The Nigerian Accountant 2011 April Edition

THE NIGERIAN ACCOUNTANT, April/June, 2011

CONTENTS

The Nigerian ACCOuNTANT

The Nigerian ACCOUNTANT(ISSN: 0048 – 0371) is published quarterly for N400 by the Institute of Chartered Accountants of Nigeria, Plot 16, Professional Centre Layout, Idowu Taylor Street, Victoria Island, P.O. Box 1580, Lagos.

The views expressed by correspondents or contributors in this journal are not necessarily those of the Institute.

The Institute reserves the right to refuse, cancel, amend or suspend an advertisement or insertion and no liability can be accepted for loss arising from non-publication or late publication of any advertisement or insertion. All articles are subject to editing.

© No part of this publication may be reproduced without the prior written permission of the publishers.

April/June, 2011 Vol.44, No.2

4 BUDGET REVIEW* Winners and Losers of Shekarau/Kwankwaso 2011 Budget

18 COVER STORY* The Use of Marketing and Advertising Strategies In Political Marketing

38 BUSINESS* Business Continuity Planning Framework for Distress Resolution In Banks Under Basel II Accord

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9 News

29 Events

36 Interview

55 MCPE Programme

30 ELECTION * Owuama Elected Pioneer President of Pan-African Federation of Accountants

* PAFA Presidency Will Help Rebrand Nigeria — Owuama

51 HEALTH* Arthritis

61 FEATURES* The Challenges of Tackling International Fraud and Corruption

L-R: Goran Tidstrom, IFAC President; Sebastian Owuama, pioneer PAFA President; Thomas Zimmermann, Technical Manager, Member Body

Development, IFAC; and Francis Ojaide, ICAN Vice President

2

THE INSTITUTE OF CHARTEREDACCOUNTANTS OF NIGERIA

(Established by Act of Parliament No.15 of 1965)

OFFICERS & COuNCIL 2010-2011President

Sebastian Achulike OWUAMA (Major-Gen., retd.), B.Sc., FCA

Vice PresidentFrancis OJAIDE (Professor), Ph.D., FCA

1st Deputy Vice PresidentDoyin OWOLABI, B.Sc., MILR, MNIM, FCA

2nd Deputy Vice PresidentKabir Alkali MOHAMMED (Alhaji), mni, FCA

Honorary TreasurerChidi Onyeukwu AJAEGBU, ACS, MBF, FCA

Members

* Elizabeth Omeresan ADEGITE (Chief, Mrs.), MBA, FCA (IPP)Solomon Oluwole ADELEKE (Deacon), FCA

Yusuf Mohammed AGABI (Alhaji), FCASunday Abayomi BAMMEKE, B.Sc., FCA

Samuel Olufemi DERU (Otunba), FCAJamiu Afolabi EKUNGBA (Alhaji), FCA

Uchenna Ifesinachi EROBU (Mrs.), FCAComfort Olujumoke EYITAYO (Mrs.), mni, FCA

Kabiru Dandago ISA, Ph.D, MNES, MNIM, MNAA, ACATijani Musa ISA (Mallam), B.Sc., FCARazak JAIYEOLA (Alhaji), B.Sc., FCA

Christopher Bassey Etim NYONG, B.Sc., MBA, FCAOlumuyiwa Samuel Akintunde ODEJAYI, mni, FCIS, FCA

Frederick Iluyomade OGUNJUBOUN, FCAAdaku Chilaka CHIDUME-OKORO (HRH.), B.Sc., M.Sc., FCA

Nnamdi Anthony OKWUADIGBO (Mazi), B.Sc., FCA Onome Joy OLAOLU, B.Sc., M.Sc., ACPIN, FCIB, FCA

Fatai Oyebade OYEDEPO (Prince), MBA, FCAOlusola OYETAYO, B.Sc., FCA

Tayo PHILLIPS, MBA, FCAMohammed Ali SHERIFF (Alhaji), FCA

Oladipo Aboaba SMITH, B.Sc., FCATitus Alao SOETAN (Deacon), FCA

Josephine Oluseyi WILLIAMS (Mrs.), B.Sc., FCAIsma’ila Muhammadu ZAKARI (Mallam), B.Sc., FCA

Registrar/Chief ExecutiveOlutoyin Adeagbo ADEPATE, B.Sc., MBA, FCA

AuditorThomas AYORINDE & Co. (Chartered Accountants)

Editorial Board MembersMazi Nnamdi A. OKWUADIGBO Dr. (Mrs.) Solabomi AJIBOLADE

Kareem SUARA Dr. John A. OYETADE

Onojedo GLORY Yohanna JUGU

Jumoke OGUNNIYIDayo AJIGBOTOSHO – Editor

Bunmi OWOLABI, Muyiwa DARE – Assistant EditorsOyinlola ADEJUMO – Staff Writer

Wale OYELOLA – ReporterStella AMIOLEMEN – Adverts

Daisi OGUNNOIKI – Production & Circulation

Correspondence should be addressed to:-The Corporate Affairs Department

The Institute of Chartered Accountants of Nigeria, Plot 16, Professional Centre Layout, Idowu Taylor Street,

Victoria Island. P.O. Box 1580, Lagos. Tel: (01) 7642294, 7642295 Fax: (01) 4627048

E-mail: [email protected] ICAN Website: www.ican-ngr.org

* Denotes Past President

From The Editor


With the support of International Federation of Accountants (IFAC) and World Bank, Pan-African Federation of Accountants (PAFA)/Fédération Panafricaine des

Experts-Comptables (FEPEC) which had been the subject of discussions in the African professional accountancy circles in the past few years was finally inaugurated on May 6 in Dakar, Senegal. Thus 37 accountancy bodies from 35 African countries now have the opportunity of speaking with one voice with regard to accounting issues on the global stage. At the PAFA launch conference, Major General Sebastian Owuama, 46th ICAN President and 16th ABWA President, was elected as the pioneer President of the new continental body.

The General, as Owuama is fondly called, considers it a privilege for him and a befitting honour for Nigeria. The position according to him is a big boost for the country in the international arena. The interview he granted The Nigerian Accountant after his election captures his feeling about the new body, the challenges ahead not only for PAFA but also the newly elected Government in his country, Nigeria. It is entitled “PAFA Presidency Will Help Rebrand Nigeria”.

General Owuama came back from the PAFA launch conference to score another first by pioneering an innovation in the process by which members are elected into the ICAN Council. On Wednesday May 11 at the ICAN Centre, Amuwo Odofin, Lagos, he declared the e-voting portal open to signify the beginning of the annual Council election and the change from the manual process of electing members into the Governing Council of the Institute.

Talking about elections, the 2011 Nigerian election has come and gone but there are definite lessons to be learnt from how the political gladiators strove to outdo one another during their campaigns packaged to woo the electorate. Our lead article is an eye-opener to the importance of robust marketing and advertising in politics. The author submits that advertising has become so intertwined with politics such that the latter can hardly do without the former.

Entitled “The Use of Marketing and Advertising Strategies in Political Marketing”, the article tries to show how marketing, communication, advertising strategies and research can assist politicians in the electoral processes of appealing to the electorate and seeking votes.

Your comments on this edition are welcome. Please, write to:

[email protected]; [email protected]; or [email protected]

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF NIGERIA(Established by the Act of Parliament No. 15 of 1965)

CALL FOR ARTICLES(Academic and Professional Researchers)

The Institute of Chartered Accountants of Nigeria (ICAN) is a professional body of accountants established by the Act of Parliament No. 15 of 1965 to, amongst other things, determine the level of knowledge and skills one should possess in order to practice as an Accountant and to raise such standards from time to time.

As part of initiative towards strengthening relationship with its members and tertiary institutions across the country and beyond as well as other professionals who are interested in accountancy research works, the Institute of Chartered Accountants of Nigeria is in the process of publishing an academic research journal titled: ICAN Journal of Accounting, Finance and Business.

THE PUBLICATION

This research journal was conceived with a view to creating avenue for members of the Institute in academia and others in practice who are interested in research work, the result of which will be published and be added to the compendium of research works that contribute to knowledge development and provide technical information and new developments in the field of accounting, finance, business and other related areas.

The Institute is using this medium to call for articles for publication in the journal from Professors, Deans of Faculties, Heads of Departments, Lecturers, independent academic researchers, students and professionals generally.

ARTICLE FORMAT

All articles to be submitted for publication in the ICAN Journal of Accounting, Finance and Business should comply with the following format and instructions:

1. Articles must be well researched on contemporary issues in the field of Accounting, Finance, Economics and Business.2. All articles should be typed on an A4 paper in not more than 25 pages using 12 points font size and Comic Sans fonts type with double line spacing.3. The title page should include the title and author’s contact information.4. The second page should include the title and an abstract of not more than 300 words to capture the main objective, methodology, findings/contribution to knowledge and recommendation(s) of the article.5. The text reference should be author/date (year) type (e.g. Ajayi: 2006); the reference list should follow the Harvard Style (surname, first and second names then initials, year, title, publisher and place) and should be arranged in alphabetical order of surnames of the authors. Adjustments are to be appropriately made if the material referred to is journal, magazine or newspaper.6. Three hard copies and a soft copy saved in Microsoft Word should be sent to the address below:

CONTACTS

Mr. Emmanuel Ogbonnaya OR Mr. B.U. Iwo 08065913277 08033454485 Director, Research & Technical (R&T) Assistant Director, (R&T) e-mail: [email protected]; e-mail: [email protected] [email protected]

c/o Mr. Olutoyin Adepate, B.Sc, MBA, FCAThe Registrar/Chief Executive, Institute of Chartered Accountants of Nigeria

16 Idowu Taylor Street, Victoria Island, Lagos.

THE NIGERIAN ACCOUNTANT, April/June, 2011 51

HEALTH

Most people with arthritis have osteoarthritis (OA), which commonly occurs with age. But there’s another

type called rheumatoid arthritis (RA), a serious autoimmune disease. The two are often confused, which can be endlessly frustrating for those with RA. “Everybody says that arthritis is one word,” says Christopher Evans, D.Sc, Ph.D, the Maurice Mueller Professor of Orthopaedic Surgery at Harvard Medical School in Boston, “but the conditions are quite different.”

While osteoarthritis is typically a disease of older people — often thought to be the result of years of wear and tear — RA can come on quickly at any age, even in children. The average onset of RA is between 30 and 50 years old; osteoarthritis strikes most people later in life. (It’s called juvenile RA when it occurs before age 16.) “Unless you’ve been banged up on a sports field or in a car crash, it’s very unusual to see someone with osteoarthritis at a young age,” says Evans.

Approximately 50 million people in the United States have arthritis, including half of those aged 65 or older. About 27 million are cases of osteoarthritis and 1.3 million are RA. Because of the big imbalance in numbers, people often think all arthritis is osteoarthritis, and may say, “Oh, my grandmother has that” to someone with RA, or may not realise that, yes, a child, teen or young adult, can indeed have arthritis.

General SymptomsThe exact cause of each disease is often

unclear. RA is an autoimmune disorder that causes inflammation in the lining of the joints. Genetics, hormones, smoking, and other environmental exposures, such as viral or bacterial infections, may play a role in setting the immune system on its rampage, notes Dr. Danielides. There is no immune involvement in the joint deterioration of osteoarthritis. A combination of age, genetics, joint injury, joint overuse, obesity, hormones, and muscle weakness are thought to play a role.

As an autoimmune disease, RA can

Arthritisflare up abruptly and then subside in a hard-to-predict pattern that can make diagnosis difficult, especially in its early stages. How the condition flares and progresses can vary widely between patients, notes Evans. “In rheumatoid arthritis, the immune system is fighting the joint as if it were a foreign object and destroying it,” he says. Osteoarthritis generally develops slowly over many years as cartilage continues to wear down and forces more painful bone-on-bone rubbing.

RA can shorten a patient’s lifespan by about three years, partly because of the

increased risk of heart disease, Evans notes. However, current treatments that target inflammation and the misguided immune response can help. “If you get in early enough with the appropriate treatment, the disease can be controlled and many patients can get on with their lives,” says Evans. Osteoarthritis has no specific impact on longevity other than the general effect of making patients less active, Evans adds.

In osteoarthritis, the cartilage in the joints wears away with time, leaving bone rubbing on bone. Ouch! In RA, the immune system cells think they recognise an invader and target the synovium, the joint’s lining. Cell-signaling molecules such as tumor necrosis factor and interleukins pour into the blood stream, causing fever, swelling and other symptoms not seen in osteoarthritis. (The inflammation caused by RA can lead to heart, lung, and eye damage.) Both diseases affect the joints, but just where and how they cause trouble differs. RA generally attacks smaller joints first, from the

wrists to the toes, leaving them painfully red, warm, and swollen, usually in matching sets, on both sides of the body. In osteoarthritis, larger weight-bearing joints such as hips and knees usually have the worst damage, and the problem joint may be on one side of the body but not the other. “Rheumatoid arthritis can spread from one hand to the other and then throughout the body to as many as 30 different joints,” Evans says, “whereas osteoarthritis affects a very limited number of joints.” Joint deformities are more common in RA than OA. This can eventually lead

to joint erosion and displacement. The hands of RA patients can become severely deformed. Fingers undergo a characteristic deviation and can appear pulled out to the side, notes Evans. Osteoarthritis patients are more likely to develop painful bony lumps or spurs in their fingers, shoulders, elbows, hips, knees, or ankles. People with either OA or RA may need joint replacement surgery.

About 20% to 30% of RA patients will develop firm nodules under the skin, frequently on the elbows, notes Stamatina Danielides, MD, a rheumatology fellow at Columbia University in New York City. These lumps, which vary in size and can be as large as a golf ball, can be quite painful and are often a sign of more severe disease, she says. Nodules are not associated with osteoarthritis.

Morning SymptomsPatients with RA will often wake up in

the morning with stiffness that can last several hours. Osteoarthritis patients can awake with stiffness as well, but it usually subsides within half an hour — although it can return after physical activity. “A patient with mild to moderate osteoarthritis might get up in the morning, walk a mile to get a newspaper, and then on way back their knees might start hurting,” says Evans.

Non-joint SymptomsA patient with RA may feel sick

overall, with a low-grade fever, fatigue, and muscle pain, says Dr. Danielides.

“Osteoarthritis patients are more likely to develop painful

bony lumps or spurs in their fingers, shoulders, elbows,

hips, knees, or ankles”


HEALTH

Depression, nerve damage, and dryness of the eyes and mouth are also common. Without treatment for the chronic inflammation, RA can go on to affect “all sorts of organs,” adds Evans. Patients are at an increased risk of heart disease and even some cancers. Osteoarthritis is typically confined to the joints.

MedicationOsteoarthritis is treated with steroid

injections (into the joint) and oral NSAID drugs like ibuprofen and naproxen (Aleve) to fight pain. People with RA need these too, plus stronger oral steroids, like prednisone, which can cause bone thinning. They also need drugs (some of the same ones used in chemotherapy for cancer patients, albeit at lower doses) that prevent joint destruction. Called disease-modifying antirheumatic drugs, or DMARDs, these meds are known for their effectiveness, as well as their risk of side effects or infections.

How to Cure Rheumatoid Arthritis PainThere are many medications for

rheumatoid arthritis, but painful flare-ups are still a fact of life. The good news is there are many things you can do to reduce and even prevent pain. “It is something that affects you throughout life, so you want to find ways to perform activities while protecting your joints and respecting your body,” says Rhonda Reininger, associate director of the physical therapy and occupational therapy department at NYU Hospital for Joint Diseases. Here, we show you 10 techniques to help ease the pain of rheumatoid arthritis:

Protect Your JointsThe main thing Reininger teaches

patients is to protect their joints, even those that are currently symptom-free. You should always be thinking about your joints, even when doing small tasks, she says. Instead of lifting a heavy pot, slide it across the counter; use a shoulder to open a door rather your hand; and hold books in the palm of your hands, not with your fingers.

Get ExerciseExercise can be a key component

in keeping joint pain at bay. It can also give you more energy and improve your mood. Walking, cycling, swimming, and

light weight training done three times a week for 30 minutes can offer these benefits, but check with your doctor to make sure they are safe for you. Reininger recommends avoiding heavy weights and beginning with short periods of exercise until you know how a workout will make you feel. If you have pain for more than an hour afterward, you’ve overdone it. Other tips: Don’t exercise when joints are inflamed; take a break if you feel pain; and alternate positions periodically when performing tasks such as gardening or cooking.

Stretch It OutAssuming you are pain-free, Reininger

says you should try to stretch all of your joints each day to the extent that it does not cause you pain. A physical therapist or other physician can help tailor a stretching program for your needs. People with RA tend to feel stiffer in the morning than at other times of the day, so take a shower to warm up your joints, and then stretch to help loosen you up for the rest of the day, Reininger advises.

Give It a RestGetting enough rest is important.

Taking a break can relax your mind, ease pain in your joints, and help reduce the fatigue that is often associated with the disease. So how much do you need? “Rest is personal — it depends

on a person’s endurance,” Reininger says. However, avoid too much rest. A sedentary lifestyle can be harmful, so intersperse rest periods with activity.

Take a Warm Bath or ShowerMoist heat in particular seems to

penetrate well and provides relief from rheumatoid arthritis pain, according to Reininger. She recommends taking a warm bath or shower or soaking sore hands in warm water. Additionally, moist heating pads, available at most pharmacies, can be applied for 10 to 15 minutes at a time to provide temporary pain relief.

Try Hot WaxIf you have pain in the joints of the

hands or feet, a hot wax bath can ease inflammation. (This is a classic technique used for sports-related injuries.) Reininger says this can work better than a heating pad because, as with soaking in a warm water bath, the heat works its way completely around the fingers or toes. These hot wax baths, which Reininger says that some patients prefer, can be found online or at drug stores.

Try a CaneA lot of people think a cane signifies

disability, but if it helps reduce joint pain, who cares? Canes are easy to find and use and can take up to 20% of your body weight off of your legs, hips, and ankles.

Lose WeightBeing overweight can place excessive

stress on, and adversely affect, your weight-bearing joints like the knees, back, and hips, Reininger says. Studies have shown that fat tissue may produce chemicals that can increase inflammation, something rheumatoid arthritis patients need to avoid.

Use Special ToolsCertain types of equipment can help

make everyday tasks less painful. Pens, knives, can openers, zipper pulls, and additional products are available to help you

protect your joints, Reininger says. The good news about finding such equipment is that you don’t always have to look in specialty stores for them. Many tools are designed simply to make them easier to use — kitchen tools with large handles, ergonomic can openers, and large drawer pulls.

Plan CarefullyIt is difficult to tell when a

flare-up may occur, making your joints become stiff and swollen, or when you will overdo it when exercising. Because you can’t foresee these events, it’s a good idea to be prepared and plan for problems before they arise. Reininger says to make sure any activity you start is one that you can end partway through. Break chores up into sections — plant one garden bed one day and the second another day instead of tackling them all at once. And when exercising, it’s not necessary to do 30 minutes at once; try three 10-minute increments throughout the day.

(Culled from www.health.com)

“Being overweight can place excessive stress on your weight-bearing joints

like the knees, back, and hips. Fat tissue may produce chemicals that can

increase inflammation”


NEWS

ICAN Has Made Our Accounting Graduates Best in Labour Market — Uniben VC

The Vice Chancellor of University of Benin, Professor Osayuki Godwin has said that the effort of the Institute

of Chartered Accountants of Nigeria (ICAN), has made the accounting graduates of the University the best in the labour market. The VC stated this in his office in Benin on 4th March, 2011 while receiving the 46th President of ICAN, Major-General Sebastian Owuama (retd.). He said Uniben accounting graduates have become hot cakes in the labour market as a result of the great number of ICAN members working in the campus.

While thanking the Institute for the Professorial Chair given to the University, the VC expressed optimism that the Institution would not let ICAN down, adding that there were so many

Universities in the country before ICAN considered UNIBEN.Owuama in response also expressed gratitude to the Vice

Chancellor for employing some ICAN members at the University. He told the VC how his entourage had spoken to the would-be Chartered accountants among the students and their eagerness to achieve the feat within the shortest period of time.

We Will Encourage Our Children to Register for ICAN Exams — Lamido Adamawa

The Lamido Adamawa, HRH, Alhaji (Dr) Muhammadu Aliye Musdafa has promised ICAN that henceforth, youths of

the region would be encouraged to register for the Institute’s examinations, having being enlightened on what ICAN stands for. The Lamido made the promise in his palace in Yola when ICAN President, Major General Sebastian Owuama (retd.) paid him a courtesy visit.

He said, although the minds of northerners had hitherto

been poisoned against ICAN as a South-West Institute, the re-orientation effort of ICAN has made them to have a change of heart. “We are aware of the criticism ICAN was facing but we have to thank you people for what you have made ICAN to become both nationally and internationally. ICAN Professionals are exceptional. We will do something about encouraging our children and youths to register for ICAN examinations, he declared.

The ICAN President had earlier told Lamido that he was in Yola for the 6th Northern Conference of the Institute. He congratulated the Lamido for the peaceful existence among the various ethno-religious groups in his domain. He also used the opportunity to talk to the youths over the importance of registering for the Institute’s examinations.

ICAN Partners NCPP, NGE, NCC on Cancer Prevention

In order to reduce the menace of cancer in the country, the Institute of Chartered Accountants of Nigeria (ICAN) has agreed

to partner with the National Cancer Prevention Programme (NCPP) along with the Nigerian Guild of Editors (NGE) and National Communication Commission (NCC). This agreement was reached when the team of NCPP, a Non-governmental Organisation led by its National Coordinator, Dr. Kin J. Egwuonwu

ICAN President, Major General Sebastian Owuama (retd.) and entourage with Lamido Adamawa, Dr Mohammadu Aliye Musdafa

ICAN President and his entourage during a courtesy visit to one of the oldest chartered accountants in Benin, Pa Garrick Aghahowa

ICAN President, Sebastian Owuama receiving the International Corporate Philantropy Day flag at ICAN Secretariat


NEWS

Conference taking place in Akure. He also explained that as usual, the incumbent President of the Institute moves round the District Societies to monitor the extent to which Chartered Accountants comply with the ethics of the profession in their places of work.

“Not only this, we move round to see to the welfare of our members and take notice of the difficulties they might be facing in the discharge of their duties as Chartered Accountants, with a view to proffering solutions to the problems,” he added.

He submitted however that reports reaching him since arrival were heartening, as members of the Institute in the state were not found wanting in their places of work and hitherto, had a cordial relationship with the state government.

Owuama therefore called on the government to have more Chartered Accountants in its employ as well as ensure that people’s votes count in the forthcoming elections.

ICAN Examination Stands Out — OSRC DG

Th e e x a m i n a t i o n conducted by the Institute

of Chartered Accountants of Nigeria (ICAN) has been described as unique and different from many other examinations in Nigeria and other parts of the world.

This was the observation on Monday, 7th February 2011, by the Director General of Ondo State Radiovision Corporation (OSRC), Mr. Ladi Akeredolu-Ale, while receiving the ICAN President, Major General Sebastian Owuama (retd.) in his office at Akure, Ondo State capital.

The ICAN President had visited the DG as part of activities mapped out for the 5th Western Districts Conference holding in Akure. The DG stated that he had never heard of the Institute’s examination questions leaking since it commenced examinations for would-be Chartered Accountants.

“We are in this country and we have heard of examination questions leaking or being sold somewhere but we have not heard of such about ICAN examinations. This is unique about its examinations. The examination is quality and this is what stands it out,” he emphasised. Speaking further, the DG who said that Accountants play critical roles in the economy of any nation, called for collaboration of the public and private sector, as neither of them could exist in isolation of the other.

Earlier, ICAN President had told the DG of the cordial relationship existing between ICAN and the media. He said this was made possible because both had in common the same posture against corruption and work together to ensure a better society.

visited ICAN President to solicit support.The NGO had informed ICAN President that the call for

concerted effort to combat cancer was necessary in view of the fact that the dreaded disease was spreading all over the world. He said the rate at which cancer killed people in Nigeria was about the highest in the world, hence the call for joint effort to curb it.

According to him, the plan of NCPP was to have Cancer Screening Centres at every local government areas in the country. Citing the example of India that has twenty national cancer centres, he lamented that Nigeria has none.

Responding, Owuama assured the team of the Institute’s support, saying that ICAN has a lot of respect for human life and had in the past championed sensitisation of people in that direction. “We are opening a new chapter in our activities by collaborating with you on humanity course. Cancer affects almost all the families in Nigeria. It is killing both women and men on daily basis. People keep dying every day due to late detection of the disease. I will table your request before our Governing Council and I believe they will buy the idea of saving lives. We are going to fly your flag and sensitise our members to contribute towards the course,” he stated.

Nigeria Should Emulate ICAN In Electing President — Dep. Governor

The Deputy Governor of Ondo State, Alhaji Ali Olanusi has advised Nigeria to emulate the succession procedure of the

Institute of Chartered Accountants of Nigeria (ICAN) in electing the President of the country.

The deputy governor, who represented Governor Olusegun Mimiko, made the observation in Akure, Ondo State capital on Monday, 7th February 2011, when ICAN President, Major-General Sebastian Owuama (retd.) paid him a courtesy visit in his office. According to him, ICAN, over the years, has perfected its succession procedure such that the people wonder how it was possible for the foremost professional Institute to arrive at such a manner of electing its president without rancor or court cases, adding that the procedure should be emulated in electing Nigerian President.

Earlier in his own speech, Owuama had told the deputy governor that he was in the state for the 5th Western Districts’

ICAN President Owuama presents a copy of his address to Dep. Governor Olanusi during a courtesy visit to the Ondo State Governor’s Office

Akeredolu-Ale and ICAN President Owuama in warm handshake


NEWS

We Shall Surprise ICAN Soon

— Jigawa Indigenes

The Accountant General of Jigawa State, Alhaji Sani Ahmed has promised that his state would soon surprise the Institute

of Chartered Accountants of Nigeria (ICAN) with the number of Chartered Accountants produced from the state. Ahmed gave this assurance on Tuesday, 22nd February, 2011 in Dutse while receiving the President of ICAN, Major-General Sebastian Owuama (retd.) and his team who were on sensitisation tour of the state.

He explained that though Jigawa people had the potential to become Chartered Accountants through ICAN but lack of coordination had always been the impediment. He called on ICAN President to ensure that an ICAN Centre was established in the state capital to give ample opportunity to the people to study and write ICAN examinations.

“On our own side, we will ensure that government buy into this project and we will set target for ourselves on how many Chartered Accountants we want to produce yearly. We will surely surprise ICAN,” he assured.

In the same vein, the Auditor-General of the State, Alhaji Abubakar Maiyakari promise to mobilise and sensitise his staff and others on the importance of the ICAN examination and future benefits it holds for them. He added that in few months time, ICAN would see difference in the number of candidates that would be registering from the state.

Be Focused, ICAN President Charges Students

Students aspiring to become Chartered Accountants have been advised to shun all forms of distractions and

concentrate solely on their examinations. ICAN President, Major-General Sebastian Owuama (retd.) made the call in Kano during his interaction with students receiving lectures at the Students Special Project (SSP) Centre, in preparation for their examinations.

Owuama who explained that ICAN certificate is not for sale, charged the students to shut their doors against social activities that could distract their attention against their examination, adding that after they might have qualified; there would be ample time for other things.

On whether the Institute could allow candidates to be sitting for two stages of its examination at the same time, Owuama said it was not possible for obvious reasons. He explained further that there had been situations in the past where candidates would combine two stages, but would fail the first one and pass the second. This, according to him, if not curbed would make a mess of the Institute’s certificate because it would be unreasonable to issue transcript to a candidate who passed stage two without having passed stage one. He therefore called on the students to concentrate on each stage they registered for and pass them once to allow them to proceed to the next one.

Answering further questions, the President assured the lecturers not to relent in their efforts to ensure that more students from the region register and pass ICAN examinations. He

however assured them of better welfare packages.

No Multiple Taxation in Lagos State — Fowler

Contrary to insinuations in some quarters that there was multiple taxation in Lagos State, the Lagos State Internal

Revenue Service (LIRS) has said there was no such thing. The Chairman of LIRS, Mr Tunde Fowler made the disclosure in Lagos while receiving ICAN President, Major-General Sebastian Owuama (retd.) in his office.

He disclosed further that Lagos State House of Assembly has passed a Bill guiding local governments on the tax they are eligible to collect and how much they can collect. He therefore advised Lagosians to do away with unfounded rumour regarding multiple taxation.

Earlier, Owuama had eulogised Lagos State for its initiative on generating internal revenue to execute most of its capital projects, unlike some states that solely rely on federal allocation. He described Lagos as a model which other states should look forward to in generating revenue.

Speaking further, he thanked Lagos state government for employing ICAN members and solicited for more jobs for the Institute’s members. He also called on the state government to always train and retrain its workforce, saying that this would be a tool to update their knowledge with regard to latest developments.

Bayero university Partners ICAN on Development of Accountancy

The Vice Chancellor of Bayero University, Kano (BUK), Professor Abubakar Rasheed has promised that his University

is ready to partner with the Institute of Chartered Accountants of Nigeria (ICAN) on the development of Accountancy. The VC made the promise in Kano on Monday 21st February 2011, while receiving ICAN delegation led by its President, Major-General Sebastian Owuama (retd.).

He said the University was proud to associate with ICAN and held it in high esteem due to its strict adherence to professionalism and ethical standards. He added that some professional bodies had come and died without making any impact in the country.

“Bayero University has been trying to improve on its accounting programme and now that ICAN has come, we are willing to partner with it in the areas of accountancy. We already have six ICAN members among our staff. We want an interface between academics and professionalism. We want the presence of ICAN in BUK and we are prepared for just that,” the VC stated.

Earlier, ICAN President had explained that he was in Kano to sensitise students and the young generation on what ICAN stands for and benefits inherent in registering for its examinations. He also disclosed that part of his mission was to interact with ICAN members in the region to know what challenges they were facing and also get a feedback from the users of accounting.He however promised that ICAN would do everything possible to


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ensure that the hitherto good relationship between ICAN and BUK is sustained.

The ICAN President also visited Kano State Polytechnic and Federal College of Education to speak with the students.

