financial vanguard 16022015

CMYK

FEBRUARY 16, 2015

BY FRANKLIN ALLI& NAOMI UZOR

INDUSTRY LEADERS in thecountry are making franticefforts to halt passage of the

Private Companies Conversion andListing Bill into law by the NationalAssembly. They said the bill beingsponsored by the Deputy Chairmanof the House of RepresentativesCommittee on Capital market, Hon.Chris Emeka Azubogu, would nothelp the business climate in Nigeriaand should be withdrawn.

Manufacturing, oil and gas sectors to be worse hitWe disagree with compuslory listing - NSE

The draft bill which is premised onthe provisions of Section 16(2) (a) (b)and (c) of the Constitution of theFederal Republic of Nigeria 1999 haspassed the second reading on the floorof the House of Representatives as atthe last quarter of 2014.

The Industry leaders drawn frommultinational corporations likePricewaterHousecoopers (PWC);Shoprite, British America Tobacco;Shell and Chevron, FrieslandCampinaincluding leaders of the OrganisedPrivate Sector (OPS) haveunanimously kicked against the Billand are now harmonising their

position ahead of the Public Hearingof the Bill.

Financial Vanguard learnt thatthe sponsors of the Bill hadadvanced the following arguments tojustify the introduction of the bill:“Conversion to public companiesand listing on the Stock Exchangewould increase the hitherto privatecompanies' access to long termfunding from the capital market ,leaving the banks to cater for thefunding needs of the real sector.

“The Bill will boost operations at theStock Exchange and increase thesector ’s contribution to the

GDP which is considered smallercompared to other emergingeconomies. The sponsors also arguedthat the Bill will promote financialinclusion and move the economy fromthe current dominance by informalsector to formal sector.

Also, section 1 of the Bill providesthat existing private companies thatshould convert to public liabilitycompanies and be listed in the StockExchange market within 12 months oftheir conversion, shall haveshareholders’ funds in excess of N 40billion, annual turnover in excess ofN40 billion and total assets in excessof N80 billion.

According to the bill, the asset valueof a private company shall bedetermined based on the gross valuesof the company’s assets as recordedin its balance sheet at the end of thelast audited financial year, while theannual turnover shall be based on thegross revenue of the company fromincome, into or from Nigeria, arisingfrom the sale and rendering of goodsand services, and the use of thecompany’s assets in a manner thatyield interest, royalties and dividends.

The bill, however, makes noprovision for the minimum percentageof the share capital to be offered tothe public but seeks to grant taxincentives to companies caught by thebill. The tax incentive, which is for fiveyears after listing, varies with thepercentage of shares listed by thequalifying companies.

The proposed tax incentives offeredby the bill are “(a) companies that listat least 40 percent of the issued sharecapital shall be eligible for a taxincentive at a rate up to one-third ofits applicable income tax.

(b)Companies that list 30 percent ofits share capital shall be eligible for atax incentive up to one-fourth of itsapplicable income tax; (c) Companiesthat list 20 percent of its share capitalshall be eligible to a tax incentive at arate up to one-eight of its applicableincome tax.

Qualifying companies will also beentitled to tax deductible expenses on:“All expenditure incurred by thecompanies for the purposes of listingon any securities and 60 percent ofSecurities and Exchange Commissionrelated fees for listing.

It was also learnt that Section 8 of

Continues on page 22

Industry leaders move againstmandatory listing on NSE

AWARDS - From left, Mr Demola Kolade, Executive Director, Mr Thompson Ajayi, Chief Accountant, and Mr PaulOmekwe, National Sales Manager, all of Brian Munro Limited, and Mr Okey Akpa, Managing Director, SKG PharmaLimited, during the 2014 Distributor Awards held by Brian Munro Limited, last Wednesday in Lagos. PHOTO:Kehinde Gbadamosi.

CMYK

22 — Vanguard, MONDAY, FEBRUARY 16, 2015

Cover Story

Continues from page 21

Continues on page 23

the bill creates offences andpenalties: “A person whocontravenes any of theprovision of the bill commitsan offence and is liable onconviction to imprisonment fora period of not less than twoyears. Where the offence iscommitted by a bodycorporate, the corporate bodyshall be liable on convictionto a fine of 10 percent of itsannual turnover for each yearof default. And where theoffence was committed withthe knowledge, consent orconnivance of a director,employee or secretary jointlyor severally, all the directors,employees and secretary thathave taken part in thecommission of the offenceshall be liable on convictionto a fine of N1 million for eachmonth of default orimprisonment for a period notbelow two years or both.”

Reacting to the bill, AlhajiRemi Bello, President, LagosChamber of Commerce andIndustry, LCCI, noted that thebill under consideration haselicited concerns from variousstakeholders in the businesscommunity, especially LCCImember companies. “Ourpreliminary review of theproposed bill shows that it willimpact negatively on localand foreign investment andthe broader economy.

It may also lead toconsiderable loss of revenueto the government and breakup of companies tocircumvent the requirement ofthe Bill. Also, the NigerianStock Exchange may not havethe depth and liquidityneeded for the investmentarising out of the mandatorylisting of these companies,”he said.

He urged the Organised

Private Sector to harmonizeits position with a view topositively influencing thedirection and content of thebill before it is passed intolaw.

Corroborating this position,Mr. Bimbo Atlola, DeputyChairman LCCI CommercialLaw & Taxation Committee,also warned that the bill, ifeventually enacted into laweither by the 7th or 8thNational Assembly, hasserious implications for theprivate sector, especially themanufacturing, energy andtelecommunications sectors.He said that the biggerpicture is that themanufacturing, the oil andgas, power and thetelecommunications sectorswill certainly be the worst hitby this obnoxious bill in theunlikely event that same ispassed into law by thegovernment.

According to him, foreigncompanies operating in thesesectors, especially in the lasttwo and half decades, and theassets acquired by thesecorporate players in thesesectors will make them easypreys to this scheme.

“The bill certainly hasserious implications for the oiland gas sector. Explorationand production includingancillary technical servicesare highly capital intensiveand as such, key operators inthe Nigerian oil and gasindustry, especially in theupstream sector, are automaticcandidates for thecompulsory conversion andlisting contemplated by thebill. Indeed, it may be safelyargued that every active oilblock owning privatecompanies including somemarginal field operators willbe caught by the regime ofthis bill and a few private key

players in the downstreamsector will also not be left out.The recent liberalisation andprivatisation of the Nigerianelectricity sector following theenactment of the ElectricityPower Sector Reform (EPSR)Act of 2005 also makes theemerging Nigerian electricityand power sector anothertarget of the bill.

Continuing Mr. Atlola said“All the Global System forMobile (GSM)communication operators inNigeria are certainlyautomatic candidates of thebill as they will be caught bythe qualifying thresholdcreated by section 1 of theproposed bill. The PrivateCompanies Conversion andlisting bill is retrogressive inseveral respects. Thepassage of the bill, in itscurrent form, signifies adrastic shift in Nigeria’spolicy on foreign directinvestment with implicationsfor the Nigerian energysector.

According to him “It isimportant to reiterate that thebill applies to enterprisesowned by Nigerians and non-Nigerians alike and this willcertainly discourage foreigninvestments in virtually all themajor business sectors inNigeria including the oil andgas, emerging electricity andpower sector. The taxincentives contemplated bythe bill also appeardiscriminatory and unfair assame is available to privatecompanies listed on the stockexchange pursuant to theprovisions of the proposed Actbut not available to thosecompanies that got listedvoluntarily. Nigeria can alsohardly afford the potentialrevenue loss to be occasionedby the tax incentives

Industry leaders move againstmandatory listing on NSE

PROMO DRAW: From left: Miss. Simisola Abass, representative of the Lagos State LotteryBoard (LSLB); Mrs. Nwosu Esther, representative of Consumer Protection Council (CPC) andMiss. Yetunde Kotoye of Retail Proposition, Sterling Bank Plc at the third Sterling GunnersPromo Draw held at the weekend in Lagos.

The focus is on the roles of technology and vocationaleducation in enhancing entrepreneurial skills that will

equip students for entrepreneurship education in Informationand Communication Technology (ICT.) driven technologicalenvironment. The world has become globalized and the futureprosperity depends on comparative advantage. Thiscomparative advantage hinges on people and their technicalor technological sophistication. Towards this, some crucialentrepreneurial and technical skills needed by the students incolleges of education (technical), polytechnics and universitiesto meet the trends in a global economy is analyzed.

Technology education is to be considered as the key agent oftechnology development, either as a way of developing humancapacity, increasing the shield work force for modernization,industrialization, environmental development or as a matterof personnel freedom, developing capability andempowerment. Technology education is increasinglyrecognized to be central to both the origins of technological

Vocation and technicaleducation– A key to improving Nigeria’sDevelopment (4)

development and challengesand to the prospects forsuccessfully dealing withthem (Alam, 2009). Decisionmakers at all levels, needtimely, reliable access toknowledge generated bytechnology and technicaleducation to introducerational policies that reflecta better global understandingof complex technical,economic, social, culturaland article issues concerningthe society, and ourenvironment. Technicaldecision making and prioritysetting is an integral part ofoverall developmentplanning and formation oftechnology developmentstrategies. Above all,technology education is a human right and, as such, shouldreceive priority in the allocation of national resources. It hasbecome very necessary not to only keep technology educationbound to the role of manufacturing skilled manpower but alsoto economic development and global economy. In Nigeria,technology education was previously not seen as fundamentalfor national development, or for the economic development,but for the school dropouts, and other social and politicaldevelopment within the nation and for individuals. Hallak(1990) argues that technology education is also linked tohuman resources development and that this has an impact onmore than just economic growth, but also an impact on thewider development of individuals and societies. According tohim, it contributes to:

(a). Individual creativity, improved participation in theeconomic, social and cultural roles in society.

(b). Improved understanding of an individual and heirrespect for others, thus promoting social cohesion and materialunderstanding

(c) Improvement in health and nutrition.(d). Improved chances of economic development.(e). Improved technological development.(f). Socio-cultural change.(g). Democracy and equality(h). Ecological development/quality of life (increasing

people’s awareness of their environments).

Technologyeducation isincreasinglyrecognized to becentral to boththe origins oftechnologicaldevelopment andchallenges andto the prospectsfor successfullydealing withthem

Vanguard, MONDAY, FEBRUARY 16, 2015 — 23

CoverContinues from page 22

CMYK

There has been series of reactions to the story: Diesel mafiaare ripping off Nigerians. Here is one of such reactions

BY EMEKA AKABOGU ESQ.

My home generator is no guzzler, yet my heart alwaysskips a beat at the sight of my monthly dieselbill. In my side of town on the Lekki-Epe

Expressway, the price of diesel is between N145.00 and N160depending on the station. Interestingly, it often costs me less

Why price of dieselremains high

to buy at the stations that sellfor N155.00/litre than at thosethat sell for N145.00/litre. Thathowever, is the subject foranother day. The trulybefuddling question is whythe more than 50% crash incrude oil prices has left theprice of diesel unaffected. Thebigger concern is that dieselis a deregulated product, andI have been one of the fiercestadvocates of deregulation ofpetroleum prices in the lastfew years. Is there now causeto question the argument forderegulation?

The FactsIn January 2015, the

international price of gas oil(as diesel is technicallyreferred to by oil traders)averaged $445 per metrictonne. A metric tonne ofdiesel could yield an averageof 1,120 litres of diesel,depending on the density ofthe particular specification.Converted to naira, theinternational price of dieselper litre has been aboutN74.00 in the period underreview. Factoring collateralcosts including foreignexchange, freight, port andstorage, the landing cost ofdiesel in Nigeria per litre isbetween N85.00 and N90.00.Actual ex depot price inJanuary has averagedN95.50k. Diesel is thereforebeing sold at a minimumpremium of N50.00 inNigerian stations for everylitre.

