CMYK

AUGUST 20, 2012

*

From left: Mr. Mike Purves, Director, UK Trade and Investment; Mr Jim Obaszee, CEO, Financial Reporting Councilof Nigeria; Arch Thomas Awagu, President, Nigerian-British Chamber of Commerce and Mr Emmanuel Ijewere,, Pastpresident, Institute of Chartered Accountant of Nigeria, ICAN during the Nigerian British Chamber of Commercebreakfast Seminar held in Lagos on Thursday. Photo by Lamidi Bamidele

CURRENCY BUYING CENTRAL SELLING

CBN Exchange rate as at 17/08/2012

113.78 -1.49

95.77 +0.17

162.45 +0.65

2,438.00 +38.00

20.36 +0.65

DOLLAR 154.8 155.3 155.8

POUNDS 242.9586 243.7434 244.5281

EURO 191.0387 191.6557 192.2728

FRANC 158.9975 159.5111 160.0247

YEN 1.9494 1.9557 1.962

CFA 0.2704 0.2804 0.2904

WAUA 232.4657 233.2165 233.9674

RENMINBI 24.3441 24.4232 24.5022

RIYAL 41.2778 41.4111 41.5445

KRONER 25.6508 25.7336 25.8165

SDR 233.6706 234.4254 235.1801

Shareholders' apathy, NUBAN policyescalate value of unclaimed dividends*N52bn as at December 2011

The low value of dividend currentlybeing paid out to shareholders isfurther increasing the amount of

unclaimed dividend in the vaults ofcompanies listed on the Nigerian StockExchange. Several retail shareholdersare ignoring the dividend companieshave declared because the value isnegligible. Some are N50, N100 andN500. These, many say they can notwaste their time to claim.

As a result, the value of unclaimeddividends in Nigeria, put at about N52billion as at December 2011 by theSecurities and Exchange Commission,

BY MICHAEL EBOH SEC, is set to further escalate, unlesssomething is done to urgentlyaddress the numerous challengesconfronting the process of dividendpayment and collection.

According to stakeholders whospoke to Financial Vanguard, themajor factors that will account for theastronomical rise in unclaimeddividends value is the recentlyintroduced Central Bank ofNigeria’s, CBN, Nigerian UnifiedBank Account Number, NUBAN,scheme and investors’ rising apathytowards the collection of dividendswith negligible or insignificantamounts.

Fitch Rating Agency, however,

believes that internal capitalgeneration in Nigeria banks needs tobe addressed in the sector as thegenerous dividend policiesdemanded by investors are notconducive to sustainable loan bookgrowth in the medium-term. The newreport considers that many Nigerianbanks have thin levels of Fitch CoreCapital, which are lower than isappropriate for Nigeria’s difficultoperating environment.

According to Mr. Taiwo Oderinde,National Coordinator, ProactiveShareholders Association of Nigeria,PROSAN, presently, we have billionsof naira as unclaimed dividends, andthe CBN has started another move,

in form of the NUBAN policy that willserve to aggravate the problem insteadof solving it.

“In addition to the problem posedby NUBAN is the issue of dividendswith low value. If a shareholder livingin a rural area or a remote locationhas a dividend warrant of about N200or N300, it will be economicallyunwise for that individual to spendabout N500 or N1, 000 ontransportation to the bank to cash orpay that amount into his account.”

“The authorities of the capital marketand other stakeholders should act

Continues on page 18

18 — Vanguard, MONDAY, AUGUST 20, 2012

Cover Story

CMYK

*Greenview Development Nigeria Limited (GDNL), the Dangote Ports Operations subsidiary,at the weekend donated a patrol vehicle to the Nigeria Police at the Nigerian Ports Authority(NPA) to enhance its security operations. Captain Joshua Oyewumi, Managing Director,Dangote Ports Operations (with microphone) presenting the key of the Toyota Hilux patrol vanto Alhaji M.U Kura, Deputy Commissioner of Police, Lagos State at the GDNL Terminal EBuilding, Apapa, Lagos.

,

,

As the RomanHistorian, Plutarch(AD 46-120?) had

noted “The mind is not avessel to be filled but a fire tobe kindled.” Given theircorrupt and greedy lifestylesNigeria’s leaders do not seemto care about integrity ormoral values. They are goodat predicting the futurewithout creating it. As PeterDrucker has observed “If youwant to predict the future,create it.”

In Nigeria, the growingproblem of unemployment inthe country has contributedlargely to the worseningproblem of poverty among thepopulace. Unemploymentaccording to Olaitan (1996)leads to frustration anddisillusionment which mayresult in crime or drug abusein a futile attempt to escapefrom and forget the pains andhumiliation of poverty andlack. The problem ofunemployment, he furtherstated, has worsened asmillions of school leavers andgraduates of tertiaryinstitutions have not securedgainful employment over theyears. Unemployment hasposed a serious problem notonly to the welfare ofindividuals but also to that oftheir families. Many ablebodied and highly qualifiedpersons who could not securegainful employment haveremained economicallydependent on their parents.This is because they lack thenecessary occupational skillsto be self employed and toeffectively function in today’sworld of work. Theseoccupational skills can beprovided by technical andvocational education.According to Abdulahi (1994)technical education is thataspect of education thatinvolves the acquisition oftechniques and application ofthe knowledge of the sciencefor the improvement of man’ssurrounding.

Technical and vocationaleducation prepares one forthe world of work with whichthe individual become reliantand can make contributions tothe development of thesociety. As employers look fornew talents every year fromnew graduates, it is importantto not only have a solideducation but graduates thathave features that stand outfrom the rest of the graduatingstudents. With the economybeing more globalized thanever, it is important to have abackground and a skill set

Vocation and Technical Education

– A key to improving Nigeria’sdevelopment Part 2

that allows graduates tobecome immersed in theglobal economy right fromgraduation (Cote, 2007). Itis important for thesestudents or graduates tohave skills in innovation intechnology education andentrepreneurship to beready to fit into the globalmarket place on whichtoday’s economy dependson. Entrepreneurial SkillsNeeded by Technical andVocational Education.

Leadership is not a majorcause of Nigeria’s

under-developed status.Nigeria can become aneconomic power-house (andrealize its visions) only ifproper attention is given toeducation and technologicaldevelopment and promotesand rewards creativity, and

channel its material andhuman resources toproductive use. The leadersmust recognize therelevance of technical andvocational education innational development andadopt and adapt what worksin developed nations. Theresources being wasted inthe on-going false re-branding campaign shouldhave been used to re-brandthe nation’s educationsector. No amount of rhetoric(or fanciful slogan) wouldsolve Nigeria’s socio-political and economicproblems. The leaders couldsalvage Nigeria’s image byre-branding their mentalityand doing the right thing:tackle corruption, reform theelectoral system and fix thedilapidated institutions.Thus, without a fundamentalshift in values, beliefs andthinking, and withouttechnological capability,Nigeria will continue todream of becoming a ‘GreatNation’.

The leadersmust recognizethe relevance oftechnical andvocationaleducation innationaldevelopmentand adopt andadapt whatworks indevelopednations

Continues on page 19

immediately to address theissue of banks’ rejection ofdividend warrants that are notNUBAN compliant. This isnecessary to prevent thevalue of unclaimed dividendsfrom skyrocketing,” said Mr.Timothy Adesiyan, President,Nigeria ShareholdersSolidarity Association, NSSA.

The CBN had given banksa deadline of May 31, 2012,to comply with the NUBANscheme, from its initialproposed take-off date of June2011.

The CBN released theGuidelines on the NUBANscheme in August, 2010,designed to achieve a 10-digituniform customer bankaccount numbering structureamong all Deposit MoneyBanks in Nigeria.

The scheme requires thatonly paper and

electronic instruments thatcarry NUBAN codes and passthe NUBAN validation test,that is, instruments withcorrect check digit, would beallowed in the automatedclearing system from May 31,2012.

According to the CBN,NUBAN has great potentialsto resolve the observedproblems with electronicpayments in Nigeria, as manyof them are related tospecification of wrongbeneficiary account numbers.

The CBN, in a statementannouncing the scheme said,“The NUBAN schemerequires that the accountnumber field in the chequeMICR code line shouldfeature only NUBANnumbers. Accordingly, all newcheques issued to customersshould carry NUBAN codes.

“This implies that bankshave to build in the requiredintelligence in theirrespective in-clearingsystems to distinguish

NUBAN codes from oldaccount numbers whileprocessing inward chequeitems and electronic paymentinstruments during thistransition period.”

In a response via textmessage, Mr. Tunde Lemo,Deputy Governor,Operations, CBN, said theapex bank has no plan toextend the deadline onNUBAN or grant any form ofwaiver to registrars orshareholders.

His said, “There will be noextensions on NUBAN.Registrars like othercustomers were givenadequate notice. Unclaimeddividend is a legacy matterwhich has been with us forover 40 years and is notcaused by NUBAN.”

In the case of dividendswith negligible andinsignificant amounts, anumber of quoted companieshave been facing tough timesof late, a factor which has ledto their posting unimpressiveperformance in their variousfinancial results.

A number of the companieshave blamed this on the toughoperating environment,attributable to a number ofeconomic factors, rangingfrom epileptic powersituation, high energy cost,and inconsistent governmentpolicies, among others.

The challenges in theoperating environmentnegatively affected the bottomline of a number of thecompanies and their ability todeliver attractive returns toshareholders.

To this end, the companiesnow declare insignificantamount of dividends forshareholders.

Most companies declaredividends as low asthree kobo per share, whileonly a few declare dividendsabove N1 per share. A cursorylook at dividends declared bycompanies on the NSE in2012, shows that Dangote

Flour Mills Plc declared adividend of 10 kobo, DangoteSugar Plc- 30 kobo, NationalSalt Company Plc - 70 kobo,UTC Nigeria Plc - five kobo,AIICO Insurance Plc - sixkobo, Custodian and AlliedInsurance Plc - eight kobo,Mansard Insurance, formerlyGuaranty Trust Assurance Plc– three kobo, Niger InsurancePlc – three kobo, UnityKapitalAssurance Plc – one kobo,NPF Microfinance Bank Plc– two kobo, Japaul Oil andMaritime Services Plc – twokobo, Afromedia Plc – threekobo, Vitafoam Plc – 30 kobo,Stanbic IBTC Bank Plc – 10kobo and First CityMonument Bank Plc – 35kobo, among others.

A company declaring adividend of three kobo

per share will leave ashareholder with 1,000 unitsof its shares with a total ofN30, an investor with 10,000units will get a total dividendof N300, while an investorwith 100,000 units will get atotal dividend of N3, 000. Acompany declaring adividend of five kobo willleave a shareholder with1,000 units with a totaldividend of N50; N500 for ashareholder with 10,000 unitsand a shareholder with100,000 units would get N5,000. All this figures are ofcourse, subjected towithholding tax, various othertaxes and charges prior tocollection. The difficultiespresented by the NUBANscheme and negligibledividends have served as adisincentive to investors,leaving a number of themwith the decision to abandonthe dividends.

According to Oderinde, iffor instance, a shareholderliving in Ibadan received adividend warrant of aboutN200, and transport to and

Value of unclaimed dividends

escalatesSContinued from page 17

Vanguard, MONDAY, AUGUST 20, 2012 — 19

CMYK

Cover Story

Continued from page 18

PHCN workersversus FG, showof shame,

,Every Nigerian will be

happier if there is a miraclethat the government willperform to bring aboutregular power supply

The current struggle be-

tween the Minister ofPower and Power Hold-

ing Company of Nigeria,PHCN, is to say the least, ashow of shame. The ministryhad allowed some level of il-legality to be perpetuated bythe management of PHCNwithout doing any thing aboutit. For years after the PensionAct became law, PHCN failedto transfer its workers to Pen-sion Fund Administrators,PFAs, as required by law. Themanagement had continued topay PHCN retirees from a su-perannuation fund that wasneither funded nor was thereany plan to deduct the man-datory 7.5 per cent from theworkers’ pay. Now that theministry wants to privatize thecompany, the workers are upin arms to resist the muchneeded reforms in the sectorthat will bring relief to the or-dinary Nigerian.

The workers are in pursuitof selfish interest. While the il-legality that favoured themwas on-going, they kept quiet,but now that it is the other wayround, they want the sympa-thy of Nigerians. The row be-tween the PHCN workers andthe Federal Government aroseas a result of the illegality,manipulation of the PensionAct to pay retiring PHCNworkers in the past. SeveralPHCN workers were paidunder the old pension schemewhile the new pension was inoperation, a gross violation ofthe law.

The question is: Where werethe Ministry of Power officialswhen this was going on? Doesit mean that PHCN accountwas never audited? TheAuditor-General of the Feder-ation mean to tell Nigeriansthat his office grossly over-looked PHCN accounts? WasPHCN account not made

available to the Ministry ofPower? Is Professor Nnaji say-ing he was not aware of thisdevelopment in PHCN?

The management of PHCNhad failed in its responsibili-ty to fund its pension schemewhich as of today, is in defi-cit. It did not transfer its work-ers to the new pension ar-rangement, neither did it payits 7.5 per cent contributionnor deduct that out of its work-ers’ salary, yet it found mon-ey to pay retiring employeesof the company.

The government has been

negotiating with PHCNworkers. While they have ac-cepted many other terms ofnegotiation, they haverefused to open accounts withPension Fund Administratorsto enable their benefits to betransferred to the PFAs asrequired by the Pension Act.Besides, the Federal Govern-ment has agreed to pay theworkers their entitlementbased on the 2004 Pension Acteven when PHCN had failedto fund its superannuation.

The issue here is that PHCNworkers are well aware that if

their pension is transferred toPFAs, they will not be able toaccess the money until they aresacked or when they attain themandatory age of 50 years be-fore they can collect the bene-fits. They want the money inhand and that is why they areasking for severance. If thesemen are paid their entire ben-efits in cash, they will jump atit.

But the existing law does notprovide for this. They are justpretending and for their self-ish interest want to hold thenation back. Every Nigerianwill be happier if there is a mir-acle that the government willperform to bring about regularpower supply.

Two of the PHCN staff whoare on the war path with theFederal Government over sev-erance allowance are billed totake home about N38.22 million

or N28.5 million dependingon their number of years ofservice. One who has put in34 years will have an averagetake home pay of N38.2 mil-lion, while the other that hasput in 25 years will go homewith N28 million according toa table of terminal benefitsaccruing to staff of PHCNobtained from those negotiat-ing with the workers’ unionof PHCN.

From the table, about twoof PHCN staffers are in

this category of EG1. The mostsenior of the two staff wasemployed on the 8th of Janu-ary 1978 and has put in 34years.

A break down of the benefitsshowed that in the EG1 cate-gory, total repatriation bene-fit as at June 2012 amounts toN272,602; severance pay

N6,286,287; 13th month allow-ance of N232,994, therebybringing the total severancebenefits to N6,791,882. Fromthe available data of benefitsschedule, accrued pensions tothis particular grade of officeras at June 30th 2004 when thecontributory pension cameinto force was N20,748,617;accrued gratuity benefits as atJune 2004, was N7, 242,189.