Why We Train Our Members in Forensic Accounting

— ICAN President

The Institute of Chartered Accountants of Nigeria (ICAN) has disclosed that the effort to train its members in forensic

accounting was aimed at empowering them to solve the current crises in the financial sector. This was stated on Tuesday, March 29, 2011 by the President of the Institute, Major General Sebastian Owuama (retd.) while inducting some of its members as Certified Forensic Accountant (CFA) at Eko Hotel and Suites, Victoria Island, Lagos.

According to him, the set that graduated was the second of the 6-module forensic skills programme affirmed to be technically competent in detecting high profile financial and economic crimes in the economy. He said that the step was designed to reinforce the nation’s anti-corruption and anti-terrorism financing crusade, in order to accelerate the process of economic development in Nigeria. He added that forensic accounting is a mechanism for global war against money laundering, terrorism financing, as well as other fraudulent and social vices that have impeded the nation’s march to development.

Owuama took the opportunity to give an insight into the financial crises witnessed in the banks in the past eighteen months, which exposed the fraudulent activities of many trusted personalities who caused the decay in the sector.

He therefore advised them to utilise the special investigative skills acquired to detect and expose all financial crimes that are often overlooked but so rampant.

Professionals Should Teach Nigerian Leaders Transparency — Otaru of Auchi

The Association of Professional Bodies in Nigeria (APBN) has been called upon to endeavour to teach Nigerian Leaders

what ethics, transparency and openness are all about. Making the charge in his palace in Auchi, Edo State, the Otaru of Auchi, HRH, Alhaji Aliru Momoh expressed disappointment that Nigerian leaders do not know what integrity and transparency mean, as they keep on deceiving people tenure after tenure about how they want to turn things around for better. “I think it is high time the association of professionals gathered together to teach Nigerian leaders what ethics, transparency and openness are all about. They keep on deceiving us that they will turn things around but what do we see at the end? Absolutely nothing”.

Earlier, the 46th ICAN President, Major-General Sebastian Owuama (retd.) had explained to the royal father that he was in his territory to see how ICAN members were faring and to get feedbacks from their employers.

He added that he had to pay courtesy visit to the Otaru, not only as a royal father but also as a senior colleague and member of the foremost professional Institute in the country. He disclosed that the present generation of Chartered Accountants is building upon the foundation laid down by the likes of the Otaru.

Standard of Private universities Is Higher — Owuama

The President of the Institute of Chartered Accountants of Nigeria (ICAN), Major-General Sebastian Owuama (retd.)

has described the standard of private Universities as very high. Owuama stated this at Fountain University, Osogbo, Osun State. He had visited the University as part of his tour of Osun and District Society of the Institute. He said since most of the nation’s universities are decaying both in learning and moral standard, those who can afford it had no choice but to take their children to private universities where they would be given good education and moral upbringing.

While commending the university authority, Owuama advised that the standard set should not be lowered for whatever reason if the set objectives for establishing the school must be realised.

In his response, the Vice Chancellor of the University, Professor Hussein Oloyede observed that ICAN has always been at the forefront of wanting the younger ones to grow.

He said that already, some of the students of the University were already writing ICAN examinations and were at various stages. He however promised that the standard set by the Institution would not only be maintained but also be improved upon.

Owuama Advises Association on Discipline

The Association of Reporting Accountants in the Capital Market (ARACAM) has been advised not to allow its disciplinary

procedure to be in conflict with that of the Institute of Chartered Accountants of Nigeria (ICAN). The 46th President of the Institute, Major-General Sebastian Owuama (retd.) gave the advice on Friday, 11th February 2011 while receiving the executive members of ARACAM who had come to visit him in his office.

Earlier, the Chairman of ARACAM which consists of mainly ICAN members had disclosed to Owuama that it was formed because there was need for it in the capital market, adding that this would also project ICAN image.

He said the objective of the Association was to educate members on the operations of the stock market as well as training members on how best to perform their duties. He added that apart from the codes of conduct set up for the members of the association, there was also an operating manual to guide them.

In his response, Owuama advised the representatives of the association to formalise the issue so as to prevent it from being hijacked from the founding fathers, adding that the Council of ICAN must also be carried along in the operations of the association.


New Exco Members for District Society

Mr. Ajileye Johnson — ChairmanMr. Malomo Moses — Vice ChairmanMr. Chidi C. Otumba — 2nd Vice ChairmanMr. Edet Emma Okon — General SecretaryMr. Hashim A. Sikirullahi — Asst. Gen.SecretaryMr. Abiodun O. Emmanuel — Financial SecretaryMr. Akinyemi Oluwayimika — Asst. Fin. SecretaryMr. Bello Olufemi Emmanuel — Treasurer

New SWAN Executive Committee MembersMrs. Tokunbo Obafemi-Adegbola — ChairpersonMrs. Onome Joy Olaolu — 1st Vice ChairpersonMrs. Titi Akibayo — 2nd Vice Chairperson Mrs. Aina Bamigbose — Secretary GeneralMrs. Catherine Nnaji — Asst. Sec. GeneralMrs. Gertrude Adetula-Martins — Membership SecretaryMrs. Stella Soladoye — TreasurerMrs. Bimpe Dada — Financial SecretaryMiss Oyinlola Oluyemi — Publicity SecretaryMrs. Bukky Akinmoladun — Welfare SecretaryMrs. Margaret Unubun — Ex-OfficioMrs. Sarah Ogunde — Ex-OfficioMrs. Folake Onabodu — Ex-Officio

AMuWO

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Johnson Okon

ICAN to Assist APBN in Establishing Local Branches

The President of the Institute of Chartered Accountant of Nigeria (ICAN), Major General Sebastian Owuama (retd.)

has assured the Association of Professional Bodies in Nigeria (APBN) that ICAN would collaborate with it in establishing its local branches. Owuama gave the promise while receiving the 12th APBN President, Mr. Segun Ajanlekoko who had paid him courtesy visit at ICAN Secretariat, Victoria Island, Lagos.

Owuama said that apart from ICAN’s readiness to collaborate with APBN to establish its local branches, the Institute would also use the platform of its District Societies to assist the Association in achieving the feat. He promised that ICAN, as a formidable member of APBN would not lag behind in fulfilling both its financial and logistics obligations to the Association.

Earlier, Ajanlekoko had eulogised ICAN, describing it as a pacesetter in professionalism as it maintains its position at the forefront of professional Institutes in Nigeria. Describing ICAN as an active member of APBN, he recounted that the foremost accounting professional Institute had in the past produced a Past President of APBN as well as APBN Merit Award Winner.

Speaking further, Ajanlekoko explained that APBN was formed to contribute to development of the nation by helping to proffer solutions to various problems confronting the nation.

On the APBN Foundation to be launched very soon, Ajanlekoko said it was established to play more active roles in promoting professionalism and ensuring that professionals are given leadership positions to move the nation forward.

ICAN Disciplinary Tribunal Suspends Timothy Ojo for Five Years

The Disciplinary Tribunal of the Institute has suspended Mr. Timothy Ojo (MN: 5316) for five years over three count

charges bordering on disrespect, professional misconduct and infamous conduct. Apart from the suspension, he would also return his membership certificate to the Institute. He may however re-apply for membership before the Tribunal after five years. He may be re-admitted by the Tribunal if he complies with the directives of the Tribunal.

Mr. Timothy Ojo had been accused of issuing sixteen post-dated cheques between 2004 and 2007, to Feyita Company Limited as payment for supplies made by the Company knowing that he did not have sufficient funds in his account to honour the cheques upon presentation by the company.

In the Judgment sheet signed by the President of the Institute, Major-General Sebastian Owuama (retd.) and made available to The Nigerian Accountant, Mr. Timothy Ojo was found guilty of willfully disregarding the Institute’s Investigating Panel’s several written requests that he should respond to allegations made against him by Feyita Company Limited. This offence is contrary to Paragraph 21.2.3 of Chapter 21 of the Professional Code of Conduct and Guide for members of the Institute and punishable under Section 12(1)(a) of the ICAN Act, Cap 185 LFN 1990.

On the second charge, Ojo was found guilty of failing to appear before the Institute’s Investigating Panel despite being properly

invited, thereby committing an offence contrary to paragraph 21.2.8 of Chapter 21 of the Professional Code of Conduct and Guide for Members of the Institute and punishable under Section 12(1)(a) of the ICAN Act, Cap 185 LFN 1990.

Thirdly, Ojo was found guilty of infamous conduct in a professional respect contrary to Paragraph 1.2.0(a) of Chapter 1 of the Rules of Professional Code of Conduct and Guide for Members of the Institute and punishable under Section 12(1)(a) of the ICAN Act, Cap 185, Laws of the Federation of Nigeria 1990.

ADENUSI & CO. is pleased to announce that the firm now has significant new global resources to offer its clients through its membership in IGAF Polaris, the powerful new global accounting association that metamorphosed from the merger of Polaris International, Fid union, and IGAF Worldwide.

The independent member firms of the merged IGAF Polaris will have combined annual revenue of over US$1.82 billion, with 2,400 partners, 16,300 employees, and 843 offices in 89 countries around the globe. This makes the combined group one of the largest associations of independent accounting firms in the world. The substantial increase in size for the merged association will further enhance ADENUSI & CO’s ability to provide expertise and resources to meet growing clients’ needs both internationally and domestically.

We have always demonstrated our zest for quality value added service delivery of international standard to our clients. This has become our hallmark and has even been acknowledged by the global Chief Executive Officer of IGAF Polaris in his recent remark on our membership of the Association.

“We are pleased and proud to have ADENUSI & CO as one of our member firms in Nigeria. Many of IGAF Worldwide member firms and their clients have relied on ADENUSI & CO’s expertise and quality service over the years, and we eagerly anticipate the contributions they will make on a global scale to the new, much larger association. In turn, I know that ADENUSI & CO will benefit from the significant additional expertise and resources being extended to their clients from their peer member firms around the globe” — Kevin Mead, CEO IGAF Polaris.

IGAF Polaris will maintain a regional governance structure, with Boards of Directors providing oversight for each of the four regions of Asia Pacific, Latin America & Caribbean, Europe, Middle East & Africa and North America. A World Board of Directors comprised of members of the Regional Boards, plus a World Chairman will provide global guidance and governance. The World headquarters office for IGAF Polaris will be in Miami, Florida, USA, with regional offices to be located in Europe, the Americas, and Asia Pacific.

“We consider this new development a great opportunity to further do our clients proud in terms of qualitative service delivery they stand to enjoy from us. Also, for easy accessibility, we have recently relocated our Abuja Office to a more centralised location at City Plaza, Ahmadu Bello Way, Garki Area 11, Abuja. We are really in for the upliftment of our practice and service delivery to the next level. This strategic move coupled with expansion of Global Resources for our Clients through membership of IGAF Polaris is a significant step toward achieving our vision which is to be a unique financial service provider which is tuned towards meeting and surpassing Clients’ expectations”, said ADENUSI & CO Chairman, Alhaji R.O. Adenusi.

In his remarks, Ahmed Tunde Adenusi, Partner/Chief Operating Officer, assured present and potential clients that expertise of over 2,400 partners and 16,300 employees is now at the firm’s clients disposal. This unparallel expanded resources will drive the firm on to achieve its mission which is to continue to add value to clients’ businesses by rendering unique financial services of international standard thereby creating value for all stakeholders.

We are at home with standards and ethics of our profession. These we promise to always put to bear in providing the much needed satisfaction of our clients in terms of service delivery no matter the change in our status and level.

It is always a new dawn in ADENUSI & CO and we therefore welcome all our clients to a new and improved dimension and scope in service delivery.

ADENuSI & CO. (Chartered Accountants)

Announces Expanded Global Resources for Its Clients through Membership in IGAF Polaris


The Annual Dinner and Awards of the Institute of Chartered Accountants of Nigeria (ICAN) has become an established

annual socio-professional ritual. The colourful event attracts professionals from all walks of life who come to witness their accomplished colleagues rewarded and celebrated for excellence and integrity. The 2011 edition of the ceremony was no exception as it was packaged to honour and recognise individuals and corporate organisations who have distinguished themselves by contributing to the growth and development of Accountancy, ICAN and Nigeria as a nation. The Awards were presented in three categories: Members, Non-Members and Corporate Bodies.

In his speech, the President of the Institute, Major General Sebastian Achulike Owuama (retd.) explained that the annual event was an avenue for members and friends of the Institute gather to unwind, celebrate the Institute’s successes and some of its galaxy of achievers. “I am proud to inform you that the Institute has made significant progress in many areas both locally and internationally for which we have reasons to celebrate.”

“During the year, the Institute has maintained a cordial relationship with our various stakeholders and our activities are widely publicised both in print and electronic media. The Institute has done its best to move the profession to enviable heights in this country and in the West African Sub-region,” Owuama expatiated.

The Chief of Army Staff, Lt. General A.O. Ihejirika, who was the Special Guest of Honour, eulogised the Institute on the

noble and unprecedented role it is playing in uplifting accounting profession both in the country and the diaspora. He also pointed out the financial and economic roles of Accountants in the country, adding that this has assisted in reducing level of corruption in the country.

Earlier in her welcome address, the Chairman, Annual Dinner and Awards Sub-Committee of the Publication and Image Committee of the Institute, HRH, Ada Chidume-Okoro took time to explain that ICAN’s awards are meant for accomplished personalities and that those chosen had been well screened and presented to the Council of the Institute for approval. “We carry our members along by sending nomination forms to them to suggest distinguished persons and institutions. The end product of the exercise is what all of us have gathered here to witness tonight,” she stated.

In the Members category, four distinguished people who received awards for their outstanding contributions to the Accounting profession and the nation’s economy were: Mr Emmanuel Itoya Ijewere, FCA, President of the Institute (1996-1997); Mr. Pius Nnaemeka Akubueze, Commissioner for Finance and Investments, National Pension Commission; HRH, Alhaji Aliru Momoh, FCCA, ACA, FBIM, LL.B (Hons) London, Otaru of Auchi Kingdom; and Dr. Edward Olowo-Okere, FCA, Director, Core Operations Services, Africa Region, The World Bank.

In the Non-Members category, Comrade Adams Oshiomhole of Edo State was honoured for his contribution to the Accountancy

Profession, ICAN and the nation as a whole.In the Corporate Bodies category, The

Nigerian Army was recognised and honoured for developing the Accountancy Profession in the Military through the establishment of Army School of Finance and Administration. The Force has also contributed in no small measure to the Institute by sponsoring ICAN members in its rank and file to ICAN programmes, especially the Annual Accountants Conference. The Force also encourages and sponsors students for ICAN examination and other professional training programmes. This has contributed greatly to professional capacity building in the country.

By MUYIWA DARE

EVENTS

The Otaru of Auchi displays his plaque

Mr. Ijewere, Akubueze and Dr. Olowo-Okere receiving their award plaques

“People’s Governor”, Comrade Adams Oshiomhole

Lieutenant General Onyeabor A. Ihejirika (sitting beside ICAN President) as special guest of honour

ICAN Celebrates Achievers at Awards Ceremony

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Hold Leaders Accountable, Owuama Charges Electorate

The President of the Institute of Chartered Accountants of Nigeria (ICAN), Major-General

Sebastian Owuama (retd.) has called on the electorate to always hold their representatives accountable if they want their regions and the country as a whole to progress.

Owuama stated this on Thursday, 17th February, 2011 in Ile Ife, Osun State at the 3rd Oba Oladele

anybody challenging the perpetrators.Delivering the paper, the guest Lecturer and Secretary to the

Government of the Federation, Alhaji Yayale Ahmed pointed out that Nigeria needs to tackle a lot of things if it is desirous of moving forward. He mentioned the power sector of the economy, unemployment and corruption as part of the problems tormenting the country. He therefore called on the government to work hard on transparency and corruption and to be accountable to those who elected them into power.

ICAN Website: www.ican-ngr.org

Find out how by calling:Orhue — 08132965401

orStella — 08026999090

Olashore Annual Lecture with the theme Public Accountability, Democratic Governance and National Development organised by the Nigerian Universities Accounting Students Association (NUASA), Obafemi Awolowo University, Ile-Ife in conjunction with the Institute of Chartered Accountants of Nigeria (ICAN).

He posited that the only way by which the country could make a headway is to hold leaders accountable in line with what accountability stood for. According to him, if the electorate decided not to ask the elected questions about certain things, atrocities committed would continue to be swept under the carpets without

Owuama with the Principal and students of Olashore International College, Iloko Ijesha

Owuama appending his signature on a document at Olashore International School

ICAN President and entourage with Aloko of Iloko Ijesha, Oba Oladele Olashore

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Nigerian Army Honours Owuama

Friday, 29th April 2011 was indeed a day of glory for the 46th ICAN President, Major-General Sebastian Owuama (retd.)

as he was honoured at a grand reception by his root — the Nigerian Army, at the Headquarters of Nigerian Army Finance Corps, Apapa, Lagos.

In a citation read in honour of Owuama, the Chief of Accounts and Budget (Army), Major General A.I. Muraina described him as a respected leader and professional accountant who had endeared himself to all, for almost thirty years as a military officer.

He stated further that Owuama is the first and only retired Armed Forces personnel to be elected as President of a world-class Institute like ICAN. According to him, Owuama who commenced his sojourn in the military in 1976 and retired in 2006, employ all in his power to enhance the professional performance of Nigerian Army Finance Corps (NAFC) personnel on the platform provided by ICAN.

Speaking further, General Muraina disclosed that apart from being an astute professional in the field of accountancy, General Owuama has also recorded an indelible landmark as an academic. He said he had been the Head of Department of Professional Accountancy at the Nigerian Army School of Finance and Administration (NASFA).

As an Academic, Owuama is said to have contributed immensely to policy formulation processes in the Nigerian Army and had many academic publications and seminar papers to his credit.

In his brief response, Owuama expressed gratitude to the Nigerian Army authorities for the honour bestowed on him as one of them. While promising to continue to be a good Ambassador of the Army, he also assured them of more support in whatever way he can.

Chartered Accountants Should Participate Fully in Politics — MimikoOndo State Governor, Dr. Olusegun Mimiko has called on

Chartered Accountants in the country to fully participate in politics as their professional ideas would be so invaluable to the growth and development of the country. Mimiko, who

was represented by his Commissioner for Finance, Chief Yele Ogundipe made the call in Akure on Tuesday while declaring open the 5th Western Districts Conference of the Institute of Chartered Accountants of Nigeria (ICAN).

The governor commended the leadership of ICAN for choosing the theme ‘Wealth Creation in a Developing Economy: The Chartered Accountant as a Link’, saying that it was fit for the dream and aspiration of the government. “This is perfectly fit for our dreams and aspirations as a government and could best be described as a theme worthy of deliberations at a time like this when finding the right mix of policies that will birth rapid and efficient service delivery, has become a challenge for many governments in Nigeria,” he expatiated.

He said that in achieving the goal of wealth creation, the government must set the example through the delivery of projects and services that would transform the socio-economic landscape of the country. This, he maintained, he had been doing in his state on assumption of office two years ago.

Earlier in his keynote address, the ICAN President, Major-General Sebastian Owuama (retd.) had posited that wealth creation is all about people, the economy, and poverty alleviation in the face of challenges. He said that poverty alleviation is about a state providing the necessary infrastructure for empowering individuals to create wealth for themselves, their family and the nation as a whole. According to him, the private sector is very crucial to wealth creation, saying that if this sector is efficiently managed, it would facilitate the creation of new jobs, new business opportunities, new markets, and prosperity, thus rescue citizens from poverty.

On the role of Chartered Accountants in achieving wealth creation, Owuama said they should ensure that people have accurate and consistent information while making investment

decisions. He also suggested that Chartered Accountants should gear their commitments towards finding solutions to issues that would lead to improvements in the quality of people’s lives.

Apart from the main theme, thought-provoking papers on the sub-themes of “Funding SMEs to Grow the National Economy” and “Effective Deployment of ICT in Wealth Creation” were delivered at two plenary sessions of the Conference which is

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Major-Gen. A.I. Muraina makes a presentation to Major-Gen. Owuama (retd.)

ICAN President Owuama presents a plaque to Ondo State Governor’s representative, Chief Yele Ogundipe at ICAN’s 5th Western Districts Conference in Akure

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ongoing at the Royal Parklane Hotels and Suites, Ijapo Estate, Akure. There were also two workshop sessions which featured “Accountability and Trust: A Panacea for Good Governance” and “Health Management and Wealth Creation”. The conference was rounded off with a gala night on Wednesday, February 9, 2011.

ICAN began holding District Conferences six years ago in Jos where the first Northern Districts conference was held. The maiden Eastern Districts Accountants’ Conference was held at the Port Harcourt International Airport Hotel, Omagwa, in Port Harcourt, Rivers State in 2006. It was one of the various efforts of the Institute aimed at bringing the Institute and the Profession as well as members of ICAN closer to the grassroots.

The Institute has also been rendering excellent services to various parts of the country through its forty-six districts across Nigeria as well as in the United States of America and the United Kingdom. The Institute regularly raises its standards in line with the provision of IFAC, which is the umbrella association for accountancy bodies all over the world.

District Chairman Attributes Successes to Owuama’s Guidance

The Chairman of Ikeja District and Society of the Institute, Mr. Joshua Oderinde has attributed the successes recorded by the

District to the fatherly advice and guidance of the ICAN President, Major General Sebastian Owuama. Oderinde, who stated this in Ikeja on Tuesday April 19, 2011 during ICAN President’s visit to the District, also described Owuama as a good mentor.

On the activities of his District, Oderinde said that series of efforts were made to sensitise members on the need to update their profile in line with the directive of the Secretariat. He said that the District is also interacting with the employers of its members with a view to fostering unity and proffering solutions to challenges. He maintained that as Chartered Accountants, they are expected to be contributing their input to the nation’s economy.

In the same vein, Managing Director of Mouka Foam Plc, Mrs Peju Adebayo also described ICAN as one of the few bodies that weathered the storm associated with economic development, adding that her company has twelve ICAN members in its Finance Department.

Responding, Owuama enthused that ICAN should be setting pace for others to follow. He said in view of this, the Institute is putting in place necessary and needed structures to strengthen and galvanise District Societies.

ICAN Inaugurates Ota District

History was made in Ota, Ogun State, on Monday 9th May, 2011 as the 46th President of the Institute inaugurated the Ota

District and Society of ICAN. In his speech, the 46th President of the Institute, Major-General Sebastian Owuama (retd.) said that the reason for creating District Societies in all nooks and crannies of the country is to serve as liaison offices to bridge perceived information gap between the Institute’s Secretariat in Lagos and its members widely spread across the nation.

He said that the importance of the Societies among others includes providing an avenue for members to interact, exchange

ideas and discuss issues of professional and national interests. He explained further that the District Societies also help to

galvanise members to form common positions on matters of peculiar relevance to their host communities, adding that the District Societies were not only in Nigeria but also in the United Kingdom and the United States of America, with plans in top gear to establish one in Canada soon.

He therefore called on members of the new district societies to see the creation as a call to service with great responsibility, particularly in the areas of compliance with the code of best practices and the rule of professional conduct for members.

He advised that none of them should mortgage their conscience or compromise their professional ideals of accountability, integrity and honesty for pecuniary or non-pecuniary gains, no matter the circumstances. He urged them to continue to discharge their various professional engagements with integrity, accuracy and strong ethical ideals bearing in mind that if virtues are compromised, the entire accounting profession would be brought into disrepute.

Earlier in his welcome address, the Chairman of the District, Professor Enyi Patrick Enyi explained that attempts have been made in the past to get the District inaugurated but to no avail. He therefore gave kudos to all who played one role or the other to get it done eventually. Calling for the support of all members of the Districts, he promised to fly the flag of the Institute as a whole and that of the District in particular.

As part of the activities marking the inauguration, the President also visited Bells University, Ota and Covenant University where students were counselled on the Accounting profession.

Died:

Chief Joseph Chinago Egedigwe of Kano and Jigawa District Society of the Institute while serving as the Chief Invigilator

of the ICAN Examinations, Kano Centre, a position he held for about 10 years. He had been in the Executive Committee of the District Society for more than 15 years, and was Chair, education sub-committee for many years. He served as the Chairman of the Kano and Jigawa District Society between 2000 and 2001, during which he initiated a lot of programmes that subsequent chairmen built on for the advancement of the District Society.

Chief Egedigwe was a fellow member of the Institute for many years, and he was among the first 2,000 Chartered Accountants in Nigeria. He qualified as a Chartered Accountant in 1977, when he completed the qualifying examinations of the Association of Certified Chartered Accountants (ACCA) in South Western London College SW 17, and then returned to Nigeria to be admitted into the membership of the Institute of Chartered Accountants of Nigeria (ICAN). He was the Managing Partner of Joseph Egedigwe and Co (Chartered Accountants), a flourishing accountancy firm based in Kano, with a good number of big clients such as the Royal Tropicana Hotel Ltd, Kano.

Late Egedigwe held the traditional title of Igwebuike 1 of Uvuoma Olokoro in Umuahia South LGA of Abia State. He was a detribalised and ethically sound chartered accountant. He was really an ambassador per excellence of the Olokoro community in Kano where he lived and died as a perfect gentleman.

May his soul rest in peace.

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Why is IFAC putting so much emphasis on supporting SMPs?

Put simply, we recognise that SMPs help support the health and prosperity of the small and medium-sized entity (SME) sector, a sector that in most countries around the world accounts for the majority of private sector employment and Gross Domestic Product. In fact, many countries are relying on this sector to help their economies recover from the global economic slowdown.

SMEs often, especially when they lack sufficient in-house expertise, look to SMPs to provide a broad range of professional services, from traditional accountancy-based services to business advisory services. In addition, a strong SMP constituency can contribute to increased choice and competition in the market for professional services.

Meanwhile, SMPs are confronted by a range of operational, market, and regulatory challenges themselves. These challenges are nothing new, but what is new is their enormity. IFAC and our members recognise that to provide effective support to the SME sector, SMPs need more help. The vast majority of the heads of IFAC member bodies (95 percent) told us, in their responses to IFAC’s 2010 Global Leadership Survey that addressing the needs of SMEs and SMPs is crucial. (See the press release.)

How have the IFAC Board recommendations impacted the SMP Committee’s objectives and work plan for this year?

The Board’s recommendations have essentially become the foundation of the SMP Committee’s objectives — not only for this year, but for the next several years. The scope of the recommendations is exciting but also overwhelming as there is a lot of work to be done. At the same time, I feel fortunate to be in a position of leadership within the committee at this time, as we pursue many exciting new initiatives that should greatly increase the committee’s ability to assist SMPs globally.

Our strategy is built upon four key objectives, which align very closely with the Board’s recommendations:

• Provide input to IFAC’s policy-making process and participate in its regulatory dialogue to ensure that SMP and SME issues are fully considered;

• Help to shape the form and content of international

standards to ensure their stability, relevance, and proportionality to SMEs and SMPs;

• Communicate the importance of the SME sector and the role SMPs can play in supporting this crucial sector to enhance the visibility, voice, and recognition of SMPs; and

• Provide and promote practical support to SMPs to enhance their ability to provide high-quality and relevant professional services to their clients.

What contributions has the SMP Committee made recently to IFAC’s regulatory dialogue?

The committee participated in the development of IFAC’s response to the European Commission’s Green Paper, Audit Policy: Lessons from the Crisis. Our insights and views helped ensure the IFAC response was robust, balanced, and sufficiently focused on SME and SMP issues. The committee will continue to closely monitor IFAC’s regulatory dialogue and participate when relevant.

H o w d o e s t h e S M P C o m m i t t e e h e l p s h a p e standards?

The committee provides input on key standards and publications at all stages of their development. In April, the committee submitted

a comment letter on the Proposed IAASB Strategy and Work Program for 2012-2014, issued by the International Auditing and Assurance Standards Board (IAASB). We were happy to note that the work program gives due recognition to the needs of SMPs and SMEs.

This year, with the formation of the its SME/SMP Working Group, the International Ethics Standards Board for Accountants (IESBA) is working to address the issues faced by SMEs and SMPs in complying with the IESBA Code of Ethics for Professional Accountants (the Code). Two SMP Committee members serve on this Working Group.

How will the SMP Committee enhance the visibility of SMPs?

One of the ways the committee hopes to enhance the visibility of SMPs is by increasing speaking engagements by committee

Voghel

IFAC Increases Support for SMPsIt’s been nearly a year since the IFAC Board reviewed the activities of the International Federation of Accountants (IFAC)

to support small- and medium-sized practices (SMPs), and made targeted recommendations for improvements based on the changing market environment and needs of our constituents. As a result of the review, IFAC will increase its support for SMPs. In this interview, Sylvie Voghel, Chair of the IFAC Small and Medium Practices Committee, speaks about the SMP Committee’s role in implementing the recommendations and provides an update on progress made so far.

INTERVIEW

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members and staff at national, regional, and global events and meetings, where they will discuss the value of SMPs and their role in supporting SMEs.

Each year, the committee holds an SMP Forum where practitioners from IFAC member bodies convene to learn, share, and discuss the key issues facing the profession. The 2011 SMP Forum in Istanbul attracted over 200 delegates. The event affords us an opportunity not only to promote the profession, but also to gain feedback from our constituents, which we can use to fine tune our support for them.

How does the SMP Committee support and engage SMPs?

IFAC is a federation of professional accountancy organisations and, as such, we primarily seek to support SMPs through our member bodies, who serve several hundred thousand SMP practitioners around the world. Increasing the engagement of this global constituency is a priority for the committee.

This year, the committee is developing a range of materials that member bodies can use to communicate with their SMP members, including articles with tools and tips to support practice management and implementation of the International Standards on Auditing (ISAs). We also initiated a quarterly SMP poll, which many of our member bodies have distributed to their own members.

The SMP Committee has also issued three comprehensive guides to help practitioners implement international standards and proficiently manage their practices: Guide to Using International Standards on Auditing in the Audit of Small- and Medium-Sized Entities, 2nd ed., the Guide to Quality Control for Small- and Medium-Sized Practices, 2nd ed., and the Guide to Practice Management for Small- and Medium-Sized Practices. All three were released in 2010. IFAC member bodies may translate, reproduce, and adapt the guides as needed. The guides and existing translations are available free of charge on the IFAC website under SMP Publications and Resources and in the Translations Database.

