1.57 1.57 354 200 4.28 0.00 0.00

ICTComputer Based SystemsCourteville Investment Plc 0.67 0.64 87,900 0.52 0.50 0.10 10.00

Computers and PeripheralsOmatek Ventures Plc 0.50 0.50 2,600 0.50 0.50 0.00 12.50

IT ServicesNCR (Nig) Plc 15.99 16.83 5,098 9.31 3.25 0.00 1.43Tripple Gee and Company Plc 1.97 2.07 360 3.59 3.25 0.01 0.00Processing SystemsChams Plc 0.50 0.50 2,706,100 50,000

ICTTelecommunicationsStarcomms Plc 0.50 0.50 4,000 1.47 0.50 0.00 0.00

INDUSTRIAL GOODSBuilding MaterialsAshaka Cement Plc 16.99 16.63 1,480,559 30.00 12.00 2.14 7.86Berger Paints Plc 9.12 8.90 1,259,971 12.57 8.10 1.09 4.97CAP Plc 45.00 40.62 99,312 43.98 15.16 2.28 8.88Cement Co. of Northern Nig. Plc 9.87 9.75 320,386 15.49 4.16 1.47 2.31Dangote Cement Plc 235.00 239.75 180,435 132.51 95.00 7.56 13.17First Aluminium Nigeria Plc 0.50 0.50 1,000 0.75 0.50 0.00 0.00DN Meyer Plc 1.22 1.34 62,984 3.51 1.02 0.00 0.00Lafarge WAPCO Plc 109.50 111.00 3,192,152 48.05 36.58 4.10 42.86Portland Paints & Products Nig Plc 4.41 4.10 52,550 5.28 5.11 0.44 14.19Paints & Coatings Manufacturers 1.90 1.81 13,299 3.36 0.51 0.23 2.89Premier Paints Plc 10.00 11.00 123,564 13.40 10.93 0.00 0.00

Packaging/ContainersAvon Crowncaps & Container 1.55 1.63 3,081 6.91 5.94 0.5 39.60Nigerian Bags Manufacturing Company 2.74 2.70 2,717,101 3.60 1.47 0.25 9.16

Tools and MachineryNigerian Ropes Plc 7.46 7.85 40 8.69 8.26 0.00 0.00

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

MetalsAluminium Extrusion Ind Plc 7.75 10.50 500 12.39 10.70 0.13 85.77

Non-Metalic Mineral MiningMultiverse Plc 0.50 0.50 33,333,333 0.50 0.50 0.01 0.00

Paper/Forest ProductsThomas Wyatt Nig. Plc 0.83 0.83 102 1.38 1.38 0.00 0.00

Electronic and Electrical ProductsCutix Plc 2.07 2.07 102 2.50 1.62 0.11 13.15Nigerian Wire & Cable Plc 0.50 0.50 5,000 2.58 2.58 0.00 0.00

Mortgage Carriers, Brokers and SeAbbey Building Society Plc 1.44 1.44 2,000 1.51 1.33 0.03 28.80INDUSTRIAL GOODSPackaging/ContainersAbplast Products Plc 3.98 3.98 6,888 3.98 3.98 0.00 0.00Beta Glass Co. Plc 19.00 19.00 2,000 15.58 12.71 3.90 3.26Greif Nigeria Plc 12.68 12.68 10 15.03 13.97 0.90 0.00Nampak Nigeria Plc 4.30 4.30 29,198 4.30 3.60 1.22 3.52Poly Products (Nig) Plc 1.05 1.05 200 1.86 1.05 0.30 6.18Studio Press (Nig) Plc 2.92 2.78 84,311 2.92 2.92 0.07 41.71W.A. Glass Ind. Plc 0.63 0.66 2,749,340 0.63 0.63 0.00 0.00

OIL AND GASEnergy Equipment and ServicesJapaul Oil & Maritime Service 0.50 0.50 755,000 0.97 0.87 0.19 6.06

Intergrated Oil and Gas ServicesOando Plc 16.91 16.49 2,970,098 78.97 27.99 1.73 4.17

Petroleum and Petroleum ProductsAfrican Petroleum Plc 20.50 20.50 82,191 37.10 0.50 4.93 7.40Beco Petroleum Plc 0.50 0.50 2,000 0.70 0.50 0.00 0.00Conoil 51.90 51.90 115 5.59 3.89 0.61 6.99Forte Oil Nig Plc 92.00 92.00 99,574Mobil Oil Nigeria Plc 118.01 122.00 58,243 163.50 141.00 6.11 11.11MRS Oil Nigeria Plc 54.44 54.44 2,050 2,100 63.86 2.98 19.23Total Nigeria Plc 159.00 172.95 390,310 240.00 195.50 14.63 17.07

HospitalityTantalisers Plc 0.50 0.50 10,000 200 0.01

SERVICESAfromedia Plc 0.50 0.50 30 0.72 0.51 0.00 12.75Automobile/Auto Part RetailersRT Briscoe Plc 1.29 1.23 326,117 3.65 1.30 0.21 8.19

Courier/Freight/DeliveryRed Star Express Plc 4.47 4.47 65,000 3.67 2.65 0.60 4.91Trans-National 2.37 2.37 10,000 0.25 11.12Employment SolutionsC & I LEASING PLC 0.50 0.50 266,100 1.64 0.90 0.04 11.25

Hotels/LodgingCapital Hotel 4.55 4.55 1,000 400 3.00 0.34 34.09Ikeja Hotel Plc 0.60 0.60 22,200 2.07 1.33 0.92 2.12

Media/EntertainmentDaar Communications Plc 0.50 0.50 50,000 0.50 0.48 0.00 0.00

Printing & Publishing.Academy Press Plc 1.80 1.72 60,000 3.68 3.17 0.25 12.19Learn Africa Plc 1.80 1.87 471,081 0.30Studio Press Nig. Plc 2.40 2.40 1,080 0.00 0.00University Press 3.85 4.00 305,300 6.82 3.60 0.54 27.69

Road TransportationAssociated Bus Company Plc 0.90 0.90 145,065 0.80 0.50 0.00 0.00

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

Transport-Related ServicesAirline Services and Logistics Plc 2.60 2.60 51,050 2.78 1.57 0.60 4.22Nigerian Aviation Handling Company 5.25 5.20 1,038,809 11.75 6.50 12.53 8.75

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

Oil and Gas and ProductsPetroleum Prod ucts

Capital Oil Plc 0.50 0.50 5,000 0.50 0.50 0.09

1st fTier SecuritiesAGRICULTURECrop ProductionFTN Cocoa Processors Plc 0.50 0.50 1,300 0.50 0.50 0.10 50.00Okomu Oil Palm Plc 42.00 42.00 35,965 24.58 14.53 7.33 2.77Presco Plc 40.00 40.00 152,400 8.30 6.40 2.75 4.37

Livestock/Animal SpecialitiesLivestock Feeds Plc 3.27 3.12 1,596,704 0.66 0.48 0.11 15.00

CONGLOMERATESDiversified IndustriesA.G. Levents Nigeria Plc 1.40 1.40 46,960 2.54 1.45 0.16 5.18Chellarams Plc 3.95 3.95 4,500 7.60 6.43 0.31 20.74John Holt Plc 1.21 1.27 1,500 8.82 5.89 0.00 0.00SCOA Nigeria Plc 5.06 5.32 5 8.28 5.52 0.35 15.77Transnational Corporation 3.70 3.76 13,478,054 1.82 0.50 0.24 3.64UACN Plc 59.36 56.41 278,435 42.50 28.70 6.89 4.14

CONSTRUCTION/REAL ESTATEBuilding Construction/StructureARBICO Plc 5.30 5.30 31,443 4 20Constain (WA) Plc 1.42 1.48 104,500 2,720,390.38

CONSTRUCTION/REAL ESTATENon-Building/Heavy ConstructionJulius Berger Nig Plc 71.25 71.25 40 62.26 32.96 4.11 10.11Roads Nigeria Plc 8.46 8.46 125,934 8.28 3.01 4.73 2.26

Real Estate DevelopmentUACN Property Development 21.00 20.90 422,994 20.15 11.59 1.69 7.33

Real Estate Investment TrustsSkye Shelter Funds 100.00 100.00 250 100.00 97.00 11.75 8.51Union Homes Real Estate Investment 50.00 50.00 20 - - - -

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

Beverages-Brewers/DistillersChampion Breweries Plc 14.51 14.51 2,000 4.63 2.23 0.00 0.00Guinness Nigeria Plc 185.00 194.25 111,510 255.00 186.00 9.95 19.98International Breweries Plc 24.20 42.20 12,880 7.10 5.23 0.41 16.29Nigerian Brew Plc 151.00 150.00 7,443,669 100.00 72.50 5.08 22.22Premier Breweries Plc 0.77 0.77 10,000 1.01 0.93 0.00 0.00

Beverages-Non-Alcoholic7-UP Bottling Company Plc 90.00 90.00 86,300 51.49 ,39.00 2.69 13.92

Food ProductsDangote Flour Mills Plc 8.90 8.90 19,713 19.90 4.31 0.00 16.91Dangote Sugar Refinery Plc 9.80 9.70 1,224,762 16.20 4.02 0.91 14.38Flour Mills Nigeria Plc 65.00 65.00 696,408 95.00 57.00 4.09 16.89Honeywell Flour Mill Plc 3.75 3.72 776,612 6.60 2.31 0.39 16.92National Salt Co. Nig Plc 12.00 11.99 296,466 6.70 3.80 1.01 5.75UTC Nigeria Plc 0.56 0.56 55,048 0.88 0.50 1.13 8.83

Food Products-- DiversifiedCadbury Nigeria Plc 80.00 78.55 5,693,763 37.27 8.33 1.35 27.61Nestle Nigeria Plc 1,025.00 1,0250.00 650,328 840.10 400.00 25.43 32.84

Household DurablesNigerian Enamelware Plc 32.27 32.27 60 36.19 33.96 13.89 2.44Vitafoam Nig. Plc 4.25 4.25 26,900 5.54 2.91 0.61 7.07Vono Products Plc 1.66 1.66 2,100 2.88 2.88 0.00 0.00

Personal/Household ProductsPZ Cussons Nigeria Plc 31.10 31.10 186,072 41.02 21.02 0.82 4.39Unilever Nigeria Plc 45.15 45.15 369,349 47.39 27.60 1.44 32.91

FINANCIAL SERVICESBankingAccess Bank Plc 7.46 7.44 6,353,059 12.39 4.70 1.42 8.73Diamond Bank Nigeria Plc 6.31 6.31 27,326,311 7.51 1.92 0.90 8.34Ecobank Transnational Incorporated 13.00 13.00 242,889 14.04 9.90 2.81 5.00Fidelity Bank Plc 2.25 2.24 3,926,236 3.47 1.13 0.43 7.93First City Monument Bank Plc 4.75 4.75 865,336 5.70 2.90 0.00 0.00Guaranty Trust Bank Plc 25.98 24.52 4,463,179 26.09 13.02 2.10 12.39Skye Bank Plc 3.68 3.69 5,271,978 6.50 2.65 0.71 9.15Sterling Bank Plc 2.50 2.50 160,824,060 3.05 0.80 0.54 5.43UBA Plc 7.00 6.97 16,955,324 7.69 1.64 0.67 11.19Union Bank Nig. Plc 10.00 10.00 88,544 10.60 2.34 0.00 0.00Unity Bank Plc 0.50 0.50 500 1.22 0.50 0.00 0.00Wema Bank Plc 0.98 0.94 3,368,970 1.75 0.52 1.34 0.43Zenith Bank Plc 19.60 19.60 7,576,961 21.49 11.96 2.09 10.24

