financial vanguard

CMYK

MARCH 16, 2015

Continues on page 22

Bank customers have resortedto using electronic paymentcards such as MasterCard and

Visa card to circumvent foreignexchange regulations.

Banks can issue Naira or Dollardenominated debit or credit cards tocustomers and such cards could belinked to the current or savingsaccount of the customer

with the bank. The purpose of thesecards is to allow the customers spendfrom their Naira account wheneverthey travel abroad. The Central Bankof Nigeria (CBN) however, stipulatesa maximum limit of $150,000 per yearfor each card holder.

Financial Vanguard investigations,however, revealed that bankcustomers are now using multipleaccounts either in the same bank orin different banks to circumvent thislimit.

Investigations reveal that bankcustomers now obtain a nairaMasterCard or Visa card linked todifferent accounts so as to be able toaccess dollars above the $150,000limit. Further investigations alsorevealed that banks are not only awareof this practice but encourage it. A topforeign exchange dealer who spoketo Financial Vanguard on conditionof anonymity said the banksencourage it because it enables themmake more money through thecharges deducted when customersuse such cards for dollar-denominatedtransactions or withdraw dollars whileoutside the country. The dealer alsotold Financial Vanguard that thepractice is prevalent among banks inthe country.

Though the CBN Director ofCorporate Communications, IbrahimMu'azu did not respond to enquirieson the response of the apex bank tothis malpractice, a top managementstaff of the bank, however, confirmed

Bank customers use paymentcards to bypass forex laws

By BABAJIDE KOMOLAFE

to Vanguard that the apex bank wasindeed aware of this malpractice.Speaking under condition of strictanonymity, he said: “We are aware of

it and I can tell you it is a breach ofregulation.

But we are not doing anything aboutit for now because of the challenge of

tracing individuals with multiple bankaccounts in the industry. But I can

AS Nigeria makes move to reclaim over 10million metric tonnes of lost transit cargoes,the factors that initially led to the loss of

this category of the country’s trade to neighbouringcountries are still very much present in the Nigerianports.

The 10 million metric tonnes of transit cargoes arefrom Niger alone and have been distributed amongstfour neighbouring countries namely: Ghana, Togo,Republic of Benin, and Ivory Coast.

How Nigeria lost 10m tonnes oftransit cargo

The issue of port has also been given as the majorfactor militating against the return of these cargoesto Nigerian ports.

In an exclusive interview with Vanguard, thecountry representative of the Niger Council of PublicTransport Users, NCPTU, Alhaji Idi Homissou toldVanguard that high duty rate and other associatedport costs actually drove Nigerien importers to portof neighbouring countries.

Homissou said that while 4.3 million metric tonnesof the 10 million metric tonnes of transit cargo has

Continues on page 23

By GODWIN ORITSE

CLOSING - President Goodluck Jonathan closing market at the Nigerian Stock Exchange (NSE), flanked by Minister ofState for Finance, Bashir Yuguda; NSE Chairman, Mr. Aigboje Aig-Imoukhuede (r); Chief Executive Officer, NSE,Pascal Onyema (l) and; Minister of Trade & Investment, Mr. Olusegun Aganga, at the NSE trading floor.

CMYK

18 — Vanguard, MONDAY, MARCH 16, 2015

Cover Story

*COLLOQUIUM - From left: Emeka Oparah, Director, Corporate Communications & CSR,Airtel Nigeria; celebrant, Dr Wole Adamolekun and his wife, Mrs Bisi Adamolekun with VC,Elizade University, Prof. Valentine Aletor at the colloquium themed: 'Africa Trending:Contemporary Challenges, Opportunities in Reputation and Crisis Management' held at theElizade University, Ondo State.

Bank customers use paymentcards to bypass forex laws

Continues from page 21

assure you this is one of theproblems that would beaddressed with the BiometricVerification Number (BVN).Once we complete the projectand every bank customer hasa BVN, it would be easy totrace those who have multipleaccounts and also monitorwhat they are using theaccounts to do.”

The drivingfactorsVanguard investigation

revealed that this malpracticeis being fuelled by a numberof factors chiefly theincreasing difficulty to accessdollars due to increasedrestrictions on foreignexchange by the CBN as wellas dearth of supply of dollarsin the interbank and parallelmarket.

For example, it is easier toaccess dollars from your nairadebit card - be it MasterCardor Visa while outside thecountry, than to source thedollars from banks or the parallel market for thepurposes of travelling withphysical cash. Furthermore,some of the bank customersengaged in the malpracticedo so because the dollarrequirement for their businessis well above the maximumprescribed by the apex bank,or because their businessdoes not qualify or cannotmeet the documentationrequired to access foreignexchange from the interbankmarket.