This brings the total accruedbenefits to N27, 990,806. Thisis not all. Adding 15 per centof pensionable emolumentsfrom 30th June 2004 to June2012 of N3,440,627 brings thetotal accrued gratuity and pen-sion as at June this year toN31,431,433. When the totalaccrued gratuity, pension andseverance package are put to-gether, the worker of PHCNwith 34 years of service hasbenefits of N38.22 million togo home with.

The second who was em-ployed on 2nd December 1986with 25 years of service willtake home a total of N28.5 mil-lion as total accrued benefitsalong the above scheme justlike every other PHCN work-er.

If that is the case, PHCNworkers must learn to under-stand that they were part of thecompromises that led to thecurrent situation. The FederalGovernment should immedi-ately arrest and prosecutethose who compromised thesystem for their benefit, be itthe workers or governmentfunctionaries.

Nigerians need power sup-ply, whoever stands in the

from the bank will cost aboutN2, 000, such people tend togive up when they comparethe cost against the benefit.

He said, “Another reason isthat some shareholders whoare residing in the rural areas,the only place where theyhave their bank accountsmight be very far from wherethey are residing and the onlyaccount they have is asavings account. Most banksdo not allow dividendwarrants to be paid intosavings account, all thesehave served as disincentive todividend collection.”

On the NUBAN scheme,Oderinde tasked thepresidency to call theGovernor of the CBN to order,saying the controversiesgenerated by the scheme, if

not properly addressed, iscapable of hindering thegrowth and development ofthe capital market and furthererode investors’ confidence.He said, “This is a clarion callon President Jonathan andother capital marketstakeholders to call CBNGovernor, Mallam Sanusi, toorder on what we call anotherobnoxious policy that canhinder the growth anddevelopment of our capitalmarket, by asking banks toreject dividend warrants thatare not NUBAN compliant.

“In one of our recentmeeting, we realized thatmany of our members wereaffected. We believe manyothers Nigerian shareholdersare facing the same problem.We would like CBN to comeup with another solution by

asking the banks to honourthe dividend warrants thathave already been issued out,while giving registrars tillDecember 2012 or thereabout,to phase out the old dividendwarrants,” he suggested.

In his own view, Mr. DavidAdonri, Chief Executive

Officer, Lambeth Trust andInvestment. Company Limited,said, “If all shareholders opencurrent accounts, it will bepossible to claim most of thedividends that get lost in post.It will also enhance the fullimplementation of theelectronic dividend (e-dividend) policy.

The Managing Director of aforemost registrar, who prefernot to be named said, “NUBANis a simple thing and a nationwide position that was

canvassed by CBN that banksshould change. It is for thebenefits of everyone. Whenyou have NUBAN account, itis for flexibility. Fromflexibility, it has affected theclearing. You will discoverthat the clearing days havebeen reduced drastically. Ifwe are able to achieve thatbecause of globalization, it’snice. “NUBAN’s position thatevery bank account should notbe more than ten numbers,will allow for integration.”

In addition, Mr. Adesiyan,President, NSSA, said, “If theissue is not addressedimmediately, there will be asignificant rise in the value ofunclaimed dividends.

“However, we plan to meetwith the Governor if the CBNand other stakeholders on theneed to extend the deadline

Value of unclaimed dividends escalatesfor dividend warrant’scompliance with NUBAN. It isnecessary that this is done,especially for the good of thecapital market.”

Also speaking, Mr. BayoOlugbemi, ManagingDirector, First RegistrarsNigeria Limited, said, “We areaware of this development andwe are making frantic effortsto ameliorate the challengesbeing faced by ourshareholders. “In the interim,we are issuing cheques toreplace the warrants as well asasking for Bank details ofshareholders for direct orelectronic credit. We are alsotrying to get in touch with theCBN on how to handle this.Shareholders should be restassured that subsequentdividend payments fromAugust will be NUBANcompliant.”

20 — Vanguard, MONDAY, AUGUST 20, 2012

CMYK

BRIEFS

Business & Economy

Coy invests N100m indeveloping Lagos beach

The Managing Director, Elegushi PrivateBeach, Lekki, Mr Yu-

suf Elegushi, said that thecompany has injected morethan N100 milllion in devel-oping the beach to its presentstatus. Elegushi told theNews Agency of Nigeria(NAN) in Lagos that morefunds would still be investedto make the beach an attrac-tive centre to tourists from allover the world..

He described the estab-lishment of the beach “as astep in the right direction toreposition Lagos as a tourist-friendly city.’ The sum of N20million was recently spent toequip the environment with

necessary facilities to makethe beach more attractive cen-tre and the best of its kind inthe world. We have providedmaximum security guaranteeas well as some swimmingguards for amateurswimmers to ensure theirsafety,“ he said.

He said that if tourism cen-tres, similar to Elegushibeach, could be established instrategic areas of Lagos, moreforeign tourists would be at-tracted and thatwould fetch government hugerevenue. Elegushi urged thestate government tocollaborate with the stake-holders in the driveto develop tourism in the

state. “The tourism sector is amajor player in growing theeconomy. We will ensure thatLagos is able to take its right-ful place in the tourism indus-try in the world,“ he said.Elegushi said that thebeach had been wellequipped with facilities thatwould position Lagos as oneof the best tourism cities in theworld. More facilities wouldstill be put in place to makethe beach more attractive andsuitable for sight-seeing,” NAN quoted him assaying. He urged investors toshow more interest in devel-oping the nation’s tourism in-dustry.

NBS puts inflation rate at 12.8% in JulyNKIRUKA NNOROM

The nation’s inflationrate declined by 0.1from the 12.9 per cent

in June to 12.8 in July,according to the latest figuresreleased by the NationalBureau of Statistics (NBS).The figures are contained ina statement issued by Dr YemiKale, the Statistician-Generalof the Federation, on Fridayin Abuja. It said that themonthly change in thecomposite Consumer PriceIndex (CPI) was due topersistent change in theprices of some item classessuch as oils and fats, and gas.

Others are bread, cereals,meats, fish, fruits and otherfarm produce. It said that thechange was also due to theprices of other items with

relatively smaller weights inthe index, such as repairs ofhousehold appliances,catering services and othermiscellaneous services. Theurban inflation rate stood at15.6 per cent in July as against15.0 per cent recorded in June.The statement said that therural inflation rate was 10.7per cent for July, while theJune figure stood at 11.4 percent.

“In July, the Composite FoodIndex increased year-on-yearby 12.1 per cent to 138.1points. The index was alsohigher than levels recorded inJune of this year by 0.3percent. The appreciation inthe Food Index was as a resultof an increase in the price ofoils and fats, vegetables, softdrinks, as well as fruit classes.The latter being a key dietary

component during thetraditional break of the fastduring the period ofRamadan.

“Also, prices of wheat, flour,and associated by-productspartially contributed to the risein the food index. This cameas the import duty on wheatgrains and flour increasedeffectively by 20 per cent and100 per cent respectively inJuly,” the statement said. Itsaid that the average annualrate of rise of the index was11.0 per cent year-on-year forthe 12-month period endingJuly.

The statement said that the“all items less farmproduce” index, whichexcluded the prices of volatileagricultural products rose by15 per cent year-on-year. Onmonth-on-month basis, the

core index increased by 0.1per cent in July 2012. Themarginal rise in the core indexis partly attributable to higherprice of gas, and otherservices such as householdrepairs, catering, andhousehold textiles. Theaverage 12 month annual rateof rise of the index was 13.0per cent for the 12-monthperiod ending July 2012,” itstated.

According to the bureau,pricing and weighting werethe two basic parameters usedto arrive at the CPI. It addedthat 10,534 officers were usedto collate the data for the CPImonthly, while 740 productspecifications were pricedacross the rural and urbanareas of the 36 states of thefederation and the FCT.

Shareholders,dealers disagreeover fees to veri-fy share certifi-cates

Shareholders and dealershave disagreed on the

increasing cost of verifyingshare certificates for the on-going de-materialisation. Thedisagreement among the cap-ital market operators in Lagosfollowed a circular by the Se-curities and Exchange Com-mission (SEC) stipulating thatthe exercise was free.

Investigations showed thatcontrary to the SEC’s direc-tives, most stock broking firmsstill charged shareholdersbetween N500 and N1, 000 asfees, depending on the loca-tion of the registrars. SEC hadon March 13 issued a circu-lar making Jan.1, 2013, thedeadline for the de-material-isation of all share certificates.According to the circular, allshare certificates de-material-ised on or before Jan.1, 2013,will be free while those thatcome after attract an unspeci-fied penalty.

It also said that the allot-ment of shares of public offer-ings would be electronicallytransferred directly to theshareholders’ accounts in theCentral Security ClearingSystem (CSCS). Mr SunnyNwosu, the National Coordi-nator, Independent Share-holders Association of Niger-ia (ISAN), said that share-holders were being shortch-anged by the dealers, in spiteof their losses. Nwosu de-scribed the charges for verifi-cation as part of the market’sflaws affecting investor confi-dence. The ISAN boss urgedSEC to ensure that it imple-mented the extant rules guid-ing the operations of the mar-ket.

StandardBank’s Africacosts weigh onprofit

Standard Bank will press

ahead with expensiveplans to open another 30branches in Sub-Saharan Af-rica this year, aiming to cashin on booming loan and de-posit growth even as the costsof such investment hit its bot-tom line. Africa’s biggest bankby assets, Standard is 20 per-cent owned by Industrial andCommercial Bank of China. Itblamed a below-forecast 9 percent increase in first-half prof-it on Thursday on costs of in-vestment.

“It really has been growingrapidly and we’ve continuedto invest, which is part of thereason for the cost growth thatyou’ve seen,” Chief Execu-tive, Jacko Maree, told Reu-ters Insider, referring to its 16operations across the conti-nent. But if you look at theprofitability in Africa, you sawthe profits growing by some80 percent, just looking at theon-the-ground banks on thecontinent, which is a very bigjump.”

Maree pledged to do all hecould to control spending af-ter a 17 per cent rise in thesix months to the end of Junebut said costs would continueto climb as the bank seeks tocash in on an estimated 30-40 percent rise in loans anddeposits across the continent.

Barrick Gold African unit intalks withChina

Barrick Gold, the world’s

largest gold miner, is intalks to sell a majority stakein its African unit to a Chi-nese buyer, the first move bynew boss, Jamie Sokalsky, toclear out poorly-performingbusinesses and revive its flag-ging shares. News of thetalks with China NationalGold Group, which bills itselfas the country’s largest goldminer, saw African BarrickGold shares closed up 8.0percent at 425 pence, as in-vestors bet the buyer wouldpay a premium to help satis-fy China’s insatiable appetitefor the metal.

If it goes ahead, the salewould be one of China’s larg-est mining deals in Africa andits most significant incursioninto large-scale gold miningon the continent to date. Ca-nadian group Barrick is grap-pling with falling profit, soar-ing costs and the fallout fromwhat some investors see asmistakes, including the take-over of copper miner EquinoxMinerals.

*From left: Sesan Sobowale, Director, Corporate Relations, Ngozi Ife-Anene, Corporate Com-munications Manager, and Mike Onuoha, Head, Public Policy, all of Guinness Nigeria Plc atDRINKIQ Media workshop organiased by the company at its corporate headquarters in Lagos.

Vanguard, MONDAY, AUGUST 20, 2012— 21

CMYK

Business & Economy

NEXIM Bank seeks cooperationwith Infrastructure Bank onproject financing

The Nigerian ExportImport Bank (NEXIM) has called for syn-

ergy between it and the In-frastructure Bank (IB) Plc. tosupport the Federal Govern-ment’s transformation agen-da through project financing. Mr. Roberts Orya, NEXIMBank’s Managing Director,made the call in Abuja whenhe led a delegation from thebank on a courtesy visit to theManaging Director of IB Plc.,Mr. Adekunle Oyinloye.

He said, “We are excited tobe here, the meeting isessentially to deepen inter-agency cooperation and alsoexplore areas of transactionalrisk sharing in co- financingprojects that have exportcontent so that we can exploreareas of mutual cooperationand build synergies andcapacities to supportgovernment’s transformationagenda. In NEXIM Bank,we are set up to diversify theeconomy from the mono-production of oil. We needto work with institutions likeyou, to be able to actualise ourown mandate.,” Orya statedthat there was the need for thetwo banks to work together ona sea-link project.

According to him, theproject is intended to easeNigerian exporters’movement of goods to otherAfrican countries and toimprove trade in theECOWAS region particularly. He explained that NEXIMBank had been working hardto see how best to enhance thevolume of trade in the region. “ We have the sea-linkproject; a sea-link project isbasically a maritime transportinfrastructure; we are lookingat how we can enhance thevolumes of trade that fallswithin the ECOWAS sub-region and even the CentralAfrican region.

“We have seen that ourexporters have a lot ofproblems moving goods out ofNigeria to the neighbouringcountries because we don’thave the maritimetransportation that will makeit easy for them.” Orya saidthe bank had since 2009,surveyed the market andobserved the majorconstraints it had. Heidentified one of theconstraints as the absence ofnew technology for theproduction of goods thatwould make them competefavourably in the market.

Orya pointed out that thesea-link project would

cost between 60 million dol-lars and 100 million dollars,explaining that 40 per cent ofthe fund would be borrowed,while the remaining 60 per

BRIEFS

cent would be raised throughequity holding. He said thebank would be interested incollaborating with the SpecialPurpose Vehicles (SPVs) un-der its mandate and exploretransactional co-financing andrisk sharing relationship withothers in projects execution.He also called for support fora power sub-station and trans-mission line for the bank’sprojects with electricity chal-lenges. Orya said: “For in-stance, hotel development astourism infrastructure in sup-port of the national tourismmaster plan.

“Entertainment/shopping

complexes with multiplexes/cinemas to support moderncinemas development in linewith government’s currentpolicy initiatives to sustaindevelopment of the creativeand entertainment indus-tries.” Responding, Oyinloyecommended NEXIM Bank forthe initiative and spoke of theInfrastructure Bank’s readi-ness to partner with it towardthe development of infrastruc-ture in the country.

“There is a whole lot ofopportunity within theinfrastructure space inNigeria; if you look at thetransport infrastructure sector,

of which the maritime sectoris one, there is a hugepotential there. The roadnetwork is inadequate; theone that is in inexistence isin deplorable condition; theairports are inadequate; theones in existence are indeplorable condition. Thewater system is somethingelse; a country like Nigeriashould be a regional hub.”Oyinloye said that the corefocus of the InfrastructureBank was to attract privatecapital and initiatives for thesuccessful implementation ofprojects, adding that the useof SPVs would make people

Nigeriaarrests shipcarryingstolen oilN

igerian authorities haveseized a ship carrying

300 tonnes of illegally refineddiesel and arrested 11 peopleon it. They said on Thursday,as part of efforts to curb oiltheft that officials estimate si-phons off up to a fifth of thecountry ’s output. Oil theftfrom Africa’s top producer isa major cause of complaintfrom oil companies and the fi-nance ministry, both of whichlose revenue from thieveshacking into pipelines in op-erations known as “bunker-ing”.