Insurance Carriers, Brokers and SectorAfrican Alliance Insurance 0.50 0.50 500,380 0.50 0.50 0.00 0.00AIICO Insurance Plc 0.80 0.79 642,059 1.11 0.50 0.50 22.20Continental Reinsurance Plc 0.99 0.95 854,200 1.03 0.58 0.14 6.79Cornerstone Insurance Company 0.50 0.50 102,600 0.54 0.50 0.02 27.30Consolidated Hallmark Insurance 0.50 0.50 500 0.50 0.50 0.50 10.00Custodian and Allied Insurance Plc 2.00 2.06 9,054,578 2.44 1.08 0.28 7.43Equity Assurance Plc 0.50 0.50 1,500 0.50 0.50 0.01 50.00Goldlink Insurance Plc 0.50 0.50 93,000 0.68 0.50 0.00 0.00Great (Nig) Insurance Plc 0.50 0.50 4,000 0.50 0.50 0.03 16.67Guinea Insurance Plc 0.50 0.50 2,200 0.50 0.50 0.01 50.00International Energy Insurance Plc 0.60 0.64 270,000 0.50 0.50 0.00 0.00Investment and Allied Assurance 0.50 0.50 1,670,890 0.50 0.50 0.02 25.00LASACO Assurance Plc 0.50 0.50 500 0.50 0.50 0.00 0.00Law Union & Rock Insurance Plc 0.50 0.50 3,200 0.60 0.50 0.00 0.00Linkage Assurance Plc 0.50 0.50 200 0.50 0.50 0.03 16.67Mansard Insurance Plc 2.08 2.08 192,800 2.59 1.06 0.16 16.19Mutual Benefits Assurance Plc 0.50 0.50 30,000 0.54 0.50 0.00 0.00NEM Insurance Co. (Nig) Ltd 0.77 0.78 1,542,010 0.81 0.50 0.37 2.19Niger Insurance Co. Plc 0.50 0.50 4,000 0.61 0.50 0.02 26.00OASIS Insurance Plc. 0.52 0.50 8,804,738 0.50 0.50 0.03 16.67Prestige Assurance Co. Plc 0.55 0.54 10,127,330 1.01 0.50 0.06 15.50Regency Alliance Insurance 0.50 0.50 500 0.50 0.50 0.04 12.50Sovereign Trust Insurance 0.50 0.50 500 0.56 0.50 0.09 5.65Staco Insurance Plc 0.50 0.50 1,000 0.50 0.50 0.00 0.00Standard Alliance Insurance 0.50 0.50 3,000 0.50 0.50 0.00 0.00UNIC Insurance Plc 0.50 0.50 200 0.50 0.50 0.00 0.00Unity Kapital Plc 0.50 0.50 1,500 0.50 0.50 0.02 25.00Universal Insurance Plc 0.50 0.50 10,000 0.50 0.50 0.00 0.00Wapic Insurance Plc 0.75 0.77 382,404 1.08 0.50 0.07 15.43

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

NPF Micro-Finance Bank Plc 0.78 0.78 509,240 1.18 0.92 0.92 10.56Mortgage Carrier, Broker and SectorAbbey Building SOC 1.35 1.35 500 1.57 1.37 0.19 47.6 7Aso Savings and Loans Plc 0.50 0.50 170,000 0.50 0.50 0.02 25.00Resort Savings & Loans Plc 0.50 0.50 20 0.50 0.50 0.00 0.00Union Homes Savings Plc 0.50 0.50 109,000 0.50 0.50 0.00 0.00

Other Financial InstitutionsAfrica Prudential Plc 2.90 3.00 3,455,798 0.75 0.00 0.19 9.16Crusader (Nigeria) Plc 0.50 0.50 22,000 0.50 0.50 0.00 0.00Deap Capital Management & Trust Plc 0.99 0.99 30,000 2.02 2.02 0.00 0.00FBN Holdings Plc 12.44 12.51 12,602,535 20.00 8.57 2.03 9.85Nigeria Energy Sector Fund 552.20 552.20 250 552.20 12.68 43.55Royal Exchange Assurance 0.62 0.59 212,000 0.78 0.50 0.13 6.00

Opening ClosingPrice Price Quantity Year Year P.E.

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

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


CMYK

Business & EconomyCommodity index

Mar 21-Mar 27, 2014 AirporAirporAirporAirporAirport tert tert tert tert terminals to beminals to beminals to beminals to beminals to becompleted soon completed soon completed soon completed soon completed soon — F— F— F— F— FAAN MDAAN MDAAN MDAAN MDAAN MDBy LAWANIMIKAIRU

All the airportt e r m i n a l sacross the

country currentlyundergoing remodelingwill be completeddespite the removal ofthe former AviationMinister, Princess StellaOduah, and delay inhaving a substantiveaviation minister. Thiswas disclosed by theManaging Director,Federal AirportsAuthority of Nigeria,FAAN, Engr. SalehDunoma.

Engr. Dunoma, whileon an inspection tour ofthe Yakubu GowonAirport, Jos and KadunaInternational Airport saidadequate budgetaryprovision has been madefor the completion ofremodeled terminalsacross the country.

According to FAANGeneral Manager,C o r p o r a t e Communication, MrYakubu Dati, “Engr.

Chief Executive Officer, Digital Africa, Dr.Evans Woherem, has said the 2014 edition of

the conference will also serve as a platform forthe 19th edition of the World Electronics Forum.

The Digital Africa boss opined that this devel-opment would mean “more people, more productsand services, increased network, more businessand business opportunities, among others.” Givingdetails of both events slated for 24th, April, 2014at Eko Hotel and Suites, Woherem said the forumincluded the giving of awards to deserving prac-titioners in the Information Communication Tech-nology (ICT) and an exhibition of assorted, up-to-date and state-of-the-art electronic products.

Digital Africa 2014 to double asWorld Electronics Forum

Dunoma charged thecontractors to ensurethe completion of workin good time to enableresidents and airtransporters enjoy thebenefit of transformationas obtainable in otherstates where airportshave been remodeledacross the country.

“The ManagingDirector who wasaccompanied by Mr JimOpotu in Jos and Mr

Garba Ringim in Kaduna, urged thecontractors to work withthe expectedspecifications andstandards. He further expressed hisunreserved appreciationover the level ofcommitment andsignificant improvementin the ongoingconstruction towardsensuring the completionof the terminals.”


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Homes & Housing Finance

The FederalGovernment hasdisclosed plans to

raise a N50 billion bond toaugment the initial take offfund of the recentlylaunched NigeriaMortgage RefinancingCompany (NMRC) in a bidto boost housing finance inthe country. This is even asthe International FinanceCorporation (IFC) is set toinvest $255 million (aboutN40.8 billion) in theNMRC.

Minister of Finance &Coordinating Minister forthe Economy, Dr. NgoziOkonjo-Iweala, said at a“ S t a k e h o l d e r sImplementation Summit onEnabling Broader Access toHousing Finance for AllNigerians” last week, inAbuja, that the issuance ofbond is aimed at ensuringeasy access to affordablehousing by Nigerians.

“This housing finance andhousing developmentimplementation summitgives us the opportunity tofulfill President GoodluckEbele Jonathan’s drive touse housing to solve socialproblems for Nigerianswhilst also creating jobsand growing the economy. I want us to leave heretoday having pledged tojump start the programmewith at least 10,000 newhouse owners or mortgagebeneficiaries by the end ofthe year. The governmentis doing everything to

•Brick houses: Housing development with local content

NMRC: FG plans N50bnbond, IFC to invest N40.8bn

By YINKAKOLAWOLE

ensure that the programmesucceeds and all thestakeholders, including stategovernments, are alreadyinvolved in it. The FederalGovernment will soon raise N50billion bond to increase thefunding for this programme.This is to assure Nigerians thatgovernment is conscious of theissues that bear directly on thewelfare of the people and isdoing everything to reduce

their burden, especially onhousing needs,” she said.

In a related development,Executive Vice President ofIFC, Mr Jim-Yong Cai, said IFCplans to invest a total of $1.5billion (N240 billion) to supporthousing and infrastructuredevelopment in the country. Hedisclosed this after a meetingwith Okonjo-Iweala in Abuja.“IFC has been following whatis happening in key sectors of

the Nigeria’s economy and weare encouraged to join in theinvestment in some of them,especially housing which isimportant in providing homesto many citizens. We are verycommitted to enlarge ourcommitment and scale up ourinvestment in Nigeria,” hestated.

Giving further insight,Mr Solomon Adegbie-

Quaynor, IFC’s CountryManager in Nigeria, said theinvestments, which wouldcome in form of equityfinancing as well as credit, arepurely on commercial terms asthe IFC will be partnering withthe private sector. He said $255million of the proposedinvestment in the countrywould go to NMRC. “Theopportunity the IFC is going tobring is going to be much, butultimately it is to make sure thatNMRC as an institution issustained. We are going to helpin the area of publicgovernance, formal underwriting standards, amongothers,” he added.

Meanwhile, Okonjo-Iwealasaid NMRC had recordedsome level of success in the firstfew weeks of its existencethrough its initial equityraising exercise. “The NMRCwas oversubscribed from theoriginal N5 billion to N6.75billion deposit for equity from19 institutional investors, withoutstanding firm equitycommitments from otherinstitutional investors tosubscribe up to N2 billion inadditional capital."

Fire: Lagos to begin enforcement of building law

By MICHAEL EBOH

Dansa Agro AlliedProducts Limited, a

subsidiary of Dangote Group,has announced plans to builda housing estate and a five starhotel within its pineappleplantation in Oban, Cross RiverState.

Chairman of the company,Sani Dangote, disclosed thisduring the distribution of oilpalm seedlings to the hostcommunities in the state.According to him, the companywill build a housing estatecomprising of houses for staffworking within the plantation,schools, mini market and a fivestar hotel within the farmcomplex. He explained that thefarm and the plantation aredesigned to attract eco touristshence the plans for a five starhotel. Cross River StateGovernor, Liyel Imoke,commended the company for itscorporate social responsibility(CSR) projects among its hostcommunities in the state,noting that it has investedbillions of naira to boost theagricultural sector withinAkampka Local GovernmentArea.

BoA agrees to$9.5bn mortgagesettlement

Bank of America (BoA) hasagreed to pay $9.5 billion

to settle charges it misled USmortgage lenders Fannie Maeand Freddie Mac before thehousing crisis in 2008. Thebank will pay $6.3 billion incash and buy back $3.2 billionin mortgage securities.

The settlement resolves fourlawsuits filed in 2011 by USregulatory agency, the FederalHousing Finance Authority(FHFA). Those suits were filedagainst Bank of America aswell as Countrywide andMerrill Lynch.

Bank of America boughtCountrywide and MerrillLynch in 2008 and 2009respectively, during the heightof the financial crisis. The banksaid the agreement resolved“one of the most significantremaining pieces” of housingmarket-related litigationagainst the firm.

“This settlement... representsan important step in helpingrestore stability to our broadermortgage market and movingto bring back the role of privatefirms in providing mortgagecredit,” FHFA director MelvinWatt said in a statement.

Dangote planshousing estate inCross River

By FRANKLIN ALLI

The Lagos StateGovernment has

threatened severe sanctionsagainst any individual ororganisation that fails to abideby its Urban and RegionalPlanning Development Law.

Speaking at a seminar onmitigating the risk of fire andother allied risks on theinsurance sector, organised byContinental Alarm Limited, Mr.Adebiyi Mabadeje, the StateCommissioner of Science andTechnology, said thatgovernment is worried aboutthe incessant fire incidents inthe state and the attendant lossof lives and properties.

He said that the stategovernment will, henceforth,ensure that buildings are firecompliant, with emphasis onfire exits and access, amongothers.

Mabadeje further explainedthat the state has invested ininfrastructure that are designedto help fight and prevent fireand is committed to creating anenabling environment for

businesses to thrive. He notedthat the Lagos State SecurityTrust Fund is an evidence of thestate government’s commitmentto security and safety of livesand properties.

The commissioner disclosedthat in the next couple of weeks,the state will be acquiring 32new fire trucks, while it hascommenced the training of

officials and men of the LagosState’s Fire Service in line withthe new roles expected ofthem. He lamented the factthat less than 50 per cent ofNigerians have fire alarms intheir homes and offices, whileit noted that it has deployedtechnology in its quest toensure safety and security oflives and properties.

Imo State government hasinitiated a land

recertification scheme with theestablishment of ImoGeographic ResourcesInformation Agency (IGIA),where landowners are toauthenticate documentsrelating to their property.

State Commissioner forLands, Survey and UrbanPlanning, Chief Uche Nwosu,said the move is to ensureefficiency and accurateinformation in the state’s landadministration. He urgedlandowners in the state to availthemselves of the opportunitycreated by the recertification

Imo unveils land recertification schemeprogramme. Nwosu alsoreminded them thatgovernment would abide bythe two years probationrequired for the allocated landsto be developed, after whichdefaulters will lose ownership.