Perception and RealityMarketers of petroleum

products are often seen as acartel of rampaging shylocksthat will stop at nothing tomake profit. They arehowever faced with significantoperational and business

challenges that seem to (butdo not necessarily) justify theprices that we pay. First off,with the naira in limbo againstthe dollar, banks have beenextremely circumspect aboutopening Letters of Credit infavour of oil marketers. Theforgettable and tragicexperiences of 2008 are stillvery fresh for many, and haveencouraged an abundance ofcaution.

More directly, banks havebeen seeing the short end ofthe stick in the RDAS market,regularly getting only a slimpercentage of what they bidfor. Diesel not being as muchof a priority as PMS for LCs,has to contend with feweropportunities for opening ofLCs, and necessarily,importation. There is also anagging suspicion by manythat the naira is going to fallfurther, and many do not wantto be caught in-between atransaction when thathappens. As a result, fewerLCs are opened for diesel andthere are fewer persons ableto import the product.

Yet the ex depot price ofdiesel (for January 2015)averaged N95.50. For the veryfear of foreign exchange risk,many importers are ready toquickly sell-off stock from thejetty tanks. With no such riskattaching to retail distributors,coupled with the slow turn-around for supply from thefew importers, retailers look to

padding profit from thepumps. The result is the N50premium per litre of diesel.Competition seemsmeaningless in this context asobvious pricing agreementsamongst retailers ensure thatconsumers are robbed of thebenefit of a deregulated andpotentially competitive

market. Profiteering is thename of the game, andconsumers seem helplessly atthe mercy of its hard-nosedplayers.

Deregulating PMSThis diesel scenario does not

bode well for the deregulatedPMS regime that I haveseverally advocated. I know asa fact that many marketoperators are also keen onhaving that marketderegulated. Suchderegulation will bemeaningless if some dominant

players sitting overchampagne glasses can agreea minimum price with nocorrelation to global or evenlocal market realities andtrends. The prospects ofinnovativeness, customerappeal and expanded optionsthat are the drivers of thederegulation advocacy could

be stillborn, with the real fearthat Nigerians will be left theworse for wear. Even theoperators would lose in sucha scenario, as the market willnot be one of skills or expertiseor uniqueness but an opensesame for all comers and asure road to oblivion.Obviously, successfulderegulation needs effectiveregulation.

Regulatory oversightThe truth is that retailers

and marketers who havestruck price agreements are

not breaking any law inNigeria. In the first place,there is no regulatoryframework for competition, orin this case, anti-competitivepractices. Though theMinister of Petroleum has thepower to fix the price at whichany particular class ofpetroleum products may besold (section 6(1) of thePetroleum Act), PresidentUmaru Yar ’adua had byexecutive order in 2009,removed diesel from the classof price-regulated petroleumproducts. However thePetroleum Products PricingRegulatory Agency(Establishment) Act of 2003states one of the agency’sfunctions to includeprevention of “collusion andrestrictive trade practicesharmful in the sector”.

This is the nearest provisionthere is to prevent abuse ofmarket positions throughcartelisation. Unfortunately,this provision on its ownconfers no powers on thePPPRA to rein in anti-competitive practices sinceneither precise price nor pricerange has been fixed whichretailers could be alleged tohave colluded to breach. Thisis expected to be one of theareas where a strengthenedlegal regime for the agencyunder the Petroleum IndustryBill will ensure more precisepowers of regulatoryintervention.

But pending the PIB whatshould be done? I think theHonourable Minister ofPetroleum Resources shoulduse the strong suasion powersof her office and prevail onretailers to temper their greedsimple.

Emeka Akabogu is theChairman, OTL AfricaDownstream

The forgettable andtragic experiences of2008 are still veryfresh for many, andhave encouraged anabundance ofcaution

proposed by the bill,especially now whenemphasis is being placed ontax revenues following thedwindling oil price in theglobal market.

“It is also my view that theobjectives sought to beachieved by this bill canotherwise be achievedthrough other lawful means.This bill and the underlyingrationale for same, in my view,simply reinforces the need foran amendment of theCompanies and Allied MattersAct, provisions of which had

long become obsolete andlargely devoid ofcontemporary relevance.The CAMA simply need to beamended to address thechallenges giving rise to thebill.

“While increased listing ofcompanies on the stockexchange is healthy for theeconomy, compelling privatecompanies to do so will bepatriotism taken too far,” hestated.

“The Private CompaniesConversion and listing Bill,2013 is retrogressive and

unconstitutional. What thegovernment should do, in myview, is to put in place a legalframework that will encourageprivate companies to fall overthemselves to get listed. TheNational Assembly may makelaws granting irresistible andmouth watering tax waiversand other incentives to privatecompanies seeking publicstatus and thereby creatinga compelling business casefor listing. While increasedlisting on the floor of stockexchange is good for theeconomy, to force private

companies to list is unethicaland smacks of dictatorship.Some Nigerian families wouldrather have their companiesdead than to go public.

“The bill, if passed, willmake Nigeria less attractivefor foreign investors and starvethe emerging energy sectorthe much needed foreigninvestments. No prudentforeign investor will invest inan economy that guaranteesno security of investment. Thebill is ill conceived and shouldbe vehemently opposed by theorganized private sector,”

Atilola maintained. In hisremarks, Kola Adeeeko, HeadCorporate Services Division,NSE, gave the perspective ofthe NSE, saying “The conceptof compulsion is totallyunacceptable to theExchange; NSE wants qualitycompanies to be on theExchange. We are not insupport that the Bill should bethrown out outright but anycompany that will be listed onthe Exchange should havegood corporate governance;we disagree with the whole

IndusIndusIndusIndusIndustrtrtrtrtry leadery leadery leadery leadery leaders mos mos mos mos movvvvve againse againse againse againse against mandatt mandatt mandatt mandatt mandatororororory lisy lisy lisy lisy listing on NSEting on NSEting on NSEting on NSEting on NSE


CMYK

Insurance

Insurance products to be sold at parks, fillingstations — NAICOMStories by FAVOURNNABUGWU

The NationalI n s u r a n c e

C o m m i s s i o n(NAICOM) is makingplans to introduceparks and fillingstations as sellingpoints for insuranceproducts.

The Commission saidthe need to providemulti-channel outlets tosell insurance products

has become imperativefor the industry’scustomers to buyinsurance products atease.

Commissioner forInsurance, CFI, Mr. FolaDaniel, made thisknown to insurancecorrespondents, inBenin, Edo State.

Daniel said, “Themajor parks could serveas agents of insurancecompanies even thefilling stations as

outlets to sell insuranceproducts.”

He stated, “TheCommission will comeout with a guideline thatwill include them intothe multi-channeloutlets for insuranceproducts”

Daniel believes thatmulti channel strategyfor underwriters offers aprime example of a keypiece of the experiencepuzzle as mobile andsocial media provide

convenience and easeof use to customers, andwill continue to grow.

According to him, “It isonly in this country thatone buys a new car anddrives on the roadwithout a number plateand insurance. If onebuys a new vehicle inthe US, it is right at theshowroom that anumber plate is fixed tothe vehicle andinsurance to go with it.”

The CFI said the

introduction of parksand filling stations willnot only entice morepeople to buy insurancebut will serve as touch-points to sell insuranceproducts in addition toinsurance agents andbrokers.

To build trust, Danielmaintained that insurerswill therefore need todesign distributionstrategies that can caterfor present day-to-daydemands of their clients

and also position themto serve tomorrow’sneed thus makingm u l t i - d i s t r i b u t i o nstrategy critical forrevenue generation andexpansion.

He said insurers needto maintain strongcustomer acquisition andretention rates to ensuresustained organicgrowth, adding that themulti-distribution willnot only help insurers toaddress changingcustomer needs but alsohelp them address arange of technical issuesthat are having profoundeffect on both the life andnon-life market.

Multi-channel refers tothe distribution ofinsurance productsthrough multipledistribution networks,ranging from directnetworks and agents tobrokers, garages andfilling stations includingmajor supermarkets.

…Says lowpublic trust,awarenessbiggestchallenge ofindustry

Low public trust andawareness are still

the biggest challengesconfronting the nation’sinsurance industry, andhas continued to beworrisome to theNational InsuranceCommission, NAICOM.

Commissioner forInsurance, Mr. FolaDaniel, sated thatregrettably, the biggestchallenge of theinsurance industry isstill low public trust andawareness.

Daniel said, “Thebiggest challenge ofinsurance industry stillremains low public trust.If the public do not trustinsurance companies,people will not buyinsurance. The otherchallenge is awareness.People are still notaware of insurance”.

He cited an instance,when a rich man waseducated on insuranceand the need to buyinsurance, he remarkedthat the man wasshocked by the percentof premium he was topay and quickly insuredall his property, addingthat the said man hassince imbibed theculture of insuring hisproperty and promptlytoo.


Business & Economy

By EMMA UJAH, AbujaBureau Chief

T r a n s p a r e n c yInternational, TI, has

advocated a crackdown onmoney launderers and thebanks that aid them in theillicit funds transfers acrossthe globe. A statement by TIyesterday challengednational authorities and theirsecurity agencies to haltmoney laundering whichdeny citizens the much-needed resources for nationaldevelopment.

According to the global anti-graft body, national judicialprocesses are ofteninadequate in tackling moneylaundering as those indictedare often given lightsentences.

It disclosed that as many as100,000 accounts are held inSwiss banks by individualsand corporates whereinvestigations have shownthat many of them actuallyhold concealed funds.

“Banks need to overseetheir employees and enforcehigher ethical standards,which have to be reflected inthe tone from the top, theperformance managementsystem and remuneration.Evidence of moneylaundering abounds, but forthe greatest part,investigations have only

Transparency Int’l seeks crackdownon money launderers…says 100, 000 suspicious accounts exist in Swiss banks

resulted in corporate fineswith almost no criminalprosecutions of individuals.

“Actions by national judicialauthorities to end this criminalbehaviour are largely absent.This lack of seniormanagement accountabilitysends a signal to the corruptindividuals and corporationslaundering cash, and to theirbanks, lawyers and otheragents who assist them intheir crimes, that in this area

there is impunity. This iswrong,” the Chairman of theBoard of Directors of TI, JoséUgaz, said.

TI said that UBS, one of thelargest banks in Switzerland,has already confirmed that itwas being investigated by theUS authorities to determinewhether it helped Americansevade taxes or otherwise.Much of stolen funds fromNigeria by past leaders weretraced to Switzerland which

has been considered as ahaven of stolen money.

A recent report of theAfrican Union and the UNCommission for Africa,revealed that Africa loses morethan $50bn every year in illicitfinancial outflows asgovernments officials andmultinational companiesengage in fraudulent schemesaimed at avoiding taxpayments to some of theworld’s poorest countries,impeding developmentprojects and denying poorpeople access to crucialservices.

Oil tops$60 forfirst time in2015

Oil rose above $60 abarrel on Friday for

the first time this year,bringing gains this weekto 4 per cent, supportedby signs that deeperindustry spending cutsmay curb excess supply.Also supporting oil, eurozone economic growtha c c e l e r a t e dunexpectedly in the finalquarter of 2014 as thebloc’s largest member,Germany, expanded atmore than twice theexpected rate.

The price of Brentcrude collapsed from$115 in June to $45.19,the lowest in almost sixyears, in January due tooversupply. SinceJanuary, mounting signsof lower industryspending have helpedprices rally by more than30 percent. Apache Corp,a top U.S. shale oilproducer, said onThursday it would cutcapital spending and itsrig count in 2015following the pricecollapse, keeping itsoutput growth mostlyflat.

Brent for April deliverywas up $1.12 at $60.40,after trading at a high of$60.54 earlier in thesession. The Marchcontract expiredovernight. U.S. crudewas up 80 cents at$52.01.

“During the last weeks,crude oil reboundeddriven by improvedmarket sentiment and byexpectations that lowprices will lead to lowersupply growth in 2015,”said Daniela Corsini,analyst at IntesaSanpaolo, in a report.Besides Apache’supdate, Royal DutchShell’s chief executivesaid supply might not beable to keep up withgrowing demand ascompanies reducebudgets, and France’sTotal announcedinvestment and job cuts.“Seeing today’s prices,supply will probably notkeep pace with thisgrowth. It may evendecline, as prices areclose to cash costs,” saidShell Chief ExecutiveBen van Beurden.