The oil is sold abroad ascrude or refined for the localmarket. “The Economic andFinancial Crimes Commission(EFCC) on August 15, 2012,took possession of an illegaloil bunkering vessel suspect-ed to be carrying 300 metrictonnes of illegally refined ...diesel,” an EFCC statementsaid. It said the boat had beenchased by authorities lastweek but had escaped, al-though one of its crew haddied when he fell over theside. Officials later tracked itand seized it. The captain ofthe ship escaped, it added.Militancy in the swamps andcreeks of the Niger Delta hascalmed down since the lastdecade - when attacks on oilinstallations at times shutdown up to half of Nigeria’soutput - owing to an amnestyin 2009.

Nigeria auctioned 75 billion naira ($477.43 mil-

lion) worth of sovereign bondswith maturities in the range of5 to 10 years at a regular auc-tion on Wednesday, the DebtManagement Office (DMO)said. The debt office said itsold 25 billion naira of eachnote, which are re-openings ofold debt. The DMO issued the5-year bond at a yield of 16.32percent, higher than the 16.19percent at last month’s auc-tion. It issued the 7-year noteat 16.14 percent, lower thanthe 16.59 percent previously,while the 10-year paper wasissued at a yield of 15.90 per-cent, compared with 16.30percent at the last auction.

The original coupon rates of15.10 percent, 16 percent and16.39 percent for the April2017, June 2019 and January2022 respectively will bemaintained, the debt officesaid in a statement.

Nigeria issuesN75bn 2017,2019, 2022bonds

By NKIRUKA NNOROM

Stakeholders in retail

business have fingeredlack of space and risinginflation as some of theconstraints to the growth ofretail sector in Nigeria.

The founder and ManagingDirector of Artee Group, Mr.Haresh Keswani, said in aninterview that the inequalityof income distribution was apotential impediment to thegrowth of formal retail,arguing that it limits the sizeof the consumer market.

He said, ”With inflationcurrently at 12.9 per cent andexpected to rise to 13.57 percent by the end of the year asa result of higher pricesfollowing the partial removalof the fuel subsidy at the startof 2012, it is likely to constrainpurchasing power.”

“Modern outlets are

Artee MD lists impediment to retail businesses

dependent on the standardsof newly built, large shoppingmalls. However, cumbersomeaccess to land, high costs andthe short duration of bankfinancing is constrainingdevelopers’ appetite,” headded.

He noted that thegovernment has a crucial roleto play in developing thesector, saying that incentivesfor real estate developers,alleviation of land accessprocedures and a greaterregard for retail in thecountry’s economic policieswould galvanise growth informal retail business.

“The government shouldencourage retail as anindustry. It is labour intensiveand accessible to workers withbasic levels of education; it isthe world’s biggest employer,”Keswani stated.

However, some retailers

have said that the country’slarge population, positivemacro-economic growth and astrong appetite for consumergoods are part of the positivesas both foreign and localretailers are dramaticallyexpanding their domesticretail footprint.

According to RenaissanceCapital, a multinationalbrokerage, growth in retailspace and opportunity hasbeen accompanied by risingpurchasing power.

“This has had a positiveimpact on people’s ability tospend, with GDP per capitalevels estimated at $1656, upfrom $1541 in 2011 and $390in 2001.” The firm also saidthat the country ’s middle-class segment earns about$6000-7000 per year, bringingthe purchase of modernhousehold goods withinrange.

*From left: Managing Director, News Agency of Nigeria, Oluremi Oyo; Chair of the LagosNAWOJ, Dupe Olaoye-Osinkolu; Permanent Secretary, Ministry of Women Affairs & PovertyAlleviation, Lagos State, Mrs. Risikat Akiyode; Editor of the Sunday Sun Newspaper, Mrs.Funke Egbemode; and Emeka Mba, the Community Affairs Manager of Coca Cola Nigeria,during the launch of a new magazine at the Nigerian Association of Women JournalistsFamily Week.

22 — Vanguard, MONDAY, AUGUST 20, 2012

Vanguard, MONDAY, AUGUST 20, 2012 — 23

CMYK

24 — Vanguard, MONDAY, AUGUST 20, 2012

Corporate Finance

From left: Managing Director, Ecobank Nigeria, Mr. Jibril Aku; Mr. Arthur Moloto, Chairman, Government Employment Pen-sion Fund (GEPF) of South Africa; Olor’ogun (Dr.) Sonny Kuku, Chairman, Ecobank Nigeria and Arnold Ekpe, Chief ExecutiveOfficer, Ecobank Transnational Incorporated (ETI), when members of the GEPF visited Ecobank Nigeria in Lagos. PublicInvestment Corporation (PIC) of South Africa managers of the GEPF had invested $250m pension fund in Ecobank.

BY MICHAEL EBOH

BRIEFS

41 companies didn't pay dividends in5 years — NSE

A total of 41 companiesquoted on theNigerian Stock

Exchange, NSE, have failedto pay dividends to theirshareholders for more thanfive years.

A breakdown of thecompanies, according to dataobtained from the NSE, showsthat three companies last paiddividends six years ago; sixcompanies paid dividendsseven years ago; onecompany last paid dividendseight years ago, one last paidnine years ago; threecompanies last paiddividends 10 years ago whilesix companies last paiddividends 11 years ago.

Also, three companies lastpaid dividends 13 years;three last paid 14 years ago;four companies last paid 15years ago; three companieslast paid 16 years ago, twocompanies paid 17 years ago;one paid 19 years ago; twopaid 20 years ago; onecompany last paid dividends26 years ago; one companylast paid 29 years ago andone company last paiddividends 31 years ago.

Further analysis shows thatmajority of the companiesidentified as the worstoffenders where redundantand are likely to be delistedfrom the NSE soon.

Stokvis Nigeria Plc is theworst culprit, as it last paiddividends to its shareholdersin 1981 — 31 years ago; whileNigerian Sewing Machine

Company Plc followed on thelist as it last paid dividendsin 1983 — 29 years ago.

Champion Breweries lastpaid dividends in 1986 — 26years ago; Afroil Plc andAnino International Plc lastpaid dividends in 1992 — 20years ago; while Rak UnityPetroleum Company Plc lastpaid dividends in 1993 — 19years ago.

Premier Breweries Plc andStudio Press (Nigeria) Plc,last paid dividends in 1995 —17 years ago; West AfricaAluminium Plc, HallmarkPaper Products Plc andLennards (Nigeria) Plc lastpaid dividends in 1996 — 16years ago; Golden GuineaBreweries Plc, International

Breweries Plc, Costain (WestAfrica) Plc and RokanaIndustries Plc last declareddividends in 1997 — 15 yearsago; while Arbico Plc, UnionVentures and Petroleum Plcand Abplast Products Plc lastdeclared dividends in 1998 —14 years ago.

Eterna Plc, InterlinkedTechnologies Plc and Juli Plclast paid dividends in 1999— 13 years ago; while sixcompanies — LivestockFeeds Plc, G.Cappa Plc,Union Dicon salt Plc,Confidence Insurance Plc,Premier Paints and CapitalOil Plc, last paid dividendsin 2001 — 11 years.

Three companies — DNTyre and Rubber, formerly

Dunlop Nigeria Plc, NigerianWire and Cables Plc andNigerian Wire Industries Plc,last paid dividends in 2002 —10 years ago; AfrikPharmaceuticals Plc last paidin 2003 and Wema Bank Plclast paid in 2004.

Six companies — John HoltPlc, P.S. Mandrides andCompany Plc, Vono ProductsPlc, Linkage Assurance Plc,Pharma-Deko Plc andAlumaco Plc last paiddividends in 2005 — sevenyears ago; while threecompanies, Cadbury NigeriaPlc, Royal Exchange Plc andFirst Aluminium Nigeria Plclast paid dividends in 2006 —six years ago.

Afromedia assures shareholders ofdividend payment…holds 46

th AGM

Afromedia Nigeria Plc, an

outdoor advertisingcompany quoted on the floorof the Nigerian StockExchange has assured itsshareholders of dividendpayment as it holds its 46th

annual general meeting onAugust 23, 2012.

Speaking, Dr. OnaolapoSoleye, Chairman of thecompany, said the companyremains undaunted by the

sluggish state of recovery ofthe Nigerian capital marketfrom the global financial cri-ses, adding that the compa-ny will forge ahead to ensurethat shareholders still havesomething to smile about.

“Despite all the challenges,we are pleased to inform youthat the Board of Directorshas recommended payment ofdividend to registeredshareholders. Not just that,shareholders will be given abonus of 1 new share for every20 existing ordinary sharesheld in the company,” he as-

sured. Dr. Soleye said thiswas the company’s way ofappreciating shareholders fortheir continued commitmentto the company during theyear.

He, however, observed thatthe Nigerian businessenvironment will graduallyreturn to stability, whilst thecompany continues toposition for the future,leveraging on its strong baseof research and developmentactivities as well as itsinternational alliances indiscovering and exploitingemerging opportunities bothin the local and offshoreAfrican markets.

PRINCEWILL EKWUJURU

Nigeriarevenue up 8%in July on high-er oil sales

Nigeria’s gross government revenues rose by

8 per cent to 825.39 billion($5.25 billion) in July, from763.55 billion naira in Maydue to higher crude oilexports, the Finance Ministrysaid. Nigeria distributed564.08 billion naira to thethree tiers of government forJuly while 213.10 billionnaira was added to the excesscrude account (ECA),Minister of State for FinanceYerima Ngamma toldreporters.

Ngamma said governmenthas removed $1 billion fromthe ECA, where Africa’sbiggest oil producer savesmoney it earns from crudesales over a benchmark price,currently $72 a barrel.

By NKIRUKA NNOROM

The Nigerian Stock

Exchange (NSE) hassuspended further trading onthe shares of Starcomms Plcwith effect from Friday, 17

th

August, 20123.The NSE in a statement that

the decision to place theshares of the company on fullsuspension followed thereceipt of applicationnotifying the Exchange ofintended Capitalrestructuring by the company.

By the suspension,investors would be able toeither buy or sell the sharespending the conclusion of thecapital restructuring exercise.

As at Thursday, the sharewas trading at nominal valueof just 50 kobo.

The Managing Director/CEO, Mr. Maher Qubain,had at the last generalmeeting with shareholdersassured that the company hasbeen positioned forsustainable growth throughenhancement of its corebusiness and investment innew and emerging growthareas.

He noted that under thepositioning, the company hasrevitalised its offerings andmade great strides inreducing its delivery costs.

“In a bid to ensure that it isproperly aligned to capturegrowth opportunities,Starcomms has madeimportant organisationalchanges by combining itscorporate and enterprisebusinesses to take advantageof the tremendousopportunities aroundbroadband and ICT growth.

NSE freezesStarcomms sharesover capitalrestructuring

Vanguard, MONDAY, AUGUST 20, 2012 — 25

CMYK

BRIEFS

Banking & Finance

By BABAJIDE KOMOLAFE

Finance Houses have been

advised to concentrateon the underserved segmentof the financial market so asto remain relevant andcompetitive.

Former Managing Director/Chief Executive, First FundsLimited, Mrs. Yemisi Tayo-Aboaba gave this advice at theCEO Business meeting andluncheon of Finance HousesAssociation of Nigeria(FHAN) held in Lagos.

Finance companies, shesaid, exist to bridge gapsbetween the big commercialbanks and the microfinancebanks. And for them to berelevant, they have toconcentrate on underservedsegments of the market and

First Bank refutesilliquidity claims

By NKIRUKA NNOROM

First Bank of Nigeria Plc,

FBN, has debunkedclaims that it is facingliquidity challenges and assuch, has stopped extendingcredit facility to interestedpersons.

The bank said in a statementthat at no time had it stoppedlending, noting that theprimary responsibility of anybank is to stimulate theeconomic growth of the societyand ensure better standard ofliving of the citizenry.

The statement said, “Afterthe last Monetary PolicyCommittee (MPC) meetingand the Central Bank ofNigeria, CBN’s, recenttemporary policy actions,wherein required cashreserve ratio was increased by50 per cent, market interestrates have risen to the highestlevels witnessed in over twoyears.

CIBN partnersUI onimprovingbankingexpertise

BY CHINEDU IBEABUCHI& BLESSING OBINNA

The Chartered Institute of

Bankers of Nigeria,CIBN has entered intopartnership with University ofIbadan, UI to improve thelevel of bankingprofessionalism in thecountry.

President and Chairman ofCIBN, Mr. Segun Ainadisclosed this in a visit to themanagement of the universityrecently to discuss issues ofmutual importance to bothinstitutions.

Mr. Segun noted that thevisit was part of efforts toengage key stakeholders onvarious initiatives of theInstitute includingbenchmarking programmes ofother banking institutes invarious countries; creating anew administrative structurefor the Institute; enhancedcertification programmes;reviewed ACIB Syllabuswhich entails a 4 routes toACIB; development of acompetency framework for thebanking industry; improvedContinuous CompulsoryDevelopment Programme(CCPD) and establishment ofa Banking School to deepenknowledge and skills in theindustry among others.

BY MICHAEL EBOH

The Central Bank of

Nigeria, CBN, hasexpressed concerns over therising spate of cyber crimes,and has called on banks toensure the safety oftransactions, especially in thelight of the cashless policyregime.

Speaking during the officialpresentation of ISO27001:2005 certificate toAccess Bank Plc. in Lagos,Mrs. Tokunbo Martins,Director, BankingSupervision Department,represented by Mr. SolaOgunmoroti, emphasized theneed for banks to ensure thedeployment of an effectivecontrol mechanism for theirinformation technologyinfrastructure to checkmatecyber crimes and ensure thesafety of electronictransactions.

She said informationtechnology is a major driverof banks’ activities, hence theneed for regulatory focus oncontrol built about aroundinformation technologyinfrastructures.

She said, “Transparencyand accountability is posingserious challenges in manyjurisdictions, and this hasbrought to the fore, the needfor banks not to downplay theimportance of InformationTechnology, IT.

“In some cases, Control isoften disjointed and withouteffective infrastructure. TheCBN has become aware of theneed to wage war againstcyber crimes, hence the

CBN expresses concerns over safety ofbanking transactions

emphasis on certification ofbanks’ information securitymanagement system”

She commended AccessBank for the certification andurged other banks to emulatethe bank in this regard.

“The certification of AccessBank is coming at a time thewhole world has realized theimportance of security oftransactions,” she noted.

She, however, added thatthe certification is not a on-off process, stating thatinformation security controlmust be strengthened tofurther develop theinformation managementprocess.