Is there anything else that you would like to add that we have not already covered?

Clearly, SMP and SME issues are an integral part of IFAC’s strategy. The independent standard-setting boards supported by IFAC have made great progress in accommodating SMEs and SMPs: the proposed IAASB strategy is testimony to this.

The IFAC SMP Committee is here to champion the cause of SMPs and represent the global SMP constituency. However, in isolation, its influence is limited; effective and enduring implementation of the IFAC Board recommendations depends upon a collective effort by IFAC, its member bodies, and the willingness of SMPs to engage, get involved, and speak with a single voice at the national, regional, and global level.

For More InformationTo learn more about the SMP Committee, see IFAC’s

International Center for Small and Medium Practices, where practitioners can access a wide range of free resources and practical support, including the guides, the electonic SMP newsletter, links to tools and resources, a discussion board, and other SMP Committee publications.

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FROM OTHER BODIES

NEWS

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Accounting Education: uNCTAD-IAESB Education Forum Identifies Opportunities and Challenges

International accountancy, education, and Professional Accountancy Organisation (PAO) leaders from over 30 nations

convened on Tuesday, March 8 at the United Nations in Geneva for the Accountancy Education Forum: Building Human Capacity and Professional Accounting Education for High-Quality Corporate Reporting. The event was jointly hosted by the United Nations Conference on Trade and Development (UNCTAD) and the International Accounting Education Standards Board (IAESB).

Opportunities for advancement and challenges being faced in the implementation of accountancy education programs were discussed over the full-day event. Key points addressed include:

• Updating the UNCTAD-ISAR Model Accounting Curriculum and the International Education Standards (IESs) to meet the challenges of delivering accountancy education in Francophone Africa and other parts of the world;

• Revising the suite of IESs to enable better understanding by PAOs of their obligations in the development of competent professional accountants;

• Developing additional guidance on the implementation of the IESs while facilitating their use as a set of global benchmarks for the development and delivery of professional accountancy education; and

• Exploring new opportunities for harnessing the latest technology and providing accountancy education programs in innovative ways.

The event provided UNCTAD and IAESB with an opportunity to reach out to key stakeholders in the area of accounting education and to share the latest developments on their respective activities, including the IAESB’s current work program on updating its IESs and its efforts to assist PAOs with implementation of existing accounting education standards.

Furthermore, the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting’s (ISAR) current work on capacity-building for high-quality corporate reporting was highlighted. In particular, the importance of accounting education for strengthening the human capacity pillar of the ISAR capacity-building framework was noted.

To download the presentations and papers from the event, please visit the IAESB-UNCTAD Accountancy Education Forum website or contact us at one of the following emails: [email protected] or [email protected].

UNCTAD is the focal point of the United Nations for the integrated treatment of investment and enterprise development. Since its founding in 1964, UNCTAD has progressively evolved into an authoritative knowledge-based institution whose work aims to help shape current policy debates and thinking on development.

UNCTAD is the host for the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR). For more than 25 years, ISAR has been the focal point within the UN system for issues of corporate transparency and accounting. Through ISAR, UNCTAD works to promote international best practices in corporate reporting and disclosure and to assist developing countries to build their technical capacity in this area. More information: www.unctad.org/isar or by e-mail [email protected].

The IAESB develops education standards, guidance, and information papers for use by IFAC member bodies under a shared standard-setting process involving the Public Interest Oversight Board, which oversees the activities of the IAESB, and the IAESB Consultative Advisory Group, which provides public interest input into the development of the standards and guidance. The structures and processes that support the operations of the IAESB are facilitated by IFAC.

IFAC Poll: Economic uncertainty Poses Biggest Challenge to Small Businesses

The effects of the financial crisis continue to be felt by small businesses, according to the small- and medium-sized

accountancy practitioners recently polled by the International Federation of Accountants. Economic uncertainty is still the biggest challenge facing small- and medium-sized entities (SMEs), said the largest group of respondents — nearly 30% — while the burden of regulation was a close second. Regulations and standards challenge small- and medium-sized accounting practices (SMPs) as well: over 40% said that keeping up with regulations and standards is the most important issue now facing their practice.

Despite the prevalence of economic uncertainty, nearly 40% of SMPs expect their practices to perform better this year than last year. Only slightly more (43%) expect business to be even with 2010, and 19% expect business to shrink in 2011. SMPs continue to generate the largest proportion of their revenue from traditional compliance-based services. Nearly 45% of respondents indicated that audit and assurance is their biggest source of revenue, followed closely by accounting and compilation (40%). Tax and advisory/consulting services comprised only 15% combined.

With the aim of taking a snapshot of the key issues confronted by SMPs and their SME clients, the IFAC SMP Quick Poll will be issued quarterly throughout 2011 in the SMP eNews, IFAC’s free newsletter for SMPs. The first Quick Poll collected 425 responses from all regions of the world over a 14-day period (January 27, 2011 to February 9, 2011).

IFAC (www.ifac.org) is the global organisation for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 164 members and associates in 125 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.


Introduction1. One of the ten Sound Practices for the management

and supervision of Operational Risk in Banks is that Banks should have in place contingency and business continuity plans to ensure their ability to operate on an ongoing basis and limit losses in the event of severe business disruption.

Business continuity is an ongoing priority for financial industry participants and financial authorities. Recent acts of terrorism in New York, London, Istanbul, Madrid and elsewhere, outbreaks of Severe Acute Respiratory Syndrome (SARS) and the Avian Flu, and various widespread natural disasters have served to heighten that priority by underlining the substantial risk of major operational disruptions to the financial system. On the local scene, persistent fuel scarcity, labour picketing, political and labour unrest, among others could cause business disruptions.

What is Systemic Distress?2. A crisis might start with one or several troubled entities,

infecting the whole system through contagion. It could also come about through a common, simultaneous shock to all institutions. For example, a falling exchange rate may trigger defaults by firms that borrowed in foreign currency against local currency revenues. Asset prices and bank balance sheets deteriorate system-wide, deposits run, interest rates skyrocket and credit dries up. A banking crisis can first appear on the liability side – as a deposit run – or on the asset side, with large-scale defaults on private loans or government debt. Although, its effects must be felt across the banking and/or corporate sector, a systemic crisis need not put every bank and firm out of business. Failure of a dominant institution such as a state bank that holds the overwhelming majority of deposits can qualify as systemic.

One bold step the Federal Government has taken to proactively prevent re-occurrence is the increased Capitalisation of Banks to N25billion. Many of the Banks have doubled and even trippled this minimum capital requirements on their own.

Other method of handling systemic distress is short-term liquidity injection (borrowing) from the Central Bank of Nigeria (CBN) to the illiquid but solvent banks.

Business Continuity Planning Framework For Distress Resolution In Banks under Basel II Accord

By Gbolahan oyEdiran

Effective Business Continuity Management 3. Business continuity management, a significant

component of operational risk management, is a whole-of-business approach that includes policies, standards, and procedures for ensuring that specified operations can be maintained or recovered in a timely fashion in the event of a disruption. Its purpose is to minimise the operational, financial, legal, reputational and other material consequences arising from a disruption. Effective business continuity management concentrates on the impact, as opposed to the source, of the disruption, which affords financial industry participants and financial authorities greater flexibility to address a broad range of disruptions. At the same time, however, organisations cannot ignore the nature of the risks to which they are exposed. For example, organisations located in earthquake-prone regions commonly plan for the impact of earthquake-related major operational disruptions.

4. Effective business continuity management typically incorporates business impact analyses, recovery strategies and business continuity plans as well as testing programmes, training and awareness programmes, and communication and crisis management programmes.

A business impact analysis is the starting point – it is a dynamic process for identifying critical operations and services, key internal and external dependencies and appropriate resilience levels. It assesses the risks and potential impact of various disruption scenarios on an organisation’s operations and reputation.

A recovery strategy sets out recovery objectives and priorities that are based on the business impact analysis. Among other things, it establishes targets for the level of service the organisation would seek to deliver in the event of a disruption and the framework for ultimately resuming business operations.

Business continuity plans provide detailed guidance for implementing the recovery strategy. They establish the roles and allocate responsibilities for managing operational disruptions

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and provide clear guidance regarding the succession of authority in the event of a disruption that disables key personnel. They also clearly set out the decision-making authority and define the triggers for invoking the organisation’s business continuity plan. The safety of staff should be the paramount consideration of an organisation’s business continuity plan.

The Benefits of High-Level Principles (of Business Continuity Plan) 5. Operational disruptions of varying kinds and impact are

commonplace – organisations routinely accommodate such risks as computer malfunctions, power failures and transportation disruptions in their business continuity plans. From a corporate perspective, resilience to operational disruptions has a clear commercial rationale – customers of organisations whose systems are prone to regular failure as a result of relatively common events will inevitably choose to do business with more resilient competitors. In a competitive environment, an organisation typically will weigh its direct benefit from measures to improve its resilience to operational disruptions against the cost of those measures.

6. Similar cost-benefit considerations apply to measures for improving a financial system’s resilience to operational disruptions. The benefits of improved systemic resilience accrue to all participants in that system (albeit to a varying extent), but in most cases such improvements are the result of investments in business continuity by individual financial industry participants. Because financial industry participants typically consider only their direct benefits and costs whereas financial authorities are expected to consider the broader public interest dimension, a natural tension exists between the levels of resilience that financial industry participants might consider reasonable for their own business purposes and the objectives of financial authorities for the resilience of the financial system as a whole.

Target Audiences 7. The business continuity principles in this paper have

been developed for two distinct but related audiences – financial industry participants and financial authorities. While these groups have different perspectives, roles and responsibilities in the event of a major operational disruption, both are integral in any meaningful effort to improve the financial system’s resilience to such disruptions. The same effort will not be required of every organisation in these groups to achieve the objectives of every principle in this paper. In fact, many organisations in both groups already have effective and comprehensive approaches to business continuity management. There are organisations in both groups, however, whose careful attention to these principles would not only improve their resilience to major operational disruptions but yield benefits for the resilience of the financial system more broadly.

Financial Industry Participants 8. For the purpose of this paper, the term financial industry

participants should be understood in its broadest sense so that it captures not only financial institutions such as banks, securities firms, and insurance companies, but also those organisations that provide services that are necessary for financial systems to operate, such as stock and commodities exchanges, self-regulatory organisations, and payment and settlement system

operators.

9. Within this broad target audience, there is a subset of participants that provide critical services to financial systems. Large value payment processing and securities settlement are examples of critical services in a financial system. A disruption of the services provided by these participants, for which there are no viable immediate substitutes in many cases, would have a cascading effect on the financial system. In addition, in some markets there may be financial industry participants whose inability to continue normal operations could, because of the significance of their role in those markets, affect other participants in those markets and thereby have a cascading effect on the financial system. For these financial industry participants, there is an inevitable step-up in their obligation to ensure a high degree of resilience in the event of a major operational disruption. In contrast, the inability of an individual financial industry participant to continue operating in the event of a major operational disruption generally would not render the markets in which they operate dysfunctional, except where that participant is a critical market participant. Principle 3 provides additional clarity on this distinction within this target audience and its implications for business continuity management.

10. The high-level principles that follow are applicable to both financial industry participants and financial authorities except for Principle 7, which is relevant only for financial authorities. Because of the different perspectives, roles and responsibilities of these two groups of organisations in the event of a major operational disruption, however, the way in which a particular principle applies may be different. The key differences in application are highlighted in the discussion that follows each principle.

11. The principles in this paper build upon traditional concepts of effective business continuity management in the following ways:

Principle 1 emphasises that the requirement for sound business continuity management applies to all financial authorities and financial industry participants and that the ultimate responsibility for business continuity management – not unlike the management of other risks – rests with an organisation’s board of directors and senior management.

Principle 2 advises organisations that they should explicitly consider and plan for major operational disruptions. While this concept may be new for many organisations, it is considered important in light of the increasing frequency of such events.

Principle 3 states that financial industry participants should develop recovery objectives that reflect the risk they represent to the operation of the financial system. Financial industry participants that provide critical services to, or otherwise present significant risk to the operation of, the financial system should target higher standards in their business continuity management than other participants. Financial authorities are encouraged to participate, as appropriate, in identifying recovery objectives that are proportionate to the risk posed by a given participant in order to achieve a reasonably consistent level of resilience.

Principle 4 stresses the critical importance of business continuity plans addressing the full range of internal and external communication issues an organisation may encounter in the event of a major operational disruption. The principle specifically recognises that clear, regular communication during

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a major operational disruption is necessary to manage a crisis and maintain public confidence.

Principle 5 highlights the special case of cross-border communications during a major operational disruption. Given the deepening interdependencies of financial systems across national boundaries, this principle advises financial industry participants and financial authorities to adopt communication protocols that address situations where cross border communication may be necessary.

Principle 6 emphasises the need to ensure that business continuity plans are effective and to identify necessary modifications through periodic testing.

Finally, to ensure that financial industry participants are in fact implementing appropriate approaches to business continuity management that reflect the recovery objectives adopted in accordance with Principles 1 and 3, Principle 7 calls upon financial authorities to incorporate business continuity management reviews into their frameworks for assessing financial industry participants.

Principle 1: Board and Senior Management Responsibility Financial industry participants and financial authorities

should have effective and comprehensive approaches to business continuity management. An organisation’s board of directors and senior management are collectively responsible for the organisation’s business continuity.

12. Business continuity management should be an integral part of the overall risk management programme of financial industry participants and financial authorities.

An organisation’s board and senior management are responsible for managing its business continuity effectively and for developing and endorsing appropriate policies to promote resilience to, and continuity in the event of, operational disruptions. They should recognise that outsourcing a business operation does not transfer the associated business continuity management responsibilities to the service provider. The board and senior management should create and promote an organisational culture that places a high priority on business continuity. This message should be reinforced by providing sufficient financial and human resources to implement and support the organisation’s approach to business continuity management.

Principle 2: Major Operational Disruptions Financial industry participants and financial authorities

should incorporate the risk of a major operational disruption into their approaches to business continuity management. Financial authorities’ business continuity management also should address how they will respond to a major operational disruption that affects the operation of the financial industry participants or financial system for which they are responsible.

13. Major operational disruptions pose a substantial risk to the continued operation of financial industry participants and financial authorities, as well as to the operation of the financial system. Accordingly, all financial industry participants and financial authorities should incorporate the risk of a major operational disruption in their business continuity plans. The extent to which a financial industry participant prepares to

recover from a major operational disruption should be based on its unique characteristics and risk profile. Because access to the resources needed for the full recovery of its operations may be limited during a major operational disruption, a financial industry participant should identify through a business impact analysis those business functions and operations that are to be recovered on a priority basis and establish appropriate recovery objectives for those operations.

14. Major operational disruptions vary in intensity, scope and duration. In many cases, organisations may be able to remain at their primary business locations if they have sufficient backup for power and other essential services. Recent experience, however, has demonstrated that some major operational disruptions constitute extreme events whose impact can be very broad in scope, duration or both. In evaluating whether their own business continuity management is sufficient to accommodate such major operational disruptions, financial industry participants and financial authorities should review the adequacy of their recovery arrangements in the following three important areas:

— First, an organisation should take care that its alternate site is sufficiently remote from its primary business location and, where possible, does not depend on the same physical infrastructure components. This minimises the risk that both could be affected by the same event. For example, the alternate site should ideally be on a different power grid and central telecommunication circuit from the primary business location.

— Second, an organisation should consider whether the alternate site would have sufficient current data and the necessary equipment and systems to recover and maintain critical operations and services for a sufficient period of time in the event that its primary offices are severely damaged or access to the affected area is restricted.

— Third, given that staff at the primary business location are likely to be unavailable, the business continuity plan should address how the organisation will provide sufficient staff – in terms of number and expertise – to recover critical operations and services consistent with its recovery objectives. Some approaches to ensuring that sufficient staff are available at alternate sites include, for example: specific plans to source staff from multiple geographic locations; locating staff at alternate sites on a permanent basis (e.g. in the case of load-sharing); cross-training employees at alternate sites or from other locations; ensuring that a percentage of employees deemed essential to meeting recovery objectives are located away from the primary business location at any given time; and hiring employees who live at the outer edges of typical commuting ranges from the primary business location.

Principle 3: Recovery Objectives Financial industry participants should develop recovery

objectives that reflect the risk they represent to the operation of the financial system. As appropriate, such recovery objectives may be established in consultation with, or by, the relevant financial authorities.

15. A financial industry participant that experiences a major operational disruption might affect the ability of other financial industry participants – and possibly the financial system – to continue normal business operations. Accordingly, financial industry participants should consider the extent to which

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they pose such a risk and augment their business continuity management where they determine that a disruption of their operations would affect the operation of the broader financial system. Relevant financial authorities are encouraged to provide guidance that would assist financial industry participants in making this assessment. Examples include a payment and settlement system operator on which financial industry participants depend to process and complete transactions – particularly where there are no others capable of substituting for that operator – or financial industry participants that play a significant role in providing financial services within a particular region.

16. Financial industry participants should establish recovery objectives that are proportionate to the risk they pose to the operation of the financial system. The board and senior management are ultimately accountable for the organisation’s recovery objectives, although in practice recovery objectives that apply to individual business lines are often developed by, or in consultation with, business line management. Financial authorities are encouraged to participate in the identification of recovery objectives where such a role is consistent with an authority’s mandate. The highest recovery objectives typically should be reserved for those financial industry participants that are most likely to disrupt the financial system in the event of a major operational disruption because of the critical services they provide or their significance to the financial system in which they operate. For example, critical market participants might reasonably be held to a within-the-day-of-disruption recovery time objective in the case of major operational disruptions resulting from discrete events,10 and generally be expected not only to recover critical operations and services but also to resume normal business in those areas within the same timeframe. It may be acceptable for other participants to target a less stringent recovery time depending on the impact a disruption of their operations would have on the financial system or on the expectations of other financial industry participants. In assessing the reasonableness of an organisation’s recovery objectives, financial authorities are strongly encouraged to consider the increased risk of failed transactions, liquidity dislocations, solvency problems, and loss of confidence that accompany prolonged disruptions in the financial system.

17. Recovery objectives should identify expected recovery levels and recovery times for specific activities. Although they may not be achievable in every circumstance, recovery objectives provide financial industry participants with benchmarks for testing the effectiveness of their business continuity management. They also provide some assurance that financial industry participants representing similar external risks will attain a consistent level of resilience. When identifying recovery objectives, it would also be appropriate to identify appropriate timeframes for implementing those objectives.

Principle 4: Communications Financial industry participants and financial authorities

should include in their business continuity plans procedures for communicating within their organisations and with relevant external parties in the event of a major operational disruption.

18. The ability to communicate effectively with relevant

internal and external parties in the event of a major operational disruption is essential for financial industry participants and financial authorities alike. Particularly in the early stages of a disruption, effective communication is necessary to gauge the impact of the disruption – on an organisation’s staff and operations, and on the broader financial system – and make appropriate decisions about whether to invoke a business continuity plan. As time progresses, the ability to communicate the best available information to the appropriate parties in a timely fashion is critical to the recovery of an organisation’s operations and to the return of the broader financial system to normal operation. Maintaining public confidence, whether in an individual financial industry participant or in the financial system as a whole, requires clear, regular communication throughout the duration of a major operational disruption.

19. Accordingly, and also because of the added pressure that is often associated with decision-making during a major operational disruption, the business continuity plans of financial industry participants and financial authorities should incorporate comprehensive emergency communication protocols and procedures. For example, a financial industry participant would need to consider the external parties with whom it should communicate, such as the relevant financial authorities, other financial industry participants, the public and other stakeholders, as well as how best to communicate with them and within its own organisation. It may also be necessary for a participant to obtain information from financial authorities and other financial industry participants regarding the status of the financial system, as well as from organisations that provide physical infrastructure services regarding the status of any services required for the implementation of the participant’s business continuity plan. A financial authority will need to consider similar issues, but its emergency communication procedures should also reflect its broader responsibilities. For example, a financial authority may want to consider issuing public statements during a crisis to assure the markets and the public that appropriate measures are being taken and inform them of those measures. In cases where financial authorities share oversight responsibilities for a group comprising more than one financial industry participant, it may be beneficial for those authorities to designate one from their midst as the “coordinator” for purposes of facilitating communication during a major operational disruption affecting the group.

20. The communication procedures of financial industry participants and financial authorities generally should:

— Identify those responsible for communicating with staff and various external stakeholders. This group might include senior management, public affairs staff, legal and compliance advisors, and staff responsible for the organisation’s business continuity procedures. This group should be able to communicate with personnel located at isolated sites, dispersed across multiple locations, or otherwise away from the primary business location;

— Build on any communication protocols that already exist within the financial system and include contact information for relevant domestic financial authorities and financial industry participants to facilitate an assessment of the condition of the financial system and coordinate recovery efforts. Examples of existing communication protocols might include conference call schedules developed by financial sector trade associations or

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financial authority working groups and bilateral communication procedures between major international exchanges. In addition, consideration should be given to including contact information for officials with local emergency response organisations where critical facilities are located;

— Address related issues that can arise during a major operational disruption, such as how to respond to failures in primary communication systems. This could include, for example, developing systems and contact information for key personnel that would facilitate multiple methods of communicating (e.g. digital and analogue land line phones, mobile phones, satellite phones, text messaging, websites, hand-held wireless devices, etc);

— In the case of financial authorities, include, as appropriate, contact information for national or regional protection and intelligence agencies and other relevant governmental authorities. These arrangements may require the use of secure communications using specialised “secure” telephones, faxes, and emails; and

— Provide for the regular updating of calling trees and other contact information and the periodic testing of calling trees.

Principle 5: Cross-border Communications Financial industry participants’ and financial

authorities’ communication procedures should address communications with financial authorities in other jurisdictions in the event of major operational disruptions with cross-border implications.

21. Because of the deepening interdependencies among financial industry participants across jurisdictions, it is increasingly likely that the impact of a major operational disruption will extend across national borders. Addressing disruptions that cross national borders introduces additional complexity. Although domestic communication procedures may be reasonably well-defined in the business continuity plans of many financial industry participants and financial authorities, special attention is warranted in preparing for disruptions with international scope.

22. Financial industry participants should consider the possibility that a disruption of their business operations in one jurisdiction would affect significant subsidiary or branch operations or otherwise affect the financial system in other jurisdictions. Where this outcome is possible, a financial industry participant’s communication protocols should address the circumstances under which it would contact the relevant non-domestic financial authorities. Financial authorities should incorporate communication protocols in their business continuity plans for communicating with financial authorities in other jurisdictions in the event of a major operational disruption that affects (or could affect) the continued operation of the international financial system. Although it was developed to address financial crises and not business continuity events, per se, the Memorandum of Understanding on co-operation between the Banking Supervisors, Central Banks and Finance Ministries of the European Union in Financial Crisis situations (2005) provides a useful example of what such communication protocols might entail. It comprises a set of principles and procedures for sharing information, views and assessments among the authorities potentially involved in a crisis situation,

as well as arrangements for the development of contingency plans for the management of crisis situations and stress testing and simulation exercises.

23. These communication protocols should build on existing cross-border relationships and multi-jurisdictional protocols by identifying the types of officials at financial authorities who might need to be involved in responding to such disruptions and including the relevant contact information. Examples of existing contact lists include the Crisis Management Contact List maintained by the Financial Stability Forum covering central banks, supervisory agencies, finance and treasury departments, and key international financial institutions in some 30 countries and the Bank Supervisors’ Contact List maintained by the BCBS listing supervisory contacts around the world.13 It is likely that communication with financial authorities in other jurisdictions would take place at several levels simultaneously, with senior decision-makers and more technical or specialised staff members in one organisation holding discussions with their respective counterparts at the other.

24. Financial authorities, in particular, are encouraged to hold periodic discussions with relevant financial authorities in other jurisdictions to develop a shared understanding of the events that could have significant cross-border effects on the financial system and agree on procedures for communicating with one another under such circumstances and the issues that should be addressed. The issues that might be covered in the event of cross-border disruptions would include, for example, the impacts of the disruption in their respective markets and its contagion effects, if any; issues involving emergency closures or suspensions of major markets; changes in trading hours or clearing and settlement periods; and, the details of any regulatory forbearance that may have been extended.

Principle 6: Testing Financial industry participants and financial authorities

should test their business continuity plans, evaluate their effectiveness, and update their business continuity management, as appropriate.

25. Testing the ability to recover critical operations as intended is an essential component of effective business continuity management. Such testing, which can take many forms, should be conducted periodically, with the nature, scope and frequency determined by the criticality of the applications and business functions, the organisation’s role in broader market operations, and material changes in the organisation’s business or external environment. In addition, such testing should identify the need to modify the business continuity plan and other aspects of an organisation’s business continuity management. In some cases, this need could arise as a result of changes in its business, responsibilities, systems, software, hardware, personnel, or facilities or the external environment. An independent party, such as internal or external audit, should assess the effectiveness of the organisation’s testing programme, review test results and report their findings to senior management and the board. Senior management and the board should ensure that any gaps or shortcomings reported to them are addressed in an appropriate and timely manner.

26. Financial authorities should strongly encourage

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financial industry participants that present risk to the financial system to conduct tests from their alternate sites with relevant critical market participants and payment and settlement system operators. Financial authorities and key financial industry participants are also encouraged to participate in market- or industry-wide tests to assess the level of resilience across markets and the compatibility of the recovery strategies of individual participants. In light of the substantial costs involved, the decision to undertake a market- or industry-wide test should be based on a thorough cost-benefit analysis.

27. In addition to ensuring that business continuity plans are evaluated and updated as necessary, testing is also essential for promoting awareness, familiarity and understanding among key personnel of their roles and responsibilities in the event of a major operational disruption. It is important, therefore, that testing programmes should involve all personnel who are likely to be involved in responding to major operational disruptions.

Principle 7: Business Continuity Management Reviews By Financial Authorities Financial authorities should incorporate business

continuity management reviews into their frameworks for the ongoing assessment of the financial industry participants for which they are responsible.

28. Financial authorities should expect financial industry participants to develop and implement effective business continuity management that is updated on an ongoing basis. Financial authorities should incorporate business continuity management reviews into their frameworks for the assessment of financial industry participants. The nature, scope and frequency of the reviews will be determined by the requirements of their regulatory or supervisory frameworks. Assessments should give due consideration to whether a participant’s business continuity management, including its recovery objectives, is appropriate for the size and scope of its business and the risk the participant presents to the continued operation of the financial system. Financial authorities should also assess whether participants are taking appropriate steps to augment their business continuity management, where necessary. Where financial authorities share responsibility for the same financial industry participant, it would be useful for those authorities to agree on a framework for coordinating those reviews.

29. In the course of reviewing a participant’s business continuity management, a financial authority should assess whether the testing programme provides adequate assurance that business processes can be recovered as intended.

Basel II Capital Accord30. Basics:— Basel Committee on Banking Supervision was established by the central-bank governors of the G10 countries in 1974 – Belgium, Canada, France, Germany, Italy, Japan, Luxemburg, Netherlands, Spain, Sweden, Switzerland, UK, US.— Meets at the Bank for International Settlements in Basel.— Formulates broad guidelines in the expectation that individual authorities will implement them.— First major result was the 1988 Capital Accord.

— Strong interest from non-G10 countries wanting to show the international stature of their banks.

31. The committee has fostered cooperation and understanding among the world’s bank regulators by sharing global perspectives on industry and regulatory best practices. They have acted to harmonise international bank regulation, as necessary, to keep surprises from impacting the global economy.

As an intergovernmental organisation, the Basel Committee possesses no formal authority and its conclusions have no legal force. But because the committee’s recommendations carry the weight of global consensus, this lack of formal authority has had little effect on their implementation.

— Strengthen the international banking system while avoiding competitive inequality — Encourage improvements in risk management by emphasising internal assessments of capital adequacy and market discipline.— Provide incentives for banks to enhance their risk management capabilities.

32. Three Pillars:— Pillar 1: Minimum capital requirements— Pillar 2: Supervisory review— Interest rate risk, credit concentrations— Pillar 3: Disclosure of information to strengthen market discipline.

Capital Requirement – Pillar 133. The major change in the first pillar is in the measurement

of risk weighting. Previously, it was a combination of credit and market risk. The new definition maintains a measure of market risk, but the methods for measuring credit risk are broader and more elaborate. And, operational risk has now been added.

The goal is to provide a framework that is more risk sensitive than the previous Accord. In doing so, the reward will go to those institutions that have more sophisticated and effective risk management mechanisms.

Although the Basel Committee’s intent is to neither raise nor lower a bank’s aggregate regulatory capital, many institutions fear future capital requirements will increase significantly over current levels.

This is however the case in Nigeria with N25b minimum Share Capital for Banks.

Supervisory Review Process – Pillar 234. Pillar 2 requires a closer working relationship and

more mutual understanding between banks and their regulatory supervisors.

The Committee views the supervisory review process as a critical complement to Pillar 1. It is intended to “mop up” the risks not otherwise covered in Pillar 1 by applying a stringent review process by the local regulating body, or Supervisor.

The review process is designed to ensure that individual banks have sound, auditable and rigorous internal processes in place to assess the adequacy of their capital – based on a thorough assessment of its risks. These processes must be visible at the highest levels within the bank – up to, and including, the Board.

The regulators, as they do now, will have responsibility for satisfying themselves as to the adequacy of the approach

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taken. The expectation is that they will apply their knowledge of best practices across financial institutions and take the appropriate actions if not satisfied with a bank’s own risk assessment and allocation of capital.

Pillar 335. Pillar 3’s intent is to apply the power of a well-informed

marketplace, and requires that banks and regulators make public more information on the riskiness of holdings.

Another complement to Pillar 1, termed “market discipline,” seeks to radically increase the level of disclosure that banks are required to make. The Committee believes the increased disclosure will allow market participants (shareholders and rating agencies) to assess key information on the capital, risk exposures, risk assessment and management processes – the capital adequacy of each bank.

The levels of disclosure increase depending on the approach selected for defining the capital requirement.

36. Institutions with more openness should expect

advantage in the capital markets. Greater transparency, or disclosure, is generally taken as a sign of institutional confidence, and builds credibility with investors.