A consortium led byFirstGate Group has

signed a Memorandum ofUnderstanding, MoU, withthe Federal Government tobuild two separate 1,000MWgas-fired and solar plants inNigeria. The Minister ofPower, Prof. Chinedu Nebo,signed the MoU on theproject with a timeline of fourto five years on behalf of thegovernment

Chief Executive, FirstGateBusiness Intermediaries Ltd,Kelvin Asogwa who signedthe dotted lines at theMinistry’s headquarters inAbuja, promised that theproject will assist in therealization of Mr. President’sPower Sector Transformationwhich is cruising at a high

Indigenous consortium plans two 1,000 MWplants in Nigeria

…Plans training, engagement of 74,000 youths

By CHRIS OCHAYIspeed.

Asogwa said theconsortium will train a total of74,000 Nigerian youths invarious technical trades, justas he disclosed that thecapacity building platformsoverseas will take place inSouth-Korea and Turkey.According to him, “thepartnering overseascompanies have accepted totrain Nigerians after whichthey would be engaged whenthe plant must have come onstream”.

Tagged Tax-Holiday, thescheme is designed as part ofthe MoU for these countries totrain Nigerian youths he said.When asked about its financialand technical capabilities,

Asogwa said that the Grouphas the muscle and assuredthat the dream will come true,adding that the process is like

a circle; from the beginning,it entails training, and latertrainees will be absorbed towork in these plants. Already,the group has acquired 27,000hectares of land in Kogi State,he stressed.

The Minister after thesigning ceremony spoke aboutGovernment’s resolve to doanything that would bringmore electricity that could beaccessed by Nigerians.

He commended FirstGateGroup for this initiative andindeed working closely withthe South-Koreans who havedeveloped solar energytechnology well ahead ofothers.

Prof. Nebo said South-Korea has developed solarenergy to power a cluster ofindustries and trade zonesadding that FirstGate wouldbenefit immensely from the

Asians in developingappropriate technology forbattery storage systems andother Hi-tech uses fromsolar technology.

The Minister warnedFirstGate Group to makehaste while the sun shinesby executing the content ofthe Agreement, stressingthat MoU not realized soonwill become dead.

He also raised the issueof financing, as key in therealization of the project,for the 2 plants it would bein the region of 2 billionUSD times 2, Nebo said.The Minister alsopromised to assist in theareas of licensing, permitsand reports, stressing thatthe ministry will ensurethat all these processesare hastened.

CONFERENCE - From left Kunle Osilaja, Head, Ecobank Capital Nigeria, with panelspeakers, Kamar Bakrin, Helios Capital; Wole Famurewa, Moderator, Markets Editor, WestAfrica, CNBC Africa; James Vincent, Qatar National Bank; and Edem Dzakpasu, Nedbank atthe Ecobank Capital 2015 Investment Banking Conference held in Lagos.


Interview

Bismarck Rewane is the Managing Director/ChiefExecutive of Financial Derivatives Company Limited.He is one of the leading economic analysts in the

country. In this interview, he proffered solutions to the continueddepreciation of the naira, and also commented on how investorsare reacting to the tension generated by the postponement ofthe election. He also offered some advice to the eventual winnerof the election, while highlighting opportunities in the stockmarket for investors.

BY BABAJIDE KOMOLAFE & JONAH NWOKPOKU

Postponement ofelection has led

to investorparalysis

—REWANE

The CBN is trying to avoidfurther devaluation, is it theright thing to do or is itachievable?

I don’t think the CBN istrying to avoid devaluation. Ithink what they are trying todo is to time it and do itappropriately but we don’thave the luxury of timinganymore. We have to do theright thing now. And the rightthing to do is to actuallyreduce the amount ofuncertainty, and therefore thenervousness, the jittery andthe panic. We have movedfrom a situation where we had

the luxury to pick our choicesto where our choices are nowpicking us. And the questionis that we now need to bitethe bullet. When you bite thebullet, the market will correctit. That is, if you move thecurrency to as much as a fairvalue, then the amount ofnaira available to everybodyto buy the dollars will bereduced and naturally thenaira will appreciate in thelong run. But in the short run,there will be devaluation andeverybody will absorb it andwhen they absorb it, we willnow have to deal with how tomake the forward adjustment

which is an appreciation of the naira that willcome after devaluation.

I know that in the past you predicted thatthis is what the value of the naira issupposed to be like, given the currentsituation, what will be your estimate of whatthe naira exchange rate should be?

I think from the beginning, 15 to 20 percentdevaluation is more than adequate. Soanything around N195/$ and N200/$ will giveyou fair value and the currency will still befragile but it will begin to strengthen after that.

In a developing and mono-producteconomy like Nigeria’s, what should be thepriority of monetary policy? Is it inflationtargeting and currency defence or economicgrowth and employment?

No, monetary policy has limited things todo with growth. Monetary policy is aboutstability. It is short term oriented. The fiscalpolicy is that which has to deal with growthwhere you have to deal with taxes, revenues,investment and expenditure and all the otherthings, including incentives. So the ministryof finance, the ministry of economicdevelopment and ministry of investment woulddeal with that. The monetary policy authoritieslook at inflation, currency, the economic valueand the reserves and use the monetary policyto make sure that they control inflation, moneysupply and exchange rates. That is what wecall the holy trinity of monetary policy. So theCentral Bank has nothing directly to do withgrowth but it helps and reinforces fiscal policy.Therefore monetary policy looks at monetaryconditions and uses monetary policy on acountercyclical basis to slow down oureconomy when it is overheated or to engineerand accommodate our economy when it iscontracting, to make it grow again or to makeit more accommodative.

There is this idea that the Central bankshould be targeting more of growth insteadof inflation.

Maybe that is a new thought but there iswhat is called leading and lagging indicators.We look at growth to see whether monetarypolicy is being counterproductive. Growth isan output measure while monetary policyissues are financial measures and you canmeasure it in naira, dollar or interest rateterms. But GDP growth is output, if youproduce 200 tubers of yam, 200,000 barrels ofoil that is the output that you measure. So, ifthe monetary policy is accommodative, it willnaturally lead to an increase in growth butthat does not make monetary policy to be incharge of fiscal policy activity. There are certaincircumstances where the fiscalist, who are incharge with stimulus, stimulating an economy

So what are theunknown unknowns?We don’t know whetherthere will be anelection? We don’t knowwhat is going to happenin the North East? Wedon’t know whether theelection will bepostponed again. Wedon’t know whetherthere will be an interimgovernment, we don’tknow whether there willbe an annulment


Interview

or curtailing with austerity,that is a different set ofresponsibility and activitywhilst the inflation targetingis a monetary policyframework where you havethe nominal anchor. Thenominal anchor is the interestrate but at times, you have thedual anchor, the interest rateand exchange rate and theyare used to bring downinflation if you think thatinflation has gone out of therange. And that is a differentset of skills, different set ofvariables and a differentmindset, totally differentwhen you are chasing growthon one hand and to an extentdevelopment. Developmentis institutional and physicalinfrastructure. I want us todistinguish this. But yousee, because we are in aconfused state, we arecomingling so many thingsby trying to comingle fiscalissues with monetary issues.But the problem withcomingling issues is thatyour vision gets blurred, youare not focused. You beginto chase many things with aconflicting agenda.

How has the election, thepreparation, the campaignand the postponementimpacted the financialmarket?

Political Science is astudy of struggle forpower while politics is

a struggle for power. In bothcases, it creates its ownuncertainties. Uncertaintiesare the by-products of risks.Risk has a price. And theprice of risk ends up in whatwe call volatility. So, thehigher the uncertainty, thehigher the risk, and thehigher the risk, the higher thevolatility and the higher thevolatility, the higher thepremium that you pay for thisvolatility. So anything thatincreases risks, increasesvolatility, and anything thatincreases volatility, increasesthe price of the product whichin this case could be currencyor the interest rate. So acertain level of risk isrequired. So that level of riskwhich is acceptable risk, whenyou cross a threshold whereit becomes difficult and thepremium begins to gethigher. So what hashappened because of electionuncertainty, that is one, thepostponement evenheightened the uncertainty,which has increased the riskand increased the volatilityand increased the price whichNigeria is paying for theseunknowns. So like somebodysaid, the known unknownsare now more than theunknown unknowns whichleads to INVESTORPARALYSIS. So what we now

need to do is to increase theknown unknowns, so that theyare higher than the unknownunknowns and that will giveus a positive quotient whichnaturally will reduce the risk.So what are the unknownunknowns? We don’t knowwhether there will be anelection? We don’t know whatis going to happen in theNorth East? We don’t knowwhether the election will bepostponed again. We don’tknow whether there will bean interim government, wedon’t know whether there willbe an annulment. You see,what you see, is what you get,but what you don’t see is whatgets you. So until theunknown unknowns are lessthan the known unknowns, wbegin to get worried and mynatural reaction is to runaway.

So in the face of where wehave gotten ourselves to,what do you thinkBusinesses should do?

Nothing! But you see,people just vote in favour oftheir fears, once I am afraid,I run. So if you douse myfears, I won’t run. Forinstance, if you see a manstanding on the road withblood all over him and with acutlass in his hands, do youwant to find out if it is ahuman blood? I don’t thinkso.

At your presentationrecently, you said that for thepast three years, the FDI hasbeen on a continuousdecline, beyond the election,what do you think must havebeen responsible for this?

First of all, oil prices are

coming down, you didn’tpass the Petroleum IndustryBill (PIB), and there are somany things. Inflows comeas a result of so manythings. Some of them areglobal. In this case, theglobal inflows to emerging

markets have increased,ours have reduced. So if youare of good behaviour,people will come. If you area good musician, there willbe a lot of people in youraudience, but when you seethe audience start reducing,one year, two years, threeyears, then maybe you haveto change your song.

Irrespective of theoutcome of the elections, doyou see the stock marketclosing with significantgains?

No! I think themarket will godown until after

the elections. And then itstarts to recover. It will not bepositive but it would haverecovered towards the end ofthe year and starts recoveringby the beginning of nextyear.

Given the current

challenges facing thenation’s economy, what willbe your policyrecommendations towhoever wins the elections?

It is to accept the realitythat Nigeria is an oilpoor country, not an oil

rich state. Oil poor becausewe produce, 12, 000 barrelsfor every one million people,compared to 295, 000 barrelsper every one million peoplein Saudi Arabia. We cannotcall ourselves an oil richcountry. Therefore we have tomanage our resources moreefficiently. We have to reduceleakage and we have to bestrategic. What do I mean?We cannot do everything thatwe wish to do. We have toprioritise on those things thatwill make impacts. What arethose things? Road and railtransportation, oil and gas,education, health, and thenrefinery, ports and all therest. So basically, we have toemphasise those things thathave a multiplier effect. Andwe have to give up a numberof things. We have to dis-equilibrate our economy andmake adjustments we can onfactor prices. We have to shiftsubsidies from intermediatetarget to final targets. That is,rather than subsidiseuniversities, we subsidise thestudents. You createuniversity autonomy so thatuniversities charge thecorrect fees, but then thestudents will get scholarshipfrom their states.

Despite the challenges inthe economy, definitely theremust be some opportunitiesfor investors, what are theseopportunities and how canthey take advantage of it?

There are big opportunitieson things that are not importdependent like stocks,insurance, fast movingconsumer goods, foodprocessing, logistics stocks,etc. So anything that is nottoo import dependent, orcompany that is not overborrowed providesopportunities for investors.

What is happening in theeconomy now was predictedby several analysts,including you, about threeyears ago, why did theauthorities ignore thesepredictions?