The certificate waspresented to Access Bank by

the Technology PlatformBusiness Resource Limitedon behalf of the BritishStandard Institute, BSI

Implementation ofinformation security

management systems asrepresented by the ISO27001:2005 certification,gives a systematic approachto minimizing the risk ofunauthorized access or lossof information and ensuringthe effective deployment ofprotective measures forsecuring the same.

It also provides aframework for organizationsto manage their compliancewith legal and otherrequirements, and improve

performance in managinginformation securely.Commenting on thecertification, ManagingDirector, Access Bank Plc, Mr.Aigbojie Aig-Imoukhuede,represented by Mr. VictorEtuokwu, Executive Director,Access Bank, said thecertification is not an end initself, that it is just a noted thatthe banks has complied withcertain regulatoryrequirements.

He said the certification hasput fresh responsibilities onthe bank, adding that it willcontinue to develop processesthat will see it deliver cuttingedge, high quality and safebanking services to itscustomers.

Finance Houses urged to focus on underserved segment

develop products to servethese segments efficiently.

“Arguably, the SMEsegment of the economy is anatural focus. The retailsegment may also offersignificant opportunities.Finance companies as agroup, may be able tocollaborate with governmentin providing funding andcapacity-building that iscritical for growing the SMEsegment,” she added.

She, however, identifiedinability to access long-termand cheap funds, as a majorbarrier to the effectiveoperations of finance housesin the country, adding thatuntil this challenge is tackled,finance houses will not beable to contribute effectivelyto the growth and

development of the economy.In a presentation titled,

Finance Houses and fundingchallenges – Any silverBullet? she said that “highcost of funds which leads tor i s k i e rinvestments makes financecompanies less attractive toother institutional financiers.Furthermore, unlike banks,finance houses are notallowed to accept depositsfrom the public. As aresult , in terms offunding, they are limited tofunding from shareholders'private equity companies,development financeinstitutions and otherinstitutional investors.”

On his part, Mr. PatrickMgbenwelu, Director andHead, Project and Structured

Finance, FBN CapitalLimited, advised financehouses on opportunities andchallenges of participating infinancing of infrastructureprojects through Public-Private Partnership(PPP). He said that due tothe inadequacy of the pool offunds in the banking system,there is opportunity forfinance houses to participatein such projects. “Pool ofexisting and projected localbank debt funding isinsufficient to meet Nigerianinfrastructure investmentrequirements of plannedprojects across all sectors asthe size of domestic bankingsystem is insufficient tofinance existing pipeline ofdeals,” he said

*From Right; Mr Ehizogie Binitie, Co-founder & Director of Product Management andMarketing, Rancard Solutions Company Limited, Mr Kofi Dadzie, Co-Founder/ManagingDirector, Rancard Solutions Company Limited, Mr Samuel Mensah, Director, Investment, Sub-Saharan African Intel Capital Company, Mr Akinyemi Lalude, Managing Partner, AdlevoCapital Technology Company Limited, During the Press briefing on launch of a new product bythe Rancard Solutions Company Limited, held last Friday at Radisson Blue Hotel, OzumbaMbadiwe Street, Victoria Island Lagos. Photo by Kehinde Gbadamosi

26 —Vanguard, MONDAY, AUGUST 20, 2012

CMYK

Vanguard, MONDAY, AUGUST 20, 2012 — 27

Homes & Housing Finance

FG allays stakeholders' fearsover land reforms

Stories byYINKA KOLAWOLE

Federal Governmenthas allayed the fears ofland owners and other

stakeholders over plannedreform of management andadministration of land in thecountry, noting that the reformis aimed at revoking existingland documents such asCertificate of Occupancy (C ofO).

Chairman, PresidentialTechnical Committee on LandReform, Prof. Peter Adeniyi,said the reform is neithermeant to repeal the Land UseAct nor usurp the powers ofstate governors and localgovernment chairmen overland administration or denyindividuals, communities orcorporate bodies of the rightto their lands, but tostrengthen capacity forefficient administration ofland.

He lamented that only 3percent of the nation’s land iscurrently registered. “It isimportant at this point to statecategorically that the landreform programme of theFederal Government is notintended to abrogate the LandUse Act or usurp the powersof the state governors andlocal government chairmen onland administration or denyindividuals or communitiesthe right to their land. But whatwe want to do is to see how itcan be made workable. “As itis now, there is not much thatcan be achieved from it; but bythe time we are through with

BRIEFS

the assignment, we wouldhave interacted with peopleand communities across thecountry to actually know howto make our land economicallyviable, not only for landowners but also togovernment’s as well,” hestated.

Adeniyi said the committeewas mandated to look intoland matters in both rural andurban areas of the country withthe objective of developing

and testing a systematicapproach to registration thatwould develop nationallyacceptable procedures for landtitling and registration. Hesaid is currentlyimplementing a pilot schemein Ondo and Kano states in abid to provide systematicidentification and registrationof title rights. According tohim, “5,000 parcels of landwould be registered from twolocations in each of the states.

We will take one in an urbanarea and the other from a ruralarea. We are going to adoptthe systematic approach ofland registration rather thanthe existing sporadicapproach. Facts have shownthat investments flow naturallyand more to countries withland registration system whilethose without comprehensiveland registration would havenothing to attract foreigninvestors with,” he asserted.

Pastor Emeka Okoye (l), MD, Pentagon, presenting titledocuments to one of the subscribers to Mainland Park Estate,Mowe, Mrs. Bose Anipupo, during the allocation ceremony

Mainland Estate subscribers get title documents

The management of

Pentagon Real EstateInvestment Ltd has handedover title documents to plots ofland at the Mainland Park Citylocated in Mowe along theLagos – Ibadan Expresswayaxis to another batch ofsubscribers to the estate.

Speaking recently at theallocation ceremony, PastorEmeka Okoye, ManagingDirector, Pentagon REI Ltd,noted that the company had tobrace several teethingchallenges common to realestate business in Nigeria tomake the estate project areality. These, according tohim, include the challenge inobtaining Certificate ofOccupancy (C of O), approvedlayout plans, buildingapprovals, obtaining beaconnumbers and registeredsurveys with RED COPIESlodged at the Land Registry.

Others are infrastructure likeroad, water, drainage systems,electricity, security, theperennial ‘Omo Onile’debacle, among others.

“Despite the challenges,today, we have come to rejoicewith another set of hundredsof subscribers who havebecome part and parcel of this

Land reforms will facilitate more of this housing development

Dangote movesto crash cementprice

Dangote Cement Plc has

commenced moves toreduce the price of cement inthe country by initiating asystematic liberalisation of theproduct’s distribution.

Managing Director ofDangote Cement, DevakumarEdwin, said the companyplans to ensure price stabilityand reduction by reviewing itsdistribution networks.According to him, thecompany was opening upmore mega depots in additionto recruiting new distributorsin order to ensure thatconsumers benefit from itsincreased capacity to producecement.

He also disclosed that thecompany had taken delivery of500 new trucks in order tosolve the problem of logistics.“What we are doing now isto liberalize the distributionnetwork by increasing ourdepots and registering morecredible distributors.

“All we require is theCertificate of companyregistration, two passportphotographs and letter ofintent. There is alsoopportunity for individuals tobuy direct. Henceforth, we areguaranteeing 48 hoursregistration with a minimumpurchase of one trailer load thatis 600 bags monthly. In fact nodeposit is required. Andcustomers can collect from anyof our plants,” he declared.

Edwin disclosed that thepurcase of bulk cement by anyinterested party was as simpleas walking into any of thecompany ’s distributionoutlets. “In the long run, wehope that this effort will notonly make cement available inevery nook and cranny ofNigeria but will reduce theprice and make the pricestable.

establishment. Access to landownership is a very key factortowards housing Nigerians.

So far, we have issuedallocations to thousands ofsubscribers though we are notdone yet. We are asdetermined as ever to meet ourobligations and to surpass thetarget we set for ourselves asa corporate entity.

“Today, we are happy toreport that over 200subscribers are being giventheir title documents inMainland Park City. Beforethe end of this year, we hopeto fully allot everybody whohas fully met his/herobligations to the company,not only in Mainland ParkCity, but also in other sisterestates like Rehoboth CityOfada, Cedar GardensAgbara, Crystal Gardens inLekki etc.

28 — Vanguard, MONDAY, AUGUST 20, 2012

CMYK

Interview

’

’

Over there in the FederalAviation Authority, I believewe have had something likesix managing directors in 12years, which is one DG everytwo years; again, it does notlend itself to continuity andtherefore becomes a problemand can be confusing.

BY NKIRUKA NNOROM

Mr. Richard

Akerele is theCEO/Managing

Director of Aviation Servicesand Logistics Plc, a majorplayer in in-flight cateringservices in aviation sector inNigeria with about 20 yearsoperating experience in theaviation business. In thisinterview with Vanguard, heposited that the aviationindustry is suffering fromadministrative lapses, lack ofcontinuity and propercoordination among otherthings. Excerpts

What is your assessment ofthe Nigerian aviationindustry in recent time

I think most Nigerians aredisappointed with presentposition or disposition of the

Aviation industry sufferingfrom lack of continuity andproper planning — Akerele

a v i a t i o nindustry inour country.This is beingaccentuatedby the recentunfortunateaccident ofthe DanaAirline someweeks ago inwhich over150 peopleperished. Ithink ith i g h l i g h t ssome of theproblems wehave in ouri n d u s t r ytoday. I amnot speakingas a technicala v i a t i o nexpert but asa concernedi n d i v i d u a l

working in the aviationindustry for over 20 years. Ihave been working in aviationsince 1990, so I believe I havesome knowledge of aviation inNigeria. I think the Nigerianaviation industry is sufferingfrom a lack of continuity and aproper plan: well thought outplan, taking account of wherewe are and we where will welike to be in the next thirtyyears. I think this road map isimportant to give us direction.I also believe that thoserunning the aviation sectorshould follow the road mapand therefore having

continuity as we move alongthe continuum. And what doI mean by this? I could bewrong but I believe in the last12 years, since 1999/2000, wehave had in Aviation/ Ministryof Transport, when we haveMinistry of Transport runningaviation, some 10 ministers,equating to almost oneminister every 1.3 years.

You see without a roadmap followed, each

minister has his idea of whatit is he/she wants to do whichmeans that progress is slowedand can be confusing. Overthere in the Federal AviationAuthority, I believe we havehad something like sixmanaging directors in 12years, which is one DG everytwo years. Again, it does notlend itself to continuity andtherefore becomes a problem

and can be confusing.So, for you continuity is

basically the problem inaviation industry. What ofinfrastructural development

Yes. The continuity is notthere. What I haveexperienced in the last fewyears- in the last 15-20 yearsexactly- every newadministration brings in newidea and always has awinning formula. We are yetto stick to a continuousprogramme. For anybody, itdoesn’t matter whether youare in the Ministry ofAviation, it doesn’t matterwhether you are ingovernment, if it is in schoolor in your own personal life,you need continuity, otherwiseyou will tend to miss the goalyou want to achieve. That iswhy I think the fundamentalproblem is lack of continuity.

There is lack ofi n f r a s t r u c t u r a ldevelopment, thereis lack of plan aswell, but lack ofplan is the mainissue. You mayrealise that sevenyears ago, we re-laid the runway atthe local airport.Still, today, severalyears after, there isstill no light in thatrunway whichraises the question-what happened?There arenumerous projectsaround the airport.The car park hasbeen lying fallowfor the past four tofive years at leastand the story goes

on. We need to really developour airport and infrastructureat Murtala MohammedAirport which is our mainairport. We are doing this, butin a fashion I consider not aplanned way. I think becauseof this, there is a majorproblem in aviation inNigeria which falls into otherareas. In respect to security,we have made someimprovement, but we have alot more to do. We need tobecome more vigilant andmore professional in our

approach to aviation ingeneral. I will like at this pointto say that unless everybodywithin the aviation sector andindeed within thegovernment and withinNigeria and all over Africacome together to worktogether with one another, itcould be difficult to succeedin any meaningful level.

What do I mean by this?You may realise that in

European countries and othercountries around the world,they work together to achievetheir objectives. It is like afootball team, everybody hasone goal to meet. I havefound out that in Nigeria,there is lack of cooperationbetween the officials ofgovernment and privatepractitioners. We should beworking together to achievethe same objectives and ourobjectives should be one andthe same.

How do you think theairlines can be adequately

Richard Akerele

*Richard Akerele...! do not buy into the general thinking that we shoflights which international airlines can make into Nigeria

CMYK

Vanguard, MONDAY, AUGUST 20, 2012 — 29

Interview

’’

’’

I think government subsidyshould be in place, and itshould be in form of directsubsidy; in other words, thereshould be reduction in landingand parking fee for theairlines or complete abolitionof parking fee for localairlines.

I also believe that in the interest ofall, if we truly want to develop theairports, they should be given overto the state governments as theirown property and they should berun and managed by the statesbecause it is then that you willprobably see a better quality and abetter service delivery.

funded because as it is, thereseems to be paucity of fundsfor their operations

That is no doubt. I believethat if you take the

airlines, particularly inNigeria, the local domesticairlines are inadequatelyfunded and this leads toproblem. Two or threeaircrafts do not constitute anairline. I think this is aproblem in itself. I think thereis not enough capital

invested into these companiesto make them viable and thishas to be looked into. It needsto be looked into: to know ifmergers are required, but wedefinitely need to havestronger, financially backedairlines in order to ensurethat they are able to run theirbusinesses. Aviation is ahighly technical business, itis not a trading business andtherefore it must be takenvery seriously. For the airlinesto succeed, they need tocooperate among themselvesand I also think that anysubvention or subsidy thegovernment wants to do mustbe specific. I do not believein handing out cash to rescueour airlines. I think this is afailed approach. I think it isborne out of the recent N300billion government bailoutthat was provided which hassomehow has disappeared. Ithink government subsidyshould be in place, and itshould be inform of directsubsidy. In other words, thereshould be reduction inlanding and parking fee forthe airlines or completeabolition of parking fee forlocal airlines, which is a directsubsidy by the government,which does not involve cashtransfer, but nevertheless willreduce, significantly, theoperating cost of theseairlines.

With better funding, theairlines will be better

able to service themselvesand their customers. I believethat kind of subsidy is betterthan cash. I also think thiskind of subsidy can make ourairlines to fly internationally,and be more competitive. Wemust have a good, stronglocal domestic airline. It is aprerequisite for a hub in anypart of the world. Today, wedo not have any strongdomestic airline or nationalflight carrier, and thereforethe idea of having a hub isyet to be realised and we willcontinue to be so until suchtime we have a strongdomest ic / in te rnat iona lairline. Now, having directsubsidy like free landing andparking fees for domesticairlines that fly internationallywill give us competitiveadvantage, and will also

reduce the cost of ticket whichwill encourage Nigerians tofly on the local airlines andtherefore strengthen thoseairlines. So, I believe directsubsidy like this will be veryhelpful. It will make our localairlines more competitive andif they become competitive,they will also grow andtherefore we should have ahub.