CONCLUSIONDisaster recovery plan is central to business continuity. It

should be accorded utmost importance by the board of directors and by extension. The management prevention is better and cheaper than cure and day. Starting from a simple daily offsite backup to comprehensive DRP, no effort should be spared to ensure business continuity.

Annex I Cases

Case Study 1: Fire Incident in XYZ Bank Plc XYZ Bank Plc head office was recently gutted by fire. The

entire head office building was razed down. The building houses the IT department and has the main server that runs the Banking software – Globus.

The Bank’s Head of IT is a respected Programmer with over 20 years of experience in IT and Banking industry. During the preceeding 2 days before the fire, an upgrade to Bank’s Banking Software – Globus was conducted using live data directly. There was obviously a miscalculation. Temenos (Globus Vendor) described the upgrade as ‘minor’ – an exercise that should not last more than 30 minutes. However, something went wrong somewhere and the whole database got corrupted. There appears inconsistent and erratic credit balances in customers account, some with amount over N10million.

The bank was in the middle of this mess and the fire incident happened. The management became extremely perplexed and there is confusion and anxiety everywhere within the Bank. The Head of IT cannot boast of any other backup anywhere other than the corrupted data that has gone up in flames. Fears was real that the press might get to know the true story and the attendant negative effect on the Bank can only be imagined.

Only a month before the fire incident, Board of Directors had just instructed the Head of Internal Control to put together a Business Continuity Plan for the Bank following an observation raised on the non-availability of Disaster Recovery Plan in his monthly report. This assignment was yet to be concluded.

XYZ Bank is a large volume transaction Bank, with a number

Graphical Representation of the 3 Pillars

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of other smaller Banks heavily depended on the Bank for regional clearing and other card payment system. In fact the Bank has just commenced card payment processing activities for 10 other Banks in the industry 6 months earlier.

Required:1. Analyse the case and list out lapses as envisaged in the Operational Risk under Basel II accord.2. Who should be blamed for this Crisis?3. What ‘good’ practices or principles should have been instituted to avoid or ameliorate the effect of the crisis?4. How best can the management manage the situation at hand?5. How would you handle the situation if you were the CBN Governor? Is there any observed lapses on the part of Regulatory Authority?

Case Study 2: The London Terrorist Attacks on 7 July 2005 Event 1. On 7 July 2005 three widely-dispersed explosions

occurred in the London Underground at approximately 8:50, followed an hour later by a fourth explosion on a bus in Tavistock Square. All four explosions were later confirmed as suicide bombings – the first of such attacks in the United Kingdom. More than 50 people were killed and 700 injured in the explosions. For a significant period the public transportation system in London was at a complete standstill.

Impact 2. The attacks, although tragic in terms of the loss of life

and injuries, did not directly target the financial sector and thus had little overall impact upon the financial system. Nevertheless there was indirect impact in terms of disruption to travel arrangements, communications and access to property within exclusion zones, which presented the sector with a number of challenges.

3. The financial markets proved to be resilient, although the volume of order book trading reached record levels during 7 July.

Response 4. Most providers of critical services experienced low

levels of physical disruption, although one was obliged to relocate to its alternate site. It was nonetheless able to maintain normal service throughout. Several others made adjustments to their normal operating systems to cope with the higher than usual volumes of trade and in response to localised shortages of personnel. These arrangements were successful.

5. To ensure that the market remained orderly in the face of record trading volumes on 7 July and that market participants’ systems were able to manage the higher trading volumes, the London Stock Exchange declared a ‘fast market’ (under which certain obligations on market makers are lifted) and suspended the use of Automated Input Facilities (commonly known as “black box” trading) which account for the majority of orders placed on the order book. These restrictions were lifted before the closing auction, however, which went smoothly.

6. Although few firms were directly affected by the events, many activated their alternate sites, for the most part as

a precautionary move. 7. The UK financial authorities were not themselves

significantly affected by the incident and were able to invoke their collective response arrangements at an early stage. These consisted mainly of contacting financial industry participants to assess the extent to which they had been affected by the events and, on the basis of that information, to make an overall judgement on whether the financial sector was at risk of substantive disruption.

Lessons Learned 8. To more accurately gauge the impact of the events

on the financial sector and the financial sector’s response, the UK financial authorities conducted a survey of major financial institutions immediately afterward. It was clear from their responses that several important lessons had been learned, as summarised below:

— A number of financial institutions who activated their alternate sites expressed concern about the ability of the providers of syndicated backup facilities to meet firms’ needs if faced with a wide-area event. In addition, there is some concern about the level of syndication of individual sites with particular uncertainty about the criteria that providers apply for prioritisation and space sharing. (Principle 2)

— Overall, most financial institutions believed that their business continuity plans had served them well on the day and had been sufficiently flexible to adapt to the nature of the incident. It appears that business continuity planning in many financial institutions is focussed upon impact and decision-making processes rather than on the nature of the disruption. This gives them what they perceive to be greater flexibility in responding to a broad range of potential scenarios. This generic impact-based approach worked particularly well for those financial institutions whose key staff had clearly defined roles and responsibilities that they had rehearsed and for which they had been well trained. (Principle 2)

— Most financial institutions that responded to the post-event survey were satisfied with the level of direct contact and support they received from the relevant authorities. However, most indicated that they would have appreciated more communication from the financial authorities during the course of the day on the status of the various financial markets. (Principle 4)

— A majority of financial institutions identified at least a few areas where communications within their organisations could be improved. Congestion and subsequent disruption to the mobile telephone networks was cited as the main obstacle to effective communication, although this did not appear to have had a significant impact upon principal business activities. Almost all financial institutions surveyed indicated that they intend to make some changes to their business continuity plans as a result of the difficulties they experienced. In particular, this is likely to be aimed at improving fallback arrangements should the main communications technology prove unreliable during an event. (Principle 4)

— In terms of monitoring the unfolding of the incident, the satellite news media were reported to have been the most valuable source of up-to-date information. However, nearly half of the financial institutions surveyed reported that their crisis management teams did not have direct access to this media. This meant in a number of cases that staff with direct access had more current information than the crisis management team.

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There was a general perception that official news channels at times lagged behind media reports, although it should also be recognised that official announcements require more thorough validation. (Principle 4)

— Data networks remained largely unaffected but the surge in e-mail traffic during the incident slowed delivery and access to the internet was similarly affected. (Principles 4 and 6)

— Financial institutions made people their main priority. However, as might be expected this proved to be the most challenging aspect of responding to events, particularly in view of the shutdown in public transport and the congestion on mobile phone networks. (Principles 1, 2 and 3)

— The timing of the incidents meant that most financial institutions’ staff were already at or close to work before the disruption began. Consequently, unscheduled absence of key staff was not a significant feature of the event. However, many financial institutions experienced difficulties in accounting for staff on the move and it is clear that there is enormous variation in the methods for doing so. Most financial institutions had nonetheless accounted for all of their staff within three hours. More challenging for many was the task of accounting for visitors and contractors, with only around half being able to do so with a high level of certainty. (Principle 4)

— A majority of financial institutions took a proactive approach to ensuring the welfare of their staff. Few firms had formal contingency plans in place, however, and ad hoc arrangements proved challenging. Several financial institutions noted that there was insufficient information provided by the authorities on the overall coordination of plans for transport and evacuation during the course of the day. This meant that individual financial institutions lacked a context in which to set their own plans. (Principle 6)

— Many financial institutions advised non-essential staff to remain at home on the day following the incidents mainly because they recognised that the transport system would still be disrupted. Many staff were able to use remote access technology to work from home. Nonetheless, a few financial institutions experienced unscheduled staff absences of above 20% – no doubt reflecting staff concerns about the risk of further incidents. (Principle 3)

— The events of 7 July 2005 have reaffirmed the priority assigned by UK financial authorities to regular market-wide testing and to benchmarking the resilience of the UK financial sector. (Principles 6 and 7)

— Communication with foreign financial authorities and financial industry participants during the events of 7 July 2005 was initiated principally by foreign organisations and was generally low-key and ad hoc. This was because the UK financial authorities had ascertained at an early stage that the events posed no significant threat to the UK financial sector and thus no risk of cross-border ramifications. Nonetheless, the UK financial authorities are reviewing their communication protocols in the light of this recent experience. There may be room for such protocols to consider the circumstances in which the financial authorities in a jurisdiction affected by a major operational disruption should be the ones to initiate communications with financial authorities and critical market participants in other relevant jurisdictions. These circumstances would include, in particular, disruptions with the potential of cross-border implications where financial authorities in other jurisdictions are likely to know that a

disruption has occurred. (Principle 5)

Case Study 3: US-Canadian Electrical Power Grid Outages in August 2003 Event 1. On Thursday 14 August 2003, cascading failures of

electrical power grids in the northeast United States and most of eastern Ontario, Canada resulted in power outages that, in some areas, lasted well into the weekend.

Impact 2. Without warning, the grid failures shut down utility

electrical power in financial centres such as New York City and Toronto starting around 16:11 local time on 14 August. Backup electrical power systems at securities exchanges, clearing organisations, and a large number of financial industry participants in the affected areas were activated automatically, enabling those organisations to avoid a sudden disruption in their systems or loss of essential data. Because the outage occurred near the normal end of the business day and perhaps because of initial uncertainties over whether the outage was the result of a terrorist attack, people were sent home by their employers or otherwise chose to evacuate the New York financial district – many left on foot because street traffic was jammed and mass transit was largely inoperable. No panic was evident, however, perhaps as a result of public statements by local and federal officials within an hour of the start of the event that there was no evidence that the power outage was terrorist-related. The financial system and its participants were largely able to complete their end-of-day operations in an orderly fashion.

3. The electrical outage continued in New York City and Toronto overnight and into the next day (15 August). Most major US and Canadian equity markets were able to maintain normal trading hours that day, while bond markets held an abbreviated trading session to allow traders more time to head home for the weekend. Wholesale and retail payments and trading and settlements proceeded with only a few delays. The large majority of banks had established backup power at larger branches and retail banking services were adequate to meet consumer needs, although numerous stand-alone ATMs stopped functioning on Thursday night. Individual bank branches that did not have backup power were closed on Friday. In a few cases, all of a US rural bank’s operations were closed for all of Friday due to lack of power.

4. The sector experienced some telecommunication problems related to the power outage. Some of these problems affected entire telecommunication networks that had insufficient backup power at some central office switches. In other cases, some firms found that their backup electrical generators did not support their internal telephone systems, rendering their digital telephones inoperable, while their analogue-line telephones (which receive power over their land lines and bypass internal telecommunication switching systems) continued to function. In addition, mobile phones soon became inoperable due to message congestion, insufficient backup power at transmission and relay sites, and the inability of individuals to recharge their mobile phones’ batteries.

5. There were no discernable effects on consumer confidence in the US or Canadian financial systems. On the whole, consumers were patient and proved able to cope with the situation, including the temporary loss of access to local branches and ATM machines. There were no unusual currency

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demands or runs on banks, nor were there any sell-offs in mutual fund markets.

Response 6. A number of financial industry participants, particularly

organisations that support payment and settlement systems, responded to the outage by activating their backup power generators. Many also activated their alternate sites as a precautionary measure.

7. Many other organisations had provided for abundant backup power at their primary sites as part of their business continuity plans and did not need to relocate because there was no immediate threat to the safety of their personnel. Given the disruption of mass transit, many of these organisations implemented plans to have key staff remain overnight at or near their primary sites to ensure that critical operations could be maintained.

8. Some financial industry participants that chose not to activate their alternate sites were subsequently confronted with unanticipated problems. For example, the American Stock Exchange (Amex) did not activate its remote alternative trading floor because the exchange’s primary trading floor appeared to have sufficient backup electrical power. At around 2:00 on 15 August, however, utility-provided steam power to the air conditioning systems that are essential for maintaining the exchange’s electronic systems began to fail at Amex’s primary trading floor. By the time the problem was discovered, there was insufficient time to activate and staff the alternate site (which was unaffected by the steam power failure in Manhattan). Instead, Amex held an abbreviated trading session on 15 August after a backup generator was located and installed.

9. US and Canadian financial authorities activated communication protocols with their respective critical market participants and other domestic financial authorities. Financial authorities conducted a series of calls with their affected institutions in the evening of 14 August and throughout 15 August to determine how they were coping with the outage and whether they required assistance in maintaining critical operations. In addition, financial authorities held a series of inter-agency conference calls throughout the event that provided an opportunity for banking, securities, and futures regulators to share information on how each sector was responding to the emergency.

10. US financial authorities invited officials from the New York City Office of Emergency Management (NYCOEM) to participate in conference calls with the exchanges and clearing organisations about how this major financial centre was responding to the infrastructure failure. In these calls, NYCOEM officials were able to provide vital information concerning the status of local power, telecommunication, and transportation services and probable restoration schedules. In addition, when NYCOEM officials learned of Amex’s problems with utility-supplied steam power, NYCOEM officials were able to assist the exchange by arranging for the installation of a backup steam generation boiler, which enabled Amex to conduct an abbreviated trading session on 15 August.

11. Announcements made by national security officials and local government officials shortly after the commencement of the outage may have contributed to consumer confidence. Moreover, consumer confidence appears to have been strengthened by the fact that the financial services sector, including highly visible organisations such as the stock exchanges, remained largely

operational.

Lessons Learned 12. Upon restoration of the power supply, financial

authorities in the United States and Canada analysed how they and their financial industry participants responded to the challenges posed by this major operational disruption. Overall, these “lessons learned” exercises indicated that:

— Business continuity plans and resilience appropriate to the risk that particular financial industry participants pose to the financial system are paramount in maintaining critical operations in the face of major operational disruptions such as those arising from a massive infrastructure failure. (Principles 1, 2 and 3)

— Business continuity plans benefit from incorporating a broad view of the potential impacts of a major operational disruption, including the loss of components of the physical infrastructure that may not have been experienced previously. Thorough testing of procedures and systems is useful in identifying and addressing otherwise unanticipated problems with critical operations during a major operational disruption (eg the failure at some firms to have sufficient backup power to support their telecommunication systems and Amex’s assumption that its steam power supplies would not be interrupted in an electrical power outage). (Principles 2 and 6)

— In view of the importance of effective communications during a major operational disruption, financial industry participants and financial authorities would be wise to anticipate that such disruptions might affect telecommunication systems. In-house telecommunications systems and wireless transmitters on buildings should have backup power. Redundant systems, such as analogue line phones and satellite phones, and other simple measures, such as ensuring the availability of extra batteries for mobile phones, may prove essential to maintaining communications in a wide-scale infrastructure failure. (Principle 4)

— Existing internal and external communication protocols were extremely useful in managing the domestic implications of the outage for the financial systems in the United States and Canada and facilitating and coordinating internal and external information flows between domestic financial authorities and the local emergency management officials responsible for the restoration of physical infrastructure. Nonetheless, financial authorities in both jurisdictions recognised following post-event reviews that further consultations on appropriate communication protocols would be useful to promote a common understanding of the type of disruption that might trigger cross-border communications and the nature of information that might be shared under such circumstances. (Principles 4 and 5)

— Communication protocols enabled critical market participants and their financial authorities to coordinate with local governmental emergency response organisations and develop and implement “work-around” arrangements to maintain critical operations. (Principle 4)

— More work was needed to coordinate the numerous inter-agency and industry-wide conference calls with other conference calls involving several financial sector trade associations. As a result, a consolidated call matrix has been developed to better coordinate future emergency calls involving individual financial authorities, financial sector trade associations, and inter-agency working groups. (Principle 4)

— Maintaining lists of contact information for key officials would expedite consultations among financial authorities

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nationally and internationally in the event of an operational disruption. (Principles 4 and 5)

Case Study 4: The Impact of the 2003 SARS Outbreak On the Canadian Securities Industry Event 1. The 2003 SARS outbreak in Canada was principally

confined to the Greater Toronto Area in the province of Ontario. The outbreak developed in two waves, the first originating on 13 March 2003 and the second on 28 May 2003.

Impact 2. The Canadian securities industry did not experience

major disruptions as a result of the 2003 SARS outbreak. A few individuals from within the regulatory or dealer communities were quarantined during the outbreak, but none of them developed signs of illness and there was no spread of infection within these communities. None of the relevant financial authorities or dealer firms reported an impact on their business operations, apart from minor disruptions arising from the need to redirect telephone and mail to staff working at alternate sites.

Response 3. The Canadian securities industry is concentrated, with

the six largest integrated firms (all dealer affiliates of the major banks) generating about two-thirds of total industry revenues. Geographically, the largest capital markets are located in Ontario. The responsibility for regulating the Canadian securities industry is shared by provincial authorities. In addition to the provincial regulatory authorities, most dealers are members of one of the self-regulatory organisations (SROs) with responsibility for enforcing market integrity rules and otherwise regulating the trading of equities and fixed income securities in Canada. Some dealers are integrated firms, whereas others focus on a specific market segment, such as institutional or retail. Securities trades are cleared and settled by a Canadian clearing agent offering electronic clearing services both domestically and internationally.

4. The responses of the relevant financial authorities and financial industry participants to the SARS outbreak varied. The provincial regulatory authority in Ontario identified the outbreak as a market disruption issue and proceeded to monitor market participants’ reactions to it. Some financial authorities arranged to share office space and access to technology with one another, agreed on reciprocal arrangements for workload sharing with other authorities, and made special arrangements with vendors to run some of their processes externally.

5. More generally, the responses of the relevant financial authorities and financial industry participants included some or all of the following actions:

— Organising meetings of the board and senior management, both at the onset of the outbreak and thereafter as necessary, to identify the risks to their organisation and assess appropriate measures for addressing them. The main risk identified by most organisations was the inability to continue operating key parts or all of their business as a result of the infection or extended quarantine of staff;

— Establishing “clean teams” for certain functions in alternate sites or creating isolated groups by temporarily relocating staff from certain functions to different floors of the same building;

— Restricting access to business facilities to specified

staff, enabling staff to work from home, encouraging the use of conference calls and other alternatives to face-to-face meetings, and in some cases advising staff to remain out of the office;

— Restricting travel to, and mandating quarantine for staff returning from, high-risk areas and temporarily suspending certain activities in order to minimise the risk of external contact;

— Creating additional communication lines and communicating regularly with staff to educate (e.g. by circulating advisories from public health authorities) and update them on SARS-related developments via notices on websites or call-in information lines, and advising staff to notify managers and seek appropriate medical attention if they experienced SARS-like symptoms or had reason to believe that they may have been exposed to SARS; and

— Promoting simple measures to prevent contamination, such as exercising utmost care in their contacts, washing hands (some organisations made hand sanitiser available), and avoiding sharing PC peripherals and phones.

Lessons Learned 6. Because the outbreak ultimately had only a limited

impact on the Canadian securities industry, the responses of financial authorities and market participants were almost all of a preventative nature. Nonetheless, it is possible to draw from the experience the following lessons applicable to the management of business continuity:

— The impact of the event was limited even though the responses of individual financial authorities and financial industry participants to the outbreak varied. Each determined its course of action based on the organisation’s assessment of its relative position in the Canadian securities industry and the nature of the functions it performed. (Principle 3)

— At the time of the outbreak, the business continuity plans of most organisations had not explicitly considered scenarios where there may be insufficient staff to conduct business due to illness or quarantine. It soon became clear as the health crisis unfolded that the possibility of a single employee being exposed to the virus could affect the operation of an entire business function in both its primary and alternate sites – and possibly for an extended period of time. On the basis of this experience, organisations have updated and modified their business continuity plans to incorporate scenarios involving significant risk to life and property irrespective of the cause, whether force of nature, accident, or intentional act. (Principle 2)

— The boards and senior management of organisations involved in the Canadian securities industry acted early in the crisis to identify the risks to their employees as well as the organisations. A variety of steps were taken to minimise the risk that employees would be exposed to the SARS virus, including educating staff about the virus and how it is spread. The swift response and the nature of the steps taken may well have prevented a more serious outcome. (Principle 1)

— The relevant financial authorities and financial industry participants have recognised the importance of regularly updating business continuity plans and have done so on the basis of their experience with the SARS outbreak. In particular, a number of organisations have taken steps to address certain limitations in their alternate site arrangements, such as the number of workstations and communication devices. (Principle 2)

— The time for addressing an organisation’s communications requirements under stress conditions is not

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during an actual disruption but when markets are operating normally. The communication challenges during the SARS outbreak revolved mainly around the ability to communicate with staff spread out over multiple locations away from the primary business location (e.g. at alternate sites and in their homes) about developments with the outbreak and business-related matters. (Principles 4 and 5)

Case Study 5: Niigata Chuetsu Earthquake Event 1. The Niigata Chuetsu earthquake, measuring 6.8 on

the Richter scale and affecting the Chuetsu region of Niigata prefecture, occurred at 17:56 local time on 23 October 2004. It was followed by a series of aftershocks that continued for two months.

Impact 2. The earthquake caused significant damage to physical

infrastructure and buildings. Its impact on the financial system and overall economy was minor, however, in relation to the impact of events like 11 September 2001 and the Hanshin-Awaji earthquake that struck Kobe and Osaka on 17 January 1995. The impact was relatively minor because the earthquake occurred in a rural area on a Saturday, which provided a two-day window for steps to be taken before banking transactions would resume on the following Monday.

3. The destruction of physical infrastructure and buildings presented the most significant impediment to the ability of financial institutions to continue operating. In particular, transporting employees, cash, bills and checks, mail, and other goods became difficult, and accommodating employees who had been displaced from their homes or offices proved challenging. Some branches were forced to close temporarily due to structural damage, and some off-premise ATMs became unavailable. Evacuation advisories caused some financial institutions to suspend operations.

4. Most of the financial institutions operating in areas affected by blackouts were able to continue operating on backup power supplies, and quake-absorbing construction techniques enabled their computer centres to withstand the impact. Communication lines for ATMs and other services generally functioned without problems. Facility damage at financial institutions was minor, largely due to measures that were implemented to provide protection from lightning strikes but which also contributed to the ability to withstand earthquakes and business continuity plans whose development was based on the experience of the Hanshin-Awaji earthquake.

Response 5. The Ministry of Finance and the Bank of Japan

assessed the condition of the quake-stricken areas and confirmed that the Disaster Relief Law was applicable in light of the nature and extent of physical damage in the region. In response, local public authorities take steps to provide shelter and other services to victims of the disaster.

6. Japanese financial authorities subsequently directed financial institutions to implement “Financial Measures Associated with Earthquake Damage”, special measures designed to minimise an earthquake’s impact on individuals in the affected areas. The measures include, for example, provisions directing banks to release funds where a deposit certificate or passbook is lost and replace dirty, torn or otherwise mutilated money and insurance companies to pay insurance

benefits promptly and extend moratoria on premium payments. 7. Because of the heavy volume of calls experienced by

telephone carriers in the aftermath of the earthquake, it took some time before financial authorities were able to communicate with financial institutions in the affected areas. However, the telephone numbers that financial institutions and financial authorities had shared previously for contact outside of normal business hours proved helpful.

8. Japanese authorities implemented an emergency calling tree that included the relevant domestic authorities, such as the Cabinet Office, Ministry of Finance, Bank of Japan, Financial Services Agency, Disaster Countermeasures Office of Niigata Prefecture, Niigata Prefectural Government and a number of industry organisations. Most authorities used a priority telephone service in the initial stage of the response, while a central wireless system was used for communication between the Cabinet Office and other relevant authorities.

9. Most financial institutions were able to confirm the safety of their employees and ascertain the nature and extent of damage to their facilities by the day following the quake. Others, however, had difficulty confirming the status for a few days afterward. Financial institutions were asked to report to the Niigata Finance Office and the Bank of Japan (Niigata Branch) on the damage they had incurred and whether they were capable of operating.

10. Before the earthquake, many of the businesses operating in the Chuetsu region of Niigata prefecture had well-developed policies requiring backup power sources and lines to cope with the frequent lightning strikes in the region. Consequently, more than 90% of the retail premises operated by regional banks in Niigata have their own power generating facilities.

11. Financial institutions used alternate routes to transport cash in the areas where the transportation infrastructure was severely damaged. Some had cooperative schemes with other financial institutions that enabled prompt cash delivery to their partners. Although financial institutions in Japan are normally closed on weekends, many in the region affected by the earthquake opened on weekends and introduced low-interest loan facilities to meet the special needs of customers in the region.

12. When an earthquake occurs in Japan, insurance companies are required to handle associated claims (ie claims under policies covering fire and earthquake damage) expeditiously and make the operation of their service centres (regional offices responsible for processing claims) their highest priority. Consequently, they have developed business continuity plans with an emphasis on service centre operation and were able to deal effectively with large-scale loss inquiries and insurance payments and draw upon their high level of liquidity to cover claims in response to the Niigata Chuetsu earthquake.

Lessons Learned 13. The lessons learned from the Niigata Chuetsu

earthquake include the following: — There was minimal interruption in the services

provided by financial institutions affected by the earthquake largely because their business continuity plans incorporated the lessons learned from the Hanshin-Awaji earthquake and from the frequent lightning strikes in the region. (Principles 1 and 2)

— Explicitly addressing the possibility of disruptions to telecommunication, power, gas, water and transport systems in

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areas affected by earthquakes and other natural and man-made events in business continuity plans improves an organisation’s resilience to such disruptions and ability to recover from them. Many financial institutions in the affected region found that pre-arranged cooperative service arrangements with other financial institutions can be particularly helpful in maintaining service during a disruption. (Principle 2)

— Public confidence in the financial system was maintained following the Niigata Chuetsu earthquake because of the ability of financial institutions in the region to withstand and recover quickly from the event. Clients of financial institutions in the region experienced minimal interruption in their access to retail financial services. (Principle 3)

— Access to a variety of communication channels and off-hour contact information is beneficial in efforts to coordinate responses to a major operational disruption among financial institutions and relevant authorities. Communication protocols that were available to all relevant organisations and included key contact information proved helpful in responding to the earthquake. (Principle 4)

— Financial institutions in the Chuetsu region were accustomed to testing their backup power supplies and evacuation procedures at least annually, which contributed to their resilience to this disruption. (Principle 6)

Annex II References 1. Basel Committee on Banking Supervision Sound

Practices for the Management and Supervision of Operational Risk, Bank for International Settlement (2003)

2. Systemic Crises: Policies & Institutions by Claessens and Laevens (2003); http://www1.worldbank.org/finance/assets/images/Claessens-Klingebiel-Laeven_Resolution.pdf

3. Australian Prudential Regulation Authority (2005): Guidance Note AGN 232.1 (Authorised Deposit-Taking Institutions) and GGN 222.1 (General Insurers), Risk Assessment and Business Continuity Management, April,

http://www.apra.gov.au/Policy/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=8529, and http://www.apra.gov.au/General/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=8532.

4. Prudential Standards APS 232 (Authorised Deposit-Taking Institutions) and GPS 222 (General Insurers), Business Continuity Management, April, http://www.apra.gov.au/Policy/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=8528, and

h t tp : / /www.apra .gov.au /Genera l / l oader.c fm?ur l= /commonspot/security/getfile.cfm&PageID=8531.

5. Banca d’Italia (2004), Continuità operativa in casi di emergenza (Regulation on Business Continuity Management), Bollettino di Vigilanza, pages 7-13, July, http://www.bancaditalia.it/vigilanza_tutela/vig_ban/pubblicazioni/boll_vig/anno04/bolvig_07_04.pdf#page=11.

6. Bank of Japan (2003): Business Continuity Planning at Financial Institutions, July, http://www.boj.or.jp/en/set/03/fsk0307a.htm.

7. - - - (2003): Business Continuity Planning at the Bank of Japan, September, http://www.boj.or.jp/en/about/03/sai0309a.htm.

8. Banque de France (2004): The Resilience of Post Market Infrastructures and Payment Systems, Revue de la stabilité financière, pages 107-114, November, http://www.banque-france.fr/gb/publications/rsf/rsf_112004.htm.

9. Committee on Payment and Settlement Systems (2001): Core Principles for Systemically Important Payment Systems, January, http://www.bis.org/publ/cpss43.htm.

10. - - - / International Organisation of Securities Commission (2001); Recommendations for Securities Settlement Systems, November, http://www.bis.org/publ/cpss46.htm.

11. Commission of the European Communities (2005): Green Paper on a European Programme for Critical Infrastructure Protection, November, http://eur-lex.europa.eu/LexUriServ/site/en/com/2005/com2005_0576en01.pdf

12. De Nederlandsche Bank (2004): Assessment Framework for BCP in Respect of Payment and Securities Settlement Systems, http://www.dnb.nl/dnb/bin/doc/Assessment%20framework_tcm13-49071.pdf.

13. European Central Bank (2001): Memorandum of Understanding on Co-operation Between Payment Systems Overseers and Banking Supervisors in Stage Three of Economic and Monetary Union, http://www.ecb.int/press/pr/date/2001/html/pr010402.en.html.

14. - - - (2003): Memorandum of Understanding on High-Level Principles of Co-operation Between Banking Supervisors and Central Banks of the European Union in Crisis Management Situations, http://www.ecb.int/press/pr/date/2003/html/pr030310_3.en.html.

15. - - - (2005): Memorandum of Understanding on Co-operation Between the Banking Supervisors, Central Banks and Finance Ministries of the European Union in Financial Crisis Situations (2005), http://www.ecb.int/press/pr/date/2005/html/pr050518_1.en.html.

16. - - - (2005): Payment Systems Business Continuity – Issues Paper, http://www.ecb.int/ecb/cons/previous/html/paysysbusinesscontinuity.en.html.

17. Federal Financial Institution Examination Council (2003): IT Handbook on Business Continuity Planning, http://www.ffiec.gov/ffiecinfobase/booklets/bcp/bus_continuity_plan.pdf.

18. The Federal Reserve Board, the Office of the Comptroller of the Currency (OCC), and the Securities and Exchange Commission, United States of America (2003): Interagency Paper on Sound Practices to Strengthen the Resilience of the U.S. Financial System, http://www.federalreserve.gov/boarddocs/press/bcreg/2003/20030408/default.htm.

19. Financial Services Authority, United Kingdom (2003): BCM Risk matrix, http://www.fsc.gov.uk/upload/public/attachments/6/bcmriskmatrix.pdf.