The commissioner said thatgovernment had cancelledland allocated to some privatedevelopers who refused towrite letters of acceptance oflands allocated with necessaryfees. He added that thegovernment had started theprocess of recertification of theCertificates of Occupancy (C ofO) of lands in the state withnew security coded certificates.


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CMYK

Insurance

BY FAVOURNNABUGWU

A whopping 600,000m i c r o i n s u r a n c e

products have so far beensold within six monthsthrough subscriptions toMTN and Airtel. Meanwhilea UK firm, MicroinsuranceCentre, have expressed togroom Nigerian insuranceindustry on productresearch.

Also, the NationalInsurance Commission,NAICOM is presentlyflocked with applicationsfrom insurance companiesfor licenses to operatemicroinsurance includingMicroEnsure, the world’sleading provider of mass-market insurance products.

Microinsurance is aspecialised platform for theprovision of insuranceservices, particularly to thepoor, low income and non-salary earners’

The Commission’s DeputyDirector (Authorisation &Policy) Mr. Leo Akah madethis known atMicroinsurance MasterClass organised the UK firmfor operators in the sector at

600,000 MTN, Airtel subscribersbuy micro-insurance in 6mths•UK firm grooms Nigeria on product research•NAICOM approves applications in stages

Bolton Hotel, Abuja onFriday.Obviously elated bythe progress of smallbusiness, Akah said MTNand Airtel get 100,000subscribers every month formicroinsurance since Octoberlast year.

In addition, he said thecommission has severalapplications from companiesfor microinsurance.

“There are many companiesthat have put in theirapplications now because weprepared guidelines for microinsurance which we releasedlast”.

“There is a company calledMicroEnsure alreadyoperating in otherjurisdictions which want toassist developing our marketincluding Nigeria. And someof our own companies want toset up subsidiaries instead ofdepleting their composite

capital for mircroinsurance”Though, NAICOM intends

to license specialisedmicroinsurance firms tohandle the business in thecountry but insist that theapproval will be in stages inorder to ensure strictadherence to the rules of thebusiness

“So we are looking at thoseapplications on stage bystage basis to be able tomonitor progress of themarket before moving to thenext stage. There arepossibilities for stand-alonemicroinsurance companies aswell”

With all that measure, thecommission intends to protectinsurance consumers whilethe guidelines seek tostrengthen collaborationbetween insurers and micro-finance banks thus helpingtraders and artisans and

other low income earners toaccess loans underwritten byparticipating insurers.

On the benefit of the UKfirm to the Nigerianinsurance market, Mr.Babajide Oniwinde, DeputyDirector, Corporate Strategy,elucidated that the countryearnestly needs the groomingto be able to effectively andefficiently develop productsthat are Simple,Understandable, Accessible,Valued, and efficient,SAUVE.Oniwinde said,“There are some countrieswhere micro insurance havereally gone far includingGhana, some of the SouthAmerican countries, evensome east African countries,South Africa have gone far onMicro insurance”.

“So we want to gather theexperiences in thosejurisdictions and bring them

here and call our policymakers, insurancecompanies, micro insurancesinstitutions, some of the socialorganisations together to letthem understand thatmicroinsurance product hasvalue for the poor that it is notjust a product for commercialpurposes but it has value tohelp the low income earnersout of poverty and help themto remain stable”

Speaking to Vanguard onthe firm’s impact to thisnation, President of theMicroinsurance Centre, MrMichael McCord saidNigerian can gain from othercountries’ experiences onmicroinsurance research anddevelopment.

He said insurancecompanies have overtimeprepared products that arenot in tune with the demandof the consumers.

“We want insurancecompanies in Nigeria toembrace this research anduse during their productdevelopment so that theirproducts can meet the needsof people”


CMYK

“For example, Nigeria hassigned an MoU with theDemocratic Republic of Congofor the importation of electricityfrom the Inga Dam PowerPlant.” Professor Nebo, Ministerof Power, PUNCH, March 25,2014.

The PUNCH had reported onthat day that “Power generationdrops by 963MW. It went on toinform Nigerians that powersupply dropped to 2500MW theday before. That is no longernews to Nigerians. Obasanjomet power generation at2,500MW in 1999; his firstMinister of Power, Chief BolaIge rashly promised Nigeriansto bring an end to power failureby December of the same year –1999. Since then, ever Ministerof Power h always promised tolift power supply to new levelsby December of every year. Yet,here we are, fifteen years afterObasanjo and the PDO tookpower and the nation is stillgenerating the same level ofpower supply.

In the same PUNCH report,one Mr Ibrahim Waziri, BoardChairman, TransmissionCompany of Nigeria, hadexplanations for this disgraceful

Power generation and professorsperformance. Please don’t laughas you read.

“Gas supply has droppedsignificantly in the last twoweeks; in fact, it is exactly twoweeks. That has resulted inreduced generation to about2,500MW”. Mr Ibrahim, at leastwas honest enough to announce,as if gladly, that “”we are back tosquare one.” [italics mine].

While Mr Waziri had beenhonest with us, Professor Nebois the second Professor andMinister of Power to grosslymislead us. His predecessor inoffice, Professor Barth Nnajiwho, apart from getting himselfentangled in conflict of interest,had made the same emptypromises which Nebo is nowpeddling – obviously withoutremorse. Let me remindProfessor Nebo of what ProfessorNnaji promised before he was,deservedly, kicked out. But, firstlet me remind Professor Nebo’sown promise – which he hadobviously for gotten.

In June last year, a few daysafter the Vice President hadshamelessly promised Nigerians20,000MW “soon”, ProfessorNebo felt obligated to come to theVP’s support. So, Prof

announced that powergeneration would reach10,000MW by December 2013.We ended the year without theMinister redeeming his pledge.But, he won’t be the first. LyelImoke and Professor Nnaji hadpromised the same target in2007 and 2011, 2012 respectively.There had been no apologies tothe public each time they failed.In fact, if there is one promisethat one can expect to be brokenit is any promise made by aMinister of Power – especially aProfessor. The dismal record ofunfulfilled promises byProfessors in government leavesone wondering what thosepeople teach their students oncampus. What ever happened tointegrity.

Finally, the Professorannounced that the “giant ofAfrica” will soon be purchasingpower from a smaller nation – asif it was the greatest achievementof the Federal governmentinstead of admission of totalfailure by a Minister who istotally bereft of ideas. You canbelieve that because it willprovide all the excuses they needto steal foreign exchange – likeimported fuel imports.

“If gold rusts…”. Whenprofessors fail us, who will deliveron the promise? Certainly, notNebo.

While we are still at it, we mightas well remind ourselves of therejoinder written last year by DrReuben Abati, the President’sSpecial Adviser on Media inresponse to the criticism of theFederal Government by Dr ObyEzekwesili. Titled Hypocrisy ofYesterday’s Men, Abati assertedthat the Jonathan Administrationmet power supply at 2000MW[a lie] and has raised it to4520MW. Like most untruthsabout power generation bygovernment officials, Abati failedto mention that the 4520MW wasreached only once and sincethen it had become a missionimpossible. Furthermore, theJonathan “miracle” vanishedsince last year and now we areback to 2,000MW without a wordfrom Reuben Abati, Ph.D.

Obviously, Jonathan, Ph.D, ispartial to people who areintelligent but whose integrity,defined as standing for truth, isat best suspect or in deficit.Otherwise, it is difficult tounderstand how he seems toappoint people as Minister of

Power whose contributions topower supply since 2010 hadbeen zero. The truth is, powersupply reached 4,000MWunder Yar’Adua in 2009;Jonathan has failed to move usbeyond that level in four years –mainly because he had madethe wrong appointments. If theperformance of the last twoprofessors is anything to go by,then perhaps it is time we trieda market trader. They don’tspeak long grammar but theyachieve profitable results.

When the power distributionsector was about to beprivatized, it was generallyknown that gas supply would bea major constraint. It was alsoexpected that the Federalgovernment would not place theDISCOs in jeopardy byimproving on the gas supply tothe generating units. Instead,what we have experienced hasbeen worsening powergeneration threatening theinvestment of the stakeholdersin the power sector. Moreannoying is the fact that, theexcuses remain the same yearafter year – as if we are listeningto a broken record.

Perhaps the Minister of Powerwill do us a favour; he shouldjust stop talking to us as if weare morons who cannotremember what he said last year.

Visit www.delesobowale.com


CMYK

Aviation

Micro-Finance

A civil society group, Right MonitoringGroup, has said from investigation

carried out by the group that the planechartered by Nigerian National PetroleumCorporation, NNPC, for the Minister ofPetroleum, Mrs Diezani Alison-Madueke is not limited to the minister’s use alone.

It will be recalled that the House ofRepresentatives Committee on PublicAccounts has been investigating theallegation that the minister spends aboutN4.1 billion monthly to maintain thechartered plane ,which they claimed is forher private use.

According to the coordinator of thegroup,Comrade Olufemi Aduwo, the privateinvestigation carried out by the grouprevealed that even members of the National

Hired plane not limited to minister’s use—RMG

Assembly also use NNPC's helicopters andplanes. He further said because of the urgencyand the nature of the terrain, oil companiesoperate from, there is need for the surpervisingminister to have a plane for quick movement.

Aduwo said: ”We read with dismay thestatement credited to the House ofRepresentatives Committee on Public Accountson jets scandal in the petroleum ministry. Wetook it upon ourselves to investigate theallegations levelled against the Minister ofPetroleum, Mrs. Diezani Alison-Madueke, thatshe used hired private jet for personalbusiness is false and misleading. By the natureand dynamics in the oil industry, the operatorsmust meet the urgency attached to theoperations, that is the normal practice in theindustry across the world.

By LAWANI MIKAIRU

The Nigerian CivilAviation Authority,

NCAA and other aviationagencies have expressedreadiness for therecertification audit of thenation’s aviation industry bythe US Federal AviationAdministration, FAA. The FAAteam from the US arrived thecountry during the weekendto begin the recertificationaudit.

FAA awarded NigeriaCategory One safety status in2010 after it was satisfied withthe country’s meeting theInternational Aviation SafetyAssessment standards andfour years later, the bodydecided to re-audit Nigeriain response to critical mediareports about the aviationindustry in the country,according to its letter toNCAA to announce therecertification.

Category One safety statushas improved Nigeria’saviation industry and hasimproved its status in thecomity of nations, in addition

NCAA set for CAT 1 re-certificationto the fact that the awardenabled Nigerian registeredaircraft to fly directly to theUnited States of America.

Since 2010 Nigeria hassignificantly improved thesector, providing safetycritical equipment andprojects and alsostrengthened its regulation ofair operation in the country.

Spokesman of the aviationagencies, Yakubu Dati saidthe Category One status wasawarded to Nigeria after theInternational Civil AviationOrganisation (ICAO) auditcertified its airspaceworthiness.

He said”Within the space ofthree years after thiscertification, the variousparastatals under the ministryof aviation have attainedsignificant milestones,”.

Dati said the FederalAirports Authority of Nigeria(FAAN) between 2010 and2014 reached a new high.“FAAN is fully compliant withICAO standards forfirefighting and rescueoperations. Before July 2011,there were only 20 fire tenders

available, but now, FAAN has46 fire tenders.”

“ In addition, 450 brand newkits, (equipment as well aspersonal protective clothing)have been provided for allfiremen and women. This hasbeen done to enable firemenefficiently carry-out theirduties in securing and safe-guarding the airportterminals, staff andpassengers,” he said.

He further noted that theNigerian AirspaceManagement Agency(NAMA), through the newAir Traffic Managementsystem deployed under theTRACON project, has greatlyimproved the safety of theNigerian airspaceexponentially.

“The TRACON project hasbeen completed withapproach radar control in

Lagos, Kano, Abuja and Port-Harcourt. Area Radarcommenced in Lagos andKano ACCs. This hassignificantly increasedairspace capacity for theNigerian aviation industry.”

He said TRACON hassignificantly improved safetyin the sector in addition to thedeployment of control towersolar power for navigationalaids which was unavailablefor a long time and nowNigeria has six navigationalaids and 11 control towers toits credit.