What is your view onputting restriction on thenumber to timesinternational airlines can flyinto this country

I do not buy into thegeneral thinking that we

should restrict the numbers offlights which internationalairlines can make intoNigeria. I say this from myown narrow perspectivebecause I believe it ishindering development in theindustry and protectionism ofthe wrong type is not reallybeneficial. Why do I say this?I think over the last fewmonths this year, there havebeen on-going argumentsover the prices of tickets to flyto Europe and rest of worldfrom Nigeria. There havebeen arguments thatcompared to other parts of theworld or our neighbouringcountry like Ghana, the pricesof our flight tickets are higherusing Virgin Atlantic andsome other European airlines.I find it difficult to compareNigeria with Ghana: Ghanais a relatively poor countrycompare to Nigeria, andtherefore cannot afford thesame things that we have.Their country is smaller as amsure you are aware. Lagosalone probably has morepopulation than the whole ofGhana, and therefore ourdemand is higher. The basiceconomics of demand and

supply will tell you that whereyou have higher demand, youare likely to have higherprices. So, from thatperspective, I think theimmediate question should behow to alleviate this problem.One way to alleviate it will beto allow international airlineslike Virgin Atlantic, Virgin Airand such like to fly twice, orthree times or as many times

as they could comfortablyafford. An example will be theBritish Airways that has eightflights a day to New York fromHeathrow alone.

There are eight flights aday in British airway to

New York and we have one.Now, they have eight flightsin a day for just BritishAirways alone to New Yorkand we have one. In otherwords, if the Airway feels theirflight from London to NewYork is more, they will reducethe price of their ticket to makesure they fill their slot. I thinkwith great supply, you mightfind that the price of the ticketwill drop. What will thatmean? The price of ticketdropping to the general publicin Nigeria means that peoplecan afford to fly more forholidays and businesspurpose and vice versa. So, Ithink it will grow youreconomy as well because all

the airlines flying more willmean more businesses for ourhotels, it will mean morelanding fees for the airportauthorities and of course,those of us operating in-flightcatering services will beproviding more food. Sogenerally, the economy willgear up. I don’t believe weshould restrict them. Weshould encourage moreflights because I think anaverage Nigerian will benefitfrom it rather than saying weshould restrict the flights toprotect the few airlines wehave at the expense ofmajority of people in thiscountry. I think it is going torev up the aviation sector two,three, four folds if you are toopen it up more. We are alarge nation in Africa as youknow; more populous and weare also the second richestnation. We are alsogeographically blessed. Weprobably have the bestposition than any otherAfrican country because of ourgeographical location vis-aviz Europe, North and SouthAmerica and possibly in themiddle east. We have shorterdistance to all of thesedestinations and in mostcases, half the distance andtherefore a lot cheaper. So,

we have all the advantages,but we are not taking it. So, weshould really be the numberone destination in Africa but todo that, we need to develop ourairports as well. That should bein our 30 years plan; havinglong range plan that we havestudied and have talked tointernational airlines; we havetalked to everybody in theindustry and not just doing itin isolation. We have asked theairlines what theirrequirements are and whatthey feel their demands will beover the next five, ten to thirtyyears period. Another area Ithink we really need to consideris our airports generally.Several years ago, thegovernment employed the IFCto do a study on how tocommercialize our airports.They came up with a plan; ablue print which involves thecommercialization andprivatization of our airports.

Richard Akerele

uld restrict the numbers of

30 — Vanguard, MONDAY, AUGUST 20, 2012

CMYK

Homes & Housing Finance

Boom time for Nigeria’s cementindustry

BRIEFS

BY JAMES MAPOSA

Nigeria’s cement

producers ares p e a r h e a d i n g

expansion and growth of WestAfrica’s regional cementindustry. Spurred by sizeableexpenditure on increasingexisting production capacity,the Nigerian cementindustry’s local output rosefrom 10.5 million tonnes in2010 to 28.6 million tonnes in2011. This robust increase inproduction also causedNigeria’s cement industry toaccount for 63.6 percent of theWest African region’s cementoutput in 2011.

Despite this substantial risein production output,Nigeria’s leading cementmanufacturers are continuingto pour more investment intofurther increasing theirproduction capacities duringthe years 2012 to 2018. Strongeconomic growth forecasts isa key contributor to the localcement industry spending

are beingexperienced,Investmentsin pluggingthe housingdeficit incities, suchas Lagos, isa n o t h e rf a c t o rexpected toboost localc e m e n td e m a n d .N i g e r i a ’ sc e m e n tproducersare thereforepositioningthemselvesto take fulladvantageof thisanticipatedrise in localc e m e n tdemand.

D a n g o t eC e m e n tGroup Plc(DCP) hasled theN i g e r i a nc e m e n tindustry ’sc a p a c i t yexpansiong r o w t h .B e t w e e n2005 and2011, DCPhas spent ani n d u s t r yunprecedented$6.50 billionon rampingup itsproductionc a p a c i t y .T h r o u g ht h e s em a s s i v ec a p i t a l

expenditures, DCP hassubstantially grown its marketshare, becoming the marketshare leader of the Nigeriancement industry in recentyears. In addition to Nigeria,DCP is also implementingaggressive expansionstrategies by establishingproduction and distributionpresences in 14 other Africannations. Going forward, DCPis expected to continue beingan industry-leader in terms ofgrowing its existing installedbase and regional presence.Frost & Sullivan expects DCPto be produce 50.0 milliontonnes of cement per annumby 2020.

Aggressive growthinitiatives such as these areexpected to have a significantimpact on the existing statusquo of Africa’s cementindustry. In early 2012, theNigerian governmentannounced the banning ofcement imports into thecountry, effective September2012. As a key trade partnerto several West Africannations, Nigeria’s cementindustry is well positioned toexport its locally producedexcess to these neighbouringstates in 2014 and beyond.Such a development isexpected to further impactnon-regional cement importsinto the region. Supported byanticipated successes inexporting cement within WestAfrica, Nigerian cementproducers are also looking tobreak into central, east andsouthern Africa. Keygeographic expansionstrategies, that Nigeriancement manufacturers willimplement, include: Buildingof import terminals andsupply of bulk and baggedcement to countries withoutlimited limestone reserves;Acquisition of a small-sizedcement manufacturer withstrong growth potential incountries with sizeable

limestone deposits, and;Construction of a Greenfieldcement manufacturing facilityin countries with sizeable,but undeveloped, limestoneand coal reserves.

Although aggressiveregional growth plans areunderway for DCP, severalconstraints hinder the cementproducer ’s progress. Thepredominant use of low pourfuel oil (LPFO) to powercement kilns within Nigeria’scement industry, significantlyraises the industry ’sproduction costs, whencompared to other Africancement producers who usecoal as their main energysource. Entering into regionslike Southern Africa, wheremost of the cement producersuse coal as a fuel source, is afactor that is expected to havea significant impact on pricingand profitability for DCP,notes Frost & Sullivan. Thecompany will also have tocontest with lower pricedAsian cement imports withinthe East African region.Transportation of cement tocentral and eastern Africa isanother factor that is expectedto further raise productioncosts, further impactingprofits for DCP.

Despite these setbacks,innovation is a key strategythat cement producersexpecting to gain a sizeablemarket share within Africawill continue to adopt. AshakaCement, a Nigerian cementproducer, is developing itscolliery and plans to supplyextracted coal to other cementproducers within the country.

Mass housing developments such as this require cheaper cement

MinistercommendsBauchi onhousingdevelopment

Minister of Lands,Housing and Urban

Development, Ms. AmaPepple, has commended theBauchi State government onits efforts aimed at providingaffordable housing forresidents of the state.

Pepple made the remark atthe inauguration of 288housing units tagged BauchiUnity Estate, in Bauchi State.She also commended the stategovernment for theestablishment of housingestates that provide cheaperand adequate livingenvironments for indigenes.

She reiterated thecommitment of the FederalGovernment to construct onemillion houses annually tomeet the 17 million needed tohouse Nigerian citizens.

The minister said the aim isto provide affordable housesin all the states of thefederation, as part of theFederal Government’s

more on expanding theirproduction capacities. Inparticular, massive capitalexpenditure on building newand upgrading old publicinfrastructure within Nigeria

*Mr. Maposa, Team Leaderfor Environmental andBuilding Technologies, Frost& Sullivan, a globalconsulting and research firm,e-mailed this from his base inSouth Africa.

Vanguard, MONDAY, AUGUST 20, 2012 — 31

CMYK

BRIEFS

Insurance

Stories byROSEMARY ONUOHA

Biometric data enrollmentfor contributors to the

new pension scheme will sooncommence in the pensionsector as Pension FundOperators, PenOp, is puttingmodalities in place to kick-start the initiative.

Chairman of PenOp, Mr.Dave Uduanu, who disclosedthis in Lagos said that themove is to capture thebiometric data of all thecontributors to the newpension scheme.

Uduanu said “Where we arenow is that we are going towork on a collaborative basisto capture the biometric dataof everybody who has apension account. Now if yourbiometric data is not capturedbefore because it was donemanually, we are going to doan electric capture of thosebiometric data. I expect thatto commence as soon aspossible and concluded veryquickly.”

Uduanu said that once thebiometric enrollment iscomplete, the transfer windowwill be opened subsequentlyby the National PensionCommission, PenCom.

A transfer window is aprocess that allows acontributor to the new pensionscheme to change from one

*From right; Mrs Omobola Johnson, Minister ofCommunications and Technology, presenting Web Jurist Awardto Ejike Osisioma, Head, IT, Royal Exchange Plc.

Pension contributors to undergobiometric data enrollment…Must do bond registration to get entitlements — PenOp

Pension Fund Administrator,PFA, to another.

Uduanu said “Theembezzlement in the previouspension scheme is becausethere was no biometric datacapture. So they don’t knowwho they are paying and thereare ghost pensioners. As such,we don’t want to have ghostpensioners in this new systemand that is why PenCom is

insisting on all of this.”The PenOp Chairman also

said that so many pensionersthat transferred from the oldscheme into the new schemeare yet to do bond registrationas required by the PensionReform Act 2004.

He said “If you don’t dobond registration, you are notgoing to receive yourentitlements. When the new

scheme started, there was acut off period. Technicallyspeaking, they were doingthe defined benefits scheme,so there was an actuarialevaluation of how muchgovernment owned them atthat point. But governmenthave said, ‘when you areabout to retire come and do abond registration’ and itmeans retirement bond,which is that government isowning you this money.”

According to Uduanu, to doa bond registration,contributors should gothrough their PFAs andprocess their documents, thenthey are to make sure that alltheir contributions are clear.After that Pencom willapprove the money that thegovernment is owing themwhich is the accruedretirement right.

“The accrued retirementright will now be paid intoyour account and that is whatwe call consolidation. Whenit is paid into your account,we now know that all themoney government owns youboth for current and past jobis now complete and we canpay. Without that we cannotpay.”

While complaining thatsome contributors don’t go forbond registration Uduanusaid, “If you don’t go for bondregistration, there is no waythat PFAs will pay you. If youdon’t do bond registration,you are to be blamed, youcan’t blame PenCom.”

The bond registration,according to Uduanu, isnecessary because there mustbe an order to the newpension system, stating “Ifthere is no order, the monieswill be lost like the oldsystem. But some Nigeriansdon’t want to respect thatorder. If you tell somebodyto go and do bondregistration, he won’t do bondregistration, you tellsomebody, go to youremployer and get aconfirmation letter that allyour benefits have been paid, they will say ‘no just payme’.”

“It is a retirement savingsaccount; it is not a bankaccount. You can go to yourbank and collect money anytime you want but this moneyis for retirement. Socontributors must go to theirPFAs and make sure that allthe documentation has beencollected. Some people say

BY RITA OBODOECHINA

The board of CrystalifeAssurance Plc said it

will seek to improve itsindustry presence bydiversifying its productofferings and optimallydeploying delivery channels.

The chairman of thecompany, Mr. KehindeDurosinmi-Etti disclosed thisto shareholders during thecompany’s 14th annualgeneral meeting held inLagos.

Durosinmi-Etti said that interms of brand image andoperational efficiency, thecompany will always seekimprovement in all itsspheres of operation,required investments inpeople, technology andprocess will be givenoptimum attention.

He noted that the company

Crystalife Assurance plans diversificationof product offerings

would implement a risk basedoperational approach with theobjective for an efficientmanagement of all processes.

Speaking on the financialperformance of the company,he said the company recordeda relatively good performancein the year ended December2011.

According to him, grosspremium income stood atN2.6 billion, which was a 24per cent growth fromN2.1billion reported in 2010.He said its life fund grew by28 per cent from N1.13 billionin the previous year to N1.44billion, resulting in actuarialvaluation surplus of N788million.

Accrued shareholdersportion of this surplus of 44percent increased the shareholder’s fund from N3.00billion in 2010 to N3.2 billionin 2011, while investment

portfolio grew from N3.7billion to N4.1billion,recording a profit before taxof N225 million.

The company furtherdeclared a final dividend of2kobo per ordinary which willbe paid within a month’stime.

According to the Chairman,“In 2012, an estimatedindustry Gross premium ofabout N250 billion appearsrealistic, as the success of theMDRI should significantlydrive volume in that year andin subsequent years. Thisdevelopment will engenderthe creation of additional jobsacross the industry throughthe agency network system,expectedly this shouldincrease market penetrationand create a wider outreachfor the desired consciousnessabout insurance in Nigeria”

Call to buildinvestorconfidence inlife companies

Investors’ value lifeinsurance assets lower

and the industry needs toboost confidence in the sector,TAL MD Jim Minto says.

“Markets value our assetslower and it is very commonfor life companies to trade atdiscounts,” he told theFinancial Services Councilconference on the Gold Coastearlier this month.

“If we are to continue to payclaims, we need to restoreinvestor confidence in our lifecompanies.”

OnePath Acting MD GavinPearce says providers ofcapital will go where theycan get the best returns.“Investors look at capitalreturns but in life insurancethe cost of distribution drawson the capital,” he said.“Unless we change investors’attitudes to life companies,we will fall down paying theclaims.”

Swiss Re reports3% rise in treatyrenewals

Swiss Re has reportedrate increases of 3 per

cent from the July reinsurancetreaty renewals, mostly fromAustralia, New Zealand andthe Americas.

CEO Michel Liès describedthe month’s renewals assuccessful and says the rateincreases follow last year’s“already strong levels”.

But a solid performancefrom the reinsurer’s propertyand casualty arm was maskedby an almost $US1 billion($946.6 million) loss from itsUS life assurance businessAdmin Re, which saw SwissRe’s second-quarter profit fallto $US83 million ($78.5million) from $US960 million($907 million) in the previoussecond quarter.

The group’s combined ratiofor the quarter was 85.7 percent, compared with 81.4 percent in the correspondingperiod in 2011.