20. - - - (2002): Operational Risk Systems and Control, UK FSA consultation paper #142, http://www.fsa.gov.uk/pubs/cp/cp142.pdf.

21. - - - (2002): A Risk-Focused Review of Business Continuity Management in Major Financial Groups Post, September 11, http://www.fsc.gov.uk/upload/public/Files/1/fsa_bcm_paper_2002-09.pdf.

22. Financial Stability Committee, Belgium (2004): Financial Stability Committee Recommendations on Business Continuity Planning, http://www.cbfa.be/eng/aboutcbfa/cfs/pdf/business_continuity_planning.pdf.

* Mr Gbolahan O. Oyediran, MBA, FCA, delivered this paper at ICAN MCPE Programme.

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The use of Marketing and Advertising Strategies In Political Marketing

By ayoZiE daniEl oGEChUKWU

Poli t icians send their messages to the Electorate through various means. The most recent is the role the internet especially the

social networking blogs of facebook and Twitter are playing in the various electioneering campaigns of the candidates of the various political parties in Nigeria, especially the presidential and governorship candidates. The implication is that marketing, advertising and other promotional mix elements have tremendous roles to play in political electioneering campaigns in Nigeria. In the past and present political dispensations in Nigeria, politicians strive to acquire power, either at the local, state or national level. Politics is about power. The need to acquire the power leads to agreements, conflicts, consensus and competition. The struggle to acquire power leads to competitions, rancour, disagreements, agreements, conflicts and conflict resolutions.

Nzimiro (1992) stated that politics is about policy. Policy is a matter of either the desire for change or the desire to protect something against changes. This can lead to disagreements, agreements, conflicts and conflict resolution.

Politics in Nigeria has always been expressed through political parties, which are created to achieve political power, goals of the originators and goals of the society. Political parties are

Favour, Ebele and Blessing my little kids wake me up in the morning with their favourite political jingles “ATIKU DEY COME OO, BETTER DEY COME, OR GOODLUCK TO EVERYBODY, GOODLUCK TO NIGERIA. In the past, it was popular to hear “On the march again, M.K.O. is our choice ooo”. With precision, the adverts of the Nigerian Republican Congress states “One wrong vote, takes us 100 steps back, Free has a price, Beware there is a trap somewhere” or the Social Democratic Party’s slogan “Enough is Enough, Don’t allow the nation’s wealth to be flown away again, vote SDP. Should Education be so expensive, should Housing be this indecent? Vote SDP”. In politics as in advertising, Nigeria seems to have adopted the United States of America and the United Kingdom as its model. The marriage of Advertising and Politics is becoming more pronounced in Nigeria (Moemeke 1992). The Nigerian electorate is getting more politically enlightened and those seeking elective offices are also becoming more sophisticated (Oyovbare 1992). There is then the need for a proper education on Political Marketing and Advertising. Marketing, public relations and advertising are very important tools in packaging of politicians, their parties and programmes from the perspective of the electorate. The use of marketing and advertising is taking firm root in the political process of Nigeria. How did the advertising firms and marketing practitioners package Barak Obama or David Cameron? How did old Jimmy Carter defeat Gerald Ford, an incumbent? This is purely because of the superior power and use of Marketing and Advertising. This paper explores briefly the political history of Nigeria, explains the concepts of political Advertising, and political meaning, and advocates how marketing, marketing communication strategies, advertising and advertising research can assist politicians in the electoral processes of seeking the votes mandate. It also briefly explains the usefulness of marketing and advertising and concludes by recommending a greater use of marketing and advertising strategies by politicians to the electorate.

A friend facebooked and twittered me of recent, and in response to my Question on political marketing has his answer which was as revealing as ever. He said politicians promise to build bridges, even where there are no rivers, and build air or seaports where there are no aeroplanes or ships. Political campaigns in Nigeria, either in the first, second, third and fourth republics are not new. It has been with Nigeria and Nigerians before and after independence. One-time US presidential hopeful, Alexander Haig Jnr. noted in an optimistic moment of his aborted campaign “I have learnt the secret of life… it is in marketing”. Former US president Richard M. Nixon is reported to have said that political advertising is to politics what bumper stickers are to philosophy.

Political marketing is a social and managerial process by which candidates and parties obtained election goals through creating, offering and securing approval of ideas of value with the voter (Kotler 2000).

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organised around specific ideologies and ideas of human societies. In the past, this conflict benefited from the disproportionate ownership of land, and capital. Presently, it is expressed in the control of the local, state, federal, other state apparatus and the mass media. Every class uses communication as a tool in the ideological war of politics. Now political parties have become platforms for rearing leaders who are interested in the contest for power through the electoral process.

Now, politics gets involved in the struggle to control the power base, as the local, state and federal base establishes its machinery for controlling the populace. Political control is disguised when the winning group controls political power and its constituent members and operatives become the ultimate beneficiaries. Nowadays, the electoral process has become the expression of the democratic form of struggle within a given class system. The power is a useful barometer for measuring all political activities.

POLITICAL PARTY SYSTEM IN NIGERIA

Political party system in Nigeria has developed in different forms. Each party is either a mass party or an elite party. An understanding of the political party system in Nigeria will determine how marketing, advertising, and their strategies will be used effectively to market the political system and campaigns in Nigeria.

FEUDAL SYSTEMNzimiro (1972) stated that Nigeria was

a feudal society. The feudal system was sustained by the myths of the origin of the traditional rulers and kings. With the advent of colonialism, party politics was introduced into Nigeria and its development involved in stages. A brief history will be helpful in determining the role of marketing strategies.

The Nigerian National Democratic Party (NNDP) established by Herbert Macaulay was the first political party in Nigeria between 1923 – 34. That was the era of conservatism in Nigerian politics.

Between 1931 – 1944 the Liberal Party under the youth movements were established. It consisted of progressives, educated and professionals, people who acquired the liberal philosophy of those years.

1944 – 1950 gave birth to the National

Council of Nigeria and the Camerouns (NCNC) and the Zikist movement which was the militant Youth front. That was the age of militant nationalism. The Nigerian youth movement disintegrated due to internal crisis. The NNDP persisted, but later fizzled out after it allied with the NCNC and the Labour Party to form the Demo Labour Alliance (Nzimiro 1992).

The NCNC later became the National Council of Nigerian Citizens when the Camerouns broke out of Nigeria. At that time modern advertising and marketing strategies were hardly used as militant nationalism and oratorical process were greatly used.

FIRST REPUBLIC The political parties managed the

political party organisation in the first Republic. The post independence period, brought about the coalition between the Northern Peoples Congress (NPC) and the NCNC, with the Action Group (AG) forming the opposition at the centre. With this, the NPC controlled the northern Nigeria, the NCNC controlled the East, while the AG controlled the West. The rank and file at all levels of the party mattered very little as the party notables (elites) only recruited them as their personal clientele who owed allegiance to them. With this, corruption flourished and the parties showed elitists tendencies with their members enjoying privileged status and authority within the social order. The regional power base of these parties gave rise to ethnic politics. The expectation that the elites would be immune to ethnicity was dealt a fatal blow as both the educated and illiterate members of the parties resorted to the massaging of ethnic feeling (Nzimiro 1992). The Northern Peoples’ Congress (NPC) reflected the structure of Northern Nigeria, Northern Sokoto caliphate. The lack of a tightly knit structure of the party is seen from the traditional structure of northern Nigeria which derived its support mainly from the village heads, native authority officials and chiefs, rather than from the masses. There existed a master-servant relationship. A party that was structured and rooted in traditional ideology with such structured organisation cannot afford the luxury of mass ideology normally expressed in election.

Ethnicity encouraged nepotism especially in the selection of relatives into the services of the native authority.

In the Western Nigeria, the Egbe Omo Oduduwa was founded as a result of Ethnic nationalism and tribal renaissance. One of the major objectives was to study the economic potentials and resources of the Yorubaland, advise on how best to utilise natural wealth in order to ensure abundance and prosperity. The Action Group (AG) emerged from the Egbe Omo Oduduwa which based its principle on the unity of the Yoruba ruling class, comprising of the Obas, merchants, professionals, etc. The AG therefore relied organisationally on unifying the various sub-ethnic groups within the entire Yoruba nation. Ideology thus marked the foundation of the Action Group.

The NCNC, according to Nzimiro (1992), was initially organised as a party of eastern and western regions while operating in the north through its alliances with NEPU (Northern Elements People Union, the Idoma State Union and the UMBC (United Middle Belt Congress).

One peculiar fact was that the first Republic politics lacked a National Conscience and corruption was built into the party apparatus, as no clear lines could be drawn between party structure and the government activities, some of which had trading and commercial import.

The leaders and rulers of the First Republic championed Capitalism, but it was at the expense of the Nigerian nation and the masses, while Regionalism pervaded their philosophy of life. These rulers refused to let the common masses known the realities of their lives.

In the first Republic, the British found alliance with the political traders who forged a link with the ruling class to share and loot the wealth of Nigeria. The country was regarded as a trading company. The sentiment of national patriotism was absent. Some of the specific features of the first Republic are (Nzimiro (1992):

(i) Corruption, nepotism, political thuggery, looting and plundering of the national wealth.

(ii) Exploitation of the masses by the ruling class.

(iii) Lack of commitment to the concept of nationhood.

(iv) Indiscipline in the national life due to the ugly life of the rulling class displayed by excessive, squandermania of the peoples wealth.

(v) There were coups, counter coups, attacks and reprisal attacks which

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cultiminated into the Nigerian civil war.

THE SECOND REPUBLICThere were the ruling parties such

as the National Party of Nigeria (NPN) which was seen as the reincarnation of the former Northern Peoples Congress (NPC). The NPN was a party of the Hausa Fulani’s who formed coalition with the elites of the minorities. The Nigerian Peoples Party (NPP) was Igbo based with recruitment from the elite of some small ethnic groups. The Unity Party of Nigeria (UPN) was dominant in the west and was seen as the reincarnation of the Action Group; the GNPP (Great Nigeria Peoples Party) controlled some states in the North; the Aminu Kano led People’s Redemption Party (PRP) controlled few states again in the North; the NPN was the dominant ruling party and formed alliance with the NPP to form a government, while the UPN was seen at the party on opposition.

The politics of the second Republic was characterised by some of the ugly features of the first Republic. The politicians did not learn much lesson from their predecessors in the first Republic and the after effects were military coups and counter coups. That the experiment of Parties of the second Republic failed was not in doubt, for the members of the political class were of the same character and ambition as their predecessors of the first Republic.

THE THIRD REPUBLIC The Babangida Military Administration

took cognizance of the failure of democratic experiments in the first and second Republics. The Government employed people’s opinion as the foundation of the new political structures. It set up the Coker Commission mandated to collect, analyse and synthesise the views of the political groups. After series of debates and symposia, it collected several documents which discussed the birth of Nigeria, the process of building the Nigerian state, structure of the political parties, the ethnic national question and states creation, the brand of political ideology the people wanted, etc. It opened the door for the lifting of ban on political parties. Old politicians were banned and unbanned. With the banning of the initial thirteen political parties recognised by National Electoral Commission (NEC), two political parties, the Social Democratic Party (SDP) and the National Republican Convention (NRC)

were formed by the Military Government with the mandate that its membership shall grow from the grassroots and wards, and that all individuals are equals in the parties, as there were no godfathers or kingpins. It recruited individuals from the grassroots to develop a new political order of Nigerian unity and holds specific rules to safeguard their grassroots bases.

The Annulment of the June 12, 1993 Elections and the subsequent death of the acclaimed winner MKO Abiola, followed by violence, and death of some political actors necessitated the military to take over government again. The political actors and actions of the third Republic and their military collaborators did not fully learn any lesson from the mistakes of their predecessors in the first and second Republics. The problems enumerated in the first and second Republic came up again in the third Republic, hence there were coups and counter coups.

FOURTH REPUBLIC The fourth republic gave birth to some

major political parties like the Peoples Democratic Party (PDP) which is the dominant party that won majority of the seats at the federal and state legislative houses and controlled the federal executive government. Other ethnic based parties include the Alliance for Democracy (AD) later called Action Congress of Nigeria (ACN) which controlled the government in the Western Nigeria, the Progressive People’s Alliance (PPA) and the All Progressive Grand Alliance (APGA) and the PDP controlled the states in the East, while the All Nigeria Peoples Party (ANPP) was in control of some states in the Northern Nigeria.

Some of the basic problems which characterised the first, second and third Republics are still very rampant, even with the introduction of more dangerous crimes which were not common in Nigeria political system. In addition, there are now rampant cases of kidnapping, rape, assassinations, militancy, indiscipline, large scale corruption, lack of commitment to nationhood, nepotism, political thuggery and large scale exploitation of the masses by the elites. Advertising and marketing strategies especially as they concern billboards, radio and television messages were used.

Advertising and marketing of politics were not providing solutions to the failure

of the political parties and political systems. In all the Republics, marketing was not used.

Bulter and Collins (1961) stated that “there appears to be little appreciation of marketing especially in Nigeria. Most writers of political marketing simply applied general marketing principles to the area of election campaigning” (Baines et al 2000). Most people believed that the old political parties do not need marketing and advertising strategies because the requirement for active members to carry the party message meant that election campaigning was labour intensive (Achumba, Ogbechi 2004). Most actors simple believed their campaign was largely about reinforcing ethnic or regional beliefs and ideas, reinforcing partnership and mobilising the masses with some exaggerated promises.

Because of increased sophistication of the masses, greater enlightenment, increased role of information technology, internet and the worldwide web, political marketing and advertising is becoming more pronounced. This has stimulated the development of political marketing (Kavanagh 2003).

But the idea of marketing and promoting politicians is not entirely a new phenomenon. In old Nigerian societies, promotion of leaders and politicians take place whenever a community was in search of special leadership qualities in a person.

Agbakoba (2003) (Ayozie 2010) stated that attributes such as courage, meekness, philanthropy, courage, valour, eloquence, honesty, perseverance, charisma, and physical fitness enhanced the position of those who possesed them in vary degrees and in different contexts. Just as the possession of any or all of those attributes advanced the standing of some individuals at the time. Presently, it plays also an equality significant role in political marketing and practices these days.

Nevertheless the issue of promotion of politicians in contemporary societies is different from promotion/advertising in historical perspectives.

WHAT IS POLITICAL MARKETING AND POLITICAL ADVERTISING

In the past, Political Marketing definition stressed the exchange process arising between votes and candidate (Achumba 2004), the use of marketing mix to promote

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political parties, and the use of opinion research and environmental analysis (Wrong 1977).

One definition of political marketing would draw reference from Kotler’s definition of Marketing: “Political campaign marketing is a social and managerial process by which candidates and parties obtain election goals through creating, offering and securing approval of ideas of value with the voter”.

Some other definition sees political marketing as being concerned more with the communication process between parties and or candidates.

Harris and Wards (2000) views political marketing as being synonymous with the use of persuasive technique in campaigns to promote the politicians, their parties and policies.

Butler and Kavanagh (1999) advocated that the borrowing of professional communication tools such as Advertising and public relations, epitomised the concept of political marketing.

Maarek (1992) in Achumba and Ogbechi (2004) suggests that political marketing is a broader concept. He stated that political marketing includes the evaluation and redesign of policy and electoral strategy in the light of studies of the electoral concerns. He claims that political communications no longer means merely designing and printing a message in posters without consideration of whom they are addressed to. To them, it encompasses the entire marketing process from preliminary market study to testing and targeting.

On the other hand, political Advertising employs the explicit use of language to propose solutions (Marketing) based on perceived needs and deficiencies (political philosophy). Politics being largely a verbal profession, political Advertising has to be an exercise in the use of words and images (communication). Elections are won and lost largely on the ability of campaign managers to use communication effectively. As Gerber (1981) noted:

“Politics is largely a word game; politicians rise to power because they can talk persuasively to voters and political elites. Once in power, their daily activities are largely verbal – commands, dialogues, debates, formulation of proposals, laws, orders, decisions and legal opinion. The skill with which they wield the tools of political discourse, adapting them to the needs of various audiences and the

goals to be achieved determines their success.”

As in campaign times and during the various election dates, the voter is exposed to many communication message about the various candidates, political parties, their philosophies and ideas, the electoral umpires and the electoral processes. Politics and political advertising and marketing would be impossible without communication. Political Advertising in a communication series “is a war for the minds of the electorate” (Okigbo 1992). The battle is fought not only in the fields of paid advertisements but also in all the compounds and alleys for peddling influences especially when the audience is unsuspecting. It is necessary to show how the managers of Jimmy Carter campaign infiltrated all media shows with Carter’s admirers. To Malcolm MacDougall who ran the Jerry Ford campaign, it was a sheer genius. To him:

“Jimmy Carter was in every talk show, every panel show, every game show, every quiz show. It hadn’t cost a nickel to bring ‘the real’ Jimmy Carter into every living room. He was part of the furniture before Ronald Reagan or Jerry Ford entered the flight”.

Whatsoever is the exact definitions of political marketing and political advertising, it is clear that the use of policies and communication to position candidates to gain more votes and sympathy explains the two concepts. In fact, in the views of Harris and Ward (2000), political marketing and political Advertising concepts includes a broader consideration of the needs of the electorate so that policies as well as promotional messages are centered on the desires of the voter.

Marketing, advertising, political phi losophy and communicat ion complements one another and roll up into one vital force, which when directed at the promotion of the political candidates can yield fantastic results. Such results are possible only when the elements are employed energetically. This calls for the adoption of wholly integrated approaches rather than disparate methods and tactics. The ultimate target is the selling of the candidate but it has to be achieved through proper positioning and the employment of appropriate strategies and tactics.

By synergy in political marketing/advertising, we mean the realised effects of the four elements that is marketing,

advertising, political philosophy and communication working together as necessary partners rather than individually. Political marketing and advertising requires a wholistic approach that employs all the elements at once. By employing a synergetic approach, the political marketing and advertising consultant uses integrated marketing communications and various marketing strategies that accommodate all aspects of advertising, public relations, events marketing, tele-marketing, sales promotion, publicity and talk shows, all directed at achieving maximum persuasive impact for the purpose of winning votes and candidates. Integrated marketing communications is the protease of managing all sources of direct and indirect information about a candidate or party to which a voter is exposed, and which can track their behaviour and reliable attitudes overtime relating to the candidate and party.

To MacDougall (1992), when you write an advertising strategy for a soap or soft drink, “you usually try to zero in to one sales message, for example, Longer lasting deodorant people need only one good reason to choose one product over another. But when you are selling a President, Governor or Senator (or for any other political candidate) one strategy just wont do”.

SOME BASIC HINDRANCES TO POLITICAL MARKETING AND ADVERTISING

As enumerated in the brief political history of Nigeria above, the basic problems of ethnicity, corruption, bribery, political rascalism, thugery, assassinations, coups, counter coups, falsification of votes, snatching of electoral materials, killings, bomb blasts and terrorisms, electoral frauds, judicial racialism, fraud, rigging, political and ethnic militancy have assumed a cyclical trend. These problems have manifested in all the republics in Nigeria. Politics, as observed in Nigeria, is a very dangerous game played in murkey waters. Infact it is like war, if not a real war, as bombs, guns, acids, killings and other war strategies are used, thus making it a do or die affair. The words used for simple electoral practice are capture, defeat, maim, hurricane, etc. This has severe implications the way political marketing and advertising strategies are used and practiced.

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Some of the basic problems are that Nigerians are totally insensitive to political advertising, marketing and communication. In reality, it does not fully influence their voting patterns and general political behaviour. Communication, no matter how powerful now and in the past, has not fully influenced voting behaviour in the past, does not in the present and has not shown any likely change in the future. This is not the practice in the developed countries of United Kingdom, Italy, United States of America or even India.

Violence and rigging are norms in Nigeria. Infact most politicians believe that elections cannot be won without the two terms. There are acid baths, killings, assassinations and shoot-out by the various political parties and their candidates. Politicians are usually caught with fake and real ballot papers purely used for rigging purposes. Infact votes do not count not minding the electoral process used. Electoral officers often announce results in the private homes of candidates, and in such cases, it has nothing to do with the voting or voting processes.

Electoral officers and materials often disappear to reappear in the houses of favoured politicians. There is an assumption in politics that votes count, and that elections are supposed to be free and fair. But the reverse is the case in Nigeria. Violence and rigging are not common denominators of the democratic norms, or for democratic societies.

Politics in Nigeria is a do or die affair, hence people are assassinated with reckless abandon and the culprits not found. Politics is full of bitterness, hatred, rancour intimidation and violence (Doghudje 1992). People vote mainly for members of their tribe, ethnic area, or religion. Issues and images do not count. The ideal candidate is always that person from one’s tribe, religious or ethnic background regardless of the qualities of other candidates from other tribes or religious background. The voting patterns in the first, second, third and even the fourth Republic explains the roles that religion and tribe play in Nigerian politics. A candidate in the second Republic promoted Nigerian free education at some levels, free health services, full employment and integrated rural development, yet he lost the presidential election, and these are full powerful promises of what an average Nigerian needs. Another candidate of immense personal integrity, excellent

ideas on how Nigeria will be corrupt free contested and yet he lost. Things have really not fully changed. Nigerians go into politics for the wrong reasons, the electorate vote for the wrong reasons and in most cases advertises for the wrong reasons. Campaigns are not fully issues based, not minding the promises of politicians. In the states and local government areas, the situation is the same (certain zones or areas of the states have long dominated governance that the other zones are crying aloud for a share in the governance. In some instances, some families have dominated governance in certain states and local government areas.

Money plays a negative role as the electorate and the electoral officers are often bribed to either vote against their conscience or to declare false results,

and to declare the wrong candidates as winners.

In Achumba and Ogbechi (2004), it quoted Lock and Harris (1991) on the differences between political and commercial marketing and advertising. It was their observation that winning parties do not continue to dominate the share of the vote in the same way that Brand leaders hold their market share. They defined a political brand as the party name, term and symbol which becomes attached to different policies and politicians.

Kavanagh (2003) clearly stated that a political party is different from a commercial operation in these relevant aspect:

— A party claims to be internally democratic. This is not the same as in a commercial organisation.

— Unlike commercial marketing, political marketing tends to be more oriented towards competitive position.

This competitive nature dominates the political communication, especially in the United States where political speech is protected under the first amendment, resulting in the more usage of the media management techniques such as rapid rebuttal, opposition research and political advertisements which many contain an element of dialogue between the parties and candidates. This is contrary to traditional commercial communications which rarely mentions other companies products except in the most vague ways.

— Also in political marketing and political advertising, it is imperative that the political product would be contrasted with that of its competitors, and that the candidates must seek to demonstrate their credibility and capability before the electorate will approve them for office

through voting. This concept is inherent in the U.S. and is the pattern between two candidates seeking to be nominated by the Peoples Democratic Party as their presidential candidates in the 2011 elections (Goodluck Jonathan and Abubakar Atiku media campaigns).

— Also because a political party usually campaigns to form the government of a country or state, the scale of its ambition dwarfs that of a commercial organisation.

ROLES OF ADVERTISING, MARKETING, PUBLIC RELATIONS AND INTEGRATED MARKETING COMMUNICATION IN POLITICAL TRANSFORMATION IN NIGERIA

When one studies the influence of pre-colonial norms on contemporary Nigeria, one is bewildered by the absence of rationality and intellectual inquiry, hence

“Politics in Nigeria is a do or die affair, hence people are assassinated with reckless

abandon and the culprits not found. Politics is full of bitterness, hatred, rancour intimidation and violence. People vote mainly for members

of their tribe, ethnic area, or religion. Issues and images do not count”

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the importance that politicians attach to the rituals of the institutions, religions dogmas, materialism, ethnic values or our inability to escape from old norms that are retrogressive. Political marketing and advertising has a role to play in the new political trajectory that Nigeria is charting. Marketing and advertising offers a lot to politicians. Every politician’s dream, whether incumbent or new aspirant, is to be in government and remain in power, and be part of the system making laws, directing and shaping the process of economic and social development (Ohiwerei 1992). The ultimate ambition is to be the president and commander-in-chief or the prime minister as seen in the United Kingdom. To get to that position, the candidates rely greatly on marketing and public relations, integrated marketing communication and advertising strategies so as to market his/her person, and the party’s manifestoes. He tries to convince the electorate that his party’s progammes are the best and more relevant to the needs of the masses than that of the competitors. He/she must convince the electorate that he/she can represent them and ensure that the party’s programme is implemented.

The political party can be likened to a company or firm, the party ideology to a company’s mission statements, the party manifestoes to a company’s marketing strategy/plans, and the party’s candidate to a Brand. So for a political party to be effective and successful, win votes and be in power (profitably) it should operate like a business or a company. With this analogy, marketing, public relations and advertising are very relevant in politics.

BRANDING AS A STRATEGY IN POLITICAL MARKETING

Boone and Kurtz (1996), Ayozie (1999) and Kotler (2006) opines that a brand is a name, term, sign, symbol, design or some combination that identities the products of one firm and differentiates them from competitors offerings. Brand marketing is becoming important in political marketing because as a result of information clutter, people are becoming more independent in deciding whom to believe. A candidate who sees himself or herself as a brand can cut through the information and communication clutter and achieve the message discipline essential to a successful campaign. In developing a brand, the political marketer has to

ensure that the candidate communicates something that the voters can understand and identify to the emotional appeal of candidate. It is the personality (brand) believability and an appealing story that persuades voters. Also, since the electorate craves something out of the ordinary, creating a brand destination is important for challengers and for the opposition and minority party candidates. Branding is about communicating a message that is rooted in emotion (Achumba et al 2004). Every successful brand has some emotional appeal. Emotion is the human element that gets our attentions (Jackson Jnr. 2004). This unique emotional component is the foundation of the candidate’s brand. Developing a good brand message involves soul searching. Before the campaign gets under way the politician should inventory his assets. The inventory includes every positive thing he has ever done that may seem compelling, everything good any one has ever said about him, every unique experience in his life, anything that sets him apart from the rest of the crowd. What is unique about him; what makes him different and why should the masses listen and vote for him/her. If a candidate is not believable, he/she might not win any sympathy. The candidate’s task is to prove this uniqueness, and why he/she stands out. Like 7Up soft drink advert “The difference is clear”.

In Brand Marketing, a successful key is a thorough understanding of the market, the consumer, the competition, and the use of marketing research. This helps in having a clear vision of the role the brand will play in the market. The brand must meet a particular need better than competing products and brands. In this, marketing research will be useful to the politicians and their parties. What we think people need is different from what they actually need. You can satisfy them by actually asking them and researching on their needs. The politician must streamline the party’s programmes with the needs of the electorate and masses. Find out what it is that matter to the masses in specific areas of the north, south, east and west of Nigeria. The needs vary although there might be the similarity in some basic areas. The political parties need to offer a benchmark to determine what to offer, where to offer and how to offer them to the electorate. This might be expensive, but it helps to win votes. So it is important

to commission and conduct a research at various levels into societies values, political expectations and societal needs. This should be incorporated into political campaign strategies. To be successful, a product is transformed into a brand. This is made possible by giving and acquiring a definite image for the product either through its unique name, mark, term, symbol, packaging or advertising. Together, these factors create in the consumer’s mind some perceived benefits. If a politician is to be successful, the mention of the name should evoke a positive perception (e.g. being humble, strong, resolute, anticorruption, a man of unity, accessible, reliability, strong positive character, a good fighter for the masses cause, a man who cares and understands the masses). A positive image is a very valuable asset. Branding helps to bring about this. There is an importance attached to names, i.e. Awo, Zik, Ahmadu Bello, Buhari, OBJ, Goodluck, etc. Every Nigerian name tells story. We choose names and acronyms that has no negative connotations, that are easy to pronounce and remember, e.g. IBB, Buhari, Goodluck, OBJ. Politicians these days shorten their very long names, while many have adopted pet names. Some have adopted a sobriquet but names alone do not sell a brand. The brand has to be of excellent quality, and good enough to be believed. Your name must have an advantage over competing brands. There must be uniqueness to guarantee repeat voting and purchase. Your uniqueness must be in a positive way (e.g. humility, strong character, anti-corruption, iron lady, tough, resolute). You must give something that has an advantage over the competitors. The politician most smoothen his rough edges so to as to meet the expectation of the masses. The politician must discover something wrong about his character and mannerisms and find positive answers to them. The politicians must discover major events or achievements that can enhance their credibility, emphasise and use those positivities.

PACKAGING THE POLITICIAN AND POLITICAL ACTIVITIES

Packaging helps to whet the appetite and heighten the desire (Ohiwerei 1992).Packaging involves the development of a container and a graphic design for a product (Pride and Ferrel 1991). A package can be a vital part of a product,

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making it more versatile, safer, or easier to use. Like a brand and as discussed above, a package can influence customers attitudes towards a product and definitely affect their purchase decisions. The same strategy is applicable in political packaging of aspirants. The politician must dress and appear well. The total physical appearance is very important, i.e. your hair cuts, beards, clothes, shoes, voice, etc. The speech, voice and diction must be good. It is not out of place to have a special beautician, voice expert, hair stylists and fashion designers to work on the politician. But politics is not a beauty contest either. Before a public appearance, mannerism, carriage and comportment must be practiced.

INNOVATIVENESS AS A BRANDING STRATEGY

The Nigerian politician must be unique. They can be unique in their way of dressing or appearance. A specific fashion designer can create a special style to increase excellent visibility. If one remains consistent in using that style, it will become one’s property and identification mark. Awo emphasised this in his glasses, Mbony Ojike did not wear western clothes and was known for the statement “Boycotting all boycottables”. Shagari has a unique cap, while Goodluck Jonathan has the Niger Delta dress and cap. Fidel Castro dresses in Safari Suits, and Obama has a uniqueness in his smart suits. Winston Churchill was known for his king size cigars. The emphasis is that the politician should be confident with the role he wants to play and must evoke a positive response from the electorate. They must create an image of uniqueness, strong character, reliability and humility. By his unique speeches John F. Kennedy, Obama, and to an extent David Cameron in the UK had strong effects on young and old people around the world, and in their respective constituencies. Kennedy’s popular speech “Think not of what your country will do for you, but think of what you can do for your country” is as relevant today as it was in the past.