Investigations, however,also revealed that somecustomers that engage in this

malpractice do so for thepurpose of round tripping i.e.withdrawing dollars abroad,and bringing it into Nigeriato sell in the parallel market.Given that the exchange rateapplied for dollar withdrawalthrough the cards is usuallylower than what obtains in thelocal parallel market, thecustomers enjoy a margin ofN15 to N20 on each dollarimported into the countrythrough this malpractice.

What the lawsaysThe CBN guidelines for

card issuance and usage inNigeria states that, “Cardsmay be issued in NigerianNaira or in any otherconvertible currency.

The international usage

limits and frequencies forNaira denominated cardsshall be defined by eachparticipating bank.

However, these limits shallnot exceed the total combinedamount of foreign currencythat each individual canaccess via Business TravelAllowance (BTA) andPersonal Travel Allowance(PTA) per annum - which iscurrently $150,000 perannum.

Issuers shall give customersthe opportunity to request forcards within the range of thebank’s card products. Forinstance, if an issuer offersbrand of cards such as Verve,Visa, MasterCard, Union Pay,etc, customers shall be free tochoose any brand of cardsissued. The available cardsprovided by the issuer mustbe explicitly stated on thecard request form (physicalor electronic) so that thecustomer can make aninformed choice.

Issuers shall also providecustomers with a choice tospecify limits for the volumeand value of transactions thatthey would perform; suchlimits cannot be higher thanthe maximum limits, asspecified in this Guideline.

Issuers shall providecustomers with the ability tospecify when their cardsshould work abroad, andwhen it should not, as well aswhich countries they wouldlike their cards to work in, atany particular time.

It is the responsibility of theissuing bank to work with thecard schemes in providingthe settlement and clearingfacility for cards used outsideNigeria.”

Once wecomplete theproject andevery bankcustomer has aBVN, it wouldbe easy to tracethose who havemultipleaccounts

Vocation and technical education– A key to improving Nigeria’sdevelopment

As the Roman Historian,Plutarch (AD 46-120?) hadnoted “The mind is not a vesselto be filled but a fire to bekindled.” Given their corruptand greedy lifestyles Nigeria’sleaders do not seem to careabout integrity or moral values.They are good at predicting thefuture without creating it. AsPeter Drucker has observed “Ifyou want to predict the future,create it.”

In Nigeria, the growingproblem of unemployment in thecountry has contributed largelyto the worsening problem ofpoverty among the populace.Unemployment according toOlaitan (1996) leads tofrustration and disillusionmentwhich may result in crime ordrug abuse in a futile attempt toescape from and forget the painsand humiliation of poverty andlack. The problem ofunemployment, he furtherstated, has worsened as millionsof school leavers and graduatesof tertiary institutions have notsecured gainful employmentover the years. Unemploymenthas posed a serious problem notonly to the welfare of individualsbut also to that of their families.

It cannot beoveremphasized thattechnical education isthe engine foreconomic growth

Many able bodied and highlyqualified persons who could notsecure gainful employment haveremained economicallydependent on their parents.This is because they lack thenecessary occupational skills tobe 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 that involvesthe acquisition of techniques andapplication of the knowledge ofthe science for the improvementof man’s surrounding.

Technical and vocationaleducation prepares one for theworld of work with which theindividual become reliant andcan make contributions to thedevelopment of the society. Asemployers look for new talents

every year from new graduates,it is important to not only have asolid education but graduatesthat have features that stand outfrom the rest of the graduatingstudents. With the economybeing more globalized than ever,it is important to have abackground and a skill set thatallows graduates to becomeimmersed in the global economyright from graduation (Cote,2007). It is important for thesestudents or graduates to haveskills in innovation in technologyeducation and entrepreneurshipto be ready to fit into the globalmarket place on which today’seconomy depends on.Entrepreneurial Skills Neededby Technical and VocationalEducation.

Leadership is not a major causeof Nigeria’s under-developedstatus. Nigeria can become aneconomic power-house (andrealize its visions) only if properattention is given to educationand technological developmentand promotes and rewardscreativity, and channel itsmaterial and human resources toproductive use. The leadersmust recognize the relevance oftechnical and vocationaleducation in nationaldevelopment and adopt andadapt what works in developednations. The resources beingwasted in the on-going false re-branding campaign should havebeen used to re-brand thenation’s education sector. Noamount of rhetoric (or fancifulslogan) would solve Nigeria’ssocio-political and economicproblems. The leaders couldsalvage Nigeria’s image by re-branding their mentality anddoing the right thing: tacklecorruption, reform the electoralsystem and fix the dilapidatedinstitutions. Thus, without afundamental shift in values,beliefs and thinking, and withouttechnological capability, Nigeriawill continue to dream ofbecoming a ‘Great Nation’.