The property and casualtybusiness increased profit by86 per cent to $US717 million($677.7 million), with MrLiès putting the strong resultdown to fewer catastrophes,reserve releases andinvestment gains. Premiumsrose 18 per cent to $US2.8billion ($2.65 billion).

Mr Liès says the Julyrenewals comprise 20 percent of the group’sreinsurance annual treatypremiums and he expects thetrend of strong rate increasesto continue.

32 —Vanguard, MONDAY, AUGUST 20, 2012

CMYK

Vanguard, MONDAY, AUGUST 20, 2012 — 33

CMYK

“The outstanding faults ofthe economic society in whichwe live are its failure to pro-vide full employment and itsarbitrary and ineuitable dis-tribution of wealth and in-comes”. John Maynard Key-nes, 883-946, in The GeneralTheory of Employment, Inter-est and Money. Published in936.

[This week I continuewhere the series ended lastweek with my WELCOME DROKONJO-IWEALA, pub-lished last year August whenshe returned as Finance Min-ister].

While you are gettingbusy finding answers to the ques-

tions above, let me draw yourattention to the statementabove made by Keynes at theend of his magnum opus. Al-though written 75 years ago,the observation is as relevanttoday as when it was writtenin 1936. In fact, it has becomemore relevant in the modernglobal economy – Nigeria in-cluded. At the moment, over200 million people are lookingfor jobs all across the world –perhaps about 42 million ofthe job seekers are in Nigeriaalone.

Part of the reason, as youmust have known, as WorldBank Managing Director, isthe fact that growth, estimat-ed at 7% per annum in Niger-ia, is not creating jobs and thebenefits of growth are not be-ing shared broadly. Now as inthe period before the SecondWorld War, when Keynespointed to the destabilizingimpact of “arbitrary and ineq-uitable distribution of wealthand incomes”, Nigerian poli-ticians in all the political par-ties governing at the federaland state levels have institu-tionalized income inequalityand narrowed access to em-ployment.

Take a look at the high pro-file selections made before thejust concluded elections andyou will notice the increasingstrangle hold on political po-sitions by a few families or ca-bal in virtually every state.Kwara might as well be called

Time to go Dr Okonjo-Iweala —2

Saraki State. But, what wasonce limited to one state isnow becoming national. InPlateau, the governor ap-pointed his son as SpecialAdviser; “arbitrary and ineq-uitable distribution of wealthand incomes” is not better il-lustrated than that. To someextent, the same is true ofstates under “progressive”governors. Dr Okonjo-Iwea-la is surely familiar with thebroad outlines of Keynes the-ory which guided economicpolicy from the late 1930suntil the conservative ele-ments staged a come-backwhich has resulted in the cur-rent global recession. Cer-tainly, she must ask herselfwhere to start redressing theinequitable distribution ofwealth in a country wherelegislators earn over 100times the take home pay of aprofessor.

Previously, a country grow-ing at 7% would have beenchurning out jobs at a ratethat will almost guaranteefull employment; if not labourshortage – given populationgrowth rate of 2.85%. Insteadof scramble for workers, suchas we experienced duringthe Gowon administration inthe 1970s, people are stillbeing laid off and factoriesare closing.

In addition to all these, theFinance Minister came thefirst time when the interna-tional price of crude oil washeading for the roof. Givenimminent global recession onaccount of economic crisis inthe US and Europe, shemight have arrived just intime for the price of crude tohead for the basement.

She needs all the luck inthe world to avoid becomingthe scapegoat for what mightfollow.

That was last August; weare in another August

and the economic debacle

facing us reminds me of his-torian Trevor Roper ’s LastDays of the Third Reich, andthe Chapter on Two Winters.The first winter was trium-phant for the German Army inRussia; the second was disas-trous. Over 800,000 Germansoldiers perished in the snowsof Stalingrad. Last year, youenthusiastically claimed thatyour mandate is to managethe economy in order to cre-ate jobs. At least that was whatthe President told you.

Well, Madam, the samePresident, a few weeks ago,announced that “During thecampaign, our emphasis wasmore on job creation, power,but now what worries us mostis security. This is becauseyou must be alive before youwill eat food.” Obviously, yourboss does not realize that ifyou don’t eat you will be deadsoon enough. What concernsus here is the fact that yourrole in government had beendemoted. Job creation, powerand food security will nowtake the back seat. Henceforth,the Minister of Defence, theDG-NIA, the National Secu-rity Adviser, the DG-SSS andthe Inspector-General of Po-lice, IGP, will take preference

over the Economic Manage-ment Team which you co-or-dinate. Since you were prob-ably aware of what happenedto the US during the wars inthe Middle East, you need notbe told that, when a nationtacitly selects guns (metaphorfor security) over gari (meta-phor for jobs, power and food),the allocation of funds head to-wards destructive pursuits notconstructive objectives. Thathas been the verdict of histo-ry which will not change be-cause the country now em-barking on that venture is ourown Nigeria.

Again you are aware thateven nations which have

expressed the burning desireto create jobs – US, Europeannations, South Africa, Braziletc – are failing woefully toachieve the goal of job crea-tion mostly on account of lop-sided income distribution. Anation, whose President haddeclared employment a sec-ondary concern, has nochance whatsoever. So, Mad-am, forget jobs. The core man-date for which you were re-cruited has become part ofA.O.B (Any Other Business)at the weekly Federal Execu-

tive Council meeting. That isnot your fault. Let me quick-ly add, you just went to workfor the wrong boss.

However, let me point outyour personal faults for whichyou should seriously consid-er throwing in the towel. Ba-sically, it comes to one wordCREDIBILITY. Last August,you were a highly credibleManaging Director of theWorld Bank. Even, some whodisagreed with your debt re-payment option accepted thefact that it was a step in theright direction. Your secondcoming was fraught with dan-gers – of which you wereprobably not aware. But youwere warned. Let me againtake you back to last August.In the second part of WEL-COME BACK, DR OKONJOIWEALA – 2, the followingobservations were made.

“ WELCOME DR OKON-JO-IWEALA; YOUR COUR-AGE IS ADMIRABLE

“The man who enters aroom by breaking down thedoor can be justifiably ac-cused of violence. Yet some-thing must be said about thestate of the door”.

Professor John KennethGalbraith, Nobel Prize Win-ner in Economics.

Nobody who studied eco-nomics in the United Statesin the 1960s to 1980s couldhave avoided the great Har-vard Professor of Economicsand iconoclast. You must haveread some of his books dur-ing your years in the univer-sity. If you are wonderingwhy this is important, it is inreference to your press con-ference on Wednesday, Au-gust 25, 2011 during whichyou were reported to havesaid that, “There has been alot of debate on fuel subsidiesand we have all resolved thatremoving it is a good direc-tion to go on. You have toleave it to us to decide whenit is prudent to do so”.

BUSINESS & ECONOMY

Dr Okonjo-Iweala

The Central Bank of

Nigeria (CBN) said inLagos that it would commencea 24-hour transactionsettlement on Point of Sales(PoS) for merchants. Mr TundeLemo, the Deputy Governor,Operations of the bank, statedthis at a seminar tocommemorate the 30thanniversary of the Institute ofChartered Accountants ofNigeria (ICAN), Ikeja District.The theme of the seminar was“Complementing the Efforts ofCBN-Imperatives andRealities of Cash-less Policy”.

He said that the 24-hour

transaction settlement wouldbe achieved through amethod described as“Straight Through Process(STP)” Lemo, representedby Mr Dipo Fatokun, theDirector, Banking andPayments SystemDepartment of the bank, said the process wouldallow immediate credit ofmerchants’ accounts, insteadof the present two dayssettlement. He said that thedevelopment would alsoincrease people’s confidenceon the cash-less policy andencourage frequent usage

of PoS terminals.Lemo said that the CBN

Governor, Malam SanusiLamido Sanusi, had alreadysigned a directive on thedevelopment, adding that thenew process would start onSept. 30, this year. Lemo,however, disclosed that theCBN was planning to rolloutPoS terminals that would beWi-Fi enabled to improve onthe connectivity problem. Thedeputy governor said that oneof the challenges facing thecash-less policy, particularlyin the area of mobile paymentwas a lack of awareness that

the policy was in progress.He said that the CBN had

registered additional threet e l e c o m m u n i c a t i o n scompanies to complement theinitial two in providingconnectivity for the mobilemoney payment. Lemo saidthat 14 mobile money agentshad been registered inaddition to the existing 16 foreffective service delivery. ThePresident of ICAN, MrAdedoyin Owolabi, said thatas accountants, the new policypresented fresh challenges foraudit control reconciliationand accounting.

Owolabi said that the policypresented a window ofopportunity to clients,employers and stakeholderswho would look up toaccountants to providesolutions that impactedpositively on businesses. Hesaid that the policy wouldpromote safety and controlsystemic and operationalrisks inherent in manualtransactions. Mr PatrickSanni, the Chairman ofICAN, Ikeja District, said thatthe body would continue topartner stakeholders toensure that members keyedinto and benefit from thepolicy.

CBN to commence 24-hour PoS transaction settlement

34 — Vanguard, MONDAY, AUGUST 20, 2012

Aviation

BRIEFS Imo State to construct new airportterminal on PPP agreement

The Imo State

Government hasindicated its interest to buildan ultra-modern airportterminal through a Public-Private-Partnership (PPP)agreement.

Disclosing this developmentduring a press briefing at theImo State Liaison office inLagos, Special Assistant to theImo State Governor, LagosLiaison office, Hon. LisaChinwe said theadministration of GovernorRochas Okorocha was poisedtowards developing Imo Statethrough the construction ofseveral projects includingbuilding a brand new airportterminal in the state.

According to her,”most ofthese projects that thegovernment is intending toembark upon including thebuilding of a brand new airportterminal in the state will be onthe PPP agreement, so that ishow they will be done.”

Hon. Chinwe further notedthat when completed, theairport terminal would bringgreater advancement inairport infrastructure andfoster development in thestate.

The intention of the Imo StateGovernment is coming on theheels of renewed call by theChairman of Bi-CourtneyGroup Limited, Dr. OlawaleBabalakin for more Nigerianprivate investors to considerentering into the PPP

agreement with thegovernment in order to fosterdevelopment in the aviationindustry. Dr. Babalakin said;”There will be greateradvancement in airportinfrastructure if moreNigerians toe the line of PPParrangements such as that ofBi-Courtney.”

Enumerating the variouslaudable projects embarkedupon by the Okorochaadministration, Hon. Chinwesaid; “Governor Okorocha is

doing everything possible tomake Imo State good in justone year in office. We aregoing to have what is called,Imo City in Lagos to showcasethe rich cultural heritage ofImo State and by next month,we are going to start a freeIgbo education centre here inthe liaison office, whereby wecan teach people Igbolanguage freely. We are alsogoing to have a Lagos Villa, itis an estate project that willafford Imo State citizens in

Lagos the opportunity to haveaccess to housing, also aninsurance scheme will be putin place to assist those doingbusiness in Lagos in the eventof fire outbreak and otherunpredicted disaster. We arepoised towards assisting ourbusinessmen in Lagos,” shestated.

According to her, thegovernment was doingeverything possible to makesure that all Imo citizens inLagos were carried along.

Minister of Aviation,

Princess Stella Oduahhas been urged to create theenabling environment thatwould make the aviationindustry more viable andattractive to foreign investors.

The call was made by theNational President, AirTransport Services Senior StaffAssociation Nigeria(ATSSSAN), ComradeBenjamin Okewu, recentlyLagos.

It will be recalled that theMinister had embarked on a10-day Aviation Road Showwith top officials of the ministryand agencies in the aviationsector in a bid to woo foreigninvestors to the aviationindustry.

“Road Show”: Create enabling environment first — ATSSSA

Speaking in an interviewwith newsmen, ComradeOkewu said theinfrastructural changes beingwitnessed in the sectorpresently should have beenconcluded by the minister ofaviation before embarking onthe “ road show” to wooinvestors to the industry.Okewu noted that theintention of the minister towoo investors to the sector wasa good thing, he howeveradded that the timing of thetrip was wrong saying thatthere are investors in Nigeriacapable of investing in thesector.

“If you ask me if the roadshow is what is needed forthe industry now, my answer

will be no. There is nothingwrong in doing a road show,but before you bring ininvestors you should firstcreate the enablingenvironment. There is aprocess, I thought we wereremodelling. Have theyconcluded the remodelling? Ithought we said we wanted tochange the face ofinfrastructure in the aviationindustry, have we concludedthat? Is that what you want tobring investors to come anddo? Don’t we have investorsin Nigeria that can do that?Yes, there is need for us to goout and look for investors butI think critically that thetiming is wrong.”

Comrade Okewu believes

that because of severalprojects that are ongoing, theMinister should allow theseprojects to be completedbefore going out to wooinvestors. According to him ‘’you have your roadmap, youhave aerotropolis that youwant to turn the industry into,and these things have notbeen subjected to inputs fromvarious stakeholders, for it tohave a concrete model thatyou can sell to investors. Ifthose investors come now andstart punctuating all thosemodels what would you say?Incidentally, it is a goodintention, it is a good projectbut sincerely the timing iswrong.

Boeing and EthiopianAirlines is celebrating

the delivery of the airline’sfirst 787 Dreamliner.. Thedelivery was made last week,14

th August and Ethiopian

Airline is the first African -based operator to receive theplane. In a statement, TewoldeGebreMariam, CEO ofEthiopian Airlines said .“Today begins the first day ina new era of flying for ourpassengers and brings useven closer to our vision forthe future, Vision 2025. Weare pleased to be the firstairline in the world outsideJapan to receive thistechnologically advancedaircraft. We have beenwaiting for this airplane andnow that we officially have itand will show it to the world,I can say with pride, it wasworth the wait. This airplaneis going to move EthiopianAirlines to the forefront ofaviation leadership aroundthe globe.”

Boeingcelebratesdelivery ofEthiopianAirlines’ first787-8

International Air Transport

Association ,IATA, hasrated Landover AviationBusiness School ,LABS,Lagos , as Africa Top 10Authorised Training Centres(ATCs) for 2012.

This is coming as LABS isbeen honoured by IATA for thesecond successive yearhaving being named amongstthe Top 10 ATCs in Africa in2011. Business Manager ofLandover Aviation BusinessSchool Mrs. Toyin Sanni whospoke on the award receivedby the school noted that theaward was given inrecognition of the number ofstudents trained by the schoolas well as the quality oftraining delivered asdetermined by the rate ofsuccess the students had intheir examination.

According to Mrs. Sanni,IATA appreciated theoutstanding contributions ofthe Landover AviationBusiness School fordeveloping human capital inthe air transport industry.

IATA ratesLandoverAviationBusiness Schooltop 10AuthorisedTraining Centre

Stories by LAWANIMIKAIRU & DANIELETEGHE

*From left; Coordinator, National Lottery Regulatory Commission, Bayelsa, Rivers & AkwaIbom, Peterson Evi-Parker handing over the car key to one of the winners of Hyundi ix35 SUVMrs. David-West Annette. With them is popular Nollywood actor, Bruno Iwuoha at the 4thPrize presentation of the ongoing MTN Goodwill Automania in Port Harcourt.