Stories byPROVIDENCE OBUH

A Kaduna based poultryfarmer, Alhaji Kassim

Abdullahi, has emergedwinner of N1 million in theongoing Nutricima MegaCash Promotion.

He emerged winneralongside others in variouscategories ranging from N500,000, N250,000, N100,000 andother compensation rewardsin the first e-raffle draw heldin Lagos, Ibadan, Onitsha,Kano, Kaduna and Josrespectively.

Speaking at the e-raffledraw, Managing Director,Nutricima Limited, Mr.Suneel Vasudevan said thatits aim was to reward loyalcustomers accross the countryin fulfilment of its promise tomake life better for them.

Nutricima is the maker ofdairy and non-dairybeverages like Nunu, Coastand Olympic milk, Bliss iceteas, Yo! among others.

While recounting the storyof how he qualified for thewin, Abdullahi stated that hehad applied for a loan toinvest in his farm when heheard about the promo and

Poultry farmer wins N1m in Nutricima mega cashdecided to try his luck.

He said, “Olympic Milk ismy favourite brand anddespite the fact that I sawsome labels with the words“Try Again,” I remainedpersistent. Despite thediscouragement from my wifeand children who made jest ofme that it will amount to awaste of time, I sent in morelabels and eventually got a

call notifying me that I hadwon one N1 million.”

He said that the cash prizeis a gift from God because theloan he had applied for willcost him some additional cashto pay interest.

Another winner, ChineduJohn, a 21 year oldundergraduate based in Jos,said that he just gainedadmission into Georgia State

University, USA and has beenpraying to God to help him geta scholarship to fund hiseducation. Whilecontemplating on thepossibility of resuming inOctober for the new academicsession, he bought Olympicmilk and decided to try his luck.

According to him, it was inthat process that he sent the sixdigit pin and six digit serial

numbers to the designatednumber and followed theinstructions from the autoresponse. Few weeks later, hegot a call that he had wonN1millon.

Meanwhile, the company,Wednesday, conducted thesecond e-raffle draw where fiveconsumers won N1 millioneach, another five in variouscategories won five hundredthousand and another twohundred and fifty thousandeach, among other winners.

A Nigerian Entrepreneurhas received

sponsorship award fromtelecommunications serviceprovider, Airtel Nigeria, tostudy at the UnreasonableInstitute, Boulder, Colorado,USA.

The entrepreneur, Mr.Mene BlessingOritseweyinmi will join otherselected entrepreneurs fromvarious parts of the world toacquire quality expertisefrom fifty world class mentors,build relationship with 30impact investment funds andpitch with 100 investors inorder to develop and expandhis venture.

The telco has offered the

Airtel sponsors entrepreneur to study at Unreasonable Institutesum of $5, 000 as financialsupport to the entrepreneur inorder to successfullyparticipate in the skillsacquisition.

The institute is a mentorshipdriven acceleration programfor entrepreneurs tackling

social and environmentalproblems. Each year, it unites25 entrepreneurs from everycorner of the globe to liveunder the same roof for sixweeks in Boulder, Colorado.These entrepreneurs receivetraining from 50 world-class

mentors, ranging from theFormer Director ofGoogle.org, to the CTO of HP,to an entrepreneur who hasenabled over 19 millionfarmers to move out ofpoverty.

Operational challenges hinder African SMEs

SMEs in Africa find it difficult to dobusiness as a result of operational

challenges, Nana Akufo-Addo, Ghanaianpolitician has said.

He described small scale businesses asinvaluable cogs in the wheel of Africa’sdevelopment, reiterating its clout in theEconomic Community Of West African State,ECOWAS.

Akufo-Addo stated, “We have in the past been

very welcoming of entrepreneurs from eachother’s countries in the region. Thelegendary Chief Biney of Ghana made hisfortune in Port Harcourt, here in Nigeria; andrecently our dearly missed Herbert Osei Baduand others have been successful executivesin the oil industry here in Nigeria. On theother hand, important Nigerian banks haveentered the Ghanaian market and beenwelcomed with open arms.


CMYK

Tax Matters

A Capital Gain may bedefined as profitarising from

increases in the market valueof capital assets to a personor corporate body, who doesnot habitually offer them forsale and in whose hands theydo not constitute stock-in-trade. It is gain from sales ofany capital asset where thesale price exceeds thepurchase price of theinvestment. Therefore, it is atax chargeable at the rate of10 per cent on the capitalgains arising from thedisposal of capital assets.Capital Assets

These are investments suchas stocks, mutual funds, realestate, precious metals, artworks and other collectibles.The increase or decrease inthe value of such capitalassets is taxed when sold.Income produced byinvestments is taxed as theincome is generated.

Treatment of Capital Gains TaxThe CGT is under the

management of the Board ofthe Federal Inland RevenueService (FIRS) and it isadministered by the FIRS inrespect of corporate bodiesand individuals resident inthe Federal Capital Territoryincluding members of theArmed Forces, Police andforeign Serving Officers. Thetax is also administered by theState Internal RevenueService in respect ofindividuals based on the rulesof residence. Under theprovisions of the Act, taxliability will arise on ActualYear Basis (AYB) when achargeable asset is disposed.An aggrieved taxpayer or therespective tax authority canappeal against the decision ofthe tax authority to aconventional court or to theTax Appeal Tribunal (TAT) asthe case may be.

Highlights of some of theprovisions of CGT Act

CGT is chargeable at 10 percent on capital gains from thesale of capital assets. Capitalloss on disposal of any assetis not deductible from capitalgains on disposal of any otherasset even if both are of thesame type. Whereconsideration is payable byinstalments over18 months,the chargeable gain shall beapportioned to the affectedassessment years inproportion to the amount ofthe instalments payable ineach of the years.

Chargeable gains areassessed on current yearbasis

Roll-over relief is available

*COMPETITION - From left: Camp Commandant, National Youth Service Corps (NYSC),Lagos State, Capt. Joshua Yandua; Camp Director, Mrs. Maria Osadebe; Executive Director,Marketing, Honeywell Plc, Mr. Benson Evbuomwan; State Co-Ordinator, NYSC, Mrs. AdenikeAdeyemi; and Channels Development Manager, HFMP, Mr. Dayo Adeniyi, at the HoneywellWheatmeal Cooking Competition at the NYSC camp, Iyana Ipaja, Lagos.

The basics of capital gains taxBy NNEKA IFEKWUNA to any company acquiring a

new asset to be used for thepurposes of the trade inreplacement of an old one.Gains arising from disposal ofshares and stocks arecurrently exempted from CGT

Chargeable Persons andChargeable Assets

A chargeable person is onewho deals in a chargeableasset. A chargeable personmay be:

A limited liability company,An individual

A limited liability companywill remit its tax liability toFIRS while an individual willremit to the SIRS, with theexception of individualsresident in the FCT. Assetsinclude all forms of propertyfor the purpose of the Actwhether situated in Nigeria ornot. Including:

Options, debts andincorporeal properties.

Incorporeal properties areassets that have values butare not tangible, e.g.goodwill, copyrights andpatent rights.

Disposal of currenciesother than Nigerian currency

All qualifying capitalexpenditure under CITA,PITA, PPTA or any form ofproperty created by thetaxpayer Chattels sold formore than N1, 000 in any taxyear.

Gains chargeable by taxDisposal of assetsDisposal of assets by a

person where any capital sumis derived from sale, lease,transfer, assignment,compulsory acquisition or anyother disposition of assets

Disposal of assets:provisions as toconsiderations:

Subject to the provision ofthis Act, a person’sacquisition of an asset andthe disposal of it to him shallbe deemed to be for aconsideration equal to themarket value of the asset.Where a person disposes byway of gift of an assetacquired by him by way of giftor otherwise, the personacquiring the asset on the

disposal shall be deemed tohave acquired the asset. Inrelation to any asset held bya person as nominee foranother person or as trustee,this Act shall apply as if theproperty were vested in , andthe acts of the nominee inrelation to the asset were theacts of the person or personsfor whom he is the nomineeor trustee. The conveyance ortransfer by way of security ofan asset shall not be treatedfor the purposes of the Act asinvolving any acquisition ordisposal of the asset

Where a person entitled toan asset by way of securitydeals with the asset for thepurpose of enforcing orgiving effect to the securityshall be treated for thepurpose of the Act as if it weredone through him as anominee. An asset shall betreated as having beenacquired free of any interestby way of security subsistingat the time of any acquisitionof it, and as being disposedof free of any such interest orright subsisting at the time ofthe disposal

Where an asset is acquired

by a creditor in satisfaction ofhis debt or part thereof, theasset shall not be treated asdisposed by the debtor oracquired by the creditor for aconsideration greater than itsmarket value at the time ofthe creditor’s acquisition of it,and if a chargeable gainaccrues to the creditor on adisposal by him, the amountof the chargeable gain shallbe reduced so as not to exceedthe chargeable gain whichwould have accrued if he had

acquired the propertyDeath: On the death of an

individual, any asset of whichhe was competent to disposeof shall for the purpose of theAct be deemed to be disposedby him at the date of his deathand acquired by the personalrepresentative(s) or otherperson on whom the assetdevolve Compulsory acquisitionof land – a person shall not bechargeable to tax under this Actin respect of any acquisition andthe disposal of land by referenceto a disposal to an authorityexercising or having compulsorypowers. Any asset acquired ordisposed of by any personchargeable to capital gains taxshall be deemed to have beenso acquired or a binding duty todispose of the asset or any rightor interest

Exclusion of lossesIn the computation of

chargeable gains under this Act,the amount of any loss whichaccrues to a person on a disposalof any asset shall not bedeductible from gains accruingto any person on a disposal ofsuch asset.

Computation

The computation of anychargeable gains shall be thedifference between theconsideration accruing to anyperson on a disposal of assetsand any sum to be excludedfrom that consideration, andthere shall be added to thatsum the amount of the valueof any expenditure allowableto such person on suchdisposal.

The basic steps are:

Identify the sales proceedson the disposal of the

chargeable asset. Deductallowable expenses from thesales proceed to obtain NetSales Proceed. Deduct cost ofacquisition and other capitalcosts from the Net SalesProceed to obtain the CapitalGains. Compute the capitalgains tax liability by applyingthe applicable rate of 10% onthe Capital Gains obtainedabove.

The above steps can beplaced in a better format asfollows:

N NSales Proceeds

xxLess: Allowable Expenses

(xx)Net Sales Proceed

xxDeduct: Cost of Acquisition

(xx)Capital Gains/(Losses)

xxCapital Gains Tax at 10 per

cent.ROLL OVER RELIEFThis arises where a sole

trader, partnership or limitedliability company carrying ona trade, dispose of one eligiblebusiness asset and replaces itwith a new asset of the sameclass as that sold. The sellerwill be entitled to deduct thecapital gain arising ondisposal from the cost of thenew asset thereby postponingthe payment of CGT on sucha gain.

Roll over relief can be full,partial or no roll over relief.

The effect of this roll-overrelief is to reduce the cost ofacquisition of a new asset withresultant increase in thecapital gain arising oneventual disposal.

Classes of assets eligiblefor roll-over relief:

Class I:Any building or part of a

building and any permanentand semi-permanent structurein the nature of a building,occupied and used only fortrading; Any land occupied andused only for trading. Fixedplant and machinery whichdoes not form part of thebuilding; Class II – ships; ClassIII - Aircraft

Class IV - Goodwill.However, the considerationarising on the disposal must bere-invested within Twelvemonths before or after thedisposal before the rolloverrelief can be granted.


CMYK

Interview

When we came on board, wemet people that were clearlyde-motivated, that were notproperly trained and were notsure about the future; by andlarge, we have been able tomotivate and train them, webuilt confidence and positionedthem to be able to competefavourably with anybody

,

,

By Omoh Gabriel

Recently, ManagingDirector of Enterprise

Bank, Mr. Ahmed LawanKuru had an interactivesession with journalists. Hesaid that the bank has beensuccessfully turned aroundand several local andinternational investors haveshown interest in acquiringthe bank which may be soldby October this year. Beloware excerpts of thediscussions.