It cannot be overemphasizedthat technical education is theengine for economic growth. Nonation can fight a war withoutan army. In the same tokenNigeria cannot develop withoutwell-equipped technical andvocational institutions. In fact, itis the missing link in Nigeria’sdevelopment policies. Becauseof poor training and ineffectiveinstitutions Nigeria suffers fromlow productivity. But theprogress of any society lies in theproductivity of its citizens.

Vanguard, MONDAY, MARCH 16, 2015 — 19

Cover

CMYK

candidacy to the class, hewas taken as a joker. Heneither printed posters norembarked on elaboratecampaign like others.

He simply went to thelibrary and took stock of theseats available in the library.He did the same for Hostelaccommodation and thecafeteria. What he did nextwas to ask from theauthorities the number ofstudents in the school andwhat was the ideal facilitiesthe students were supposedto have in the various placesnamed above. He got thedata and was armed for themanifesto night.

When it was his turn tospeak, Tella just told thestudent body the number ofseats in the library and howmany were supposed to bethere, he said the same of thehostel accommodation, thecafeteria and what thestudents were missing by theuniversity not providingadequate facilities for themto study without tears. Beforehe finished, the man whonobody gave a chance, wasendorsed by all the studentswith the chant, "Tella, youhave won, Tella you havewon."

I decided to reflect on thisexperience in my studentdays based on the hollownature of the electioneeringcampaigns going on in the2015 bid for the variouselective posts. Nigerianpoliticians have left thesubstance and are chasingshadows while our countrymen watch helplessly. These

PDP, APC: Yourpromises are vague

During the student union election in 1979/80 at the University of Benin,Mr. S.A. Tella, now a professor of Economic and Statistics department

taught the university community how sacred facts and effective statisticscan be used for electioneering campaign.

Tella entered the race for the student union election to the office ofStudent welfare two weeks to the election. When he announced his

politicians are not makingany measurable promise tothe electorate. They are justdancing naked to amuse theelectorate.

Each time they mount therostrum, they speak vagueand foul language devoid offacts and figures. There is nonew idea of how to deal withthe economic and socialproblems that have plaguedthe nation. "I will deal withcorruption." What is the levelof corruption you plan todeal with? In what sector orarm of government do youhave this high level ofcorruption? How much isNigeria losing per year dueto corruption? The partieshave not conducted anystudy, they have no idea howmuch is being lost and howto block the loopholes. Whatare the new plans to dealwith corruption? Nigeriansare not being told; yet weclap our hands for vaguespeeches made on soap box.

Nigerians know that themajor developmentchallenges facing thecountry today arecorruption, insecurity, theeconomy - unemployment/poverty, power,infrastructure, health andeducation etc. The ongoingcampaign shows that the two

poli t ical part ies do notunderstand the depth of theeconomic problem facing thecountry. They both have nocredible agenda to deal withthe issues, especially withinthe context of the evolvingglobal economy andNigeria’s broken publicfinance.

A look at what happens inother parts of democraticworld, party and leaders whodo their home work usuallycome up with policyframework whereprogrammes and policiesthey intend to pursue ie

Party manifesto, are fullycosted and strategies tofinance and implement themare spelt out. Neither APCnor PDP can make suchclaim.

To any economist, any planwithout the cost outlay isnothing but a wish-list. Theyare not telling us how mucheach of their promises willcost and where they will getthe money to run them. Nonetalks about the broken ornear bankrupt public financeand the strategy to fix it.Each talks about agriculturalrevolution, what type ofagriculture are we planningto implement? What are thevalue chains the agric policywil l pursue? What l ightindustries are coming onstream and where are theyto be located? How are theyto be financed? What is thecost est imate for suchprojects? How many jobs areto be created from the sectorper annum? These arequestions that they are notready to answer. What is theexport strategy for thesurplus that will be createdfrom investment inagriculture? Which market isNigeria targeting for export?And what plans are in theirmanifesto to free Nigeriafrom dependence on importespecially petroleum imports

in order to save the nairafrom continued devaluation?

In response to the questionof where the money willcome from, some Nigerians,journalists inclusive, arequick to say that the problemof Nigeria is not money butthe management ofresources. This is far fromthe truth. To deliver anefficient national transportinfrastructure aloneaccording to availableestimate, will cost $3.05trillion in the next 30 years,about $25 billion per annumeven by corruption-free,cost-effective meansestimated by NationalEconomic Council.