Vanguard, MONDAY, AUGUST 20, 2012 — 35

CMYK

People in Business

M r. Brown Ekanem

is the Chairman,Board of Directors,

You-Nik Nigeria Limited, anInformation and Communica-tion Technology firm estab-lished in 2006. The outfit is intocomputer training, websitedesign/development, softwareand multimedia virtual tutori-al development. In this chatwith Vanguard, Ekanemspeaks on his journey intobusiness and the challenges.Excerpts:

According to Brown Ekanem,a Physics 0graduate from theUniversity of Calabar, he hadalways wanted to be an entre-preneur. “During my universi-ty days, I was always engagedin one form of business or theother until I found my passionin Information and Communi-cation Technology.”

Child of necessity: Necessi-ty, they say, is the mother of in-vention and so it was forEkanem. “The idea of Multi-media Virtual Tutorial (MVT),usually developed with picto-rial and video animated illus-trations, came to me on a par-ticular day when I was takingsome of my computer studentson internet lessons in 2004.That particular class was veryexhausting so I started wonder-ing if there was a way I coulddeliver my lessons to my stu-dents and other people simul-taneously without stressingmyself much, and behold, theidea of MVT came,” he said.

Continuing, he said with theMVT which is designed to takeeducation beyond the four wallsof the classroom, a student cantake a full class or course workfrom the comfort of his/herhome or office. “It complementsschool activities and ensures95% comprehension and reten-tion of every topic studied aspeople remember more of whatthey see than what they hear.It gives the student the oppor-tunity to watch and listen to aparticular lesson over and overagain until maximum under-standing is achieved.”

The Lafia, Nasarawa-basedoutfit which has staff strengthof over 40; has two subsidiaries- You-Nik Celebration Nig. Ltdand You-Nik Academy Nurseryand Primary School.

Speaking on the reason forsetting up You-Nik Academy,Ekanem said, “two years agowhen my daughter was born, Iwas worried about a suitableschool for her and since my wifehas passion for children andeducation, we decided to pro-vide good early childhoodeducational services for all-round development of childrenthrough best teaching method-ology. Our motto is Mouldingfuture leaders."

On the challenges in doingbusiness in Nigeria, Ekanemsaid he had faced several chal-lenges. “Financial constraintand lack of skill in some areas Idelved into. I have fallen downseverally in the course of mybusiness and I have gotten up.Now I am not scared that I willfall or fail in my business or feelbad about what people will saybecause I know that no matter

Always rise up no matter how manytimes you fall – Brown Ekanem

Stories ByEBELE ORAKPO

how many times I fall, I will riseagain,” he stated.

Ekanem believes that al-though hard work is good, itdoes not on its own guaranteesuccess. He said, “To be suc-cessful, one does not need towork hard only but intelligent-

ly hard, be honest and time-conscious and never be afraidto fail, always rise up no mat-ter how many times you fall,learn to give back to the soci-ety, above all, be prayerful.”

On Nigeria’s educationalsystem, Ekanem regretted that

the average Nigerian youthgoes to school mainly for thecertificate instead of knowl-edge. “Some parents are nothelping. These days you seethem paying mercenaries andteachers to help their childrenpass examinations. I find thatvery disturbing.

“We recognise that every par-ent wants to see their child suc-ceed sometimes even by allmeans. What we do in ourschool is build a good sense ofvalue in the kids, a value thattells them they can succeed,

that they are excellent childrentherefore they should study hardto showcase their innate abilities.

"We focus on quality in our con-tent, combining both British andNigerian curricula in groomingthe kids; qualified and well moti-vated teachers and child-friend-ly equipment to create a good ed-ucational environment. "Whenthese fundamentals are present inany school, the pupils get ex-posed and gain confidence to apoint that during external exams,they will not need the help of theirparents."

He advised the Ministry of Ed-ucation to ensure a more strictmonitoring of schools by commit-ted and passionate staff to be ableto evaluate and correct what hap-pens in the classroom.

“Most teachers in Nigeria don’thave confidence in the profession.Many of them are just teachingbecause it is the last resort. Iknow this because I have inter-viewed many in the course of ourexistence. A banker who earnsN50,000 wears well-fitted clothesand works with a smile and con-tagious confidence, unlike ateacher who earns about the sameamount. We need to encourageand promote this profession be-cause the future of our nation de-pends largely on it.

“At You-Nik, we developed ascheme to make teachers proudof their profession. We have a freemedical scheme for all our teach-ers which covers two of their fam-ily members. We reward the bestbased on set parameters. Anual-ly, we give gifts like car, plasmaTV, deep freezer, motorcycle etc.We increase their salary everyyear and send them for differ-ent professional trainings to helpthem adopt excellent methodol-ogy in teaching. Most impor-tantly, the relationship betweenthe management and teachers isthat which increases their con-fidence and love for the profes-sion. We remind them of theirimportance.

The school which started witheight pupils, now boasts of apopulation of 170 pupils in justtwo years, with a teaching staffof 18.

*Mr. Brown Ekanem

Normalcy returns to Port Harcourt refinery…Marketer predicts price change in products

Full production of DPK (kerosene), PMS (petrol) andAGO (diesel) by the Port

Harcourt Refining Company(PHRC) and marketing of petro-leum products by PPMC bothsubsidiaries of NNPC, has com-menced in Port Harcourt. PHRCsupplies refined petroleum prod-ucts to PPMC depots in PortHarcourt, Aba, Calabar and oth-ers. Last month, National Presidentof NUPENG, Igwe Achese andRivers State Chairman of IP-MAN, Sunny Nkpe had raisedalarm over the illegal diversionof crude oil from PHRC.They had stated that for overthree months, the management

of PHRC complained of insuffi-cient supply of crude oil to pro-duce DPK and AGO.During this period, the demandfor the products exceeded sup-ply leading to increase in pumpprices of PMS, DPK and AGOfrom N97, N110 and N145 toN105, N135 and N170 respec-tively in the South-South andSouth-East regions.Speaking with newsmen, theManaging Director, Riquest Oiland Gas Ltd, Mr. ChineduOkonkwo thanked the Ministryof Petroleum and the new man-agement of NNPC led by Mr.Andrew Yakubu for coming to therescue of both marketers and con-sumers in the region.

On the price change in petro-leum products, Okonkwo said,“If you are a good business ana-lyst, you will observe that in thepast two-three years, the price ofkerosene goes up between Oc-tober and December. Price ofpetrol will drop a little becausewithin the next few weeks, weexpect PPMC to increase load-ing and marketing of petrol. Sec-ondly, in Port Harcourt, Gover-nor Ameachi is repairing theWhimpey-Iwofe Road, a majorcommercial route for the trans-portation of petroleum products."When the road is fully repairedand loading commences fully atMasters Energy and Petrostar,price of petroleum products will

be forced to drop.”On diesel, he said since thecountry has hit 4,477 megawattsin power generation and thePetroleum Minister said that sup-ply of gas to PHCN has in-creased, and also in rainy sea-son, the high water level causesincrease in power generation, "itis safe to predict an improvementin electricity power supplywhich will negatively affect theconsumption of diesel." He not-ed that the decline in global mar-ket price of crude oil will adverse-ly affect the price of refined prod-ucts. "These two major factors willcause the price of diesel to de-cline. For instance, an averagehotel uses 8,000 to 10,000 litresof diesel monthly, since the elec-tricity power has improved, I ampredicting a fall to 5,000 to 6,000litres per month,” he said.

To be successful, one doesnot need to work hard onlybut intelligently hard, be

honest and time-conscious

,

,

36 — Vanguard, MONDAY, AUGUST 20, 2012

CMYK

Agric

Ondo StateCommissioner for

Agriculture, Engr. AdemolaOlorunfemi, is a delight tolisten to as he reels out whathe thinks the state under theleadership of GovernorOlusegun Mimiko hasachieved in the area ofagriculture.

In this interview withJIMOH BABATUNDE in hisoffice last week as the stateprepared to dole out N45million to the 9

th set of

beneficiaries of Fadama IIIproject, he said the state hasdone more to upliftagriculture.

Here is an excerpt On the state’s policy on

agricultureI am sure that you are

conversant with the agendaof Governor OlusegunMimiko. He has A caringheart agenda which representsthe things the governor wantedto do and they are what he hasbeen doing.

It might interest you to knowthat the 'A' standing alonerepresents Agriculture andFood security. That is by nomeans a coincidence, it is adeliberate design and thatunderscore the hugeimportance attached by thegovernor and hisadministration to agriculture.

As you are aware that iswhere we are coming from asa country and a state, but theadvent of oil put paid to all ofthat, but we are coming backto the basics , because it has dawned on us that what issustainable and inexhaustibleis agriculture and that is oneeconomic area that can give millions of jobs within monthsand that is why thisgovernment has takenagriculture as number one torun with other areas of theeconomy.

On the objectives of theministry under the caringheart agenda

Essentially, it is foragriculture, food

security and we are looking atthat. The objectives include selfsufficiency in basic foodcommodities in which the statehas comparative advantage intheir production.

It also has the objectives oftransforming agriculture fromthe level of subsistence to thatof commercial agriculturethrough mechanization, aswell as the increase of livestockand fisheries so as to increaseanimal protein in the diet ofthe populace.

We also have the objective ofusing agriculture to generateemployment for the youth andfor them to make a genuinecareer in agriculture.

Just as we have the objectiveof modernizing agricultural

Our achievements inagriculture speakvolumes — Olorunfemi

production, processes,storage and distributionthrough the infusion ofimproved technology andmanagement techniques so asto make it more responsive tothe demand of other sectorsof the economy.

In other words, we arelooking through the

agricultural value chain fromthe concept, to production andall the way to processing andpackaging as well asmarketing.

We want to enhance thecapacity for value addition,leading to employment andare able to facilitate theacquisition of farm lands andtitle holdings towardsimprovement of agriculturethrough public–privatepartnership initiatives.

This is where you will havethe large scale agriculture,talking about 5000, and 10000hectares.

On what the governmenthas done to moveagriculture from subsistencelevel to commercial level

Thank you, why we don’twant to flung figures, let mestart by saying that as at thistime last year, thisgovernment had spent aboutN6 billion on agriculture

these items - herbcides ,fertilizers, seeds and evensprayers. Of course, like Isaid, these inputs are directlyfrom the manufacturer, thatmeans they are genuine, costcompetitive and of course, we

farms, we take the farm inputsfrom the 18 farm centers tomarkets in villages andhamlets on market days , withprior information to farmersthat we are coming and we sellat the same rate famers wouldhave bought going to the samefarm centers , having travelledone hour or more.

We also introduced the buyback scheme where we buy theproduce from the farmers atcompetitive market rates, wego to their farms to buy and itsaves them cost oftransportation, spoilage andall of that and then sustaintheir interest in producing thefollowing season .

At off-seasons when theseproduce become veryexpensive, we sell to farmers at subsidised rate of 50 percent of market price. In fact,the governor has givenapproval for the sale of 500metric tonnes of maize to thegeneral public, mostly poultryfarmers.

We have huge silos in all 18farm centers as well as storeswhere you could keep thegrains. Silos are for a very longtime, but in this instance, weare not keeping for a long timeas we buy and sell during off-seasons.

On mechanizationIn terms of mechanization,

this government has bought 76

tractors from less than 30 thatwe met on ground and we arebuying another 50 very soon.We have brought in theprivate sector to come to thisarea and assist.

We have increased our tractor hiring unit

from the former four inmany years back to 18 so asto cover the 18 localgovernments and there is nomagic, we are just using thesame 18 farm centers.

So we have done a lot oftraining in every area using the engineering services interms of tractor, ADPextension, Fadama, IFAD andothers, to increase thecapacity of our farmers.

On tractor for instance, weare going to commencetraining of 100 youths ontractor operation andmechanics soon.

On financing and loansWe have given out loans to

over 2000 farmers. We havegiven out N700 million, underIFAD, ADP, FADAMA; wehave given out grants of overhalf a billion since inceptionof this government.

The IFAD, ADP andFadama programmes

are special projects that arecommunity-based, and thisgovernment has been payingits counter part funding to theWorld Bank, AfricaDevelopment Bank and theFederal Government.

I am glad to say that in allof these, we have alwaysbeen top in Fadama; this isthe third year running. TheWorld Bank has rated the statethe best performing state inthe Fadama project. These arejudged largely in terms of theprompt payment of counter-part fund; the appropriatemanagement of the schemeand achievement of thedeliverables. These are itemsthat are clearly stated.

Soon, we will be giving outN45million to the 9

th set of

beneficiaries of Fadama.Before now, we havedisbursed N290 million.These are monies that go tocooperatives, the people formcooperatives, determine whatthey want and we provide thetechnical evaluation and paythis money to their accountand monitor them. This hasdeveloped over 4000 ruralfamilies.

On agric servicesThis government created

what we call new generationof farmers. As you are aware, the farming population isaging, you and I don’t wantto go into farming for obviousreasons and that is why weare introducingmechanization, tractorizationand all of that.

We have 15 centers spreadacross the state with 40hectares.

excluding this year. The government has been

able to increase our agricinput supply agency which isin charge of providinggenuine agricultural inputs,seeds, fertilizers, herbicides,insecticides and other inputsto farmers at highlysubsidized rate, usually in therange of 50 – 70 per cent.

The government immediately on assumptionof office, pumped in aboutN200m to the existing N46m for the agency to procure all

subsidy them by 50-70 percent.

The government has 18farm centres spread

across the state, so theseinputs are distributed there,we network through farmers’ groups, media andour extension agents inAgricultural DevelopmentProject (ADP) to reach out tofarmers.

As if that is not enough, thegovernment through theministry created mobile farmcenters. Through the mobile

•Engr. Ademola Olorunfemi

,

,

We also introduced the buyback scheme where we buy

the produce from the farmersat competitive market rates,we go to their farms to buyand it saves them cost of

transportation, spoilage etc

Vanguard, MONDAY, AUGUST 20, 2012 — 37

38 — Vanguard, MONDAY, AUGUST 20, 2012

Advertising, Media & Marketing

CMYK

Vanguard, MONDAY, AUGUST 20, 2012— 39

Stories byPRINCEWILL EKWUJURU

BRIEF

Soon, a subscriber ofMTN in Nigeria would

become the proud owner of abrand new aeroplane courtesyof its Ultimate Wonder promo.The promo which was flaggedoff in Lagos is a newcustomer-based ‘recharge andwin’ promo in whichcustomers will win weeklycash prizes, and an ultimatewinner will cart home aCessna 182 T aeroplane, in agrand prize presentation inOctober.