The politician must be innovative in relating with his constituency and the masses. Personal contact with the masses is brightly rewarding and excellent. Door to Door contact, personal visits and contacts have excellent effects on both the high and lowly placed members of the society. It gives the politician first hand knowledge of

the problems of the masses. It gives them the confidence to vote for a candidate whom they believe relates well with the electorate/masses and understands their problems. A dinner with masses will build confidence and reliability on them. The politician should build their foundation on the masses, as they will never fail at the moment of need, especially when they are needed (Ayozie 2009).

DISTRIBUTION OF POLITICAL MATERIALS

The politician that starts early has a better chance of getting the best result and in reaching out early to the electorates “Early to bed, early to rise”. Plan well ahead of time how to distribute your campaign materials posters, leaflets and banners. Early and repetitive messages on the internet and in the websites has excellent and positive influences. The politician should employ well trained sales people and campaign strategist/managers as they help in delivering his/her political messages. Whoever you are employing must be well trained, hold excellent ethical and moral standards and must understand the politician, the political party, their programmes and actions. They must be unique as the politician and must uphold the excellent unique image. Just like as in products, the politician/candidate must be seen by the electorate as capable of deliverying campaign promises and benefits most effectively than the competitors. Like in the 7Up and Omo adverts, “7” Up the difference is clear” or Omo washes brighter and it shows. A politician should base his appeal on rational and clearly measurable goals. He must not make false and empty promises in building bridges where there are no rivers and seas. He must fully and practically demonstrate the ability to deliver the campaign promises by his party or future performances. Have an emotion appeal which must be sustained. The campaign objectives and the actual campaign programmes must sell and popularise the party, the politician, the party symbols, and project the party as a disciplined and democratic party with a dedicated leadership capable of turning the affairs of the nation around, ensuring security of lives and property, and guaranteeing prosperity. It should guarantee the electorate an active participation in the affairs of the nation, functional and affordable education, good healthcare,

cheap and efficient transportation, good roads, alternative transportation systems, affordable food, better life for the masses, better opportunities for the youths, women, children, disabled, decent housing with water and electricity and rural development and employment.

OPINION/ISSUES POLLS Just as it is obtainable in consumer

marketing, marketers first identify the consumer’s needs and wants and try to satisfy them. In political marketing, politicians have to identify the wishes and aspiration of the electorate and masses. Opinion and issues polling is a survey of issues of interests to the populace, their attitudes to these issues, and the reasons for holding such issues. It could be politically suicidal for a candidate to take a rigid stand on some issues without knowing how important such issues are to the electorate or how strongly or otherwise they feel about such issues, for the lives of the electorate revolves around issues (Odusi 1992).

Such issues might be on abortion, minimum wage, lesbianism, gay, religion, diplomatic ties with some nations, security and terrorism. The electorate needs to know the candidate’s stand before the voting date. Politicians will find issues polls useful in sorting out specific campaign issues and positions, establishing a broad based strategy on both issues and image, thus leading to basic decisions on policy and advertising strategies. Issues polls are best conducted before elections. The aim being to ascertain which of the issues is most important to the electorate.

TARGETING AND TRACKING POLLS Most times, polls are conducted and

limited to certain groups of people in the society such as mothers, men, youth, women, opinion and religious leaders. Here it is necessary to keep track of how opinions change from time to time among the electorate or interest groups. Targeting and tracking polls solves such problems. While targeting refers to a deliberate attempt to locate a group of relevant voters within the general voting population, tracking is the continuous measuring of changes in the political behaviour of the people (Odusi 1992). Both tracking and targeting complements each other and are important elements in information management system for

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political campaigns. For example, tracking might reveal the popularity of a party, candidate, or group, and this might lead to identification of new target. To enhance effective targeting, there is the need to segment the population and to stratify them according to social, demographic or even geographic variables in order to obtain the most pertinent information for campaign strategy which will enable a candidate to make specialised appeals to both actual and potential supporters.

Generally, both targeting and tracking make possible continuous and sensitive monitoring of communications so that strategy and tactics can be finetuned responsively to the opportunities and importunities of events.

IMAGE STUDY/RESEARCHAn image research is an important step

in planning political advertising efforts. Odusi (1992) stated that it helps to identify areas of candidates reputations and character that the voters might be unaware or confused about. This will become the focus of a candidate’s communications programme. Odusi (1992) defined image “as the net result of interaction of an experience, impressions, beliefs, feelings and knowledge people have about an entity. For any candidate contesting an elective position, it is important to consider two types of images. First, the image of the candidate as opposed to that of the opponent contesting for the same post, and the image of the party that stands behind the candidate.

In general, image research is geared towards finding out gaps between the facts about a political entity as it is, and as people believe it to be, and pointing out the way forward.

It can be carried out on or before nomination of a candidate for a political office and periodically before elections.

CAMPAIGN RESEARCH APPROACHOpinion research which is relevant

to campaign can be ad-hoc survey, omnibus project and syndicated projects. However, the most useful to political marketing is adhoc research. Adhoc research is designed to address issues of importance that arise from time to time and to meet specific needs of the party or an aspirant. The research could also be useful in selecting the most relevant media to a particular segment of the

voting population; to find out the effect of message disseminated to the target audience; to feel the pulse of the public on a number of election issues and a quick device for measuring public reaction to a newly introduced political idea by a political party.

PROMOTING THE POLITICAL PRODUCTS

The political product is mainly issues based (political policies, messages and ideologies) rather than the physical products. Achumba and Ogbechi (2004) advocated that for political products to appeal to the electorate, it needs to be credible and retain some measure of ideology. In recreating their policies, and messages, political candidates needs to link it to their ideology.

Human interaction forms part of the product at the point of consumption. Hence political marketing techniques can be used to change opinion, and to follow and document public opinon, as this makes it different from physical product marketing where manufacturer may try to alter people’s buying habits and attitudes. Techniques such as opinion research and focus groups are used to measure public opinion and then the communications are modified to convey and stress the message statements which approximate the position of the electorate or specific voter groups taking into account the ideological ethos of the political party and the candidate.

Political marketing strategy is also seen in the various processes by which the politicians convey that messages to the electorate. From studies in the United States, political campaigns are generally shorter than commercial campaigns, while in Nigeria from observations, they almost have the same duration. But basically, there are rules from the Nigerian Broadcasting Commission, APCON and other relevant Agencies on the campaign message. The intense competition surrounding the election and the ultimate desire to be the absolute winner produces a highly charged and negative form of compaigning. This situation often leads to outright elimination of political challenges.

Achumba and Ogbechi (2004) opined that the highly complex nature of the political product has led to a high degree of specialisation in terms of services that could be offered. For example in the United States of America, political consultants

offer services in areas such as general consulting, direct mail, media consultants, opinion polling, opposition research and fund raising.

THE ROLE OF BRAND POSITION To position means to place a product

in a unique certain position in the minds of the prospective or present buyers, as in the one of politics, in the minds of the electorates/masses. Positioning as an effective marketing strategy places its emphasise on serving a particular market segment by achieving a certain position in the buyers minds. Positioning is used by marketing companies to distinguish their company’s products or services from that of competiting ones and also to create promotions that communicate that desired position.

This strategy involves emphasising a product’s unique advantages and differentiating it from those of the competitors (Boone and Kurtz 1998). In political marketing, a party and its candidate stand unique and connect with the voters. It consists of developing a campaign theme that consists of convergent policy stance on issues (Achumba and Ogbechi 2004). Party brand positioning is important in that the strategists use it to set out the policies which the party and the candidates use to persuade the voters to vote for the party and the candidates of the party. The candidates then select a slogan/theme on major national issues like employment, security, Niger Delta, minimum wage and then connect it to the voters. Bradshaw (1995) defines the theme as “the rationale for your candidates election, and your opponents defeat. It is the single central idea that the campaign communicates to voters to sum up the candidates connection with the voters and their concerns, and the contrast between your candidate and the opponents (Achumba and Ogbechi 2004). The selection of the theme/slogan is important because the party cannot later attempt to use a theme which is not consistent with their original policies and statements since this may be picked up by the opposition parties spokesperson in a process known as rapid rebuttal.

INTEGRATED MARKETING COMMUNICATION AS A STRATEGY

The American Association of Advertising Agencies for Research offered this definition of Integrated

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Marketing Communication (IMC): “It is a concept of marketing communications planning that recognises the added value of a comprehensive plan, evaluates the strategic roles of variety of communications disciplines, e.g. Advertising, Direct Responses, Sales Promotion and Public Relations and combines these disciplines to provide clarity, consistency and maximum communications impact”.

IMC is the process of developing and implementing various forms of persuasive communications programs with customers and prospects over time. The goal is to influence or directly affect the behaviour of the selected communications audience. IMC considers all sources of brand or company contacts which a customer or prospect has with the product or service as potential delivery channels for future messages. It makes use of all forms of communication which are relevant to the customer and prospect and to which they might be receptive. In sum, the IMC process starts with the customer or prospect and then works back to customer or prospect and then works back to determine and define the forms and methods through which persuasive communications programs should be developed.

In both definitions, the crucial elements are first the integration reconnects the campaign with the voter by building a detailed data base of past and current actions taken by the voter that may help to predict his or her future behaviour, e.g. if the voter is registered, has voted in primaries, and votes regularly, the campaign can develop specific communications targeted to this type of voter (Caywood 1992). Other behavioural data might include political involvement including party membership, donations, use of campaign literature, response to literature voluntary activities, willingness to drive others to the polls, attendance at meetings, etc.

When survey data can be completed on a household or specific voter without violation of confidence and privacy, the database becomes a useful tool to develop specific communication tactics to reach the voter with a timely and relevant message, especially with an email in the internet or direct mail messages at home.

In addition, the campaigns knowledge of where the voter might come into direct or in direct contact with the candidate (TV viewing habits, use of cable television, radio usage, newspapers and editorial

sections read and others) will permit a more specific interception of the voter.

In summary, the knowledge of the voter, their behaviour and attributes, permits a more conversational marketing and advertising dialogue with the voter.

Stockwell (2004) defined political campaign as the rush of media items leading up to polling day. Campaigns are multi-disciplinary entities that are of interest to, and draw methods from political science, media theory and marketing. Political campaign originated because the political function of language is embedded deeply in the evolution of human society. Notwithstanding the evolution, political campaign uses techniques derived from advertising, public relations, mass marketing and game theory. (Blumenthai 1980) Election campaigns have some stages. Strategy (from candidate/issue analysis, to developing the game plan), communication (day- to-day development of the message and its distribution through mass and direct media) and high gear (locking down commitment and getting out the vote).

While money is key determinant of the impact of the campaign, good organisation, innovative use of new technologies, skillful volunteer and resources management and accurate reading of the political terrain can be useful. Today’s governments uses campaign techniques to manage their interactions with the public via the mass media, to ensure their re-election, and to perform their daily functions.

All forms of political campaign seek to persuade target audiences by managing the message communicated to them through the media. Political campaigns seek to communicate their messages via all channels consumed by the target audience/electorates (Stockwell 2004, Achumba and Ogbechi 2004), (e.g. in newspapers, radio, television, billboard, transportation, handbills, posters and the internet). In seeking free coverage in the editions and political portions of the media, the campaign monitors the media, prepares press releases, hold press conferences, produces web pages, runs media events, run launches and debates and talks to the editors and journalists.

Paid advertising allows the campaign people to bond together the matrix of ideas, images, policies and arguments that make up the message into a moment of emotional exchange directly with

the audience. Though direct contact is a very persuasive form of political communications, interpersonal contact at meetings, debates, launches, events and in the doorway develop a personal relationship. Finally, audience segmentation and canvassing can generate lists of targeted individuals who can be engaged in interactive communication by direct mail, social networking sites, (face book, twitter, my years book) email, door knock visits or special purpose meetings (Stock well 2004).

Achumba and Ogbechi (2004) opined that political campaigns therefore use the obvious marketing techniques of advertising, internet messages in targeting and in segmentation. Political campaigns are therefore marketing driven.

In Anderson’s (2004) view, election campaign is more about marketing than about politics. It involves making a connection with the masses, electorates, and voting publics, and ensuring delivery of excellent reasons so as to encourage the electorate to vote in a particular format.

It is worth noting that unlike what is obtainable in Europe, America and in the UK, Nigeria campaigns are still non-issue centred, party oriented, labour and financially intensive and uses a lot of deceptive messages. In the US, UK and Europe, campaigns are candidate and issue oriented, capital intensive, money and media driven, and based on external professional consultancy. In the UK, political campaigns are party centred, stressing the building of competence, trust and identification with the parties as collective actors in government or the opposition (Achumba et al 2004).

THE ROLES OF ADVERTISING IN PARTY POLITICS

In politics, advertising is intended to present the candidate or the party as the best of the options available in the market place of political goods. In a political terrain characterised by ignorance of the political options available, the task of advertisement (soap box appearance, jingles in electronic media) is to advance the awareness of the electorate. Advertising is any supervised and controlled form of non-personnel presentation and promotion of ideas and services by an identified sponsor which is used to inform, educate and persuade and potential target market (Ayozie 1988). Advertising calls for the best

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skills in salesmanship, i.e. presentation of facts in the most persuasive manner, without shopping into an exercise in mass deception (Gana, A. 1992). Facts such as the candidates past achievements, his/her integrity, his/her vision for the electorate readily comes to mind.

Advertising in a pavlovian sense is meant to stimulate the public to accept ideas or personalities not really meant for their own good but for the good of the owners of the advertising firms and their clients. According to Nzimiro (1992), the greatest danger done by advertising is that it incessantly demonstrates the prostitution of men and women who lend their intellects, voices and artistic skills to purposes in which they themselves do not believe and it reaches the emotional meaninglessness of all the creation of the mind image and ideas.

Nevertheless Advertising must be made to serve the people in a wider sense of conscienisation – making them aware of political options amenable to desirable political changes and actively supportive of the new politics of grassroots democracy. Nzimiro (1992) stated that political advertisements should be a tool for pointing out the dangers of ethnicity in politics and:

— It should emphasise on the development of a true nationalist ideology which should be the unifying creed of a nation.

— It should promote ideas which will help to mould the political conscience towards an indivisible entity called Nigeria.

— It should provide correct information necessary for engendering patriotic feelings.

— It should direct attention away from negative political attitudes and deposition.

— It should hold firm to the ideals of democratic politics so that their advertising campaigns will reflect their true beliefs.

— It should promote clean advertising practices.

— It should appropriately manage the crises and conflicts in politics.

— It should instill in Nigerians the love for Nigeria and humanity by being the conscience of the oppressed masses. Whatever political advertisements to be used must be an attention getter and unique. It must stand out of the cluster. It must be relevant to the electorate and

incorporate some classic innovativeness. The message and the politician can be innovative in relating with the electorate, through the dressing, way of speech, music or salutations.

PUBLIC RELATIONS IN POLITICS Public relations is seen as the deliberate

planned and sustained effort to establish and sustain an excellent relationship between the organisation and the public (Ayozie 2000).

Public relations is simply doing good and getting caught or getting credit while doing good. It is the winning of Public acceptance by acceptable performances. It is communication of truth, i.e. good works well told (Ayozie 2005).

It is simply a distinctive management function which helps to establish and maintain mutual lines of communication, understanding and cooperation between an organisation and its publics. It involves the management of problems or issues, helps management to serve the Public interest and effectively utilise change, serving as an early warning system to help anticipate trends and uses research and sound and ethical communications techniques as its principal tool. It is a tool widely used in political marketing and it is very effective.

Public relations has to carefully secure third party credibility through news and editorial coverage of a product, service or candidate for a promotional outcome. In politics, the credible third parties that may enhance the candidate’s credibility through internal and external communications are the newspapers and magazines, through their editorials, stories, cartoons, opinions and comments, broadcast programmes in the electronic media, comments by prominent religious bodies, schools, organisations, labour, professional groups, families and even friends. In all, public relations messages should show the candidate as credible, newsworthy, the view the candidate takes on known national and policy matters. The tactics can include participation in Awards where the candidates and the political groups receive awards that generate positive press, donate books and booklets written (or ghost written) under the candidate’s name, attending contests, competitions and charity events, paying courtesy calls, participating in protest and marches for reasonable causes, participating in

formal and informal debates, being part of exhibitions, musical programmes, public gatherings, participating in fan clubs, public rallies, supporting professional groups, taking credit for store, and other economic openings which may receive media coverage, opening telephone hotlines to speak with the masses, attending luncheons, breakfasts, dinners and press parties which will fasten excellent press relations and provide news materials from speeches and discussions, give out free Newsletters to the public and the press, engaging in talk shows, grant print media interviews, engaging in radio shows or being a regular commentator on national issues, support good societal causes, producing for free excellent national symbols (e.g. family photos, symbols of success in Nigeria), or visiting some notable leaders or monuments that will generate news coverage, visiting the schools, polytechnics, colleges and universities that afford you forum for speeches, attending important programmes, producing video news releases to be distributed to media houses who are unable to cover a speech or event, working in various industries, which will generate good press releases.

CONCLUSION The implication is that a broader and

integrated marketing communications and advertising strategies will contribute to the effectiveness of a political campaign. A synergy will be essential. Political advertising and marketing has become a widely used strategy now in political engineering. The present Nigeria political actors have recognised the increasing importance of marketing and advertising in political campaigns. Politicians are of the opinion that they, like products and services, need to be marketed and advertised properly. Various marketing and advertising tools have proved very useful for politicians not only in the developed countries of American, Europe and Australia, but also in Nigeria, especially in securing votes and endorsements that will enable them to govern the nation.

As marketing and advertising is increasingly adopted in politics, it will assist in increasing voter turnouts, reduce voter turn-offs by offering alternative and constructive messages, increase efficiency by gaining greater press coverage based on news worthy items, increase loyalty and repeat voting, by

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building long-term relationships with the voters, demonstrate the full range of the candidate’s communications ability and capacity. The current campaigns by politicians in the fourth republic show that many politicians and parties are making greater use of marketing, integrated marketing communications and advertising. In general, the new age of Nigerian politics have found a supportive partner in marketing, advertising and integrated marketing of communications because of the numerous benefits.

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Various authors, nations, legal systems, organisations and culture have deferring definitions, impressions and ideas on fraud and corruption. UK Fraud Act 2006 (S.1) defines fraud as false representation, failing to disclose

information and abuse of position. Transparency International (TI) defines corruption as ‘the abuse of entrusted power for private gain’ (Transparency International, UK, n.d. a.). . In all definitions, fraud and corruption is social, political and economic evil every nation fights hard to reduce to barest minimum. Plastic card fraud, identity fraud, banking fraud, kickbacks and advance fee fraud are daily occurrences. Corruption can manifest in different forms but the most frequent occurrence is in the form of bribes that may be used to influence the award of public contracts, acquire various benefits from government, lower tax liabilities, obtain licenses, expedite government processes, influence judicial decisions or lower penalties (Mario, and Livio, 2000; Caiden and Jabbra, 2001).

Corruption thrives on darkness and invisibility. It is anonymous and unmeasurable. It is rooted in the very human vices of greed and lust for power… It is colourless, shapeless, odourless, collusive, secret, stealthy, shameless… It often leaves no trail but that impressed in human minds, memories and perceptions.

SCALE OF INTERNATIONAL FRAUD AND CORRUPTIONThis paper examines the scale of fraud corruption in

international arena, analyses its impacts on the citizen and economy, and evaluates the strength and weakness of various strategies in place and the extent to which outstanding local practices are transferable to international context. All over the world, fraud and corruption has been identified as global menace that have pervaded all aspect of international relations like politics, business, finance, justice systems, foreign aid health care and sports. In the recent past, several political leaders and public office holders have been brought down on allegations of fraud and corruption. Indonesia President Suharto resigned after

being accused of diverting $440m to his family and cronies from a scholarship fund for underprivileged children. Reuben (2008) and Bhargava (2003) related that the anticorruption agency in South Korea (KICAC) recorded over one thousand bribery and corruption cases involving key government officials in three months in 2002. In China, 28 officials were detained in cases relating to embezzled or misappropriated Central Government funds amounting to $919 million, more than $4.86 billion was found to be poorly managed (Zhe, 2007).

Corruption, fraud, bribery in the public sector have become major concerns for legislators all over the world (Kenneth, M. 304). It is more worrisome that this law making arm of government has in itself been bedevilled by the menace. Police and the judiciary systems are not left out.

The cancer of fraud and corruption has also eaten deep into international business and financial system. Five British firms were accused and prosecuted for offering $3 million in bribes to officials in Lesotho. The French oil company, Elf was implicated in corruption scandals in Angola (Jain, 2001). Investigation into Halliburton bribe scandal revealed that the company gave inducements totalling $180 million in exchange for contract ‘favourable tax treatment’ at the Nigerian Liquefied Natural Gas project (Sun News, Monday, April 20, 2009). The fall of Enron, Worldcom and other blue chip companies is still fresh in our minds. The world will not forget Jerome Kerviel’s £3.7 billion loss in Societe Generale Bank, Nick Leeson’s collapse of Baring Bank with £860 million loss and jailing of Madoff for 150 years for fraud totalling £40bn. Riggs Bank was sold as a consequence of its deficient anti-money laundering practices. Depending on the magnitude of financial loss, every financial organisation has a story or two to tell.

Global health system has also been undermined by corruption. Global market for fake and adulterated drug is estimated to worth $32 billion (Taylor and Dickson, 2006, p106). United States commits 15.3% of its GDP on health out of which 5-10%

The Challenges of Tackling International Fraud and Corruption By olasUnKanMi MUfUtaU and alaKa abayoMi

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is lost annually to fraudulent ‘overpayments’ (Transparency International, n.d. b.). Similar complex fraudulent cases exist in all countries. Poisonous foods and counterfeit drugs are manufactured, distributed and smuggled across countries. Thousands of deaths have been reported. The scenario led to establishment of Food and Drug Administration and Control offices by most nations. Pathetically, various Food and Drug Administration Agencies’ Chiefs have been accused of corruption at one time or the other. Zheng Xiaoyu, former director of China’s State Food and Drug Administration (SFDA), was executed July 2007 after being convicted of taking 6.49 million Yuan in bribes in return for approving hundreds of medicines, some that proved dangerous (China Daily, 2007). Fraud and corruption have also bedevilled development assistance and humanitarian relief to countries in need of emergency assistance due to wars and natural catastrophes.

IMPACTS OF INTERNATIONAL FRAUD AND CORRUPTIONThe problems of fraud and corruption can be broadly

categorised into three: political, social and economic impacts.Corruption can dent a nation’s integrity and international

image, compromise the external security, destabilise the political system and law order (Balogun, M. 2001: 22). Corruption erodes legitimacy. In Mexico for instance, public outrage with corrupt politicians … led Mexicans to vote PRI (Partido Revolucionario Institucional) out of office after over seven decades of uninterrupted rule (Jain, 2001). When corruption is endemic, it penetrates every aspect of lives. High scale Fraud and, and breach of fundamental human right (Caiden, 2001). Corruption by General Sanni Abacha, the most corrupt leader in history of Nigeria, led to the country’s political instability, perversion of democratic institutions, high level of unemployment, social decadence. It is capable of encouraging laziness, killing initiatives and penalising hard work, ‘undermining morale and esprit de corps’ (Balogun, 2001). Corruption subverts justice, denies victims their protection under the law and encourages citizens to take law into their hands.

Economically, the impacts of corruption are especially severe on the poor people that rely on public utilities like transportation, health care, housing, etc. It distorts resources allocation away from beneficial projects to ‘white-elephant’ ones, from the poor towards the ‘rich, the powerful, and the politically well connected’ (Asian Development Bank, 1998 ).

National Fraud Authority estimated that fraud cost UK economy over £30billion in 2008 (NFA, 2010). The 2006 estimates for US, Canada, Germany and Australia stood at £378million, £10million, £137million, £2.3million respectively (Attorney General’s Report, 2006 p.275). Former Nigerian President Olusegun Obasanjo asserted that corruption costs 25% of national income of an average African country resulting to a combine loss of about $148bn a year (BBC, 2006). Fraud and corruption is indeed a national and global concern.

STRENGTH AND WEAKNESS IN STRATEGIES EMPLOYED TO DEAL WITH FRAUD AND CORRUPTION IN INTERNATIONAL ENVIRONMENT

It has been identified that corruption is caused by individual poverty, type of government, availability of corruption opportunities, lack of ethical values of public officials and citizens, and lack of deterrence. Advancement in communication breakthroughs

in science and technology and liberalisation of international financial markets enhanced the explosion in global interactions and made transferring and hiding the proceeds of corruption from one country to another easier (Sampford, Shacklock and Connors, 2008). Tanzi, (1998) informed that globalisation has brought individuals from countries with little corruption into frequent contacts with those from countries where corruption is endemic. In the recent past, there have been concerted efforts to stem the trend of fraud and corruption in the international arena. The various strategies employed can be broadly categorised into three: Preventive, Detective, and Corrective strategies.

(a) Preventive Strategy — Prevention of fraud is a key strategy. Fraud must be prevented before it happens.

1. Political openness. This encompasses access to information, freedom of association and press, and creation of enabling atmosphere for citizens to criticise and vigorously debate government policies and engage in peaceful protest. The type of political system practiced by a nation determines the level of political openness. Corruption Perception Index consistently shows that the countries that have long established democracies appear to be less corrupt (U4 n. d.). This political openness has been appreciated and in practice United States, Canada, United Kingdom, Australia and South Africa.

2. Criminalisation of corrupt practices. The United Nations Convention Against Corruption (UNCAC) requires (among others) member states to criminalise corrupt acts under domestic law and to define corrupt activities to include bribery, public funds embezzlement, trading in influence and concealment and laundering of the proceeds of fraud and corruption. Other regional conventions also enacted law in this direction. They include African Union Convention on Preventing and Combating Corruption, The Organisation of Economic Cooperation and Development Convention (OECD) on Combating Bribery of Foreign Public Officials in International Business Transactions, just to mention a few. These conventions are aimed at passing criminal judgement on corrupt leaders and individuals and corporate organisations. The ultimate goal is to ensure deterrence. However, survey showed that awareness of OECD convention among international businessmen is extremely low (OSCE, n. d.) while some of the requirements of regional and international conventions are not fully implemented due partly to domestic pressure.

3. Gender Integration. In the recent past, involvement of women in politics and public sector in some African countries has been on the rise. Some development agencies mandate governments to integrate gender in public life by increasing women’s representation in the public sector and into country development frameworks as a precondition for development assistance (World Bank, 2001). This is premised on the few studies positing that women are less corrupt than men (Dollar, Fishman and Gatti, 1999). The impact of this strategy has not been made known yet especially in countries with higher number of women in public offices.

4. Involvement of other Governments and Non Governmental Organisations (NGOs) in election monitoring. All things being equal, acceptance of a government of a nation by global community is a function of the credibility of election that put the government in power. Every developing nation strives to conduct credible election so as to be recognised and accepted.

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However, this strategy has a negative bearing on the sovereignty of nations.

5. Declaration and Monitoring Financial Assets of Political Leaders. This is expected to effectively check abuse of office. In the US, S.101 of Ethics in Government Act, 1978, Declaration of Assets Act, Nov 11, 1990 of Turkey and Part IV of The Public Officer Ethics Act, 2003 of Kenya are a few examples. While declaration of assets is compulsory for all public servants in Singapore, not all category of public servant are required in OECD countries. ‘Managing the risk of politically exposed persons remains challenging, …banks are simply greedy or under pressure to meet targets, which leads to politically exposed person accounts being opened by the banker turning a blind eye on regulations’ (ICJS, 2008 p.179).

6. Institutionalising corporate governance. In the US, Sarbanes Oxley Act was enacted in response to the high-profile Enron and WorldCom financial scandals to protect shareholders and the general public from accounting errors and fraudulent practices in the enterprise. In UK, the revised UK Corporate Governance Code, June 2010 seek to protect the interest of all company stakeholders. Absence of perfect market (efficient market hypothesis) and the cost of monitoring implementation in companies are the key problems of corporate governance (The First Group, n.d.).

(b) Detective Strategies1. Anticorruption bodies. Several countries have taken

this seriously. National Fraud Authority (NFA) in UK, Economic and Financial Crime Commission (EFCC) in Nigeria, Office for the Suppression of Corruption and Organised Crime in Croatia, Central Service for Prevention of Corruption in France. Meanwhile. most governments have been accused for establishing anti-corruption agencies hurriedly in reaction to a political emergency, the agencies so established are often perceived as a technocratic answer to a political problem (Smilov and Tisné, 2004). It has also been argued that anticorruption agencies are frequently used to intimidate and suppress political opposition (Heal Nigeria, 2008).

2. Compliance and enforcement. United Nations International Group for Anticorruption Coordination (IGCAC) comprises anticorruption advocacy groups (NGOs) and the United Nations. This provides platform for best practices, experiences, information and support for UNCAC members (International Group for Anticorruption Coordination, 2008). Other regional anti corruption conventions are tailored through these strategy. However, accepting regional and global anticorruption assistance is often perceived as encroachment into the sovereignty of member nations. It creates suspicion, and are often viewed as an indication of a weak state and regarded as partial surrender of national sovereignty (Webb, P., 2005 p.228). assets were not followed in Peru (United Nations Office of Drug and Crime, 2007 p.24-25). Other anticorruption strategies include providing aid to support democratic reforms, more competitive economies and improved governance (Klitgaard, R. 1998). Award of development contract by the donor nations, investigating and prosecuting bribery overseas, application of computer technology to track suspicious fund and exclusion of suppliers convicted of fraud and bribery from the tendering procedures. Coordination, (2008). Other regional anti corruption conventions are tailored through these strategy.

However, accepting regional and global anticorruption assistance is often perceived as encroachment into the sovereignty of member nations. It creates suspicion, and are often viewed as an indication of a weak state and regarded as partial surrender of national sovereignty (Webb, P., 2005 p. 228).

(c) Corrective Strategy1. Prosecution, penalty and sanction. While law enforcement

increasingly depends on international cooperation to gather evidence and apprehend fugitives, the mechanisms for mutual legal assistance (MLA) and extradition remain inadequate. Despite stiff penalty against companies for bribery, more cases are still being revealed year on. $1 billion penalty was imposed on global Germany Company; Siemens, by US courts in 2008 and Daimler was fined 136 million euro recently.