You see the policy makerand the Nigerian public arein denial. For example, whenyou have a son and someonefrom outside comes and says,it’s like this your son has amalaria and the child deniesit. It is because he does notwant to be given an injection.That is where Nigeria is, theydon’t want the injection.

When you have ason and someonefrom outside comesand says, it’s likethis your son has amalaria and thechild denies it. It isbecause he doesnot want to begiven an injection.That is whereNigeria is, theydon’t want theinjection.


Corporate Finance

The Securities andE x c h a n g e

Commission (SEC) andthe National InsuranceCommission (NAICOM)will collaborate for betterenforcement againstinsurance companies thatmisappropriate fundsraised from the capitalmarket.

This disclosure wasmade by the ActingDirector General of SEC,Mr. Mounir Gwarzo, whohosted the Management ofNAICOM on a courtesyvisit at his office in Abuja.

The DeputyCommissioner, Technical,NAICOM, Mr.Muhammad Kari, hadhighlighted a few casescurrently beinginvestigated by NAICOMwhere funds were raisedfrom the capital market andapplied for personal gain.

According to him, thecases necessitated theinvolvement of SEC asapex regulator of theNigerian capital marketwith the responsibility ofprotecting investors.

Responding, Gwarzosuggested closercooperation between thetwo regulatory bodies toensure erring persons orinstitutions are swiftlybrought to book. “We areready to work closely withNAICOM to resolve thesecases” Gwarzo said.

Presently, collaborationbetween the twoinstitutions happenswithin the framework ofthe Financial ServicesRegulation CoordinatingCommittee (FSRCC).

However, Gwarzobelieves the collaborationcould be even stronger andmore result oriented if thetwo bodies were to set upan inter-agencycommittee.

He said “The FSRCCwas established to facilitatecollaboration across theentire financial system.But beyond that platform,we need to create an inter-agency committeeinvolving specific contactpersons between our twoinstitutions who willstrengthen the synergybetween our respectiveareas of oversight”.

SEMINAR - From left, Dr Gbolahan Elias, Partner, Gbolahan Elias and Co; Mr. TolaAdeyemi, Partner and Head, Audit Services, KPMG; Chief Timothy Adesiyan, President,Nigerian Shareholders’ Solidarity Association (NSSA) and Mr. Goodluck Obi, Partner, AuditServices, KPMG at the Nigeria Shareholders’ Solidarity Association (NSSA) Seminarorganized by KPMG in Lagos.

Market conditions not favourable toIPOs this year — EXPERTSBy NKIRUKA NNOROM

The present marketsentiment which isexpected to be

sustained in the first half ofthe year does not support anymarket listing or an InitialPublic Offer, IPO, in 2015,experts at United Capital Plchave said.

This is contained in theirend of year review titled,“Nigerian Economy andFinancial Markets, 2014Review and 2015 Outlook:‘Tales of Two Halves’.

Already, the stock marketstarted the year on a negativefooting and has been downfor most part of the year.

Resultantly, the marketcapitalization of all listedequities dropped by 16.6percent in just one month,closing at N9.847 trillion asat the close of business onFriday, January 30, 2014,from N11.478 trillion at theend of transactions onDecember 31, 2014.

They noted that: “Followingthe twin stellar performanceof the equities market in 2012and 2013, the market saw twomajor listings in 2014 bySeplat PetroleumDevelopment Company Plcand Caverton OffshoreSupport Group in April andMay respectively.

The dual listing of Seplat onthe Nigerian Stock Exchange,NSE, and the London StockExchange, LSE, in April 2014marked the first IPO on theNSE since the market crashin 2008.

“Seplat listed its shares onthe main board at N576.0(£2.10) per share, making itthe first upstream oil and gascompany listed on the NSE.Following this, Cavertonlisted its 3.35 billion sharesat N9.30 per share, addingN32 billion to the total marketcapitalization of theexchange.”

They however stated,“Though we expect to seecapital raising exercise bylisted companies, a publicoffer is not expected.”

They further observed thatthe equities market in 2015would be shaped by keyglobal and domestic factors,ranging from interest ratehike in the US and UK,falling oil prices, exchangerate instability and possibilityof further devaluation of theNaira.

Others include the effect offalling oil prices ongovernment finance,expenditure and

consumption and the rippleeffect on company’s earnings,effect of the CBN’s tighteningstance on banks’ performanceand earnings, pass-througheffects of devaluation of costof imports and inflation,bearish sentiment, as well asattractive pricing anddividend yield. They notedthat given the dominance offoreign investors in the

equities market, the impactof a capital flight fromfrontier and emergingmarkets on the back ofinterest rate hike in the USand UK will have asignificant impact on themarket.

“The benchmark rate whichhave been at a low of 0.25%since 2009 coupled withliquidity boost from

quantitative easing drovecapital flows into emergingand frontier markets. A hikein interest rate by the US Fedcoupled with impressivenumbers in the US whichcould lead to a betterperforming US equitiesmarket would lead to capitalflight and also reduce inflowinto Nigerian equities,” theysaid in the report.

Stockbrokers seek close ties with CBNto resolve market downturn

By NKIRUKA NNOROM

S tockbrokers in thenation’s capital market

have called for a closercooperation with the CentralBank of Nigerian, CBN, totackle the dwindling fortunein the market.

Speaking on behalf ofother stockbrokers duringthe visit of the CBNgovernor, Mr. GodwinEmefiele, and his team tothe Nigerian StockExchange, NSE, Mr. SamNdata, who is the doyen ofthe stockbrokers, said thatthe cooperation becamenecessary in view of thenegative impact somemonetary policies of theCBN have on operation ofthe market.

He assured the apex bankof their readiness to workwith it in developing themarket, saying, “I can assure

you that we are ready tocooperate and work withyou, particularly indeveloping local talentsbecause we believe that wehave the resources like yousaid, we have the talent andwe have the answer to turnaround this exchange to thedelight of whole Africa.

“It is not just the largestin terms of size, it is also thelargest in terms of resources,and that is why we want towork very closely with you.”

Ndata also called for a moreregularly meeting betweenthe capital operators and thecentral bank to thrash outissues in the CBN’s monetarydecision that could have thecapacity of undermining thegrowth of the capital market.

He said, “We hope we canformalize this meeting so thatthere will be regularinteractions and regularexchange of views between

us because some of themeasures that are taken bythe monetary side, evenwhen they are goodmeasures, often conflict withthe interest of the capitalmarket.

“We believe that if we havean established forum (weused to meet with yourpredecessor, but that is whenthe occasion demands), it willaugur well with the market.

“I will suggest that weformalize this and met moreoften with the central bank toexchange views on how someof your monetary policies aregoing to affect the capitalmarket and iron out thedifferences, so that you canhelp us in developing themarket.”

He, however, decried thepreference by regulatoryauthorities for foreign expertsin the country, saying thatmore attention should be paid

SEC, NAICOMpledge bettercollaboration todiscipline erringcoys


CMYK


CMYK

Corporate Finance

INTERACTION - From left : Secretary General, Association of Professional Bodies of Nigeria, Jacqueline Odiadi; 1stDeputy President, Dr. Omede Idris; President, Mr. Foluso Fasoto; and 1st Vice President, Chartered Institute of Stockbrokers,Mr. Oluwaseyi Abe, during a board meeting on Extra-ordinary General Assembly Political Interaction in Lagos.

As part of strategic move to boost itsrevenue base , theChartered Institute of

Stockbrokers (CIS) has signed aMemorandum of Understanding (MOU) onfrontier partnership with Business InNigeria Events Limited(BINEL).

Under the frontier partnership, BINELLimited would assist the institute to co-ordinate its high profile events and ensureprofitability. The events which include thefamous Annual National Stockbrokers’Conference and Annual National Workshoprequire high capital outlay in view of theirprofessional and national relevance.

The institute’s major events thrive onattendance by top government functionariesand eminent people from the OrganisedPrivate Sector, OPS including top classprofessionals. By the new businesspartnership, BINEL would henceforthpackage, and market the high profile eventsof the CIS in order to generate revenue,sponsorship and ensure maximumattendance quality audience subject to theagreement between the two organisations.

Commenting on the MOU, the Presidentand Chairman of Council of the institute,Mr Albert Okumagba described it as historic.In his words “ The institute has a strong

PZ WilmarinvestsN12.4bn invegetable oilproduction plant

BY PRINCEWILLEKWUJURU

PZ Wilmar NigeriaLimited, asubsidiary of PZ

Nigeria Plc, a quotedcompany on the NigeriaStock Exchange, NSE said itinvested about N12.4billion($75 million) in its vegetableoil production plant , as itexpects 100 percent localcontent input in five years.

The Managing Director ofthe company, Santosh Pillaidisclosed this at the rewardceremony of Devon Kingsvegetable oil ‘Cruise promo,’where its trade partnerswere rewarded with prizesworth over N30 million,which included cars and cashprizes in the Lagos zone of thepromo for their performancein the 2014 financial tradingyear. Speaking on localmaterial input in thecompany ’s productionprocess, Pillai said, currently,15 to 20 percent of its localproduction comes from localraw material, “this is becausewe just stated the plantationin Cross river state .” Henoted. He stated further thatthe 26,000 hectares farmlandin Cross River state on whichthe plantation rests is part ofthe company’s object to seethat in the next five years 100percent of the plantation willform significant portion of thecompany’s products.

Explaining the rationalebehind the promo, Pillai whosaid PZ Wilmar is a JointVenture between PZ Cussons and Wilmar Internationalstarted operation in 2013 inNigeria clarified that thepurpose of any promotion isto ensure that trade partnersare able to reach theirconsumers in a much moreattractive manner and get theright kind of returns for theinvestment they have made.

He said Kings is asignificant brand and whenthe company introduced the 5litres “we wanted to ensurethat the consumers understoodthe value of the product. Wecannot reach the consumersfast unless we createincentives for the tradepartners and make theproduct available and equallymake the consumers aware ofit”.

STORIES BY PETEREGWUATU

The Board of Directorsof NigerianBreweries, NB Plc has

declared a total dividend ofN37.2 billion for the 2014financial year. The amountrepresents a pay out of N4.75(four naira seventy five kobo)per ordinary share of fifty koboeach.

According to the company,the total dividend ofN37.2billion has beenrecommended by the board forshareholders’ approval at the2015 Annual GeneralMeeting, AGM.

A statement released by theBoard, said the company hadearlier paid an interimdividend of N9, 453, 380,540.00 (nine billion, fourhundred and fifty threemillion, three hundred andeighty thousand, five hundredand forty naira only) that is,N1.25 (one naira twenty fivekobo) per ordinary share offifty kobo each in October2014. Thus the final dividendwill be N27, 751, 853, 108.00( twenty seven billion, sevenhundred and fifty one million,eight hundred and fifty threethousand, one hundred andeight naira only), that is,N3.50 per ordinary shareheld. If the proposed finaldividend is approved, it shallbe paid subject to a deductionof withholding tax, on the14th of May 2014 to allshareholders whose namesappear on the company ’sRegister of Members at theclose of business on the 4th ofMarch 2014.

The statement signed byMr. Uaboi Agbebaku,Company Secretary andLegal Adviser revealed thatthe company recorded a

NB declares N37.2bn dividendrevenue of N266.3 billion in2014, a 0.8 per cent declinefrom N268.6 billion revenuein 2013. The results from thecompany ’s operatingactivities showed a profitbefore tax of N61.4billion anda profit after tax ofN42.5billion for the yearunder review.

Agbebaku said despite thechallenging circumstances in2014, the Company was ableto return creditable results forthe year due in part to herCost Leadership and

Innovation agenda. “In thecourse of the year underreview, the Companyconcluded the legal processwhich culminated in a mergerwith Consolidated BreweriesPlc resulting in an enlargedcompany. The effective dateof the merger was 31stDecember, 2014. Thereported performance doesnot include the results of thedissolved ConsolidatedBreweries Plc”, the statementsaid.