Larry Annetts, ChiefMarketing and StrategyOfficer, MTN Nigeria, notedthat as a market leader, MTNcontinually seeks for avenuesnot only to enrich the lives ofits customers, but also toappreciate and reward itsloyal subscribers for keepingfate with the brand over a longperiod of time. “MTN is keento transform the lives of manyNigerians; we recognisereward schemes as one of thebest ways to touch and enrich

APRA to counternegative reporton Africa

The African PublicRelations Association(APRA) has expressed

its desire to counter what itdescribed as the negativepublic relations activity ofwestern media on the Africancontinent. The associationdisclosed this at its inauguralmedia roundtable where theSecretary-General of APRA, Mr.Yomi Badejo-Okusanya, saidthat APRA is concerned thatAfrica is often reported in thenegative light by western mediaas a continent of corruption,underdevelopment and a homeof failures, "but we have resolvedto change that story byrepackaging the continent as thefrontier and destination of globaleconomy and foreign directinvestment. We are not unawareof the numerous challengesAfrica has to overcome as it rises,"which he said had continued toplague her as a continent,placing her in a veryunfavourable position globallyand so APRA is determined totake up the challenge ofbridging the gap, by becomingthe mouth, voice and mouthpieceof the African continent.”

The discourse titled, RisingAfrica and the Role of theMedia, was aimed at bringingtogether stakeholders in thecommunication sector to makerelevant inputs in the projectionof a positive image for Africa, inline with the vision of APRA.According to Okusanya, Africa’sability to identify thesechallenges and surmount themwill form a major part of herhistory and go a long way toestablish a unique identity bywhich Africans can begin toconsciously build the future thatthey seek.

He disclosed that theassociation had taken theinitiative to critically assess thesituation of the continent andidentify immediate need inbuilding the image of Africa andeconomic development bysupporting Buy Africa initiative;infrastructure development andtechnology advancement;advancing democracy; healthand social welfare and combatthe image battery by westernmedia and tell a different side toAfrican stories through theestablishment of African cablenetwork.

Competition is good forbusinesses and ithelps to grow the

economy, and bring out thebest in companies, as well ashelp create employment, butsometimes it has thetendency to breed monopoly.The entry of Multichoice andother pay-TV channels intothe Nigeria pay televisionmarket was a welcomedevelopment.

Months back, when GOTVwas launched in Lagos tocompete in the PayTVmarket, the new brand wasto ride on the back of thelatest Digital Broadcast;(DVB-T2) technology.Before now, the brand hadlaunched in Ibadan, Enugu,Port Harcourt and otherAfrican countries. Thebrand’s entry strategy, whichis affordable pricing waslaudable. Other strategiesemployed were patriotism,channel variety and superiortechnological platform. Allthese were deliberate to rivalStarTimes.

Interestingly, StarTimes,also equipped with all thecharacteristics of GOTV eventhough consumers havegiven GOTV the chance tosucceed where brands likeDaarSat, Infiniti TV, TrendTV, FlySat TV, HITV andFSTV had failed.

GOTV like every newproduct, has embarked onaggressive media campaignnot only to fight for marketshare but also for the shareof the voice. While thebrand’s payoff clearly says‘entertaining Africa’, its coremessage in the Lagosmarket is Lagos for showapparently coined from thepopular Eko for showmantra.

The campaign is hingedon the fact that it has 30+channels, superiortechnology driven bypatriotism and affordability.However, the brandpromoters and perhaps theadvertising agency thatcreated this campaign, hasnot been able to sell onething that distinguishesGOTV from StarTimesexcept the fact that GOTV ischampioned byMultiChoice, operators ofDStv against an NTA-drivenStarTimes.

Another worrisomec o m m u n i c a t i o n s

strategy is that the brandmay tend to continue toattach a particular city toitself as it expands. For

Near Monopoly: Multichoice’s GOTV

ambushes Startimes…deploys aggressive marketing campaign

instance, the Lagos for Showmantra; what happenswhere brand is extended toother states? The branding ofhouses remains anotherstrategy deployed by GOTV.

But as Mr. Pang XinXing, Chairman,

Startimes Group said duringthe second anniversary ofthe company, in the last twoyears, the vision of enablingevery Nigerian household toafford digital TV, to watchdigital TV and enjoy digitalTV, NTA-STAR has alreadyset up the DTT network in

nine cities, including Abuja,Lagos, Kano, Ibadan, PortHarcourt, Benin, Kaduna,Onitsha and Asaba, offeringclear and rich digital TVprogrammes to Nigerians ataffordable price andproviding digital TVtransmission service fornational TV and private TVstations.

GOTV is not also very clearwith its brand promise.Unlike HiTV whoseintroduction was hinged onEnglish Premier League andChampions League andStarTimes on affordability,

Ultimate Wonder promo: MTN woossubscribers with airplane

the lives of our subscribersand so we are connectingNigerians to life-changinginitiatives that are not easilyreplicated by any brand inAfrica,” he said.

According to Annetts, “Lastyear, in commemoration of our10th year anniversary inNigeria, we excited andenriched many Nigerians withthe much-talked about ‘1Billion Naira’ reward; where90 lucky winners went homewith cash prizes of N10million each among othermouth-watering prizes. Thisyear again, through the MTNAutomania game, asubscription-based initiative,

the company is giving out 100xi35 SUVs in a 100-daynationwide promo. But withthe launch of the MTNUltimate Wonder promo, youwill agree with me that MTNhas taken the customer-reward concept to anunprecedented level where nobrand has attempted inAfrica,” he added.

Apart from the ultimate prizeof an airplane, subscriberswill also have opportunities ofwinning weekly cash prizes ofN150,000 for 100 customersand a weekly star prize ofN2,000,000 in the three-month, nationwide promo.

*From left;The International Relations lecturer, Mr. Kunle Ogedengbe, Secretary-General,African Public Relations Association(APRA), Mr. Yomi Badejo-Okusanya and President, BrandJournalists Association of Nigeria (BJAN) Mrs. Neta Nwosu during APRA interactive sessionwith the media in Lagos.

GOTV is talking aboutseveral things that seem toput consumers at crossroads.

DaarSat suffered adisastrous end due to non-focused communicationstrategy. The same can be saidof HiTV, which due to stiffcompetition from DStv brandslike FSTV, Trend TV, Infiniti TVand many others, has not beenable to see the light of day.

It has also been said that GOtvwas introduced by MultiChoiceto wrestle the low end segmentof the market currently beingcontrolled by StarTimes.

As part of activitiesmarking its 38thanniversary, on “Close

Up Loves Naija campaign”platform, the toothpaste brandfrom Unilever Nigeria Plc has

Close-Up gives to charity, rewards winners

given back to four charityorganisations.

The choice of the charityhomes was premised on thedecision of its consumers whovia an interactive social

media platform, chose thehomes within Lagos State.

It doesn’t end with namingthe charity, as they have to getthe charity voted for by friendsto get it on the shortlist.

40— Vanguard, MONDAY, AUGUST 20, 2012

CMYK

Omoh Gabriel - Group Business Editor

Babajide Komolafe - Acting Finance EditorClara Nwachukwu - Energy EditorPeter Egwuatu - Head, Capital MarketYinka Kolawole - Snr Bus. Correspondent

Favour Nnabugwu - Insurance CorrespondentGodwin Oritse - Maritime CorrespondentGodfrey Bivbere - Maritime Correspondent

Yemi Adeoye - Energy CorrespondentOscarline Onwuemenyi - Energy CorrespondentFranklin Alli - Industry ReporterMichael Eboh - Capital Market Reporter

Amaka Abayomi - Money market ReporterEbele Orakpo - Energy ReporterIfeyinwa Obi - Maritime Reporter

CONTRIBUTORSPrincewill Ekwujuru - Media/MarketingNaomi Uzor - Industry

Providence Obuh - Capital MarketLAYOUT - Graphics Department

0817 002 3569

BUSINESS & ECONOMY

The Federal Ministry ofFinance on Friday

published the names of 21firms being investigated

Fuel subsidy: FG names 21 companiesunder investigation

under the fuel subsidyregime. This is contained ina statement issued by theSpecial Assistant to

the Finance Minister onMedia, Mr Paul Nwabuikwu.

The statement said the firmswere being investigatedbased on the report of thePresidential Committee onFuel SubsidyPayments headed by MrAigboje Aig-Imoukhuede.The companies are: AlminnurResources Ltd, Brilla EnergyLtd, Caades Oil and Gas Ltd,Capital Oil and Gas IndustryLtd, Connoil Plc,Downstream Energy SourceLtd., and Eterna Plc. Othersare: Euraafric Oil and GasLtd, Lumen Skies Ltd,Majope Investment Ltd,Matrix Energy Ltd, MenonOil and Gas Ltd, MobInternational Services andM.R.S. Oil and Gas Ltd.

The rest include: NasamanOil Services Ltd, NatacelPetroleum Ltd, Ocean EnergyTrading and Services,Pinnacle ContractorsLtd, Sifax Oil and Gas

Company, Tonique OilServices Ltd and Top Oil andGas Development Co. Ltd.The statement noted that theAig-Imoukhuede committee’sreport recommended thatthese firms should refundvarious sums to the FederalGovernment’s treasury.

Also, the statement listed asecond group of companieswith infractions considered bythe government and Aig-Imoukhuede-led committeeas “ relatively minor.”According to the statement,these categories of companiesare in discussion withgovernment for a quickresolution of their issues. Itgave conditions in whichgovernment was prepared tosettle their claims.

“For oil marketers underinvestigation for possiblerefunds to the government,their 2012 outstanding claimswill be netted out againsttheir expected refunds to

government. For those with apositive net balance, that isoutstanding claims greaterthan expected refunds will beprocessed and paid.” Also,the statement said formarketers that owedgovernment more in refundsthan government owes them,the Aig-Imoukhuedecommittee would acceleratereview of their documentsafter the Eid-el- Fitr publicholidays. Itassured Nigerians thatclaims for marketers in thiscategory would be processedand settled, if cleared,without further delay after thepublic holiday.

“For others that may not bein the above categories butwho have other issues orclaims, their claims will alsobe addressed with the samedispatch. ” The statement alsoreiterated that the ministrywas not responsible for thelooming fuel supply shortagein Abuja and environscaused by the oilm a r k e t e r s s t r i k e o v e rdelayed payment of subsidyclaims.

,

,

In democratic countrieswhere utmost respect forthe rule of law prevails,

constitutional violations notonly receive condemnations,but are also visited withserious sanctions. Indeed,even when social evolutionovertime makes earlierconstitutional and legalprovisions redundant, thejudiciary will still mete outexisting sanctions provided inthe constitution for suchinfractions. We note, forexample, the inability of theterminally ill Mr. TonyNicklinson to willfully put anend to his suffering, withoutthe jeopardy of a life sentencefor anyone who facilitates hissuicide, according to Englishlaw.

However, in recognition ofthe outdated law on suicide, aBritish High Court, advisedpoliticians to quickly amendthe law in line with currentsocial consciousness, butnonetheless, refused to grantNicklinson’s request foreuthanasia!

The above contrasts verysharply with the Nigerianpredicament, whereconstitutional violations by noother than government itselfare openly condoned andsustained without any voice ofdissent, talk less of sanction.

Regrettably, the federalexecutive remains the primevillain in this matter; we recallthat about six years ago,

ECONOMY: ACQUIESCENCE TO CONSTITUTIONAL VIOLATIONSformer President Obasanjoprivately concludedarrangements with ourLondon and Paris Clubcreditors to pay $18bn, so thatabout $12bn could be writtenoff our debts before seekingthe approval of thelegislature. The sameObasanjo similarly paid outover $12bn for theenhancement of our powerinfrastructure and later alsopaid billions of dollars moreto a Chinese conglomerate forthe improvement of our railtransport system. These

constitutional provisions,which carry impeachablesanctions; but OBJ got awayunscathed!

In similar vein, the latePresident Yar ‘Adua’s initialattempt to abolish fuel subsidymet with such serious civilresistance that madeYar’Adua to back down.

Ultimately, even thoughthere were modest provisionsin appropriation bills duringthe Yar’Adua years, theNNPC obviously got apresidential nod to absorbhumongous subsidy values,in excess of budgetprovisions; even though thiswas a constitutional violation,Late President Yar’Adua alsogot away with it without somuch as a legislativewhimper of protest. Incidentally, PresidentJonathan inherited the silentunderstanding for NNPC’sunderwriting of extrabudgetary subsidy valuesuntil the bubble burst inJanuary this year, when itbecame clear that the subsidyprocess had become a hugescam, in which, possibly overN2 trillion had been paid outin place of less than N300bnprovided in the 2011 budget!!

Of course, all the aboveinfractions are serious enoughto attract impeachment, butinexplicably, our legislativeassembly has remainedunperturbed, some would saysettled, while the citizenry’spursuit of daily survival left

no time to assess theintricacies of governance.

Similarly, the concept of anExcess Crude Account (ECA)was also the brainchild offormer President Obasanjo,and Okonjo-Iweala asFinance Minister.

Every rational Nigerianwould endorse the wisdom inputting away surplus fundsfor future application. Indeed, it will be difficult toargue against thrift as avirtue. However, one mustwonder about the wisdom inputting away money whileone lives in ghetto shackswith leaking roofscompounded with his family’ssevere health and educationaldeprivations. Worse still, theexcess crude savings attractminimal interest while ourgovernment goes cap-in-hand, to borrow at rates above15%, sometimes for funds thatwill just be kept idle.

Incidentally, there is noprovision for an ‘excess crudeaccount’ in our constitution,Section 162 of which statesvery clearly that all moniesmust be domiciled in aconsolidated revenue fund,and disbursed in accordancewith extant constitutionalprovisions; impeachment isthe collateral sanction for anyviolation.

Even if our socialcircumstances were differentsuch that our incomes grosslyexceeded critical expenditurefor social infrastructural

enhancement, an excesscrude account would stillremain unconstitutional untilthe relevant provisions havebeen amended to formallyaccommodate themaintenance of such anaccount, just as in the case ofsuicide facilitation for theterminally ill TonyNicklinson.

The concept of theSovereign Wealth Fund(SWF) is similar in manyrespects with the maintenanceof ECA! The only difference,of course, is that the SWF istargeted for disbursement inthe medium term to distantfuture. In any event, thereis also no provision for asovereign wealth fund in theconstitution.

Furthermore, Dr. Okonjo-Iweala’s announcement of asinking fund into whichN25bn will be paid monthlyfor the purpose of debt serviceand redemption is alsosimilarly patentlyunconstitutional; so far, thefederal executive appears tohave failed to carry along theother two tiers of governmentin the sustenance of any ofthe above unilateral executivedeductions from theconsolidated revenue fundwithout legislative approval. Inexplicably, no one iscomplaining!

SAVE THE NAIRA, SAVE

NIGERIANS!!

payments were all madewithout prior legislativeapproval; consequently, these payments wereexecutive violations of

Ultimately, eventhough therewere modestprovisions inappropriation billsduring theYar’Adua years,the NNPCobviously got apresidential nodto absorbhumongoussubsidy values, inexcess of budgetprovisions