2. International cooperation. This include mutual legal assistance against fraudster, forensics investigation assistance, tracing the flow of corrupt assets, freezing and seizure of loot, and confiscation of proceeds of fraud and corruption. International cooperation led to the establishment of Europol, Eurojust, Interpol. However, effectiveness depends on individual member states.

3. Asset recovery. The procedure for asset recovery is cumbersome. Assets so recovered were in some instances suspected of being poorly utilised. For instance in Nigeria, asset utilisation monitors experienced some constraints while standard budgetary procedures for expending the recovered were ignored.

AREAS OF OUTSTANDING PRACTICE AND THE EXTENT TO WHICH THEY ARE TRANSFERABLE TO INTERNATIONAL CONTEXT

Over the years, some countries have evolved means of stemming fraud and corruption within their societies. These strategies form the basis for combating corruption at the global level.

1. Collaboration with Civil Rights and Non Governmental Organisations. These groups play crucial roles in advocacy and awareness about corruption and anti-corruption policy especially by exerting pressure on government and the private sector for greater transparency and accountability. They independently monitor the conduct and performance of institutions and officials and of policy implementation. The most influential and well-known NGO working primarily on anti-corruption issues is Transparency International.

2. The Extractive Industry Transparency Initiative (EITI). This was launched in UK in 200 society to increase the transparency of revenue flows. The initiative encourages the prudent use of income from natural resource for the benefit of a country’s citizens and encouraging high standards of transparency and accountability in public life (EITI, n.d.).

3. Annual Fraud Measurement. In order to tackle a problem as complex as fraud and corruption it is important to measure the scale of the problem and identify those vulnerable and endemic areas requiring more attention and action. It can also be used to assess the effectiveness of counter measures put in place (NFA, 2010: 6-9). In recent times, various tools have been applied in measuring fraud and corruption:

i) Annual fraud estimates. This is usually done at national levels. In 2008, fraud cost the UK £30.5billion (NFA,

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2010, p.6).ii) Transparent International Corruption Perception Index

(CPI). This ranks countries in term of perception of corruption in their public service and among politicians. It assists highly rated countries to work harder in curbing fraud and corruptions in their countries.iii) Other corruption indices include Global Corruption Barometer, Bribe Payers Index Global Competitive Report and Business Environment survey.Measurement of fraud and corruption involves political will by

government, the expertise and skill, and freedom of expression of citizens.

4. Whistle blowing. One of the most powerful strategies employed to expose corrupt activities is whistle blowing (Johnson, R. 2004). However speaking out has led many whistle-blowers to be punished. A study of whistleblowers in the USA found that: 100% were fired — most were unable to find new jobs, 17% lost their homes, 54% harassed by peers at work, 15% were subsequently divorced. It offers one successful model for building integrity and common industry standards in key sectors of the economy. The EITI brought together oil, gas and mining companies with governments and civil 80% suffered physical deterioration, 90% reported emotional stress, depression and anxiety and 10% attempted suicide (Irish Times, 2000). Many fraudulent and corrupt acts have been exposed through this means. To encourage citizens however, they must be protected. In United Kingdom, Public Interest Disclosure Act of 1998 and Whistleblower Protection Act of 1989 is a Federal law in the US. Many more nations have followed suite.

MODEL FOR COMBATING FRAUD AND CORRUPTION IN PUBLIC LIFE IN THE INTERNATIONAL CONTEXT

Since causes, consequences and perceptions of corruption constantly change, strategies for combating the menace will also change from time to time. The degree of fraud and corruption varies from one country to another and from one sector/industry to another. Each type of fraud requires different strategy to tackle. Developing a generalised or global counter fraud and counter corruption model appear not to be feasible, but specific models may be developed to counter fraud and corrupt practices in specific areas within public sector, foreign aid, international banking, international business, money laundering, fake and counterfeit drugs, public procurement, disbursement of humanitarian relief material etc. Since there is no single world police, enforcement of global or regional conventions on corruption and money laundering activities is largely voluntary (Webb, P., 2005). It is worth of note that there are four key factors that are crucial to developing an effective anticorruption strategy in all areas of life; evaluation of the scale of problem, political and strong public supports, legal backing enabling law with anticorruption agencies, and enforcement and feedback (Edgardo and Pradhan, 2007).

CONCLUSIONPolitical will of governments and strong support by the

public are the first step for combating corruption. Anti-corruption programme could be so successful to correct the bad social, political and economic injuries of the past by:

a) Supporting economic liberalisation.b) Promoting public service reforms.

c) Removing administrative barriers for businesses;d) Strengthening the penalties and control;e) Encouraging co-operation with international institutions and NGOs; and f. Involvement of citizens and the media.Strict adherence to the Seven Principles of Public Life

which include Selflessness, Integrity, Objectivity, Accountability, Openness, Honesty, Leadership and Codes of conduct, will in no doubt, rid the entire system of the scourge of fraud and corruption, even on the international scene.

In conclusion, experience has shown that there is no fraud without auditor’s knowledge; no corruption excludes accountant and no money can be laundered without a banker. If these blames hover around the chartered accountants, then the global fight against fraud and corruption start from their table.

REFERENCES1. Balogun, M. (2001) Tracking Ethical Compliance and

Violations in Government: Contemporary Approaches and a Research Proposal, Asian Review of Public Administration, 13(2). Retrieved May 24, 2010 from http://unpan1.un.org/intradoc/groups/public/documents/EROPA/UNPAN008232.pdf

2. BBC (2006) The Cost of Corruption in Africa. Retrieved 26 May, 2010 from http://news.bbc.co.uk/2/hi/africa/4723572.stm

3. Bhargava, K. (2003) Challenging Corruption in Asia: Case Studies and a Framework for Action, Washington, DC.: World Bank. Retrieved 22 May, 2010 from http://site.ebrary.com/lib/portsmouth/Doc?id=10046592&ppg=160

4. Caiden, G. (2001) Where Corruption Lives: Governance and Corruption in West Africa, Bloomfield, CT, USA: Kumarian Press, Incorporated, 2001, p.112. Retrieved on May 23, 2010 from http://site.ebrary.com/lib/portsmouth/Doc?id=10048013&ppg=124

5. Caiden, G.; Dwivedi, O.; and Jabbra, J. (2001) Where Corruption Lives, Kumarian, Bloomfield CT: Kumarian Press.

6. China Daily (2007) Premier Wen Vows to Fight Corruption of Officials. Retrived on 24 May, 2010 from: http://www.chinadaily.com.cn/china/2007-07/10/content_5424937.htm

7. Dollar, D.; Fishman, R.; and Gatt i , R. (1999) Are Women Really the “Fairer” Sex? Corruption and Women in Government, Working Paper Series. Policy Research Report on Gender and Development: World Bank. Retrieved 30 May, 2010 from http://www.worldbank.org/gender/prr/wp4.pdf, 03/11/03, 15:25.

8. Economic and Financial Crime Commission (2010) High Profile Cases, Retrieved from http://efccnigeria.org/index.php?option=com_content&task=blogsection&id=9&Itemid=72

9. EITI, (n.d.) The EITI Principles and Criteria. Retrieved 30 May, 2010 from. http://eiti.org/eiti/principles

10. Heal Nigeria (2008) of Opposition Party and Anticorruption, Retrieved 24 May, 2010 from: http://healnigeria.blogspot.com/2009/12/of-opposition-parties-and-anti.html.

* Mr. Olasunkanmi Mufutau, B.Sc., ACA, CISA, works at Power Holding Company of Nigeria while Mr. Alaka Abayomi, B.Ed., M.Ed., is of the Institute of Chartered Accountants of Nigeria.

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the 46th President of the Institute of Chartered Accountants of Nigeria (ICAN), who is also the 16th

President of Association of Accountancy Bodies in West Africa (ABWA), Major General Sebastian Achulike Owuama (retd.), has emerged the pioneer President of the newly inaugurated Pan-African Federation of Accountants (PAFA)/Fédération Panafricaine des Experts-Comptables (FEPEC).

He was elected the President of the new body at the just concluded PAFA Launch conference held at the Le Meridien

President Hotel, Dakar, Senegal from May 4 to 6.

Present at the ceremony were the President of International Federation of Accountants (IFAC), Goran Tidstrom; President of Order National des Experts Comptables et Comptables Agrees du Senegal (ONECCA Senegal), Mamour Fall; Director, Core Operational Services, Africa Region of World Bank, Edward Olowo-Okere; and other seasoned professionals from not less than thirty seven professional accountancy Institutes from 35 countries across Africa.

Just before leaving the country, Owuama had disclosed during his welcome address at the Annual Dinner and Awards of ICAN on Friday, 29th May 2011, that he, in his capacity as the President of ABWA, would

pledged that the Board of PAFA would give purposeful leadership which would engender the realisation of the objectives for which the body was formed, prominent among which is the development of Accountancy in Africa. He also stated: “As the economies of African countries continue to grow, the contribution of the accountancy profession to sound corporate and public sector financial reporting and good governance is now more important than ever. PAFA will accelerate the development of the profession and strengthen the voice of the profession

within Africa and worldwide.”Apart from Owuama, the Vice President

of ICAN, Professor Francis Ojaide, was also appointed a member of Council of PAFA. While the President of PAFA is Nigerian and its Vice President is Tanzanian Dr. Mussa J. Assad of National Board of Accountants and Auditors, Tanzania, the secretariat of the new body will be hosted by the South African Institute of Chartered Accountants in Johannesburg.

Major General Owuama who is acclaimed as the first retired Army General to lead a professional accountancy body, was educated at St. John’s (RIMI) College, Kaduna from 1961 to 1965; Holy Ghost College, Owerri, Imo State from 1966/67 to 1970 for his Higher School Certificate; University of Nigeria, Enugu Campus from

Owuama Elected Pioneer President of Pan-African Federation of Accountants

lead some key members of ICAN to Dakar, Senegal in the first week of May, for the inauguration of PAFA.

The formation of PAFA had been inspired by the encouragement of IFAC, the global organisation for the accountancy profession with members and associates in 125 countries, and World Bank both of which were in favour of sub-regional accountancy bodies on the African continent coming together under as a united Pan-African Federation of Accountants for the purpose of speaking with one voice on accountancy issues. This led to a series of interactions

between stakeholders, during which a draft Constitution and Bye-Laws were prepared by a Steering Committee set up by the regional groupings. The effort came to fruition last Friday, May 6 at Dakar and Owuama was picked to be the pioneer leader of the continental body.

IFAC has described the PAFA launch as “a historical event for the accountancy profession and the African continent”. Said Goran Tidstrom in an IFAC release: “The formation of PAFA demonstrates the commitment of the African accountancy profession, acting in the public interest, to strengthen its means of collaboration and to further develop the profession to support the emerging economies on the continent,”

As the PAFA President, Owuama

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1971 to 1975 for his B.Sc. Accounting; Norwich City College of Further & Higher Education Norwich Norfolk, England from 1980 to 1982 for his ACCA Professional Examinat ions; London School of Accountancy & Emile Woolf College, London from 1982 to 1984 also for ACCA; as well as London Business School (for the Senior Executive Programme).

His professional training afforded him the opportunity to acquire rich professional experience and his career spanned over three decades. He was at the East Central State Audit Department from 1972 to 1974). He was also Audit Trainee, Benue Plateau State Audit Department (1975 – 1976); Accounts Supervisor, Central Bank of Nigeria, Enugu Branch (July – Dec. 1976) Audit Officer, (UCA) Command Finance Office, Apapa, Lagos (1978 – 1980); Head of Department, Professional Accountancy, Nigerian Army School of Finance & Administration, Apapa, Lagos; Staff Officer, (Grade

2) – Command Finance Office, Apapa, Lagos (1987 – 1990); Managing Director, Nigerian Welfare Insurance Scheme (1991 – 1995); Assistant Director, Nigerian Army Finance & Accounts – Hq 2 Mechanised Division, Ibadan (1996 –1998); Acting Commandant, Nigerian Army School of Finance & Administration (NASFA), Apapa (January – July 1999); Deputy Commander, Command Finance Office, Apapa (July 1999 – July 2001); Commander, Command Finance Office, Apapa (July 2001 – June 2003); and Director, Army Finance and Accounts (July 2003 to December 2005).

He has served in almost all the committees of ICAN since his election to Council in 1995. He was Member, Investigation Panel – Federal Government Owned Insurance Companies (1986 – 1987); Member, Investigation Panel – Funds of Epe Local Government (1998); Chairman, Public Accounts Committee – Imo State (1987 – 1990); and Vice

Chairman, Ibadan Golf Club, Ibadan (1997 – 1999).

Not only was General Owuama decorated with the Corps Medal of Honour, which is the highest Medal for any officer who has risen to the top to command his corps, he was also in retirement, on July 5, 2010, decorated with the Distinguished Post Service Medal, the highest medal given to any army personnel, who after retirement has distinguished himself in other fields of human endeavour.

General Owuama is not all about work and military service. He is also a great family man and he is happily married to Mrs. Theresa Chizomam Owuama. The marriage is blessed with three very successful children. His hobbies include sports, reading and adventure. He is a keen and experienced golfer.

After his election, Owuama speaks to The Nigerian Accountant about the challenges of PAFA and the newly elected Nigerian Government.

Congratulations on your election as the pioneer President of Pan-African Federation of Accountants (PAFA). Can you let us into how Nigeria clinched

the position?It is interesting because for a while now, that is since

2006, the issue of formation of Pan-African Federation of Accountants has been in the foreground — right from the first meeting we had in Nairobi, Kenya in 2006, through the contact group in Cotonuo, in Johannesburg, in Japan and finally in Dakar, Senegal. I was privileged to be part of PAFA steering Committee that was set up in Addis Ababa to provide guidance for the drawing up of PAFA constitution and ballot and it took quite a while. By the time we finished and we were set for the launch of PAFA, a date was fixed and venue was Senegal.

Going by PAFA constitution, we couldn’t give the presidency straight to any country just like that. There must be five countries that would produce an individual that would be subjected to an election. Nigeria happens to be among the five most prominent professional bodies in Africa. We have SAICA — the South Africa Institute of Chartered Accountants, Institute of Chartered Accountants of Nigeria, the Kenya Institute, there is a second Professional Body in South Africa and then Ghana in that order. They now brought their candidates who must be either Vice President or President of the Professional bodies.

Now, the second batch of members to form the Board is to

PAFA Presidency Will Help Rebrand Nigeria — Owuama

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be picked on regional basis. We have five regions in Africa, east, west, north, south and central. Each of these regions was to nominate one person and to get this nomination, contending bodies were equally subjected to votes. Like in the West African sub-region, Togo, Senegal and the Gambia contested and Togo won. At the end of that round of exercise, five more persons joined the PAFA Board. We now had ten. So, out of that ten, anybody could vie for any position and it would be subject to election.

Your country of origin no longer played a dominant role because you had to sell yourself to the participants. You were given two and half minutes to introduce yourself and tell the member bodies who you are and what you are capable of achieving for PAFA if you are voted into the Board.

They started with the position of Vice President and out of the ten, three people indicated their willingness to contest for the position of the Vice President. They were representatives of Tunisia, Kenya and Tanzania. They made themselves available to contest for the position of Vice President and they were given time to talk to people on why they felt they were competent and fit. Some came up with their academic profile and experiences they gathered over the years in running similar institutions, and so on and so forth. So, when they finished with that, they now came to the position of the President. They said the first person on the list is Major General S.A. Owuama from Nigeria. They said tell us why you think you should be PAFA President and they gave me two and half minutes.

At the end of that exercise, they called for more nominations and nobody came out. Even though there was only one candidate for the Presidency, the constitution of PAFA says candidates must be voted for. So, they conducted the voting exercise. Participants came out and filed to pick ballot papers and voted. They counted the votes for the Vice President slot, Tanzania won. When they came to that of the Presidency, out of thirty seven, thirty five voted for me while two abstained. One of the countries who wanted to be PAFA President, unfortunately, could not make it to the Board level and if you are not a member of the Board, you cannot become President of PAFA. Apart from coming from a particular nation, you must be subjected to an election. That is how God did it.

As the pioneer President of PAFA, what do you think would be the challenges ahead of you and what would be your focus in your Presidential years?

Yes, as the pioneer President of PAFA, there are lots of challenges ahead in the sense that a good number of African countries do not have recognised professional accountancy body, just like we have ICAN here in Nigeria. So, part of the challenges is to assist those countries to attain legislative and statutory back up. Among some of them who already have, they have a very low level of vibrancy. They need some margin to move forward and at least put themselves in a position where they can seek for admission as IFAC member body. These are the immediate challenges, not to talk of the issue of diversity in language. We have the francophone, we have the Anglophone and those who want Arabic to be included and so on, and getting the necessary infrastructure in place for the new body. The challenges are there but they are not insurmountable.

I am an insider. I have been a member of the steering committee and I know the challenges we have. Even as ABWA

President, out of the nineteen member bodies, we only have five who are IFAC members. So, we have to upscale the knowledge and professionalism in all these member bodies to beef them up and there are financial constraints. There are issues of legislative back up.

A new government will be sworn in on 29th May, 2011 in Nigeria. What do you think should be the agenda for the in-coming government?

I don’t believe in having about seventeen or twenty-point agenda. Let us just face two issues during the first one year — power and security. You know power is like the blood we transfuse into the economy. When there is power there will be other things. You can imagine those who run businesses on generator. Apart from the health hazard, the cost of maintenance is there. A litre of diesel is N180 today. Can you imagine how many litres that will be used in a month? The overhead cost is much. What about factories that have giant generators? How can they make profit? It is not possible. A 33,000 litres trailer multiplied by N180, what does that give you? Just to generate power that other countries take for granted.

And the issue of security is also there. If security of people’s lives and property are not guaranteed, there can’t be influx of direct investors into the country. If within the first year, the issue of power and security is addressed, I think all other things will naturally fall into place. Then, we can now begin to talk about schools, roads, hospitals and so on. If you go to a first class hospital and there is no power to operate equipment, of what use is it? If you go to a first class hospital and there is no security of lives and property, of what use is it? So, power and security are the most fundamental things I think the government should address.

Recently, the Central Bank of Nigeria (CBN) came up with a proposal that starting from 1st June 2012, no individual will be allowed to withdraw more than N150,000 in a day, while corporate organisations can’t withdraw more than N1million naira in a day. What is your reaction to this?

If we are to act like a typical 21st century country in any part of the world, we should now be thinking of doing away with cash. The idea is good. It will bring about a high dose of transparency and integrity in our financial system because it will now be easy to trace the flow of funds and all illegally-got funds can now be followed and tracked. It will make auditing easier. It will be easy

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to know when money came in and how it went out. It will not be lost in transit as it were. It will bring a good measure of credibility and integrity and counter the issue of money laundering and financing terrorism.

But then on the other side, look at the typical Nigerian set up. For a cashless society to thrive, the formal market must be very vibrant. It must have a high level of literacy. Let’s take a typical example of a cattle herdsman from Kano who wants to bring about thirty or forty cattle in a trailer down to Lagos. Let’s say cattle costs between N120,000 and N150,000 each and the people to whom he wants to sell them are local people who don’t know how to read and write, they may not even have bank account. They carry their money in purses or bags fastened to their waists or have other ways of securing them. How do you now integrate these

people into that system? How will you tell a cattle rearer who moves from one place to the other that if he sells at a particular place, he should take the money to a bank. These are some of the practical problems.

Let me give you an example in my state. A woman who deals in palm oil and has about three or four empty drums in a pick-up van and goes to a big market with a bundle of cash to buy palm oil. She buys two jerry tins from a seller, three tins from another and so on like that. Let’s assume that a tin of palm oil is N15,000 and she needs about 30 tins to fill a drum, how many tins can she buy with just N150,000? If she starts withdrawing N150,000 everyday and she needs about one hour to go to the bank and collect N150,000. The next day she does the same, it will become difficult for her and the people she wants to do business with are not ready to collect a cheque from her.

These are the problems inherent in the type of society we are. The level of illiteracy will pose a challenge. Maybe the formulators of this policy will have a way of working round this challenge; otherwise this is a noble idea. Alternatively, they can increase the threshold of an individual to N500,000. I am not talking about the salaried worker, I’m talking about the businessmen and women. These are the people who go to the interior to buy goods and bring them into the cities.

Maybe they have other ways of extending the Micro Finance and other facilities to the rural areas. Then rather than just push the policy and sit back, they should closely monitor it such that it doesn’t contract the economy. The economy should grow and expand but when you have restrictions on a, b, c, d and you do

not have alternative facilities to take care of the challenges pose by them, it is going to contract the economy.

History was made in ICAN on Wednesday 11th May, 2011 as the Institute changed its election process from manual to e-voting. You declared the e-voting portal open on that day at Amuwo Odofin ICAN Centre. What brought about this idea and what are the benefits?

ICAN is a first class professional accountancy body. It leads the pack and now we have established our leadership position even in the African continent. ICAN is not shying away from innovations that are of relevance to modern day operations. We are technology-driven. We are gradually moving into a paperless society. Everything is done online. You can have conference calls;

you don’t have to be moving around. And now we have progressed from e-balloting introduced sometime ago to e-voting, so that ICAN members in the U.S.; in the U.K. and any part of the world, who are financially up to date and who have updated their profile are eligible to vote. I have cast my vote, without having anybody coming to canvass for vote. Even if I promise you that I am going to vote for you, the Registrar who was there with me and helped me to open the portal did not know the person I voted for. So, there is the element of transparency and integrity and fairness in it. When you win, you know you win.

So, it has changed the way ICAN conducts its election tremendously and it is for the better. Why am I saying this? The Institute of Chartered Accountants of Nigeria has a rancor-free, hitch-free succession pattern. You know in advance when you will be President or Vice President or anything for that matter. We are a pacesetter in this and we have even recommended this system of succession to other professional bodies and in fact, to government. And we are moving ahead of the pack. That is

why I said it is now time for us to rely on technology to improve our voting system. People do not have to physically carry ballot papers from place to place; you can stay where you are and cast your vote. I think it is one of the greatest things that have happened to the Institute and since the election has been declared open and people started filing in their votes, nobody has heard of any individual going round to campaign on tribal, religion or whatever basis. It has really diffused the tension and the charged environment.

If this idea is as noble as you think it is, don’t you think one should recommend it for Nigeria?

Well, Nigeria will be ripe for it in the next fifty years! (laughter) But what I want to say is this: For Nigerians in Diaspora who have been desirous of being part and parcel of our electoral system, we can start from them. They are looking towards it and they have the power and facilities. I think INEC can start with capturing the votes of millions of Nigerians in the Diaspora. Let these people have facilities to cast their votes. They can give them about a week to cast their votes in advance. In U.S., their soldiers on the war front all over the world

“We should now be thinking of doing away with cash. The idea is good. It will bring about a high dose of transparency and integrity in our financial system because it will now be easy to

trace the flow of funds and all illegally-got funds can now be followed and tracked”

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cast their votes. So, if we as a nation can start electronic voting in 2015 for

Nigerians in diaspora, it is good. They are literate. They have the facilities. All they need do is to log on to the INEC website and the day the results are to be collected, INEC will just open the portal. I think it is a good way for INEC and the organisers of our election to make people in the diaspora to vote. Do you know that many Nigerians in the diaspora actually came home to vote during the elections? That shows how desirous they bare about participating in the electoral system. We have representatives of the various political parties in the diaspora. I’m sure we should have up to six million Nigerians who are interested in the electoral process of this country. It is a good way to start.

Then, why did you say it would take Nigeria about fifty years to do this?

It is because the infrastructure is not there. Look at my village, the type of electricity we have is from the sun. If there is no sun, there is no electricity. What of the multitudes who move from one agricultural set up to the other? So, these are the challenges we are talking about. And the level of illiteracy is there. Somebody who doesn’t know how to sign cheques, how do you tell him to go and operate a computer? It is a good idea but not until we have about 75 to 80 percent of literacy level.

From what you have said so far, it seems education also would play an important role in our attaining vision 20-20-20 we have been talking about.

Yes education can come. But we need power. If we have schools that have no light for students to read, there is no light to iron their uniforms, there is no light for factories to produce cloth, of what use are such schools? Then, security. If you send children to school and they cannot come back safely, they are kidnapped on the way… So, we cannot dispense with these two issues. All the other issues will fall in place. If we can address the issue of power and security, all other things can come. Education can come. We can also be talking of constructing good roads, because we also need power to turn the plant that will produce the asphalt they will use for the roads.

Let’s come back to PAFA. As the giant of Africa which Nigeria is, what is going to be the relationship between Nigeria and PAFA, even though PAFA Secretariat is located in South Africa?

Whether PAFA relates with the Nigerian government directly or not, the mere fact that a Nigerian is the pioneer President of PAFA tells a lot about the perception on Nigeria and Nigerians. Hitherto, Nigerians were only discussed in the negative. Once, you mentioned Nigeria in the international community and the perception was negative. But having a Nigerian sit on a world-class professional body is a noble achievement. We are talking of rebranding; this is an integral part of rebranding. South Africans no longer see Nigerians as drug dealers in South Africa, or immigration offenders, or 419ners. They now see Nigerians from

a professional angle, high level professional angle. And this is going to change this old bias and prejudice about Nigeria. When you carry Nigerian passport now with this type of positive things coming, people will look at you positively.

PAFA Presidency will definitely help rebrand Nigeria because for South Africa, Kenya in North Africa and other African countries to see a Nigerian become PAFA President, it means they now see that the people they had thitherto seen as 419ers actually have virtues of honesty, integrity and so on. They know that before you can belong to such a body as this, you must have integrity, honesty and honour among your fellow professionals, before thirty seven of them would say go for the PAFA Presidency unchallenged. It

is the height of trust. They were more or less saying, go because we see in you some qualities we believe we can leverage to drive the PAFA process.

So, one single event may kick-start something and may have domino effect on other positive things that will be coming. If we start with the African region now, wherever a Nigerian goes, he’s seen in a positive way, especially in South Africa. If we start from the professional angle, changing those perspectives, it is going to do a lot for us, so that others who are coming to the continental arena will also do same. You know some of these things have ripple effects.

They will be pointing to it that if a Nigerian can be President of this, he can also be President of that. That level of confidence will permit other aspects. That is the way I look at it.

What is your advice for PAFA member nations?My advice to PAFA member nations is to have faith, trust and

confidence that the voice of Africa as a continent will now be heard in the international arena. So, they should be supportive of PAFA. I know the next one or two years are going to be tough for PAFA if we look at it from the perspective of funding. The Board is yet to meet to determine how much dues will be paid by member bodies. Even, after having determined that, financial constraint will make it difficult. Only those who have the muscle will pay. But we have to run PAFA. It is going to be a challenge.

How do you feel being the pioneer PAFA President?Have I even given it a thought? I’m rather humbled that people,

professional colleagues from the continent have confidence and trust in me. As I have said elsewhere, it puts a lot of pressure on me. This is the pressure of fear of failure. It has become an obsession. You don’t want to fail, you want to succeed because expectation is high. If the expectations are high, what do you do? That means you burn the candle at both ends 24/7 to make sure you don’t fail.

It is one thing to get to the top, it is more challenging to remain there. Rather than jumping up and down out of excitement, I said God should give me wisdom, the resources and good health to shoulder this responsibility.

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The term budget has been defined in several ways, each emphasising on the issue of planning and control of future activities. It

could be viewed as a process of setting performance standard for future activities so as to exercise control (on cost, revenue, income and other financial or non financial activities). It could also be viewed as a means of obtaining accountability and control over the use of money or over all activities. These and many other definitions ascribable to budget are emphasising the need for good planning and control of financial and non-financial activities by all the three components of an economy: individuals, firms and governments.

The definitions also show that since resources are scarce, there is need for proper and adequate budgeting of the scarce resources and sincere implementation of the budget in order to utilise the scarce resources to achieve maximum satisfaction. Budget is a very strong instrument for managing scarcity by all the three components of an economy!

This paper attempts a critical review of the 2011 Budget presented by His Excellency, the Executive Governor of Kano State, Sardauna (Dr.) Ibrahim Shekarau to the State House of Assembly. While Sardauna Shekarau is implementing the budget for five months (1st January to 28th May, 2011), the governor-elect, Engineer (Dr.) Rabiu Musa Kwankwaso, is to implement it for seven months

(29th May to 31st December, 2011). The critical review is conducted with a view to highlighting the “winners” and “losers” of the budget so as to draw the attention of the governor-elect to areas of the budget that need some “panel beating” and those needing objective consolidation if his campaign promises are to be reasonably addressed in the first 200 days of his administration, using the instrument of the budget presented by the out-going governor to the State House of Assembly for passage into law.

“WINNERS” AND “LOSERS” OF THE BUDGET

Some of the key provisions of the Budget of Continuity 2011, as Sardauna Shekarau tagged it, are hereby reviewed:

1. The Phasing of KSRD: It is in this last budget of the Sardauna Shekarau’s administration that it thought of breaking down the 10-year Kano State Road-map for Development (KSRD) into three phases: with the first phase covering 2011–2014. Thus the 2011 budget, the last for the administration, is the beginning of Phase One of the implementation plan, as if the administration is just starting! The budget is too submissive to the ‘blueprint’ developed by the Nigerian Economic Summit Group on Vision 20: 2020, as if the Summit has been doing anything spectacular for the Nigerian economy, which the Kano state economy is to emulate. In short, this budget suggests

that the KSRD has been a “loser” since adoption, as it is only now that its first phase of implementation would begin! Would Engineer Kwankwaso have any faith in the KSRD? Would he implement it up to its planned second phase, when the first term of his administration will end? Although the ethics of continuity demands that he carries on with the Road-map, there is need for him to find out why Sardauna Shekarau delayed its implementation to the tail-end of his administration.