“The beginning of 2015 has

seen a continuation of thechallenging businessenvironment with even moreimpact on disposable income.However, our Company ispoised to maximize theeconomies of scale arisingfrom an enlarged companyformed from the merger withthe dissolved ConsolidatedBreweries Plc, with a view tocreating more value forshareholders. Our innovationand Cost Leadership agendawill be enhanced in 2015 and,the Company is also in aposition to take advantage ofany upswing in the economyand maintain its marketleadership”.

CIS, consulting firm sign MOUon frontier partnership

strategic plan that requires huge capital toexecute; hence, the partnership agreementwould advance the realisation of the vision,mission and core values of the institute.Okumagba explained that the broad objectiveof frontier agreement is to raise the bar forthe institute’s revenue base for enhancedexecution of its laudable programmes.”

BINEL’s Managing Director, MrChristian Udechukwu explained that thecompany would deploy all its platforms toenable the CIS realise its revenuemobilisation objective. Udechukwuexpressed optimism that his company isblessed with human capital that can drivethe new relationship with the institute.BINEL is a frontline professional consultingfirm renowned for assisting clients toorganise high profile events that cangenerate income in the final analysis. Thefirm would work very closely with theProgramme Committee of the CIS to haverelevant information needed for organizingany event.

Meanwhile, the institute had signed anMOU with many notable organisations tomobilise 150,000 young graduates to enrolfor its Professional Diploma in Securities andInvestment Examination.


CMYK

CMYK

34 —Vanguard, MONDAY, FEBRUARY 16, 2015


CMYK

CMYK


to improve the bank’s balancesheet to modify its standingas a financial institution

Our strategy will involvedeveloping pro-active andeffective strategies to attractoffshore funding foraffordable housing toNigerians as well asimproving service delivery toNHF contributors across thecountry. We also plan to lookat improvement of membersof staff welfare across boardto ensure a well motivatedworkforce and profitableoperations.

The new management willalso ensure the completion ofongoing housing estateprojects under the MinisterialPilot Housing Schemenationwide and thecompletion of the GoodluckJonathan Legacy Estate inKaba District in the FederalCapital Territory, FCT will bevigorously pursued.

As a returning member ofthe team, I have had theprivilege of experiencing thevarious challenges facing theFMBN as well as thehousing sector in general.We have tried to improve onthe little we find on ground,people say we did well butwe are just starting and wehope within the next fewmonths we will be able to domore so that the results of theefforts will be realized. Wehave set an agenda forourselves and chief amongthem is the recapitalization ofthe bank. We have madesubstantial progress on that,in the next few weeks we willsee results on the table.

How soon is therecapitalization and howmuch are we looking at?

Very soon, timing is veryessential. There are fewissues now. You know we arein politics so government willconcentrate more in that areanow but we have beenpromised as soon as possible.What we have requested foris N250 billion. But at themoment there are a lot ofcompeting needs, security,infrastructure but I know thatthey will do it.

Do you think a single digitmortgage rate can besustained given availableeconomic indices?

Yes, our rate has alwaysbeen single digit, our estatedevelopment loan orconstruction loan is 10percent, our mortgages are at6 percent and we also intendto extend that same rate tothe informal sector so that wecan make the housesaffordable to them. Nigerians

is to introduce new buildingmethods that will now reducethe cost of houses.

We just came back fromThailand with officials ofFCDA, Ministry of Lands, andHousing and UrbanDevelopment. After theTsunami, they commissionedseven universities to doresearch on affordable andsustainable housing. We haveseen the development in thatcountry. We took sand fromKuje here and they took it tothree of the universities. Itwas discovered that it is even17 times better than theirsand. So they are producingsome blocks for us with lessthan 5 percent cementcontent. So if we do that, thatissue of affordability will beaddressed. Apart fromaddressing the issue ofaffordability, we want toaddress the issue of deliveringquality houses. This isbecause most of the houses,particularly in Abuja, forwhich some of the mortgageshave been created; you willend up paying for a mortgagefor 20, 25 years. How are wesure that these houses willalso last up to that time? Wewant to check that aspectbecause for us to be able togive you mortgage for aparticular tenor, we have tomake sure that the house willbe able to stand within thatperiod. With the support ofNigerians, these are some ofthe things we want to do.

Accessibility to land isstill an issue, how do youplan to tackle it?

I agree with you, but wehave put a MoU in placewhereby we are working withvarious state ministries ofland and we are also workingwith the various labourorganizations for the land toeither be allocated to us as agovernment bank or to beallocated to labour directly.Why we are doing that is toreduce the cost because if youallocate it to the developerdirectly he will put any costhe likes on the property. Andwe insist that particulargovernment that is allocatingwhether it is a state, federal ofeven a local government thatthe land should be allocatedfreely particularly on thehouses that we are buildingfor NHF contributors. I amhappy to say that as at todayin all the six zones where wehave pilot projects we aredoing on the ministerial pilotscheme all the land that havebeen given to us is donatedfree by the various stategovernments.

Homes & Housing

Nigerians can’t afford more than single-digit mortgage — FMBN MD

By YINKA KOLAWOLE

Nigerianscannot affordany anythingabove singledigit becausethe averageincome is verylow, that’s whywe areproviding abuffer wherebythey are able topay

The FederalGovernment recentlyre-appointed Mr.

Gimba Yaú Kumo asManaging Director of FederalMortgage Bank of Nigeria(FMBN) for a second tenureof four years. In thisinterview, he assesses themortgage industry in Nigeriaand the plan to recapitalizeFMBN for betterperformance. Excerpts.

How would you describethe mortgage industry inNigeria at the moment?

The mortgage industry inNigeria is just starting if youlook at the size of ourcontribution to the GDP is lessthan one percent but my targetbefore I leave here is that weshould be able to contribute atleast 15 percent. That is whywe are putting a lot of issueson ground to be able to drivethis process. And how do youdo that? If you look at theNational Housing Fund(NHF) that we are managing,out of the 170 millionpopulation less than onepercent are the onecontributing so we said this isnot good, how do we reach theother segment of the societythat are not in formalemployment.

Have you resolved the issueof NHF concerning some ofthe states that pulled out?

As at today, we have only sixstates that are not in NHF andmost of those states,particularly Lagos, whathappened is that they haveformed co-operative societieson their own. They haveregistered with us, so they arecontributing indirectly toNHF. The other states, we aretalking to them and as soonas possible we will see whatwe can put on the ground.This is because workers wantto see actual action; they wantto see the mortgages created.This is what we are trying todo in all the 36 states, to beable to build the houses,create the mortgages and atthe end of the day we will beable to convince them. But Ican assure you that in the next10 to 11 months all the stateswill be back.

How many mortgages doyou hope to create in the nextfour years?

It depends on availability offunds, but I hope to createbased on the memorandum ofunderstanding with NLC,TUC and NECA, we should beable to do at least four million.

With your re-appointmentas MD, how do you intend toimprove the fortunes ofFMBN?

We will work to continue toprovide quality and affordablehouses to Nigeria and strive

cannot afford any anythingabove single digit because theaverage income is very low,that’s why we are providinga buffer whereby they are ableto pay.

Like we took the minimumwage of N18, 000 as a base,with that you can be able todo a mortgage of N450monthly. So this is theminimum the informal sectorbeneficiaries are expected topay but this will be difficultfor some of them so we arelooking at a subsidy.

Is there any way that PMBscan be prevailed upon tocharge single digit interestrates?

If you say government, youare talking in terms ofagencies that delivermortgages. On the

government side for now it isonly FMBN that is reallydelivering mortgage. Andour mortgage is single digit,six percent. We charge ourmortgage at the rate of 6percent on a long tenurebasis, 15, 20 and even up to35 years

Why is it difficult fordevelopers to giveNigerians affordablehouses?

The houses are expensivein the sense that cost ofmaterials for constructingthese houses are also high.So, there is need forreduction in the cost ofcement, there is need for areduction in the cost of ironrod and other accessoriesthat will make up the houses.Once that is done, I think itwill go a long way in reducingthe cost of the houses.

These are the issues we aretrying to address. If you lookat the earning of Nigerians,particularly somebody whoearns N18, 000, which is notup to 100 dollars going bytoday’s exchange rate, thatperson is not in a position tobuy even a one bedroomapartment going by thepresent structure. So what weare working together with theministry to see if we can havediscount on some of theinputs that make up thehouse like discount oncement, discount on rods forconstruction and also hat weare trying to do on our own

*Gimba Yaú Kumo, MD, FMBN


CMYK

Micro-Finance

CIBN pledges support for MFBs, lauds AMfB'sfinancial inclusion strategy

Stories byPROVIDENCE OBUH

Chartered Institute ofBankers of Nigeria(CIBN) has assured

continued support forbanking industry, especiallythe Micro-finance Banks(MfBs) sub-sector operatingin the country to realize theirobjectives, commendingAccion Microfinance Bank(AMfB) for its commitment tofinancial inclusion.

President/Chairman ofCouncil, CIBN, Mrs. ‘DebolaOsibogun, gave thecommendation during hervisit to the bank’s head officein Anthony, Lagos. Shefurther commended thebank’s relentless support forthe development ofmicrofinance and effortstowards empowering micro-entrepreneurs and low-income earners.

Osibogun said that the bankcontributions to the institute’sendowment fund wouldfurther engenderprofessionalism and stimulateimproved performance bystudents writing the CIBNMicrofinance CertificationExaminations.

“This is a valuablecontribution towardssupporting capacity buildingfor the microfinance bankingsector and by extension, theeconomy at large,” she said,encouraging MfBs in thecountry to work out processesof accessing the intervention

fund provided by the CentralBank of Nigeria for economicdevelopment as well asdevelop business strategiesthat would enable themattract targeted customers.

She stated that theInstitute’s core mandatesincludes determination of thestandards of knowledge and

skill to be attained by personsseeking to become membersof the banking profession;conduct of professionalexaminations leading to theaward of certificates as maybe prescribed by the Instituteand ensuring the furtherance,maintenance and observanceof ethical standards andprofessionalism amongpractitioners of the bankingprofession in Nigeria.

ChamsMobile, Skye Bank to launch virtual Visa cardin Nigeria

ChamsMobile incollaboration with

Skye Bank Plc hasentered into agreementto launch a Virtual VisaCard in Nigeria anentirely digital paymentcard for online andmobile use.

In a statement, DeputyManaging Director,ChamsMobile, Mr.Gavin Young, expressed

excitement in partnering withSkye Bank on the new virtualpayment solution, developedwith the company ’sinternational joint venturepartners Bancore and GlobalTechnology Partners (GTP).

Young explained that withthe virtual visa card offeringon mobile phones, millions ofNigerians will have access topayments and makepurchases, along with a rangeof other services, by using a

added: “the bank chose towork with ChamsMobile, andits card processing partnerGTP, based on carefulconsideration of the benefitsall parties could bring to thetable and in consideration ofhow the bank could best servethe millions of Nigerians withthis product and particularlythose who may be financiallyexcluded, requiring a low costyet fully inclusive financialservices offering.”

“People are saying youpeople said you will do [byDecember 2014] 6,000MW,yes! We have the capacitystanding..” ProfessorChinedu Nebo, Minister ofFinance, PUNCH, January28, 2015, p 38.

That statement by theMinister was tuckedinto a report which

screamed, POWERGENERATION DROPPEDBY 2,042MW. The story wenton to state that “Peakgeneration for the country asof Tuesday was out at3,865MW, while 3,331MWwas the figure for the off-peakgeneration.” Meanwhile, thefirst month of the year hascome to an end and thenation is still receiving lessthan 4,000MW steadily,despite the lies by the PDPand the Minister’s wideningcredibility gap. ProfessorNebo simply cannot stopmaking promises which willnot be redeemed; he can alsonot keep his mouth shut. And,when he opens it, anotherfutile promise drops. Whatsort of a Minister is this?Hundreds of Ministers havegraced the offices of theFederal Government sinceAlhaji Abubakar TafawaBalewa, Prime Minister ofNigeria, formed his cabinet in1959. None had made asmany promises as Nebo and

Can this man beserious? 2

none had been so devoid ofremorse when he fails to keepthem. What sort of man isthis? On the occasion inreference, he was up to hisold tricks again. According tohim, “by 2016, we expect toget up to 10,000MW; and, by2017, to get 12,500MW’. Whoin his right senses willbelieve this man anymore?Who will believe a man whohad failed each and everytime he promised? Yettrillions of naira worth ofinvestment is riding on this;not to talk of the future ofNigeria.