Introductory remarksWhen we were appointed by

the Central Bank of Nigeria(CBN) through the AssetManagement Corporation ofNigeria (AMCON), we clearlysaid our mandate was and stillis, to manage the bankcommercially, professionally, ,to take the bank out of thewoods and position it for betterservice delivery. In anyorganisation, there are threethings that are key to success.These include the people,technology and processes.When we came on board, wemet people that were clearlyde-motivated, people that werenot properly trained and werenot sure of the future. By andlarge, we have been able tomotivate the people, train them,built their confidence andpositioned them to be able tocompete favourably withanybody.

We made it very clearfrom the beginningthat we are not here for the sizegame. We are not interested inbeing number one, number twoor number three. Our strategyhas always been to be anefficient bank, a retail bank andto be a bank that is focused onhelping small businesses. Thereis no way you can achieve thatwithout having a highlymotivated workforce.

So we invested a lot ofresources towards building ourpeople. The core bankingoperations that were supposedto drive our operations whenwe came on board, most ofthem were obsolete. So wehave been able to upgradesome of our core bankingoperations, we have upgradedour servers and have equippedmost of our branches with the

necessary tools required forefficient banking delivery.

We were able to turn aroundthe bank and right from the firstyear, the bank has consistentlybeen profitable, which to us, isa very big achievement.

What is the time frame forthe sale of the bank?

Right from the beginning, ourmandate was to run the bankand run it commercially. So,even when AMCON decidedto sell the institution and theyappointed financial advisers toassist them, we decided not toget distracted with what ishappening. I can confirm toyou that we are not part of thesale process. Professionalshave been appointed and theyare driving the process. Whatwe are doing is to run the bank.Of course, the timeline wasdiscussed with us initially, butlike every other thing, therewere issues pertaining toadhering to the timeline,

particularly in this kind ofenvironment. Initially, thetarget was the first quarter ofthis year, but because westarted very late, whatAMCON has said is that theprocess should be completedby October. For us, we areready, everybody is welcomed.What AMCON decided to dowas to leave the professionalsto do their work such that thereis no much interference.

About 24 prospectiveinvestors have showninterest locally and

internationally. A lot of themcalled us, including internationalfinancial institutions that

showed interest because theyhave seen the financials andthey strongly believe that thebank has a lot of potential.So we don’t knowhow manyinstitutions finallymade the list. Butwhat we decidedto do internallyis to focus onrunning theinstitution;we don’ta s k

questions about what ishappening and we haveallowed those responsible forthe process of divestment tocarry on with the assignment.At any point in time, ifAMCON requires ourattention, they will surely getit. But our mandate is to runthe bank and we haveenergized our members of staffbecause whoever is buying theinstitution is not buying thebuilding, but they are buying thevalue, the customers, thequality of staff and so we areworking on those mandates sothat the valuation of theinstitution would be very high.

Is the bank out of thewoods?

Since we came on board, wehave been building the books onthe average of 20 per centyearly in terms of deposits, andif it is risk assets, we have doneover 80 per cent. When wecame on board, our loan-to-deposit ratio was less than fiveper cent, but today, it is inexcess of 60 per cent becausewe are building our loan book.In terms of profitability, lastyear, we closed in excess ofN11 billion. Our rate of returnon equity is also increasing.Our return on capital is one ofthe best in the industry becauseyou may see some banksdeclaring N50 billion, N100billion, but what we need to lookat is the capital deployed. If Iam able to declare N5 billionor N10 billion on an equity ofN25 billion and somebody isdeclaring N100 billion on acapital of N100 billion, it tellsyou the efficiency ratio.

Averagely, on a year-on-yearbasis, we have been buildingour books by 20 per cent andthat is why AMCON, becauseof the health of our financialfigures and the achievementsrecorded so far, pickedEnterprise Bank as the first

bank it wants to showcase andto divest from. The level ofinterest that has been shownshows that what we haveachieved so far iscommendable. Generally, ifyou look at the health of ourrisk assets, it is also solid. Youlook at the character of thecustomers and the activeaccounts; we have almost 160branches.

The way banking istoday, it is not thenumber of branches

that matters anymore.Banking now gradually iselectronically driven and whatwe try to do is to take bankingservices into the office of thecustomers. So, most of thebranches that we have, we aretrying to make them more ofe-banking to such an extentthat from inside their offices,customers can scandocuments, they can go to theinternet and they can give youinstructions withoutnecessarily coming into thebanking hall.

In fact, what most banks dois to come up with incentivesto encourage people to usetheir ATM machines, to usetheir electronic cards so thatthey don’t necessarily need tocome into the banking hall

CBN’s 75% CRRdirective reducedinvestible funds

*Ahmed Lawan Kuru...our loan-to-deposit ratio was less than five per cent, but today, it is in excess ofcent because we are building our loan book


CMYK

Interview

I can confirmto you that weare not part ofthe saleprocess.Professionalshave beenappointed andthey are drivingthe process.What we aredoing is to runthe bank

Public sector funds for us in theindustry, before now was sort ofcheap funds because there areno strings attached to them andusually you keep them in currentaccounts and it gives you a lot ofleeway to have a lot of resourcesor to lend

,,

,

,

because that iswhy the cashless

policy is beings u p p o r t e dstrongly bythe bankingcommuni tybecause it willbring down thecost ofo p e r a t i o n s .

Operational cost is very highin the industry today. That iswhat is contributing to the highinterest rate. So if we are ableto share services, bring downthe operation cost and take ourservices to the customers,obviously it will bring down thecost of financial services.

What is your loan targetfor the year?

When we started, westarted with an operating loanbook of less than N5 billion in2011. We have grown it toaround N76 billion. Last year,our target was to do aroundN100 billion. We are a smallbank; we don’t want to goback to the old days, so weare very conservative when itcomes to building our loanbook. This year, we intend togrow our loan book to aroundN130 billion because webelieve that is what willsupport our balance sheet. Butwe are also very careful indiversifying our loan portfolio.

Now, it is very easy if youwant to build your loan book,for example, in the oil and gassector you can do that in onemonth with one transaction.But for a retail bank, you aretrying to build the small loansand the small loans which wenormally sell through products,take a longer time. This is

because we are talking aboutN10 million, N5 million, leaseand so on. That takes a longertime but usually performsbecause the irregularities arenot up to five per cent. We havea lot of products to support ourretail banking strategy.

Where is EnterpriseBank‘s strength?

Really, our revenue strength,just like most banks in Nigeria,is from lending because that isthe core line of our income. Wedo have a lot of income thatcomes from fees andcommissions, but ultimately, ifyou go through the balancesheet of most banks, between60 and 80 per cent of therevenue base is from lending;we are not an exception. Wemake more money fromlending even though quite a lotof fees and commissions docome either from foreignexchange transactions,treasury activities, but basicallylending is where we make

more revenue.What proportion of your

deposit is public sectorfunds?

Now, public sector funds forus in the industry, before nowwas sort of cheap fundsbecause there are no stringsattached to them and usuallyyou keep them in currentaccounts and it gives you a lotof leeway to have a lot ofresources or to lend. So quitea lot of banks – some of thebig banks and some of the smallbanks; realised that thecomposition of their depositprofile had a lot of public sectorfunds. Whether we like it ornot, in Nigeria, the governmentplays key role in our economy.

They are the majorsource of liquidity inthe economy. So

banking with public sectorfunds used to be very profitablebecause it gives you the cashflow. Obviously, the increase inCRR would affect theinvestible cash flow that youhave. At 75 per cent CRR,what it means is that if youcollect N1 billion of anygovernment deposit, N750million of that money will bekept somewhere at zerointerest rate.

Meanwhile, it is also part ofyour balance sheet. So, thereare lots of other benefits thatyou usually get if a deposit ispart of your balance sheet, butnow it works on the reverseside. So, definitely it will affectthe cash flow that we have. ButI can also tell you that it is awelcome idea. It is somethingthat the banking industry canalso deal with. What it meansis that we now have to refocusand re-strategise and go afterthe small businesses.

If you recall, the level offinancial in Nigeria is less than60 per cent which means thatthere is still a lot of room togrow in other sectors. What ishappening now is that mostbanks have gone to thedrawing board to see how tocompensate the exclusion of75 per cent public sector fundsfrom the funds that they have

to play around with. So I willsay it has affected the businessbecause if you are going toIkeja and you have a friend thathas a boat, he will take youthere faster than if you gothrough third Mainland Bridge.So, we are in business and onceyou are in business, you lookfor opportunities and publicsector funds I can tell you,provides a lot of opportunities.But gradually, given theimplication of excess liquidityin the economy as a result ofthe availability of public sectorfunds, I think the bankingindustry has come to realisethat it is important that the mopup is done so that we canmaintain price stability.

If you have excess liquidityin the market, what it means isthat you will not be able tocontrol exchange rate stabilityand inflation. So, looking at itfrom a professionalperspective, I think it issomething that the bankingindustry has accepted andidentified with as a sacrifice tostrengthen the bankingenvironment because it willhelp exchange rate, it will helpinflation and it will also regulatemoney supply in the market.

Which of the policies ofthe central bank greatlyaffected your operations,either positively or

f 60 per

*Ahmed Lawan Kuru...We now have to refocus and re-strategise and go afterthe small businesses

*Ahmed Lawan Kuru...Basically, lending is where wemake more revenue.

negatively? If you ask me what CBN

policy has affected us as abank, one can selfishly say theCRR. This is because it hadtaken money that typically isfree, away from me. If I haveN50 billion which typically Iwas earning money from andyou take it out, definitely thereis an income loss to me. So,from a selfish perspective, Ithink that is a major policy thathas affected us in the industry.But from a professionalperspective, what the CBNdoes is to bring most of thesepolicies to the bankers’committee, we discuss, agree,and some we don’t agree.Sometimes when you have theurge to make profit and youlook at the larger economy,then you can see sense in someof those actions.

“The question is howAfrican leaders canbuild on this progress byproviding stableagriculture and fiscalpolicies that encourageinvestment, ascommitted 10 years agoin the MaputoDeclaration, andstrengthen governanceand accountabilitymechanisms thatcontribute to mores y s t e m i cimplementation ofpolicies andprogrammes,” saidBukar Tijani, FAOAssistant Director-General and Regional

Agric

The Food andA g r i c u l t u r e

Organisation (FAO) hassaid that Africa remainsthe world’s most food

insecure continent,with relatively lowlevels of agriculturalproductivity, low ruralincomes, and high ratesof malnutrition, despiteimportant economicprogress andagricultural successes.

At its 28th RegionalConference for Africa inTunis recently, FAOcalled on Africanministers of agriculturefor action in priorityareas to accelerateincreased investmentand broad-basedtransformation insupport of smallholderfarmers, including ruralyouth and women.

Africa has recordedcontinuous economicgrowth since 1999,accompanied byimproved governanceand humandevelopment indicators.

Currently, seven out of

Africa still most food insecure continent —FAO


Maize plantation

By JIMOH BABATUNDEwith agency reports

the top ten fastestgrowing economies inthe world are situatedin Africa, and theInternational MonetaryFund estimates thateconomic growth insub-Saharan Africa willbe 6.1 percent in 2014.

Africa’s annual totalGDP grew on averageby 4.8 percent in 2000-2010, up from 2.1percent in the previousdecade, and theagricultural sector ’sgrowth rates in thesame time period were3.2 percent and 3.0percent respectively.

The continent hasachieved a series ofagricultural successesin major areas,including theintensification of staplefood production,improved varieties ofbanana in eastern andcentral Africa, high-yielding varieties ofmaize in east andsouthern Africa, andproductivity gains incotton production inBurkina Faso and Maliand in tea andfloriculture in EastAfrica.

Representative forAfrica.

“These actions arecritical to trigger atransformation in thecapacity of countries todeliver sustained andb r o a d - b a s e dagricultural growth anddevelopment.”

The Conferenceadvocated for providingthe enablingenvironment to endhunger in the continentby 2025. It primarilyfocused on sustainablyincreasing the potentialof agriculture, fisheries,livestock and forestry asa source of employment

and income for Africanyouth, women and menwho engage in thesesectors for food andnutrition security as wellas agri-businessventures aimed atincreasing familyincomes.

The status and trendsof agriculture, foodand nutrition in Africa

Trends in per capitafood production havebeen generally positiveover recent decades. Onaverage, agriculturalproduction in Africa hasincreased slightly lessthan 1 percent per year,

compared with about 2percent in developingcountries.