2. Development/Capital Projects: The total size of the budget is N109,472, 231,434, lower than that of 2010 by N1, 219,120,036. The capital component of the budget: N58,516,979,286, constitutes 53.5% of the total budgetary allocation, which is far better than that of the Federal government where capital expenditure allocation is just 25% of the total! If strictly complied with, in actual sense, development projects could be said to be part of the “winners” of the 2011 Kano State budget. If the governor-elect would ensure the actualisation of the budget as envisaged by the out-going administration of Sardauna Shekarau, a lot of wealth and employment would be created in the first 200 days of his administration and that would go a long way in fulfilling his campaign promises to the unemployed youths and the poverty-stricken good people of Kano state. As development projects are rated as winners of the 2011 budget, Eng. Kwankwaso should

Winners and Losers of Shekarau/Kwankwaso 2011 Budget By KabirU isa dandaGo

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implement the budget to such a level that he would count himself as the most successful governor in the first 200 days of the 4th dispensation of the current civilian government in Nigeria.

3. Funding Sources of the Budget: The estimated recurrent revenue receipt of N84,591,244,914 is mainly from the federally collected revenue, while the expected capital revenue receipt is from VAT and other external sources. His Excellency, the Governor, has not taken any courage or pride to announce, in the budget speech, how much the state government expects to generate from its internal sources of revenue in 2011, thereby marginalising the internal revenue generation effort of the government. This casts IGR (Internally Generated Revenue) as a “loser” of the ‘Budget of Continuity’! IGR is one of the criteria the Federation Account Allocation Committee (FAAC) uses in the horizontal sharing formula of the amount credited to the Federation Account and, so, the higher a state’s IGR, the higher its share from the Federation Account. Another thing of note is the fact that it is only on the IGR sources that the state government has absolute control!

This marginalisation of IGR is a very big challenge to the governor-elect, as he has made many promises to the electorate who are now anticipating “paradise” on earth from a governor that is bound to be constrained by scarcity of funds to provide for all the promised goodies, especially in the first 200 critical days of the administration. It is hoped that the in-coming administration would not be a “loser” in its first 200 days on the ground of scarcity of funds/resources.

4. Allocation to Agriculture: ‘The budget of Continuity 2011’ proposes an expenditure of N11.2billion (10.2% of total budget) to support activities in the agricultural sector, out of which N9.64billion (86% of the allocation) will be expended on capital undertakings, leaving just 14% of the allocated amount to cover personnel cost and other recurrent undertakings. If it would be possible for just N1,568,000,000 to cover the overheads and personnel costs in the state’s ministry of agriculture and related agencies for the whole of the budget year 2011, then capital projects/undertakings in the agricultural sector of the state should be accepted as “winners” of the budget! It is, however, expected that the massive

capital investment in Agriculture would pave way for accelerated mechanised farming practice in the state, from the 2011 onwards. This is a big challenge to the governor-elect.

Sardauna Shekarau took pride to say, during the budget presentation, that Agriculture provides succor and employment to more that 70% of the working population of Kano State, hence the commitment to fund the agricultural sector on a continuous basis throughout the seven and a half years of his stewardship! It is unfortunate that rather than investing the workforce of the State in the real sector for the production of high quality manufactured products, the state government is encouraging confinement of the vast majority of the workforce to subsistence and primitive farming. What the Kano state citizens need is a situation whereby a few of the working population are involved in mechanised farming (producing much to satisfy local demand and export excess), and the majority to be in the manufacturing/real sector and other sectors, to ensure speedy industrialisation of the state! Do I hear Eng. Kwankwaso say “yes, this is achievable before the end of 2014”?

5. Al locat ion to Heal th: The health sector was allocated a sum of N10.74billion, which is 9.8% of the total budget. Upgrading, expansion, completion and rehabilitation of primary healthcare facilities and structures across the state have been emphasised in the budget, and this is suggesting that sustenance of healthcare facilities and structures are part of the “winners” of the 2011 budget. But, on the other hand, killer diseases like HIV/AID, tuberculosis, leprosy, malaria, polio are to be fought from the perspective of curative and preventive efforts with a paltry sum of N127million for the whole of the year 2011! Sufferers from these diseases are clear “losers” of the budget, especially where the amount is not totally expended as budgeted.

The in-coming administration has made a lot of promises on healthcare delivery, especially for pregnant and nursing mothers. The citizens of the state are expecting a sort of “magic” on their well being, from the governor-elect, especially those that are suffering from a number of diseases, some of which have been mentioned above. The amount budgeted (N10.74billion), if actually realised and

committed to the provision of the facilities budgeted for, would go a long way in solving the medical problems the citizens of the state are battling with in the first 200 days of the in-coming administration.

6. Allocation to Education: The government proposes to spend 24.1billion on funding educational activities in the state, which accounts for 22% of the total budgetary expenditure estimate. This shows that the state government has maintained its effort at moving close to the UNESCO minimum standard (26%) on yearly budgetary allocation to education. In view of the fact that this sustained 22% allocation to education is one of the highest in the country (check that of the Federal and the other 35 state governments in Nigeria), we can consider education sector as a “winner” of the ‘budget of continuity 2011’. We should, however, be conscious of the need for the allocation to make tangible impact on all the objectives set and the issues raised on the educational sector of the state before we start praising the government for the relatively high allocation! This is where Eng. Kwankwaso’s second coming as a governor of the state is challenged the most.

Kano state is st i l l rated as an educationally disadvantaged state in Nigeria, despite all the relatively high budgetary allocation education sector enjoys. There are likelihoods of abuses or misappropriations of the amount being allocated as reasons behind the poor performance of the education sector of the state. Right from primary schools in the state up to the State University of Science and Technology, there are complaints of dilapidation of structures, poor staffing, poor teaching facilities, etc. These problems have slowed down the process of development in the educational sector of the state, forcing many potential school children to resort to des-schooling practice (becoming ‘yan daba), leading to mass failure of students in external examinations (Common Entrance, WAEC, NECO, etc), and producing substantial low quality indigenes of the state to higher institutions of learning. Engineer Kwankwaso has up to four years to reverse the trend, starting with the instrument of this year’s budget prepared by his predecessor, for him to implement in the last seven months of the year!

7. Allocation to Urban and Rural

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Infrastructure: This aspect of economic development of the State is a big “loser” of the budget as only N4.7billion (4.3% of the total budget) has been allocated to it, despite His Excellency’s recognition of the fact that “a significant proportion of our population resides in the rural areas”. The allocated amount is to be used on construction of rural roads (to provide access to goods and services), ensuring safe and clean rural water supply, rural electrification, etc. On rural electrification, for instance, only a paltry N420million was allocated for linking up more communities with the national grid, giving an average of less than N10 million per local government in the State! How far can the State go on rural electrification in the year 2011, considering the paltry allocation, corruption that might be there in the expenditure, and the uncertainty of realising and releasing the meager amount for the project?

One wonders as to how Eng. Kwankwaso would address this problem in the first 7 months of his administration, considering the mass support he enjoyed from the electorate residing in the rural areas. Would he call on them to exercise patience until 2012 when his first budget might prioritise them?

8. Allocation to Water Supply: This is another big “loser” of the budget, allocated a paltry sum of N1.8billion (just 1.6% of the total budgetary allocation)! The water supply sector of the State deserves a lot of attention from the 2011 budget formulators, preparers and implementers, in view of the fact that water supply was a cardinal campaign promise of His Excellency, Sardauna Shekarau, in the build up to the 2007 Election, through which the jinx for second term was broken in Kano State! The fact that complaints of wide gap between demand and supply of water still persists in most parts of the State suggests that mass allocation should be made to this sector so that, before the end of His Excellency’s tenure, the gap could be narrowed down to the minimum level possible. Again, the budget speech is silent about how much revenue is expected from those consumers that are presently enjoying the water supply from the State Water Board and how the generated revenue would be used. Is the amount expected insignificant for disclosure, thereby making the sector a

“loser” again in this respect?Eng. Kwankwaso, the governor-elect,

is a respected water engineer, and the people of the state are enthusiastically awaiting the taking over of the state government by the ‘bamu ruwa baba’, a sort of messiah on water scarcity in the state. It is hoped that the state would witness tremendous positive change in the water supply situation in the first 200 days of the Kwankwaso administration, even as the allocation to water supply is rated as a “loser” of this year’s budget.

9. Allocation to Environmental Management: Considering the fact that the government budgeted just N2.05 billion (1.88% of the total budget) to protect the state environment against

desert encroachment, gully erosion and ever increasing solid waste, we should see Environmental Management as a “loser” of the Budget of Continuity! As His Excellency rightly observed, environmental protection in Kano State with more than 10 million people is a key challenge, especially in the area of Waste disposal, promotion of a clean and safe environment, and ensuring the physical well being of the populace. The amount allocated, even if all would be realised and prudently used for the sector in the year, would not be enough to ensure effective environmental management. His Excellency has mentioned that the government has a Waste-to-Wealth Scheme that is enjoying some budgetary support, but the impact that Scheme has so far made to the state economy has not been disclosed. How much wealth

has been created or how much poverty has been reduced through the Scheme so far?

These are questions the in-coming administration should provide answers to, by the end of the budget year. As the administration works towards implementing the budget, effort should be made to ensure that the amount allocated to environmental management is well utilised and that the so-called Waste-to-Wealth Scheme is well actualised in the best interest of the state. We can recall the tiling, flowering and other environmental management efforts of the Kwankwaso administration of 1999-2003, hoping that those efforts would be revived for the development of greener environment that would be the

pride of Kano citizens in both the urban and rural areas of the state.

10. Allocation to ICT: Due to the Information and Communication Technology (ICT)’s increasing influence on the lives of the Kano State people, bringing economic benefits to them and shaping their future, the government proposes to spend the sum of N2.3billion (2.1% of the total budget) to fund certain vital undertakings in the ICT sector. This projects ICT as a “winner” of the budget, especially as it gets more more financial recognition than Environmental Management, Water Supply, Commerce and Manufacturing activities, Women and Social Development, and even the whole of the agencies for Shari’a implementation! It is, however, disturbing to note that up to now the Kano ICT Pack Project is yet to make any tangible impact on the lives of

“Personnel emoluments for top government functionaries: Commissioners, Special Advisers, Special

Assistants, First Ladies, etc, consume much more than Shari’a Implementation and the Ministry of Commerce, etc, put together! This suggests that there is an urgent need for the emoluments of political office holders to

be scaled down and their number reduced, so as to save much money for pumping into the development

of key areas of the state economy, like manufacturing, commerce, tourism, agriculture and education”

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the citizens of the State, despite previous budgetary allocations to the Project. The state-owned media outfits are quite rightly doing well, in terms of accommodation of oppositions and awareness campaigns on many issues.

Would the in-coming administration of Eng. Kwankwaso sustain this emphasis given to ICT and the media? The governor-elect should be properly guided by experts in the area of ICT before taking any decision (positive or negative) on the matter.

11. Al locat ion to Commerce and Manufacturing: The Ministry of Commerce, Industry, Cooperative and Tourism is a perpetual “loser” of the Kano State Government budget for a long time now, as if the state’s pride of being ‘Centre of Commerce’ is just for slogan sake. This year’s allocation to the activities under the purview of the Ministry is a paltry N593.9million (0.54% of the total budget) down from the 2010 allocation of N625million! One wonders as to how any tangible progress could be made in the area of industrialisation, development of cooperative spirit among the citizens and tourism development, with this type of marginalisation of those important activities. With seriousness on the activities of that ministry, it might have to be divided into four ministries: of Commerce, Industry, Cooperative and Tourism, so as to seriously accelerate the development of commercial activities, industrial activities, cooperative ventures and tourism potentials in the State. Tourism, which could have been made the mainstay of Kano State economy, is not practically enjoying the attention it deserves from the State government!

Observers’ eyes would be wide open to see how the governor-elect would treat this ministry and its components. Will he continue with the marginalisation of those important components of the ministry in budgetary allocation and in using it as the spear header of the process of sustainable economic development of the state? Is he going to encourage and challenge the ministry to work towards creating a specific number of job opportunities for the teeming unemployed “youth voters” in the State. This should be a very big priority issue to the administration in its first 200 days in office.

1 2 . A l l o c a t i o n f o r S h a r i ’ a Implementation: To keep the momentum

of Shari’a implementation, the State government plans to expend a sum of N1.77billion (1.62% of the total budget) on the activities of all the agencies responsible for effective implementation of Shari’a in the State. This suggests that Shari’a implementation is a “winner” of the budget, especially as it enjoys more budgetary allocation than the whole of the ministry of Commerce, Industry, Cooperative and Tourism, and Water Supply!

I t i s e x p e c t e d t h a t S h a r i ’ a implementation, which started during the first tenure of Eng. Kwankwaso (1999-2003), would continue to enjoy the concern it deserves as the administration is making a second coming eight years after its defeat at the polls! The amount allocated for its continuous implementation, through the various agencies put in place for that purpose, should be effectively utilised to ensure that the set objectives are achieved. The Shari’a agencies need to be more empowered for them to perform better, in line with the agitation of the vast majority of the people of the state.

1 3 . A l l o c a t i o n t o G e n e r a l Administration: To fund the operations of the three arms of government, paying remunerations and meeting obligations and other exigencies of government, a sum of N23.5billion (21.47% of the total budget) has been allocated! Out of this amount, N3.4billion (3.1% of total budget) is earmarked for personnel emoluments. This casts General Administration (whatever that actually means) as a big “winner” of the budget. Personnel emoluments for top government functionaries: Commissioners, Special Advisers, Special Assistants, First Ladies, etc, consume much more than Shari’a Implementation and the Ministry of Commerce, etc, put together! This suggests that there is an urgent need for the emoluments of political office holders to be scaled down and their number reduced, so as to save much money for pumping into the development of key areas of the state economy, like manufacturing, commerce, tourism, agriculture and education.

It is expected that Eng. Kwankwaso would urgently address this ‘wastage’ in the name of ‘general administration’, with a view to making reasonable savings that could be re-allocated to youth empowerment programmes, urban and rural developmental projects, educational development initiatives,

etc. It is encouraging to note that Eng. Kwankwaso has mentioned several times, during his campaign, that he is not in support of the wastage called “Office of the First Lady”, which is not provided for in the 1999 Constitution of the Federal Republic of Nigeria.

CONCLUSIONThe fact that budget is an important

instrument for managing scarcity is enough reason for any serious government to ensure its effectiveness in all its ramifications. Budgeting exercise demands a thorough scrutiny of the sources of funds and expenditures, a critical evaluation of all claims/proposals, prudent spending of realised revenues to minimise costs and maximise savings, timely reporting of actual results at the end of the budget period and rigorous variance analysis, so that reliable feedbacks for future budgeting could be obtained. All the three arms of government in Nigeria are to ensure that governmental financial management is carried out with effective budgeting exercise serving as the foundation.

This paper highlights the major “winners and losers” of the Kano State Budget of Continuity 2011, with a view to drawing the attention of the governor-elect, Engineer (Dr.) Rabiu Musa Kwankwaso, to the challenges facing him as he takes over the implementation of the budget on 29th May, 2011. The review exercise ended up as a draw game, with 7 winners and 7 losers identified from the Budget!

This analysis should be replicated in states like Imo, Nasarawa, Ogun, Oyo and Zamfara, where the “winning candidates” of opposition political parties are taking over the mantle of leadership from the “losing incumbent governors” of the states at the same time with Engineer (Dr.) Rabiu Musa Kwankwaso. While congratulating the Sardauna of Kano, Mallam (Dr.) Ibrahim Shekarau, and the “losing governors” of the five states, so far identified (electoral appeal tribunals may rule against more incumbent governors), for completing their tenure without sustaining cardiac arrest, this is wishing all the “governors-elect” a successful tenure, especially in the first pressing 200 days in office!

* Kabiru Isa Dandago, Ph.D., ACA, ACTI, MNIM, MNES, MIMC, is Professor of Accounting and Chair, Bayero Consultancy Services Unit, Bayero University, Kano, Nigeria.

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MCPE PROGRAMME

THE INSTITuTE OF CHARTERED ACCOuNTANTS OF NIGERIA (Established by Act of Parliament No.15 of 1965)

AnnouncesThe Mandatory Continuing Professional

Education (MCPE) Programme For Year 2011

Objectives To maintain adequate level of up-to-date

technical knowledge among members of the Institute

To assist members of the profession to adapt to new techniques, changing responsibilities and economic conditions; nationally and internationally

To demonstrate the Institute’s responsiveness to the needs of its stakeholders and encourage members of the accounting profession to have adequate and technical knowledge and skills in the drive towards maintaining professional excellence at all times

To maintain the competence and relevance of the Chartered Accountant in today’s global economic, political and social environment.

For Whom

The MCPE is compulsory for every member of the Institute of Chartered Accountants of Nigeria whose

membership is current.

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Seminar Dates, Zones and LocationsS/N ZONE SECTOR DATES LOCATIONS1. Lagos Tax Practice March 30 – 31 Lagos Airport Hotel, Ikeja 2. Lagos Consultancy April 13 – 14 Lagos Airport Hotel, Ikeja 3. Warri Public Sector Accounting April 20 – 21 Hotel Charles David Lot, 5/7, Evive Close,

83, Airport Road, Effurun, Warri, Delta State 4. Lagos Accountancy and Audit April 20 – 21 Lagos Airport Hotel, Ikeja 5. Enugu General Management Practice May 04 – 05 Roban Hotels, Ukwa Street, Independence Layout,

Enugu 6. Ilorin Public Sector Accounting May 04 – 05 Royal Shekinah Suites, Ajase Ipo Road, Opposite

MRS Filling Station, Ilorin, Kwara State7. Abuja Banking May 11 – 12 Sharon Ultimate Hotel, 9, Jos Street, Off Tafawa

Balewa Way, Area 3, Garki, Abuja 8. Lagos Information Technology May 11 – 12 Lagos Airport Hotel, Ikeja9. Lagos General Management Practice May 25 – 26 Lagos Airport Hotel, Ikeja10. Port Harcourt Consultancy June 01 – 02 L A Kings Complex, Plot 267, GRA Phase IV, Stadium

Road, Elekahia, Port Harcourt, Rivers State 11. Lagos Capital Market and Insurance June 01 – 02 Lagos Airport Hotel, Ikeja12. Ibadan Accountancy and Audit June 08 – 09 University of Ibadan & Conference Centre

UI Ventures, Ibadan, Oyo State 13. Lagos Public Sector Accounting June 08 – 09 Lagos Airport Hotel, Ikeja14. Uyo Information Technology June 22 – 23 Multipurpose Hall, Governor’s Office Annexe,

Wellington Bassey Way, Uyo, Akwa, Ibom State 15. Lagos Manufacturing June 22 – 23 Lagos Airport Hotel, Ikeja16. Asaba Petroleum and Energy July 13 – 14 Nelrose Hotel, Government Road, GRA Asaba,

Delta State 17. Kaduna Consultancy July 13 – 14 NAF Club, Rabah Road, Kaduna 18. Abuja Tax Practice July 27 – 28 Sharon Ultimate Hotel, 9, Jos Street, Off Tafawa

Balewa Way, Area 3, Garki, Abuja19. Lagos Telecommunications July 27 – 28 Lagos Airport Hotel, Ikeja20. Owerri Public Sector Accounting August 03 – 04 New Castle Hotels, Plot 14, Area A, New Owerri, Off

Owerri – Port Harcourt Expressway, Owerri, Imo State

21. Lagos Banking August 03 – 04 Lagos Airport Hotel, Ikeja22. Jos General Management Practice August 10 – 11 Hill Station Hotel, Jos 23. Lagos Tax Practice August 10 – 11 Lagos Airport Hotel, Ikeja24. Kano Tax Practice August 24 – 25 Horizon Hotel, 5 Courthouse Close, Off Miller Road,

Bompai, Kano 25. Lagos Petroleum and Energy August 24 – 25 Lagos Airport Hotel, Ikeja26. Benin – City Accountancy and Audit Aug. 31 – Sept 01 Bishop Kelly Pastoral Centre, Airport Road, GRA,

Benin - City 27. Lagos Capital Market and Insurance Aug. 31 – Sept 01 Lagos Airport Hotel, Ikeja28. Calabar Public Sector Accounting September 14 -15 Channel View Hotel, MCC Road Calabar,

Cross River State 29. Lagos Information Technology September 14 – 15 Lagos Airport Hotel, Ikeja30. Lagos General Management Practice October 26 – 27 Lagos Airport Hotel, Ikeja31. Ibadan Tax Practice October 26 – 27 University of Ibadan & Conference Centre

UI Ventures, Ibadan, Oyo State 32. Lagos Telecommunications November 02 – 03 Lagos Airport Hotel, Ikeja33. Abuja Information Technology November 09 – 10 Sharon Ultimate Hotel, 9, Jos Street, Off Tafawa

Balewa Way, Area 3, Garki, Abuja34. Lagos Public Sector Accounting November 09 – 10 Lagos Airport Hotel, Ikeja35. Port Harcourt Petroleum and Energy November 23 – 24 L A Kings Complex, Plot 267, GRA Phase IV, Stadium

Road, Elekahia, Port Harcourt, Rivers State36. Lagos Consultancy November 23 – 24 Lagos Airport Hotel, Ikeja37. Lagos Accountancy and Audit Nov 30 - Dec 01 Lagos Airport Hotel, Ikeja38. Lagos Tax Practice December 07 – 08 Lagos Airport Hotel, Ikeja

Note: A change in seminar dates/venues would be uploaded on the Institute’s website at least a week to the programme.

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Seminar Topics For 2011A. MANDATORY CONTINuING PROFESSIONAL EDuCATION

i. TAX PRACTICE SECTOR TAXATION IMPLICATIONS OF IFRS MANAGING TAX DISPUTES: STRATEGIES AND OPTIONS TRANSACTION TAXES IN NIGERIA: KEY ISSUES PETROLEUM INDUSTRY LEGISLATION: TAX ISSUES AND CHALLENGES ii. CONSULTANCY PRACTICE SECTOR OPTIMISING TRAINING CONSULTANCY NEGOTIATING CONSULTANCY SERVICES CONSULTING FOR MICRO, SMALL & MEDIUM ENTERPRISES AND FAMILY OWNED BUSINESS (MSMEs/FOBs) IN NIGERIA STRATEGIC CHANGE MANAGMENT iii. PUBLIC SECTOR ACCOUNTING IMPLEMENTING MEDIUM TERM EXPENDITURE FRAMEWORK (MTEF) INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARDS (IPSAS) IN THE NIGERIAN PUBLIC SECTOR: CONSIDERATION FOR CASH BASIS DESIGN AND IMPLEMENTATION OF POVERTY REDUCTION STRATEGY PAPERS (PRSP) EQUIPPING THE PUBLIC SECTOR ACCOUNTANT FOR DONOR-FUNDED PROJECTS iv. ACCOUNTANCY & AUDIT /INSOLVENCY SECTOR FORMAL INSOLVENCY PRACTICE: CORPORATE LIQUIDATIONS GLOBAL TRENDS IN GROWING AND MANAGING ACCOUNTING PRACTICE FIRST TIME ADOPTION OF IFRS: ISSUES AND CHALLENGES POSITIONING INTERNAL AUDIT FOR VALUE CREATION v. GENERAL MANAGEMENT PRACTICE SECTOR MANAGING EMPLOYEE RELATIONS: THE ROLE OF THE PROFESSIONAL CREATING VALUE THROUGH ORGANISATIONAL LEARNING MANAGING ORGANISATIONAL CULTURE, POWER & POLITICS FOR STRATEGIC ADVANTAGE BUSINESS ETIQUETTE AND PROFESSIONALISM

vi. BANKING SECTOR IMPLEMENTING BASEL III AND THE NEW PRUDENTIAL GUIDELINES: ISSUES AND CHALLENGES ELECTRONIC BANKING FRAUD: LESSONS FOR NIGERIAN BANKS AND CUSTOMERS IMPLEMENTING THE NEW BANKING MODEL: KEY SUCCESS FACTORS INTERNATIONAL FINANCIAL REPORTING: ROAD MAP TO THE ADOPTION OF IFRS IN BANKING vii. INFORMATION TECHNOLOGY SECTOR IT PRODUCTIVITY TOOLS FOR THE ACCOUNTANT E-BUSINESS MODELS: ISSUES AND CHALLENGES CLOUD COMPUTING: RISKS, REWARDS AND THE ROLE OF THE ACCOUNTANT INFORMATION SYSTEM (IS) SECURITY MANAGEMENT: BEST PRACTICES AND GUIDELINES viii. FINANCIAL SECTOR (CAPITAL MARKET & INSURANCE) INTERNATIONAL FINANACIAL REPORTING: ROAD MAP TO THE ADOPTION OF IFRS IN INSURANCE

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B. CONTINuING PROFESSIONAL EDuCATION (CPE)

1. APRIL 27 THE PRINCIPLES OF EMOTIONAL INTELLIGENCE (EI) BENEFITS TO THE MANAGER AND THE ORGANISATION

2. JUNE 29 THE ROLE OF ETHICS AND AUDITING IN RESTORING PUBLIC TRUST

3. AUGUST 17 DEVELOPING STRATEGIES FOR ALTERNATIVE REVENUE SOURCES IN THE PUBLIC SECTOR

4. NOVEMBER 16 PLANNING AND MANAGING RETIREMENT

VENUE: Lagos Airport Hotel, Ikeja, Lagos (For Members and Non-Members)

C. EXECuTIVE MANDATORY CONTINuING PROFESSIONAL EDuCATION (EMCPE)

1. JULY 20 – 21 LEADING AND DELIVERING COST-EFFECTIVE IFRS TRANSITION

2. SEPTEMBER 07 – 08 LEADERSHIP IN THE KNOWLEDGE AGE

3. DECEMBER 07 – 08 DESIGNING AND IMPLEMENTING WINNING BUSINESS STRATEGIES FOR OUT-PERFORMING THE COMPETITION

VENUE: Sheraton Lagos Hotel and Towers, Ikeja, Lagos

STRATEGIES FOR MANAGING AND COLLECTING INSURANCE PREMIUM DEBTS RESTORING AND ENHANCING VALUE TO INVESTORS IN THE CAPITAL MARKET: THE ROLE OF CORPORATE GOVERNANCE DEBT MARKET AS ALTERNATIVE SOURCE OF FUNDING FOR INFRASTRUCTURAL AND CAPITAL ASSETS DEVELOPMENT ix. MANUFACTURING SECTOR MASTERING INNOVATION: EXPLOITING IDEAS FOR PROFITABLE GROWTH IN THE MANUFACTURING INDUSTRY MANUFACTURING IN DEVELOPING ECONOMY: THE NIGERIA EXPERIENCE APPLICATION OF WORLD-CLASS MANUFACTURING TECHNIQUES FOR OPTIMAL PRODUCTIVITY EFFECTIVE PRODUCT PRICING IN THE MANUFACTURING SECTOR x. PETROLEUM AND ENERGY SECTOR NATIONAL CONTENT DEVELOPMENT IN THE OIL AND GAS INDUSTRY: OPPORTUNITES AND CHALLENGES IFRS IMPACT ON OIL AND GAS ACOUNTING DEREGULATION AS A TOOL FOR ATTRACTING PRIVATE SECTOR PARTICIPATION IN THE DOWNSTREAM SECTOR POWER SECTOR REFORM ROAD MAP: INVESTMENT OPPORTUNITIES FOR THE PRIVATE SECTOR xi. TELECOMMUNICATIONS SECTOR COST MANAGEMENT IN TELECOMMUNICATIONS OPERATIONS APPLICATION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) IN THE TELECOMMUNICATIONS SECTOR ACCOUNTING TREATMENT OF SPECIALISED ASSETS IN THE TELECOMMUNICATIONS INDUSTRY REVENUE ASSURANCE IN THE TELECOMMUNICATIONS INDUSTRY: THE ROLE OF ACCOUNTANTS

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Seminar Fees

1. MCPE Members Only N20,000.00

2. Executive MCPE Members Non–Members N80,000.00

3. CPE (a) Members(b) Non–Members

N35,000.00N40,000.00

* Please note that all courses are non-residential and the fee covers only course materials, lunch and certificates (where applicable)

Method of PaymentAll payments should be in cash or certified bank draft issued in favour of “The Institute of Chartered Accountants of Nigeria” and payable at any of the Institute’s Secretariat offices. Please make your reservations and payments at least a week before the programme date to enable us make necessary preparations.

Credit Hours (15 hours)

In addition to participating in the programmes within their sectors, members are enjoined to attend seminars in other sectors in order to broaden their knowledge base.

Training Programme for 2011Kindly download the Executive Training Programme for Year 2011 from the Institute’s website www.ican-ngr.org

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Credit Hours Sanctions

Every member of the Institute is required to obtain at least thirty (30) credit hours yearly. This is in line with IFAC regulations. For the purpose of compliance, the credit hours would be counted on a three-year basis. That is, each member is expected to have at least ninety (90) credit hours over three years.

The Institute will commence the implementation of sanctions from the first quarter of year 2011; the effective period would be 2008 – 2010 (3 years).

To avoid these sanctions, please confirm your credit status, for 2007 – 2009 on the Institute’s website to ensure you have obtained the ninety (90) credit hours. Kindly attend MCPE seminars to make up for any outstanding credit hours. Such members who are deficient in MCPE requirements would be denied the following privileges:

• Sponsorship of students for registration, exemptions, examinations and registration for induction into membership;

• Sponsorship of graduate members for the Institute’s membership;

• Elevation to Fellowship;

• Obtaining and Renewal of Practising Licence;

• Membership of Committees;

• Contesting Council Elections; and

• Occupying any executive position in a District Society.

All members are implored to attend any two seminars from the various sectors and groups each year to earn the necessary 30 credit hours.

EnquiriesFor further enquiries on the Institute’s Professional Training Programmes, please call on or write to:

TOyIN ADEpATE, B.Sc, MBA, FCA Registrar/Chief ExecutivePlot 16, Idowu Taylor Street,Victoria Island,Lagos. Tel: 7642294 – 5 Fax: 01 – 4627048 E-mail: [email protected]: www.ican-ngr.org

OR

Members Education & Training Department:Folake Olawuyi — 0803 703 3930Adams Imonikhe — 0806 790 8190Niyi Adesola — 0802 335 6214Tel: 01 – 7917234 (DL)01 – 7642297–8, 4705336, 7740627Fax: 01 – 4627048 E-mail: [email protected]

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Designed by BEP Graphix, Lagos. Printed by Academy Press Ltd.

The Nigerian Accountant 2011 April Edition

Documents

Transcript of The Nigerian Accountant 2011 April Edition