While the man’s credibilityhas been eroded to nothing,he can nevertheless becounted upon to ensure thateverything that will workagainst the interest ofNigerians is implemented.Last week, Nebo was at hisworst when he proclaimed asfollows: “Less than 50 percent of Nigerians are metred.How do you collect yourmoney? The commerciallosses are huge and

unfortunately somebody hasto pay for it. Andunfortunately again, it isthose who are paying that arepenalized to pay for thosewho are not paying[underlining mine].”

Since the Minister has notdenied making thatstatement, then it must beassumed that he wascorrectly quoted. And, if so,it stands as the mostirresponsible statement by apublic official ever in history.The plain meaning of the

unfortunate (to use Nebo’swords) declaration can bereduced to LEGALISEDROBBERY by the FederalGovernment of Nigeria and itsunfortunate (to use the wordagain) Minister who wouldhave been better left in theclassroom. Like severalmillion Nigerians, honest andresponsible citizens, who paytheir bills monthly, I deeplyresent being told by athoroughly misguidedMinister that we must beforced to pay somebody else’s

bills simply because both theGovernment and the stupidowners of DISCOs, whoinvested in the sector, startedoff without asking thequestion “How do you collectyour money?”

While still on the issue ofresentment, the Ministerneeds to be told that he hadmade a statement whichmight form the basis of a classaction suit involving severalthousand customers of EkoElectricity DistributionCompany and me and theCompany. We would not onlydemand for restitution but forpunitive damages for willfulembezzlement of our hardearned money. To be quitecandid, it is remarkable thata Professor could notunderstand the fullimplications of what he said.

The Professor had alsoinadvertently raised anotheroption available to those of uswho have been responsible.

We can also stop being soresponsible, consume powerand pass the bill to others topay. Even the village idiot caneasily see that if enoughpeople select that option, theDISCOs will be liquidated inno time at all.

The banks, which alsofinanced their investment willalso be in deeper trouble thandeclining crude oil prices hadalready brought upon them.

We can also stop being soresponsible, consume powerand pass the bill to others topay. Even the village idiot caneasily see that if enoughpeople select that option, theDISCOs will be liquidated inno time at all

Visa card from their phoneand other electronic devices,with the benefit of access tothe global digital economy.

“E-commerce savvy userscan shop securely online andthose without a formalbanking relationship willsuddenly have the means tomake their money work forthem and move towardsfinancial inclusion,” he said.

Head, E-Channels, SkyeBank Plc, Mr Akinwale Ojo,


People in Business

BY VERA SAMUELANYAGAFU

Mr. Edwin ObioraOkafor is theC E O / M D ,

Access TelecommunicationLink Service Limited, anindigenous company withHead office in Jakarta,Indonesia.

Noted for his remarkablecommitment totelecommunication andhybrid security technology,Okafor was determined toensure that all Nigeriansreceive the best of hisservices at an affordableprice.

Shortly after his universityeducation, he ventured intoentrepreneurship, thenmanufacturing and provisionof security services acrosscountries, including Nigeria.

With his research anddevelopment centre inJakarta, Indonesia, Okaforwas able to provide reliableand advanced securitysystem to enhance and dealwith some of the securitychallenges facing Nigeria.

In this interview withVanguard, the IT wizardspoke on many issues,especially the need to haveNigeria properly equippedwith the necessary ITproducts for the security ofall and those who may havecome into Nigeria for onebusiness or the other.

Excerpts;

BackgroundShortly after obtaining a

Higher National Diploma(HND) in ElectronicsEngineering, Mr. EdwinObiora Okafor proceededoverseas for further trainingon hybrid technology tocompete with other hybridtechnology experts.

Back in Nigeria, hisexpertise was sought by twoN i g e r i a nTelecommunication servicecompanies, followed by aforeign telecommunicationservice company, where herelentlessly contributed hisquota towards providingquality telecommunicationservices to Nigerians.

Striving to be on top of hisgame, Okafor floated Access

Telecommunication LinkService Limited in 1992 andwith a research anddevelopment outfit inIndonesia, he was able toaccomplish his vision anddreams of giving Nigeriansthe best in respect of hybridtechnology.

What we doOkafor said that

Telecommunication LinkService’s hybrid securitysolution is customised to

insecurity by usingcommercialised securityproducts to fight crime.

“Our solution canstreamline insecurity andassure a track record of anycriminal action any time,any where, because wespecialise on building acustomized securitysolution based on thenature of the insecuritythey intend fighting,

“In addition, we haveinvested resources andenergy into operationaldevelopment initiativethat will support ourchronological growthtarget. Our companyhas trained engineers onthe board which give R&Dsupport service for anyproduct developed by us,we go the extra mile to trainour customers in anyproduct developed by usand ensure that ourproducts are customer-friendly and stand the testof time.”

Challenges"We are rarely challenged

with having to deal withcounterfeiting products.

Although we mayencounter hurdles arisingfrom technical issues insome situations, it neverhampered provision ofquality services to ourcustomers.

The issue of maintenanceappears worrisomesometimes, but in all, wehave been able to maintaina standard unequalled.

Gatheringcomponents

“A good number ofthe components weuse come through ourhead office in Kalibatacity square in Jakarta,Indonesia, and for the factthat we have proven ourworth in terms of providingquality services, mostt e l e c o m m u n i c a t i o n scompanies in the countryhave signed us on asstrategic partner toproduce, install andmaintain their customisedsecurity base devices,PABX equipment, hybridsecurity technology telecomproducts, etc.

“We are technically driven

to deliver the utmost servicein security system, IT andTelecommunication supportservices. We aresynonymous with buildingexcellence and specialisedservices and will continue tointroduce innovativeproducts to satisfy theneeds of our new andexisting valued customers.”

Business regulatoryrequirements

“Of course, the regulatoryrequirements expected for

the type of business we doare not ruled out.

We are fully aware that thesecurity of lives andproperty is the focus ofevery well-meaning

government, and as such,we are up to date with

all the regulatoryexpectations inrespect of ourservices.

Consequently,we have goneinto partnershipwith thegovernment inareas ofc u s t o m i s e dhybrid securityproducts toassist inbalancing theiro b l i g a t o r y

mandate towardssafe- guarding

lives and propertyof citizens.

We cannotoverlook theurgent need forprevention ofk i d n a p p i n g s ,armed robberiesand other relatedcriminalities that

occur on a daily basisacross the country.”

Okafor also added that,“ A c c e s sTelecommunication LinkLtd has given birth to anew company, Eagle Eyefollowed by Access Gold.

“In the past, we havehad cases of kidnappings,assassinations, bankATM frauds, and robberyattacks, where lives andgoods worth severalbillions of naira werelost.

On many occasions,these unfortunateincidences occur atnights and odd hours,and being aware of thatwe are in the age oft e c h n o l o g i c a ladvancement, we haveworked tirelessly toimprove the quality ofhuman existence byprotecting andenhancing their livesthrough our improvedtechnologies.

“With the presenceof these companies inNigeria, Nigerians are

sure of receiving the bestof a world class securitydevice to fight crime, asour security solutionsurpasses the securitydevices currently beingused in both governmentand privateestablishments across thecountry.

Same is applicable to ourtelephone sets, DigitalPABX equipment, GPSTracker and otherdevices."

help citizens andgovernments checkmatevarious levels of criminalityin the society.

“The service ensures thatcitizens and foreigners in thecountry go about theirbusinesses without fear. Thefact is that management ofcompanies in Nigeria,especially foreign investorsare not comfortable with thesecurity challenges facingthe country.

Most foreign investors areafraid of investing in Nigeriabecause there is no securitysolution. It is worthy of notehere that no country willovercome challenges of

We are enhancing livesthrough improvedtechnologies— OKAFOR

No countrywill overcomechallenges ofinsecurity byusing acommercialised securityproducts tofight crime


Aviation

The Nigerian CivilAviation Authority,

NCAA has declared that itwould sanction all airlinesthat are indebted.

The Director General ofNCAA , Captain UsmanMuhtar, who made thedeclaration, added thaterring airlines who fail topay up their outstandingdebts and remit their currentpayments would faceappropriate sanctions.

According to him,”alloperating airlines who areindebted to the authorityshould commenceremittance of outstandingand current payments orappropriate sanctions will beapplied in full”

Captain Usman howeverappreciated the airlinesoperators including theforeign airlines for theirefforts to ensure safety andsecurity in all theiroperations.

He said that while theprimary safety lies in thepurview of the operators, theregulatory authority wouldcontinue to provide theregulatory framework thatwould increase their valuechain.

The NCAA DG furtherurged the operators toadhere to their maintenanceschedules and train theirstaff to allow for symmetricalworking relationship withthe well trained staff ofNCAA.

While enumerating hispolicy for the year 2015,Captain Usman stressedthat his focus was anchoredon the training andretraining of staff of theagency.

According to him, theAuthority will not rest on itsoars but will ensure a greaterefficiency and sustenance ofthe robust regulation thathas been the hallmark of theNCAA.

He said this whilespeaking to the managementand staff of the Authority onhis policy outlook in 2015 atthe aviation house premises.Usman reiterated that quiteremarkably 2014 was anaccident free year, however,complacency will have noplace in our regulatoryfunctions rather it will bestrengthened by adequatetraining of staff this year.

AON decries redundancy of 327 pilots

Chairman of theA i r l i n e sOperators of

Nigeria, AON, CaptainNogie Meggison hasdecried the inability of theFederal Government toprovide job opportunitiesfor about 327 pilots who arecurrently in search of jobsin the aviation industry.

This is coming on theheels of the statementcredited to the Minister ofAviation, Mr. OsitaChidoka that all the privatejet operators must have aNigerian pilot onboard asthis would help in creatingemployment for them.

According to CaptainMeggison, “as at today,we have about 327unemployed pilots who areregistered and looking forjobs. The Minister made astatement, he said there are90 airplanes and privatejets operating in Nigeriawith

foreign registrations. Ifyou take that alone, thereare two sets of crew perairplane so if you even say90 - and we are saying itsabout 140 or 190 but he says90 - but even if we take 90alone 90 are two sets ofcrew per airplane becausethey cannot flycontinuously”

To him, it was logical forthe government to createjobs for the people notingthat any private jetsoperator or anybody flyingin Nigeria was expected totake

Nigerians in the cockpitas this would create jobsand take people.

He said “it is only logicaland mutually benefittingand makes more sense

and when any airlineoperating and taking fromthe government createavenues to create jobs for thepeople. It is not a novel ideathat Nigeria is standingalone to say that any cockpitoperator or anybody flying in

Nigeria is expected to takeNigerians in the cockpit.This will create jobs andtake people off the street”

“A country with 180 millionpeople you can count thenumber of people flying. Asthey say, one in every four

black men is a Nigerian whycan’t we have one in everyfour African aviator to be aNigerian? If you take theposition today, you willprobably be talking of one inevery one hundred aviator outof Africa to be a Nigerian”

NAHCo partners NSCDC to boostairport security

The Nigerian AviationHandling Company

(NAHCoAviance) has enteredinto a partnership with theNational Security and CivilDefence Corps in order toenhance security at theMurtala Muhammed

International Airport, MMIA,Lagos.

Disclosing this developmentto newsmen, Head, CorporateServices, Nahco aviance, Mr.Bashir Ahmed Gulma said thatthe agreement brought aboutthe deployment of about 25

NSCDC operatives at theCargo terminal of the airport.