While Africaexperienced highinstability in food pricelevels, per capita foodproduction was morestable over time andvariability was relativelylow compared to otherregions, such as Asia orLatin America.

But despite the overallprogress made onhunger andmalnutrition in Africaover the past decades,absolute levels ofhunger andu n d e r n o u r i s h m e n tremain worrying in sub-Saharan Africa, FAOsaid.

FAO estimates thatpoverty rates in Africadeclined marginallyfrom 56 percent in 1990to 49 percent in 2010,leaving 388 million inextreme poverty andapproximately 239million chronicallyundernourished in thecontinent. The foodsecurity situation in theSahel and the Horn ofAfrica continues to be ofparticular concern.

People in Business

Mrs. BolaAgunbiade is theDirector of Avail

International ConsultLimited (AICL Education),an outfit that specializes ininternational students’recruitment and careercounselling. In this chat withFinancial Vanguard,Agunbiade says integrity isvery important in theinternational educationcounselling business.Excerpts:

The Beginning:According to Mrs

Agunbiade, she started off bytaking some marketingcourses.

“I have done severalstrategic marketing courseswith communication outfitshere in Nigeria. I havetravelled severally fortrainings abroad in Dubaiand the United Kingdom. Ihave a degree from theDepartment of Philosophy,University of Lagos. I havebeen in the business ofinternational studentrecruiting for 10 years. Istarted work as a counsellorwith one of the foremostagencies in internationalrecruitment in Nigeria -Preparation for Life (PFL)-in 2004. I waswith Preparat ion forLife for seven years first asa studentc o u n s e l l o r , l a t e r a sthe Country Representativefor West London College,UK.

“I enjoyed my work andtime so much in PFL that Irealised that this is what Ihave always wanted to do;interacting with people,helping people, solvingproblems.”

In 2011, she resigned fromPFL to follow her dream.“AICL was born by the graceof God, in 2011 and in threeyears, we have been able toassist hundreds of studentsto travel and study abroad.Our main aim is to helpstudents make informeddecisions about theireducation and futureprospects that will standthem in good stead for therest of their lives,” she said.

What we do in AICL:"We raise awareness of

higher education amongstudents at the national level.We inspire them and provide

The most mportant ingredient in business is integrity— BOLA AGUNBIADE

The most mportant ingredient in business is integrity— BOLA AGUNBIADEBy EBELE ORAKPO

,

,

them with requiredinformation to guide themwith the entire admissionprocess. We also utilise ourinternational expatriate andstudents’ network to helpaspirants in Nigeria solvetheir career-related andacademic problems throughcollaborative discussion andsocial networking.

We believe Nigeria canbe uplifted only

through proper utilisation ofits intellectual and skilledmanpower and that studyingabroad not only opensopportunities tointernational careerexposure, better educationand state-of-the-art research,but also individual economicand intellectualadvancement.

We assist applicants withselection of the best suitedschools from the threemajor dest inat ions werepresent. Our servicesinclude selecting the rightcourse as per the student’sinterest, assisting studentswith the completeapplication procedure,tracking the applications foroutcomes, providinginformation on the costsinvolved in terms of livingexpenses and tuitionfees, advis ing onscholarships andgiving information onuniversi ty and privateaccommodation, completeguidance on student visas,arrangement of pick-up and

drop from the airport to thecampus and veryimportantly, progressreport from our partnerinstitutions on behalf ofour students."

We have done severalwrite-ups in education toeducate the mind becausewe believe that educationis nurturing the mind, notjust for economic purposes,no, we want to nurturepeople’s minds. About ayear ago, I invitedjournalists here because Ifelt I needed to dosomething for the societyand I knew there wereinstitutions abroad thatwere tuition-free, some hadpartial scholarships butthese are basically merit-based, we needed to getacross to outstandingstudents. If you are lookingat studying abroad and you

have got excellent grades, weare willing to help you.

Giving back to community:Another initiative we are

currently working on isAward for best students inEnglish Language insecondary schools. This is forstudents who have excelledin English language.

It is an initiative borneout of the fact that wehave noticed that a lot ofstudents do not realise thei m p o r t a n c eof English Language asa prerequisite for gettingadmission abroad. I fstudents are struggling withEnglish language, itbecomes a big problem tocope with studies abroad.

" We have a list of schoolsalready, but this is notexhaustive as we are willingto take on more schools.Interested Proprietors andPrincipals or careerCounsellors can contact usfor participation.

Initial capital: "We started small.

Honestly, it is not about howmuch you have; the mosti m p o r t a n t ingredient is integrity. Youmay have lots of money butwithout honesty andintegrity, i t won’t work.Parents want to be sure theyare getting timely andaccurate information. Theyneed to know that they cantrust you with the lives oftheir children, that they cantrust the information you aregiving to them."

Range of international

students’ fees:Quality education does

not come cheap. For UK, USAand Canada, on theaverage, tuition fees areapproximately betweenN1.5 and N2 million peryear.

Living expenses willa v e r a g e b e t w e e nN1million and N1.5 milliondepending on the location.For instance, if youa r e s t u d y i n ginside London, cost ofliving is higher than otherparts of the UK.

Challenges:"The only challenge we

have is dishonesty on thepart of either the parent orthe student. Right intentionsare very important to us. Weneed to be able to determineif students have the genuineintention to study abroad.We are able to determineintentions most of the timebut there were a few timeswe missed the dangersignals."

•Mrs. Bola Agunbiade ...Parents need to know they can trust you

with the lives of their children

PTDF trainsover 1000youths

The PetroleumT e c h n o l o g y

Development Fund (PTDF)said it has trained over 1000youths from the 36 states, with40 per cent of them fullyintegrated in the oil and gasindustry.

Dr Oluwole Oluleye, theExecutive Secretary of PTDF,announced this at Eleme,Rivers, while inauguratingthe second phase of ModuleB-Plate Welding training for505 youths. According to him,the industry will not absorb allthe trainees.

“And so, we have come upwith an entrepreneurshipprogramme to enable traineesto stand on their own andbecome employers oflabour. He said the trainingwas in line with the FederalGovernment’s Local ContentAct." Oluleye said theprogramme is aimed to equipyouths with fabrication andwelding skills to meet thenation’s local contentrequirement in the oil and gasindustry.

Brian Munrorewards Camparidistributors inNigeria

Brian Munro Limited hasrewarded outstanding

distributors of Camparienergy drink in Nigeria.

Addressing dignitaries fromthe Wine & Spirit Industry,Marketing Manager, Mr.Abayomi Ajao, said: “TheCampari Distributor’s Awardis aimed at showingappreciation and encouragingdistributors to continue theirunwavering loyalty toCampari, a world classbrand.” He said that theCampari brand is not onlyfocused on selling, but also onappreciating its valuedcustomers, distributors andmarketers.

Highlights of the event werethe presentation of brand newcars to eight outstandingdistributors of Campari acrossthe country by the ManagingDirector of Brian MunroLimited, Mr. Paul Wilson,while guests were treated toan evening of good music,delightful cuisine and anamazing taste of Camparicocktails.

Some of the distributorspresent also expressed theirjoy as the awardees. Mr.Onyenanu, an outstandingdistributor, said: “I am glad tobe recognised and rewardedthis day by the CampariGroup.

We believeNigeria

can be upliftedonly through

properutilisation of its

intellectualand skilledmanpower


E- Commerce

*HEALTH - From left: Mr Ayo Osinlu, Head of Media, Nigeria Health Insurance Scheme; Dr Folakemi Olomojobi,Permanent Secretary, Ministry of Health, Ekiti State; Mr Akin Fadeyi, CEO, Bufferzone Ltd; Mr Gbenga Adeyinka, Comedianand Barrister Ramatu Umar-Bako, Country-Director, Speakers Corner, at the Health Access Talkshow held in Lagos.

Photo by Lamidi Bamidele.

By JONAH NWOKPOKU

How online marketplace drivese-commerce transition

Recent trends in e-commerce haverevealed what

appears to be deliberatetransition by e-commerceoperators globally, fromBusiness to Consumer, B2Cto Business to Business, B2Bservices.

A critical look at thisphenomenon has alsorevealed that this transition isdriven not merely by anxietyon the part of the operators tobeat competition and deepenprofit margin, it has alsoincidentally become a naturalorder of progress andexpansion for the industry.

Online marketplace is oneof the most common ways thatthe industry has embracedthis transition and has indeedbeen the chief driver.

The implication of thismovement is that every e-commerce operator has begunto craft strategic platforms thatwill accommodate both sellersand buyers on their platforms.

For instance, online retailerslike Amazon, eBay, Alibaba,Konga.com including onlineclassifieds like OnlineExchange have all createdplatforms that not onlyenables people to buy but toalso sell as well.

Recent infographics onmarketplaces of some giantretailers like e-Bay andAmazon show that theleading global e-retailershave over 116 to 117 millionactive users on theirmarketplace platforms.China’s e-commerce king,Alibaba has over 500 million

,

,Online marketplace is an

incredible powerful force that weexpect it to probably stem ruralurban migration at some point. Thesector itself can create a lot of jobsbut I think what is really exciting isthe platform that it can create interms of enabling commerce.

active users on itsmarketplace.

In Nigeria, onlinemarketplace likeKaymu.com.ng readily comesto mind as it has providedmany Nigerians with itsplatforms to buy and sell.Online Exchange, Olx hasalso been offering suchservices through its onlineclassified platform,olx.com.ng.

Recall also that recently,Nigeria’s online retailerKonga.com launched amarketplace. Over 3000 usershave already registered inless than four weeks after thelaunch. Online e-commercemarketplaces are the primarytype of multi-channel e-commerce and it is a type ofe-commerce site whereproduct and inventoryinformation is provided bymultiple third parties,whereas transactions areprocessed by the marketplaceoperator.

In an online marketplace,consumer transactions areprocessed by the marketplaceoperator and then deliveredand fulfilled by the

participating retailers orwholesalers.

It aggregate products froma wide array of providers.This makes selection wider,availability higher, and pricesmore competitive compared tovendor-specific online retailstores. Industry watchersbelieve that this trend showsa clear progression for e-commerce. Some others alsobelieve that given the

potency of onlinemarketplace in deliveringaccess, it is capable of not onlyboosting employment, in aplace like Nigeria but alsocontribute significantly toiGDP which is the internet’scontribution to the grossdomestic products.

Konga.com’s founder andCEO, Sim Shagaya capturedthe place of onlinemarketplace succinctly whenhe joined a panel thatdiscussed Nigeria’s digitalrevolution at the justconcluded Nigerian Summitorganized by EconomistMagazine recently.

He said Konga wants tomake a transition from beingjust a retailer to becoming a

marketplace where everyNigerian could buy and sell.

According to him, onlinemarketplace “is an incrediblepowerful force that we expectit to probably stem rural urbanmigration at some point. Thesector itself can create a lot ofjobs but I think what is reallyexciting is the platform that itcan create in terms ofenabling commerce.”

“E-commerce is a big partof the digital revolution,” hesaid and he believes theindustry in Nigeria, nayAfrica may not to toe the pathof western world e-commercewhere it is one giant companycalled Amazon just buyingand selling. He believes thatthe industry will tend to takethe eastern flavor of e-commerce where the largeste-commerce will be a platformfor others to trade, buy andsell and get empowered.

“At least this is what we areaspiring to do withKonga.com,” he said.

He also alluded to the factthat online marketplace iscapable of contributingsignificantly to Nigeria’siGDP, which stands at 1.5 percent at the moment, accordingto the data released byMckinsey & Company, amanagement consulting firm,late last year.

With this trend clear foroperators, it reveals again thehuge potential in e-commerce, a critical aspect ofthe digital revolution. Thetask before them then,remains consumer educationas this will determinewhether the marketplace willfare better than core andspecific online retailing.

Kaymu partnerskinabuti to boostentrepreneurship

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

Kaymu.com.ng has partneredwith Kinabuti, a Nigerianfashion house with thesupport of Thea Kuta to trainyouths of Orile Iganmucommunity on silk screeningand how to sell online.

The three course moduletitled Kaymuvarsity, aneducational initiative byKaymu.com.ng wasconducted on 13 graduates ofthe silk screening workshoporganized by Kinabuti andThea Kuta. The moduleeducated the students on howto sell online, how to managean online store, as well aspublic relation and socialmedia strategies for onlinemarketplace sellers.

Speaking on the initiative,the MD of Kaymu.com.ng,Massimiliano Spalazzi notedthat, Nigerian youths areentrepreneurial in nature,eager for knowledge andbusiness savvy and there is nobetter way to contribute to thedevelopment of youths thanteaching them a skill andtraining them on how totranslate this skill to money.”

He explained that, “”For aneconomy to thrive, it wouldrequire youths who arewilling and able to becomeserial entrepreneurs; who canlaunch and successfullydevelop their own businessventures and Kaymu is thereto provide a platform for thesebusiness ventures to bloom.”

Konga.comcrashes Androidpowered Nokia-Xprice

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

Konga.com is has announcedthe sale of the newly releasedNokia X smartphone, anandroid powered device at adiscounted rate of N19, 200.00only.

Konga.com’s Head ofMarketing, Gabriel Umodenwho announced at the launchof the product in Lagos saidthe price is the lowest priceanywhere online or offline inNigeria and competesfavourably with internationalpricing. “The key to us isalways to meet our customers’needs, and we are constantlyentering new partnershipswith the sole purpose ofachieving this,” he added.

The Nokia X comes withfeatures such as a strong/capable camera, access toapps available on android likeBBM and Instagram.


Appointment & [email protected] 08033348923

THE Board of Flour Millsof Nigeria PLC, FMN,

has announced theappointment of Mr. FolusoPhillips as a Non –ExecutiveDirector of the Company.

The appointment took effectfrom March, 12 2014.

Foluso, according to astatement by the company, isthe Executive Chairman andFounder of PhillipsConsulting Limited, a firmengaged in business andmanagement consulting, withoffices in Nigeria and SouthAfrica.

The company noted that heis a qualified IndustrialEconomist, a CharteredManagement Accountant ofthe United Kingdom, and aFellow of the Institute ofChartered Accountants ofNigeria.

It said, “He brings with himexperience and expertise infinance, business

Phillips joins Flour Mills board

management, enterprisedevelopment and macro-economic policymanagement. Mr. Phillipswho is very active in theNigerian corporate scene sitson many boards as a director,trustee or shareholder of

commercial organizations,NGOs and charities. He is theChairman, Nigeria EconomicSummit Group; Chairman,Nigeria/South Africa Chamberof Commerce; Chairman,Interbrand Sampson WestAfrica; and Chairman, WebLiquid West Africa. Mr.Phillips also serves as Director,Special Olympics of Nigeria;Director, Vigeo Holdings (aPower & Energy company inNigeria); advisory boardmember, Africa LeadershipAcademy (an AfricanLeadership Senior Schoolbased in Johannesburg).

“Mr. Phillips demonstrates aspecial interest and a keencommitment to the AfricanRenaissance, and he is veryactive in supporting Pan-African initiatives in hisdifferent spheres ofendeavour. He is a prolificspeaker, who has addressedmany international business

seminars and conferencesincluding Wharton BusinessSchool and Harvard BusinessSchool both in the UnitedStates of America, Business inAfrica’s Leadership Summit inSouth Africa and several otherleadership conferences,business and trade summitsacross Africa, Europe, and theUSA. He is also the publisherof the West Africa edition ofthe “Business in Africa”Magazine.”

In addition, GroupManaging Director, FlourMills, Mr. Paul Gbededo said,“Foluso is a professional withhigh personal integrity, andbrings with him, many yearsof managerial experience inturning around and growingcompanies profitability.Indeed, the Board of FlourMills of Nigeria is thrilled tohave such an experiencedand versatile gentleman whocan add great value.”

•Folusho Philips

PRESIDENT-GENERALof Maritime Workers

Union of Nigeria,MWUN,Comrade TonyEmmanuel Nted has beenhonoured with the MaritimeMan of the Year 2013. Theazward, Maritime IndustryMerit Award was organisedby the Maritime MediaLimited.

The award was inrecognition of Nted’stremendous contributionstowards the growth anddevelopment of the maritimeindustry. Speaking afterreceiving the award, Ntedthanked the organisers forconsidering him worthy fornomination for the historicaward.

The President-Generalexpressed appreciation to themaritime workers for theopportunity given to him toserve with a promise to domore to improve thecondition of workers in thesector. He dedicated theaward to the downtroddencasual workers in the sectorand encouraged them not tobow to frustration stressingthat there is always a rewardfor hard work.

“This award is a challengeand a task to do more and Ipromise not to relent in my

Nted receives Maritime Man of the Year Awardefforts to improve on thewelfare of maritime workers.It is a life time commitment,”Nted said.

Chairman of the occasionand President of the NigeriaLabour Congress, NLC,Abdulwaheed Omar, said thehonour was well deservedbecause Nted had broughtpeace and stability to themaritime industry.

Omar, represented by aDeputy President of the NLC,Promise Adewusi, described

Nted as a man who had givenlife and future to dockworkersnoting that this was donethrough humility anddedication to service.

Earlier, Managing Director/Chief Executive OfficerMaritime Media Limited, Mr.Asu Beks said the award wasinitiated in 1997 as a credibleplatform for rewardingexcellence using keyperformance index.

He said the idea was borneout of the need to identify and

honour individuals andcorporate bodies that maketremendous contributionstowards the development ofthe maritime industry.

“A look at the nomineesrevealed that we have beenable to beam our searchlighton deserving personalitieswho have dinstinguishedthemselves throughinnovations. In this edition,stakeholders in the maritimeindustry overwhelmingly

AWARD - From Left: Mrs. Tony Emmanuel Nted, Comrade Tony Emmanuel Nted, President-General, Maritime Workers Union of Nigeria, MWUN, Mrs. J.D. Amalian, Deputy Director,trade Union Service, Ministry of Labour and Productivity representing Minister of Labourand Productivity, Chief Emeka Wogu, and Mr. Asu Beks, Managing Director\Chief ExecutiveOfficer, Maritime Media Limited, during the formal presentation of Maritime Man of theYear 2013, to Comrade Nted in Lagos.

CIPM Riversre-electsOjeh asChairman

Chartered Institute ofPersonnel Management

of Nigeria, CIPM, RiversState Branch has re-electedMr.Ojeh as its Chairman foranother t wo years.

His election is seen as anoverwhelming recognition bymembers of his’ purposefulleadership, credible activismand demonstration of hisacclaimed capability buildinginitiatives as well as massivetransformation of theinstitute’s activities in thestate.

Ojeh holds B.Sc, M.ScEconomics, MBA, and inaddition to being a member ofCIPM, is also a fellow of theChartered Institute ofPersonnel and Development,CIPD, United Kingdom,where he currently serves asthe only Upgrade Assessorbased in Africa.

His competence areasincluded HR Policy,Leadership Development,Change Management,Compensation, BusinessPartnering, TalentManagement and currentlyE m p l o y e e / I n d u s t r i a lRelations and EmployeeCommunications Managerfor Shell Companies inNigeria.

ENTRIES for this yearNigerian Breweries

Golden Pen Award will closeFriday April 25, 2014.

Corporate Affairs Adviser toNigerian Breweries, NB Plc,Mr. Kufre Ekanem, said theentries for the award billed forJune, commenced Friday,March 27.

According to him, thisyear’s award is focusing onEducation and YouthEmpowerment. He saidthat,this year’s award would begiven to the best entriesfeaturing a focus onEducation and YouthEmpowerment at its core. Asyou all know, Education andYouth Empowerment arecritical success factors forNigeria to fulfill its potentialsas a nation. Our Awardcriteria of quality,professionalism andobjectivity will remain thefilters upon which entries willbe shortlisted for awards. Thejudging panel will analyzethe reports and photographsfor their Originality, NewsValue, Use of Resources,Credibility and factuality.Other areas of interest wouldinclude Info-graphics, Layout/Headline, Clarity andSocial impact.

“As usual, all entries shouldbe sent to the coordinatingagency, MediacraftAssociates [email protected] Associates, anindependent media agency,will also collate all entriespublished in the focus areasand about Nigerian Breweries

NB Golden Pen award holds in Juneand its brands in thenewspapers from January toDecember 2013 for the juryassessment. Collection ofentries for the Nigerian

Breweries Golden Pen Awardswill commence today March27, 2014 and close on Friday,April 25, 2014.

“On prizes, we have revised

our categories and introduceda new super-category in linewith the expanded focus of theNB Golden Pen Awards.


Advertising, Media& Marketing

,

,

Customers as Captives– Part One

R.T. Briscoe (Nigeria) Plc is one of Nigeria’sforemost distributors of Toyota cars, among other

things. It also offers after-sales support at its servicecentres strategically located in major cities. Thecompany has been doing business in Nigeria fornearly 60 years. And it appears to have distinguisheditself in the various sectors of the economy it hasventured into.

So when the air-conditioning system of my Toyotacar began to malfunction, it was a no-brainer for meto take the car to R.T. Briscoe. Interestingly, the twocustomer service representatives I met at the companyasked me to deposit N15,000 before anybody couldlook at the car. I found that strange. I thought thecompany was supposed to diagnose the problem withthe car first, and give me an estimate for the repairsfor approval. At least, that was what I was used to,but I was a first-timer there.

I sought the rationale for the deposit and I was toldit was “management policy.” I sought to know whatwould happen to my deposit if I decided not to fixthe car. I was told the deposit was refundable. But Ismelt a rat. I know how difficult it is to get a refundfrom a Nigerian company. Moreover, I didn’t see thesense in taking a deposit in the first place if it would

be refunded in full to acustomer that decides notto go ahead with therepairs. While I was stilltrying to challenge thatmethod of doingbusiness, a customerservice rep pointed outthat technicians werepaid on hourly basis.That “Freudian slip”settled the matter for me.Was it possible that partof the deposit would beconverted to a“diagnosis fee” (for thetechnician’s wages) if Idecided not to fix thecar?

I didn’t wait to find out.I left in a huff and R.T.Briscoe lost me before Icould become acustomer! I drove toMetropolitan Motors inIkeja. Thankfully, theapproach wasrefreshingly different.There was no talk ofdeposit. Instead, the

company quickly diagnosed the fault with my car andgave me an official estimate of almost N26,000 forapproval. I approved willingly. At least, I knewbeforehand what I was letting myself into. Workcommenced immediately, still with no talk of deposit.In fact, while the repairs were on, I dashed to a nearbyATM to get cash for the bill. After the car was fixed, thefinal bill was N1,000 less than the estimate. Again, Iwas happy with the approach at Metropolitan. But thatwas not all. One week later, someone phoned from thecompany to find out how the car was doing and whetherI was satisfied with the work done. You can guess myresponse. If you were in my shoes, which of the twocompanies I encountered would you rather do businesswith?

Let’s get to the point of this story. Why do somecompanies make customers part with money even beforethey know exactly what they are paying for? Is it thatsuch companies are afraid of losing out completely ifcustomers change their mind? Or do they believe thatthe best way to do business is to treat customers likecaptives? If that is so, then such companies have veryweak value propositions indeed. Those organisationsthat try to hold customers captive lose in the long run.

TO BE CONTINUED

I sought therationale forthe depositand I wastold it was“managementpolicy.” Isought toknow whatwouldhappen to mydeposit if Idecided notto fix the car.I was told thedeposit wasrefundable.But I smelt arat.

As part of activities tocelebrate the 2014 World

Consumers Day, BrandJournalists’ Association ofNigeria, BJAN held a one daysymposium in Lagos to drawattention to issues affectingthe Nigerian Consumers. Thetheme of the event,“Corporate Nigeria and TheHelpless Consumer,” had thespeaker in the person ofOyeyemi, General Manager,Consumer Marketing, MTN,provided an incitingdiscourse. The discussantsinclude Tam Tamunokonbia,Head, Lagos Office of theConsumer Protection Council,CPC, Sola Salako, President,Consumer AdvocacyFoundation of Nigeria,CAFON, David Okeme,Brand Building Director,Unilever Nigeria and YomiBadejo-Okusanya, CEO,CMC Connect (PerceptionManagers).