Mr. Gulma pointed out thatCivil Defence operatives weredeployed to assist inimproving security at thecargo terminal since the fracasensued between men andofficers of the Nigeria CustomsService and licenced agentsin November last year whichled to the closure of the Cargoterminal for about two weeksby the Federal Government.

According to him ,”Armedoperatives of the NSCDC hadsince January taken uppositions in various sectionsof the terminal. They wouldhave the responsibility tofurther enhance the securityof the terminal. Theoperatives who are about 25in number would complementother security arrangementsalready put in place by theground handler, who also hasa subsisting MoU with theNigeria Air Force”.

Dana Air to commence daily flight operationsto Owerri

Dana Airline hasindicated its

readiness to begin its dailyflight operations to Owerriairport in a few weekstime.

Disclosing thisdevelopment to newsmen,Chief Commercial Officerof the airline, ObiMbanuzuo said that suchmove was part of theairline’s expansion plan toconvey passengers to theirvarious destination across

the country.According to Mr. Mbanuzuo

“Dana Air is prepared tocommence daily flightoperations to Owerri in thecoming weeks as part of itsexpansion drive to make itsunique services readilyavailable to all”

The Airline’s ChiefCommercial Officer furtherpointed out that in the spiritof valentine season, theairline has introduced apromotional fare in itsbusiness class which waspegged at N27,000.

While unveiling thevalentine promotional fares,Mr. Mbanuzuo stressed thatwith such fares in place, itwould afford most of theairline’s guest to travel at easeand comfort with a lot ofleisure during their trips.

“We want to encourage ourguests to travel for leisure andbusiness in style and comfortthis season and this initiativeis part of our commitment tocontinually offer pocketfriendly fares across our saleschannels” he said.

NCAA tosanctionairlines overindebtedness

SEMINAR- From left: Mr Paul Uduk, Managing Director, Vision and Talent Ltd; MrsJameelah Ayedun, Chief Executive Officer, CR Services and Mr Ibrahim Salau, ManagingDirector, Environmental Accord Nigeria Ltd, during a 'Train the Trainers' seminar on masteringTraining and Facilitation Skills organised for Chief Executive Officers by Vision and TalentLtd in Lagos.

Stories By LAWANIMIKAIRU & DANIELETEGHE


CMYK

E-Commerce

PARTNERSHIP - From Left: Mr. Arnuad Davigne, Managing Director, Online Classifieds, Africa Internet Group, Hon.Metche Nnadiekwe, General President, United Berger Motor Dealers Association, UBMDA, Apapa, Lagos, Monday Otabor,Chairman, Sahen Park, UBMDA and Christian Keller, Managing Director, Carmudi Nigeria at a partnership renewal eventwith Berger auto dealers in Lagos.

Stories BY JONAHNWOKPOKU

GREENFIELD AssetsLimited says its Aba

Mega Mall being constructedat the cost of N50 billion(about three-hundred-million

N50bn Aba Mega Mallto go online

dollar) will go online on theday it is commissioned.

“We are going to have AbaMega Mall online. So the e-commerce of this mall willcommence operation at thecommissioning. What thatmeans is that if you can’t come

down to the mall to shop, youcan shop online, whereveryou are in the country. Evenif you are in Lagos or Abuja,you can shop from any shopin the mall and it will bedelivered to you at yourlocation,” said Paul Obanua,Group Managing Director ofthe company.

According to him, theproject when completed andoperational will stimulateeconomic activities in thestate and the entire South-East and South-South regionsof the country.

He also stated that oncompletion, the project wouldbe the first mall with a dryport in Nigeria and Africa aswell as the biggest mall in thecontinent.

“The dry port is going be a30,000 square meter bondedwarehouse, which affordspeople of the South-East theopportunity of getting theirgoods in, on time. So, theydon’t suffer time wastages,due to port congestion at ourvarious sea ports.

“We are going to also offergood storage facilities-automated climate controlledfacility. So this mall is goingto be a one-stop-shop. And bythe second phase, you aregoing to have a 100-roomhotel come up here at the AbaMega Mall.

“So, we are going to have asection that will be called theAba Business Resort, so thatyou have your events here,like conferences and whenyou are in the South-East, youcan also lodge in and do yourbusiness.”

Elite Employee Quest competition, aninitiative of the online enterprisesolution, PushCV .com has unveiled

officially in Lagos.The Elite Employee Quest, according to Co-

Founder of PushCV, Somto Ifezue is aimed atsearching out 5,000 of the best qualified jobseekers and placing them into gainfulemployment in organisations.

“The programme is aimed at testing andassessing these candidates, to test theiremployability before we could place or publicisethem to the companies in the labour market,”Ifezue told Vanguard on the sideline of an eventto announce the competition beforestakeholders in Lagos. He said interested andqualified candidates who want to be part of thecompetition “can apply online and take a coupleof tests on online and we get back to them aftera week.”

“The programme is expected to run for sixweeks. Every week, the candidates are giventasks and are assessed by our stakeholders andpartners. Every week they enter a different stageuntil the end of four weeks. By the fifth week, westart doing real interviews and at the end of theday, we come up with ranking process based onhow fast a candidate has been able to complete atask. In the end, we have the final 5, 000 and

Elite Employee Quest debuts, targets 5000 job seekerstheir names being published in themedia,” he explained.

Also speaking on the competition andits place on addressing the challenge ofunemployment in Nigeria, OlumideSoyombo who is a board member ofLeadpath Nigeria, a PushCV Investor, toldVanguard that the Elite Employee Questinitiative does not just seek to employ jobseekers but to empower them with therequisite skills needed to thrive in thelabour market.

“Platforms like these are here forenablement and capacity building. Mosttimes we talk about unemployment in thecountry but what about employability? Howmany of these people are actuallyemployable? So what is different from whatPushCV is doing apart from job placementis that they also have initiatives aroundcapacity building,” he said.

PushCV which started operations inMarch, 2014 and has processed over 70,000 applications as a recruiter, said its keydrive is to provide a level playing field tohelp talented individuals secure jobs basedon skills, knowledge and experience andput them in front of appropriateemployers.

The Nigerian PostalService has launched

its partnership withKonga.com, Nigeria’s onlinemall, with the opening of acollection centre at theUniversity of Lagos PostOffice.

The UNILAG collectioncentre is the first in a seriesof collaborations by the twoparties to address logisticsand delivery issuesexperienced by e-commerceoperators in Nigeria. Theseinclude a shortage of secureand conveniently locatedplaces where customers canpick-up their purchases, andalso return items that do notmeet up to theirexpectations. Remarking onthe launch of the partnershipbetween NIPOST andKonga, the HonourableMinister of CommunicationTechnology, Dr (Mrs)Omobola Johnson reiteratedthe Federal Government’scommitment to transformingNIPOST into a viable,socially conscious yet profit-orientated entity.

According to her, “The firstPost office in Nigeria wasestablished over 160 yearsago and NIPOST has beenfulfilling its mandate of

Konga, NIPOST partner to drivee-commerce logistics

providing universal access topostal services ever since.Furthermore, the Post officehas grown to become the mostextensive retail network inNigeria.

Carmudi, Bergerauto dealers renewdeal to boost onlinemarketplace

Nigeria’s online carmarketplace, Carmudi

has renewed its partnershipwith auto dealers at WestAfrica’s largest auto market,the Berger Auto Market inLagos.

The dealers, under theauspices of United BergerMotor Dealers Associationexpressed their desire tocontinue their partnershipwith the online carmarketplace, Carmudi inLagos last week.

Speaking at the event, theGeneral President, UnitedBerger Motor DealersAssociation, Hon. MetcheNnadiekwe, told journaliststhat the Carmudi platform hasbrought a new dimension totheir business especially byhelping to boost their marketexposure.

“The world is changing andwe have to change with it.And that is why we have beenenjoying the partnership withCarmudi. They have beenhelping to sensitise ourcustomers through theinternet. Their platform hashelped us to reach morecustomers event beyondLagos state which was hardbefore now."

WaraCake.com, anonline cake making

platform has launchedofficially in Lagos.

WaraCake which means‘Come buy some cake’ nowoperates as an e-commercegifting platform. The platformworks by aggregatingdifferent cake merchants andbakers across Nigeria toprovide customers with amyriad of gift options.

Waracake’s model allows iteliminate the bottlenecksassociated with theconventional cake purchaseprocess.

WaraCake had a soft launchand has been operatingoffline since October 2014;delivering cakes to customersacross Lagos state. Also, inearly 2015, WaraCake startedaccepting orders fromcustomers in Abuja.

It has now officiallylaunched on February 13,2015 and orders are nowbeing accepted on the onlineplatform.

WaraCake.comlaunchesofficially in Lagos


CMYK


Banking & Finance

First City MonumentBank (FCMB)Limited has unveiled

a Mobile Point of Sale (MPoS)terminal, called FCMBPayPad.

The Bank said theintroduction of the newproduct is a demonstration ofits commitment to furthersupport the growth of Smalland Medium ScaleEnterprises (SMEs) and thesuccess of the cashless policyinitiative in Nigeria.

The FCMB PayPad is aportable device that allowsmerchants securely processpayments in a seamlessmanner, driven by a robustmobile application on a smartphone or tablet. It can easilybe customized to suit theneeds of merchants. Thiscould range from inventorymanagement to airtimevending. The device can beobtained from any FCMBbranch across the nation at nocost to the merchant.

In a statement, the Bank

Ecobank Capital, the Investment Bankingsubsidiary of Ecobank TransnationalIncorporated (‘ETI’) hosted its maiden

Conference recently in Lagos, Nigeria. TheConference themed “Nigerian Economy -Navigating the headwinds of Oil prices”brought together business and industry thoughtleaders to discuss the Nigerian Economy andhow to navigate through the current headwinds.

The event was attended by domestic andinternational investors, with the panel speakersincluding representatives from Helios Capital,Dangote Cement, Nedbank, Qatar NationalBank and First-EPDC.

Experts from Ecobank Research reinforced theneed for the Nigerian economy to diversify. Theteam hailed the current AgricultureTransformation Agenda and emphasised theneed for Nigeria to continue in its value capture

Ecobank Capital hosts maiden Investment Banking Conference

in key soft commodities value chain; On theEnergy outlook, the need to recalibrate localcrude oil funding dynamics was also raised.

The Group Executive, Corporate andInvestment Bank, Charles Kie highlightedthe strength of the economy despite theheadwinds. He stated that Ecobank isstrategically positioned to provide therequired support for industry players giventhe bank’s scale and industry experience.

As closing remark, Moyo Kamgaing,Managing Director of Ecobank Capitalannounced that the investment bank recentlyclosed a $1.5 billion landmark deal for SocieteNationale Des Petroles Du Congo (SNPC)for the company’s 5-year capital expenditureprogram and noted that Ecobank Capital iscommitted to providing innovative solutionsfor its clients.

FCMB boosts cashless policy withmobile POS terminals

said that the FCMB PayPadprovides a more secure,simple and efficient paymentsolution to merchants in theNigerian market. It easilysynchronises with any smartphone or tablet running thecustomised application that isfreely downloadable from theapp store. The benefits of thedevice, includes availabilityof transaction details viaSMS, email and paper printand long lasting rechargeablebattery which ensures fewerrecharging frequency. It isalso portable (smaller than amobile phone) which makeshandling very convenient.

According to FCMB’sExecutive Director, ServiceManagement andTechnology, Mr. Nath Ude,the robust nature of FCMBPayPad makes it very reliablefor secured transactionprocessing for merchants thatrun mobile businesses andalso for small, midsize andlarge merchants. He addedthat, ‘’it is also the device of

choice for businesses in the e-commerce space that operatedoor-to-door delivery andneed secured paymentprocessing”.

Mr. Ude continued bysaying, “the FCMB PayPad istruly a payment device thatwill revolutionize how

secured payment processingis done in fixed locations andon-the-go. It is one of theinnovative products fromFCMB designed to enhancecustomer experience across alltouch points and helpmerchants to grow theirbusinesses in a sustainablemanner”, he said.