As expected the discussionswere meant to portray thehelplessness of consumers inthe hands of corporateorganisations, but opinionon the topic was divided asthe guest speaker, Oyeyemisaid that corporateorganisations are indeedhelpless instead.

He painted a scenario thataffirms the consumer as kingand at liberty to reject oraccept any product or servicestargeted at him or her. Kolasaid this has put the serviceproviders and productmanufacturers at adisadvantage since theconsumer has plethora ofchoices and alternatives to

Stakeholders parley onconsumers’ rights abuseBY PRINCEWILLEKWUJURU

choose from.On the contrary, Kola urged

that the Nigeria Consumerswere indeed among the mostprotected across the world.He based his assertion on thepremise that severalgovernment agencies aredaily tasked with theresponsibility of protectingthe consumers frommanufacturers and serviceproviders.

He listed the numerousagencies to include theMinistry of InformationTechnology, NigerianC o m m u n i c a t i o n sCommission, NCC, NationalFood, Drug AdministrationCouncil, NAFDAC,Consumer Protection Council,CPC and State InfrastructureRegulatory agencies. Healso said that serviceproviders especially in thetelecommunication sector areover regulated by agencieswhich mostly seek to makemoney out of levies, sanctionsand fines.

Oyeyemi who is also thePresident of AdvertisersAssociation of Nigeria,ADVAN, noted that despitethe difficult challenges ofdoing business in the country,these agencies daily sanctionservice providers for notmeeting up with theirobligations.

He further argued thatservices providers andmanufacturers are indeedendangered because noagencies of government areon the look for their interest.He said that despite effort bymanufacturers and serviceproviders to survive in aharsh business terrain in thecountry, consumers remains

demanding and disloyal toany particular brand andwould quickly move to acompeting brand.

Oyeyemi said this hasmade service providers tostoop low to still providequality services even atlow prices to remain inbusiness. He cautionedthat at the rate industryregulators dish outsanction, servicesproviders may begin to foldup in coming years. In theend his suggested that thetopic should have been‘Empower the Consumer,And The HelplessCorporate.’

The GM ConsumerMarketing, MTN Nigeriaview was also supported byOkeme who pointed outthat manufacturers in thecountry still try to satisfy

the consumers evenwhen they areproducing at a loss.

Okeme lamentedgovernment’s apathyto the manufacturingsector saying that nocountry can truly

survive when its manufacturingsector is practically dead. He saidthat despite the numerous factorsaffecting product manufacturer, theyremain committed even to thepoorest consumers who desiresquality at cheap prices. He gave aninstance where his company havehad to increase the size of one of itsproducts for same market price justto remain in the competitive market.Okeme submitted that governmentmust change it policy and attitudetowards the manufacturing sector sothat already surviving companieswould not begin to fold up. He saidthat manufacturers and servicedeserves as much protection as theconsumers.

The founder of CAFON in hercontribution sympathized withservice providers andmanufacturers on the challengesthey face in the country but aptlynoted that such was not enoughreason for exploiting consumers whoshe insists were indeed helpless.

Salako said that in a bid to covertheir high cost of production,manufacturers and service providersresort to all manners of scam andtricks to cheat the consumer. Shesaid this has been responsible forthe huge profit make especially bythe telecoms sector despite thecomplaint of harsh economicenvironment.

Salako also pointed that everyconsumer deserves the right to getquality services for paymentsalready made and that no excuseshould suffix to the contrary. Shealso disagreed with the previousspeakers that regulatory agencieswere really on the side of consumers.According to Shola the action ofregulatory agencies which collectfees and fines from defaultingservice providers andmanufacturers without making directcompensation to consumers isunacceptable.

PROMO - From Left: Mr. Austin Aka, Regional Trade MarketingManager – East, Nigerian Breweries Plc; Chukwuma Tochukwu Obo,winner of Brazil ticket; Obabiyi Fagade, Brand Manager - Star, also ofNigerian Breweries Plc and Senator, the show compere; at the lastedition of the Star Trip To Brazil promo, held at the Bamboo Garden,Awka, Anambra, recently.



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

Business & Economy

CMYK

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

CONTRIBUTORSPrincewill Ekwujuru - Media/MarketingNkiruka Nnorom - Capital MarketJonah Nwokpoku - E-CommerceNaomi Uzor - IndustryProvidence Obuh - Micro FinanceLAYOUT - Graphics Department

MONETARY POLICY COMMITTEE asmetaphor for the blind leading the blindCentral Bank’s Monetary

Policy Rate (MPR), inpractice, is the strategicbenchmark for modulating bestpractice standards in the criticaleconomic indices of inflation,cost of funds and exchange rate. Consequently, the CBN’s MPRsets the standard for prevailingmoney market interest rates, as itrepresents the ‘penalty’ cost forbanks’ that need to borrow short-term funds from the apex bankfor whatever reason.

Thus, the higher the MPR, thehigher also will be the rate atwhich banks will, in turn, lend toboth their public and privatesectors customers. Additionally,apart from cost, the CBN alsocontrols the extent of availabledomestic credit by insisting thatcommercial banks keep specificproportions of their assets ascash or other readily convertibleinstrument. Thus, the higher thestipulated ratios for cash or liquidassets, the less will be the abilityof commercial banks to alsoexpand credit. Conversely, thelower the required ratios, thewider will be the credit that bankscan extend to customers.

Last week, Monetary PolicyCommittee (MPC), whichstatutorily determines the CBN’smonetary benchmarks,unanimously decided to maintainits current tight monetary standwith the existing high monetarypolicy rate of 12 per cent, in orderto restrain spending and driveinflation below the current levelof about eight per cent.

The MPC report, however,recognizes that although theultimate goal of transiting to a

The pertinentquestion iswhether weshould continueto kill industriesand impoverishour people, sothat foreigninvestors can feedfat on ourgovernment’seconomic folly ofborrowing in spiteof allegedsystemic surpluscash induced bythe same CBN

“truly low inflation environment”has remained unattainable, thecurrent tight monetary policy hadpartially restrained creditexpansion, particularly for federalgovernment borrowings;nonetheless, the committee was,however, concerned that thegrowth of credit to the industrialsector, with its potential forincreasing economic growth andemployment opportunities, hasregrettably continued to lagbehind.

It is evident, nonetheless, thatthe Nigerian economy will neverattain its real potential for rapideconomic growth with increasingjob opportunities and enhancedsocial welfare, with a high MPR,which may, indeed, attractspeculative foreign investmentinflows, but also has a downsideof adverse consequences of realsector contraction with the threatof capital flight, at any slight hintof instability in both domestic and international economies.

The pertinent question,therefore, is whether we shouldcontinue to kill our industries andimpoverish our people, so thatforeign investors can feed fat onour government’s economic follyof borrowing in spite of allegedsystemic surplus cash induced bythe same CBN. Besides, we shouldalso ask why the MPC’s attentionis fixated on attraction of volatileforeign capital inflows, while ourown Central Bank sits on an idlezero-interest-yielding cache ofabout $40bn.

Incidentally, the MPC comprisesof highly accomplished men andwomen with great intellect,experience and education, but it

must be worrisome that the focusof the committee’s deliberationlargely remains as an the attemptto sustain our festering economicsore rather than the actual healingof the malaise. It is not rocket

science to recognise that theprime cause of high rate ofinflation, high cost of funds and aconstantly challenged nairaexchange rate can all be traced tothe unabating existence of alleged‘excess’ cash in the system. Evidently, when surplus cash ispitched against relative scarcegoods and services in anyeconomy, spiralling inflation willundoubtedly be the outcome; so

also, if systemic surplus naira isconstantly pitched againstdeliberately rationed dollarsupply, a weaker naira will also bethe product.

The Monetary PolicyCommittee is also not apparentlyconcerned that the allegedsurplus naira ironically exists sideby side with scarcity of funds tobuild quality educational andhealth institutions or to indeed,deliver potable water and moderntransport facilities to enhancemass social welfare.

It is inexplicable and worrisomethat Nigerians, includingprofessors of economics invarious universities in Nigeria aswell as the Nigerian intelligentsiaat home and in the diaspora, haveremained mute as a mule toSanusi’s unforced confession lastyear, that the CBN, and byextension, the Monetary PolicyCommittee, itself, had for decades,consciously sustained a veryfoolish policy of giving awaygovernment funds at zero per centto banks, only to proceed soonafter to borrow these funds backat a cost of between 12 and 17 percent, and thereafter farcicallysimply warehouse the loanproceeds as idle funds.

The CBN Committee alsomischievously concluded that“the recent pressure on the nairaexchange rate was largely theresult of forex outflows inducedby the marginally improved rateof interest in the United States’money market. In reality, the MPCappears oblivious of the realitythat the actual cause of subsistingnaira depreciation is the alleged

‘eternally’ surplus naira in thesystem. Evidently, a weaker naira,not only instigates a rise in thegeneral price level, but also makesthe naira unattractive as a storeof value, and such publicperception of our currency willultimately lead to capital flight. Worse still, a weaker naira, in spiteof increasing oil revenue will alsolead to higher domestic fuelprices, and the collateral oftrillions more of subsidypayments annually. (See “TheAvoidable Oppressive Burden ofFuel Subsidy” of November 2013,at [email protected]).

The real question is certainlyhow to address the true cause of‘eternal’ systemic surplus cash. Observant Nigerians would havenoticed that the CBN generallydecries the existence of the villainof surplus cash soon after themonthly disbursement ofhundreds of billions of nairaallocations to the three tiers ofgovernment. Incidentally, in spiteof 80% total distributed revenuebeing dollar-denominated,inexplicably, exclusively nairavalues are ultimately distributed. The substitution and supply of aunilaterally determined nairaequivalent for monthlydistributable dollar revenueinadvertently provides a platformon which banks can extensivelyleverage credit expansion,regardless of the attendantcollaterals of unbridled inflation,high cost of funds, a weaker naira,increasing national debts and fuelsubsidy values, not to mention thechallenge of successfullyderegulating the downstreampetroleum sector.

Instructively, the adoption ofdollar certificates for payment ofmonthly allocations of dollar-derived revenue will restorecommonsense and sanity in themanagement of our economy.

Managing Directorof IkejaE l e c t r i c i t y

Distribution Company,Ikeja DISCO, Engr. AbiodunAjifowobaje, has identifiedinadequate customers’metering as one of the majorchallenges confronting thenew owners in the powersector.

Delivering a paper titled,“The Power Sector Post-Privatisatin: Challenges andImplication on theManufacturing Sector”, atthe fifth edition of MANIkeja Manufacturers’Consultative Forum, he saidthat the new owners alsobattle with inadequatesupply from the nationalgrid, saying that it hascontinued to hamper their

‘Inadequate metering major challenge in power sector’ability to meet up with currentdemand.

Represented by Mrs.Olubukola Ojurongbe,General Manager, CustomerService, he said that only 35percent of Ikeja DISCo’scustomers are adequatelymetered as at date, while thecompany receives an averageof 350 mega watts per monthsince November when theprivatization exercise wascompleted out of its 900MWdemand, leaving the companywith 550Mw shortage.

He noted that it is impossibleto guarantee 24 hour powersupply with the presentsituation.

He stated that it is pertinentfor the country to seek powergeneration from alternativesources like wind, solar, andwaste among others, sayingthat this is what is obtainable

in countries like Sweden.He further appealed to

Nigerians to desist fromenergy theft as it erodes therevenue of the new powerowners.

Speaking on ‘Other Sourcesof Power Available toManufacturers aside IKEDC’,Engr. Reginald Odiah,Managing Director, BennettIndustries. Limited andChairman, InfrastructureCommittee, ManufacturersAssociation of Nigeria, saidthat the most viable alternativefor manufacturers isdelineation of members intoclusters and provision ofpower plants to serve eachcluster.

According to him, thesystem will eliminate theagony and pains of runningindividual power plant atunnecessarily high cost, allowmanufacturers to fully

concentrate on their corebusiness, and substantiallyreduce cost of production forwhich power alone constituteabout 35 percent to 40 percent.

He advised the DISCOs to“introduce and encourageenergy eficieny practicesthat will reduce wastages andfree saved energy for use.

By NKIRUKANNOROM

Investors lose N960bn in 3 months as NSE market value drops by 7.3%

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Transcript of Investors lose N960bn in 3 months as NSE market value drops by 7.3%