First City Monument Bank(FCMB) is a member ofFCMB Group plc, which is

one of the leading financialservices institutions in Nigeriawith subsidiaries that aremarket leaders in theirrespective segments. Havingsuccessfully transformed to aretail and commercialbanking-led group, FCMBexpects to continue todistinguish itself by deliveringexceptional services, whileenhancing the growth andachievement of personal andbusiness aspirations of itscustomers.


CMYK

Advertising

Keeping hope alive with 'Airtel Touching Lives'

It was especiallypleasant to see

that following theemotional andthought- provokingpremier episode ofC S R - f o c u s e dtelevision series, AirtelTouching Lives, thetempo and delivery onpromise has notdropped. Thedynamics, emotioncanduor of theb e n e f i c i a r i e s ,creativity and settingsused as the backdrop

AAAN condemns unhealthy political campaigns

The Association ofA d v e r t i s i n g

Agencies of Nigeria,AAAN has condemned intotality the spate ofunhealthy smearcampaigns by thepolitical parties andshadow interest groups

Unilever NigeriaPlc says it has

put plans in motion toincrease the salesprofile of its Close-upbrand duringValentine’s daycelebration byspreading love with its‘cupid game.’

The companydisclosed this whileintroducing the game tothe media where Davidoand Yemi Alade who arebrand ambassadors tothe game explained themechanics of the game.

Speaking, BrandBuilding Director of thecompany, Mr. DavidOkeme, said the brandthrough the game isdeveloping a deeperrelationship withconsumers, particularlywith young peoplewhich will invariablyincrease visibility of thebrand in the market, aswell as affect its marketshare positively duringthe val celebration andbeyond.

Unileverplansincreasedsales profilefor Close-up

of the first episoderemains a recurringdecimal in episode 2. Infact, all the elementsput together form aharmonious blend inthe delivery of a trulycaptivating show thatleaves one yearning forthe repeat episode andthe next episode –showing on Sundays onAfricaMagic channel154.

The second episode’sopening story was abreath of fresh air, a

reminder of how powerful and real thestories of thebeneficiaries are andhow this could be the lotof the viewer. BlessingDanladi, a young poetliving with her widowedmother Rhoda, shows uswith her simple,unassuming demeanorthat dreams can bedreamt and can also bemade to come alive. Shehas turned her love ofspoken word into a skill,amazingly beyond her

years and circumstance.Her delivery of a poemshe wrote rivals that ofmany a spoken wordartists and gives hope

that this blooming art-form has a body ofupcoming practitioners.

Her dream to be adoctor to in her words“to take care of peopleso they feel better” isreminiscent of many ofour childhood dreams.

However, I make bold tosay we may have aNigerian Maya Angelouon our hands. Hernominator, Joseph Yaba,proved that there is ariver of human kindnessstill flowing in the heartsof Nigerians.

across the various mediachannels.

The Association saidthat this is in utmostdisregard of theadvertising code andethics of, AdvertisingPractitioners Council ofNigeria, APCON and

the AAAN, of which mostof these politicaladvertisements havebeen exposed withoutgoing through thevetting procedures andconsequent approvalsfrom the AdvertisingStandards Panel (ASP)of APCON. Ourconcerns are that theprofessional values ofthe advertising practiceand indeed publicsensibilities, as well asthe very stability of thepolity have beenseverely undermined bythe continued characterassassinations, wantonabuses, unrestrainedattacks, threats andcounter threats thathave become the bane ofthe politicalcommunication buildingup to the elections.

Business & Economy

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


Omoh Gabriel - Group Business EditorBabajide Komolafe - Deputy Business EditorClara Nwachukwu - Energy EditorPeter Egwuatu - Asst. Business EditorYinka Kolawole - Snr Bus. CorrespondentFavour Nnabugwu - Insurance CorrespondentGodwin Oritse - Maritime CorrespondentGodfrey Bivbere - Maritime CorrespondentMichael Eboh - Energy ReporterFranklin Alli - Industry/Agric. ReporterIfeyinwa Obi - Maritime ReporterRosemary Onuoha - Insurance ReporterNkiruka Nnorom - Capital Market Reporter

CONTRIBUTORSPrincewill Ekwujuru - Media/MarketingJonah Nwokpoku - E-CommerceNaomi Uzor - IndustryProvidence Obuh - Micro FinanceLAYOUT - Graphics Department

CMYK

“The report of the 14Nigerian banks which wereappointed as Asset Managersof Nigeria’s reserves wascarried on the back page ofThe Guardian Newspaper ofthe 5th of October 2006. Thereport confirmed that “alreadydeposits worth $7bnrepresenting part of theCentral Bank of Nigeria’sshare of foreign reservesestimated at about $38bn hadbeen released to theconsortium of bankers”,according to CBN’s Head ofCorporate Affairs, Mr. FestusOdoko.

“In this event, CBN madegood its promise to inviteNigerian banks which haveconsolidated a minimum$500m capital base to a“foreign reserves banquet” ifthey showed evidence ofcollaboration withinternationally recognizedfinancial houses. TheGuardian report furtherconfirmed that all 14 Nigerianbanks are already associatedwith reputable affiliates, butit is not clear whether or notthe M.O.U. between theparties involves jointresponsibility for profits andloss, with global best bankingpractice and ethicalstandards, or if collaborationis simply formalised glorifiedcorrespondent banking!

“Nonetheless, criticswondered if the 14 bankswhich had just raised theircapital base under duress toN25bn could also raiseadditional capital of aboutN35bn in so short a space oftime to qualify formanagement of CBN’sreserves; conversely, the apexBank may have quietlydropped this requirement soas to pursue its declaredagenda!

“But whose interest is CBNserving? The sum of $7bnis a huge sum of money inany currency anddisbursement of such huge

Where is the $7BN CBN loan to 14 banks?public funds should not betreated with levity. Although in the Guardianreport “Mr. Odoko confirmedthat the appointment of the 14banks was ratified by theInvestment Committee of theCBN on Tuesday, 3/10/06, thedeposits worth $7bn hadalready been shared byThursday morning, 5/10/06!

The question is whether or

not the returns from this hugeinvestment will stimulateproductivity and employment,and improve our socialwelfare. If not, who willbenefit from this biggest eversingle investment paidupfront by the Nigeriannation? Yes, you have got it,the 14 banks who will wearbroad smiles to their overseasvaults! Although CBN didnot declare what returns itdemands from the 14 fattenedbeneficiaries, it is unlikelythat banks will pay more thanthe prevailing internationalcost of about three per centinterest per annum for suchplacements!

“Incidentally, the 14favoured banks are at libertyto invest anywhere in theworld! Thus, while we arepleading with foreigninvestors to come to Nigeriato support economic andindustrial development, weare simultaneously exposingour hard earned foreignexchange, for minimal gain,to a consortium of Nigerianbanks which have aconsolidated capital base ofless than $3bn, without askingfor some measure of auditcontrol or equityparticipation.

“Nigerian banks have for solong found it unattractive toinvest in the real sector,particularly the income andemployment generatingSMEs; so, it would be

foolhardy to expect that thelargesse of an uncollateralised$7bn low interest loan wouldchange their attitude to theNigeria economy. Thebizarre strategy of a minimalreturn of three to five per centfor a $7bn investment withoutan overtly declared time limitis amplified by CBN’swillingness to conversely payinterest rates of between 12and 17 per cent for monies itborrows from these samebanks.

and bonds where they canearn rates of return of up to17 per cent from governmentborrowings! “Worse still,moneys so collected for saleof government bills and bondsare regrettably just kept idlein CBN vaults.

“Mr. Odoko, the CBNmouthpiece had also claimedin the Guardian report quotedabove that “the $7bnrepresents the apex bank’sshare of the foreignreserves!’ I beg yourpardon! Apart from the verylucrative business of changingnaira for federally allocateddollars, what work did theCBN do to earn $7bn? TheConstitution does notdistinguish a share of dollarreserves, especially for theCBN; our crude oil earningsbelong to the Nigerian peopleas constituted by the threetiers of government; theSenate and the House ofRepresentatives would havedefaulted in theirconstitutional duties if CBN isnot invited to defend why$7bn of our reserves shouldbe ‘given’ to 14 banks withoutoversight approval!”

The preceding is a summaryof the above article, whichwas first published on the 9th

October 2006 in the VanguardNewspaper. Notsurprisingly, less than twoyears after Prof. ChukwumaSoludo’s lauded bankingconsolidation and assurances,most Nigerian banks titteredon the verge of collapse. There has never been anyconfirmation that the 14 banksrepaid the $7bn “soft loan”granted by CBN before the2008 banking crisis;consequently, it is possiblethat Nigeria’s $7bn reservesmay have ultimately ‘gonewith the wind’ during theensuing financial meltdown! Nonetheless, such probable

default did not stop thebanking sector from receivingadditional largesse in excessof N5tn ($30bn) from lifelinesfrom CBN and its surrogate,the Assets ManagementCorporation of Nigeria’sinterventions, less than threeyears thereafter, between2009 and 2010!

CBN’s misguidedgenerosity notwithstanding,the banking sector hasremained resistant toproviding the real sector withloanable funds at affordablerates to stimulate industrialrejuvenation, economicgrowth and increasingemployment opportunities. If anything, the CBN’s self-styled “own reserves”increased well beyond $40bnto fund CBN’s sporadic multi-pronged cash interventions tovarious subsectors;paradoxically, in spite of a stillcomatose real sector, thebanking sector has sincebounced back with bountifulprofit postings, whileunemployment, oppressivemass poverty and increasingnational debt persist!

In the above event, it maybe necessary for the Economicand Financial CrimesCommission to take a closerlook at the circumstances andthe ultimate fate of CBN’sextraordinary loan of $7bn tothe banks in 2006; Nigerianssurely have a right to know.

After all, if the CBN madethe $7bn largesse to banks, awidely reported media affair,one should, indeed expectthat successful applicationand liquidation of this soft loanshould even be heralded by amuch more ‘in your face’media blitz to assureNigerians of the wisdom ofsuch intervention in the firstplace.

Save the Naira, SaveNigerians!!

“Nonetheless, in the event

that the 14 banks are free torepatriate all or part of the$7bn back to the Nigeriancapital market, it is notdifficult to predict where theirinterests would lie: you havegot it; the obvious destinationwould be further patronage ofgovernment’s treasury bills

I beg yourpardon! Apart fromthe verylucrativebusiness ofchangingnaira forfederallyallocateddollars, whatwork did theCBN do toearn $7bn?

Seplat to defer oil projects, boost gas to beat plunge

Seplat PetroleumDevelopment Co., a

Nigerian oil producer thatbought assets from ChevronCorp., plans to defer someoil investments whileexpanding gas output tosurvive low crude prices,company ChairmanAmbroise Orjiako said.“We’re looking very stronglyto compensate for therevenue drop by increasinggas production,” Orjiakosaid in an interview withBloomberg TV Africabroadcast Thursday. Therewill also be “a lot of

tightening” with thecompany deferring “non-essential” capital projects, hesaid.Seplat currently pumpsabout 70,000 barrels a dayand is on course to meet itstarget of 85,000 barrels a dayby next year. Small Nigerianoil companies pumping lessthan 100,000 barrels per day,have seen their revenueeroded by the more than 50percent drop in crude pricessince they peaked in Junelast year, analysts includingPabina Yinkere of VetivaCapital Management Ltdsaid.

They’re further squeezed byhigher production costs ofabout $30 for a barrel,compared with $15 a barrelfor bigger oil companies suchas Royal Dutch Shell Plc andExxonMobil Corp.Seplat expects to double itsgas-processing capacity to280 million cubic feet per dayby the end of first quarterwhen it completes expansionprojects, Orjiako said. Thiswould enable the companytake advantage of higherdomestic gas prices of $2.50per thousand cubic feetapproved last year by thegovernment.

financial vanguard 16022015

Documents

capital market

thequalifying companies

public companiesand

percent ofits share

public liabilitycompanies

public hearingof

tothe public

ofits applicable income