These politicians shouldstop lying to Nigerians andtell the nation how bothparties would fund theirprogrammes. This crop ofpoliticians should learn alesson from Chief ObafemiAwolowo who was asked in1978/79 electioneeringcampaign about his promisesof free education and freemedical services. He,Awolowo reeled out figuresabout the amounts he wouldsave from various ‘ waste’including the tea/coffeeserved in governmentoffices. The issue here is thathe would always do hishomework before makingany pronouncement.Evidently, from what the twomajor political parties areoffering, it does not seemthat they are offeringNigerians any serious deal.

How Nigeria lost 10m tonnes of transitcargoes

Continues from page 21

been taken to Togo, Nigerienimporters have also moved 2.5mliion metric tonnes of theirtransit cargo to Togo.

For Ghana and IvoryCoast,1.8 million metrictonnes and 400,000 metrictonnes were taken overrespectively, while Nigeria isleft with a paltry 200,000 metrictonnes of transit cargoes fromNiger.

“The issue of port cost is themajor challenge importersfrom Niger are facing inNigeria, even though we seesome level of efficiency," hesaid

"The high duty rate is still anissue that must be lookedinto,” he added.

He explained that Nigeriaand Niger used to be a singlecountry until the Europeans

came and separated them andcarved Niger out of Nigeria.

The Nigerien representativein Nigeria said that Nigerianports are nearer to Jibiya (aborder town between bothcountries) than Togo or Ghana.

He further said that Ghanato Niger is about 3,400kilometers as against 1,300kilometers from Lagos to Jibiyain Niger.

He disclosed that transitcargo from Niger was lost toother countries long before theports were concessionedadding that the seemingefficient services currentlybeing experienced at the portis what is attracting importers

from Niger.Homissou also said that the

issue of safe passage of theirgoods has been a source ofconcern until the leadership of

the Nigeria Customs Serviceassured them of safe passageof transit cargoes.

“Naturally, Nigeria is thenearest country to Niger andit makes sense for us to moveour cargoes through Nigeriabut if the Customs duty is ashigh as it is now, then we mayhave to look elsewhere for usto transit our cargoes.

Even what we pay toNigerian Customs officials toescort our goods to the borderis very exorbitant whencompared to what othercountries collect from us.

“While other countriescollect payment per convoy, inNigeria, we pay per

container,” he said.He also disclosed that there

have been situations wherethe Nigerian Shippers’Council has to come to therescue of a vessel that almostgot stranded with Nigerientransit cargoes on board.

He commended the effort ofthe management of theNigerian Shippers’ Council fortrying to woo Nigerienimporters back to Nigeria.

Homissou also told Vanguardthat the Comptroller-Generalof the Nigeria CustomsService has visited importersin Niger and assured them ofquick passage of their cargoesthrough the Nigerian portsystem.

These politiciansshould stop lyingto Nigerians andtell the nationhow both partieswould fund theirprogrammes

While othercountries collectpayment perconvoy, inNigeria, we payper container


CMYK


Business & Economy

NNPC renews, extendspipeline protectioncontract to communitiesThe Nigerian National

Petroleum Corporation(NNPC) has announced therenewal and extension of thepipeline protection contract tosome of its host communities.

This is contained in astatement issued in Abuja by theGroup General Manager,Group Public AffairsDepartment, NNPC, Mr OhiAlegbe.

The statement said themeasure was to effectivelycombat the growing scourge ofpipeline sabotage that hadimpacted negatively on thecorporation’s operations.

It stated that the contractsdid not in any way underminethe responsibility of the policeand other security agencies toprotect the pipelines but ratherto complement it.

It explained that the firstcommunity-based contractwhich was awarded in 2011expired in 2012.

The statement stated that therehad, however, been a noticeableincrease in the spate of attackson crude oil, products, and gaspipelines since the expiration ofthe contract.

13 ships laden withpetrol, rice arrive LagosThirteen ships laden with

petroleum products andbulk rice have sailed into Lagosports, waiting to berth. TheNigerian Ports Authority (NPA)stated this in its daily publication– ‘Shipping Position’- madeavailable to newsmen onThursday in Lagos. NPAindicated in the publication thatseven of the ships containedpetrol while two others haddiesel and base oil.

The document noted that theremaining four ships, waiting toberth, were laden with bulk rice.It further indicated that 38 otherships were expected in the portsfrom March 12 to March 25,same as 38 ships expected as atWednesday. The document alsostated that 16 of the expectedships would sail in withcontainers, 22 others with bulkrice, tug boat, buck wheat, freshfish, bulk malt, used vehicles,steel products and bulk fertiliser.

The rest of the commodities tobe brought in by the ships are:soya beans, buckwheat, bulksugar, bulk salt, base oil andgeneral cargo, crude palm oiland petroleum products. 22 shipsare pesently in the ports,discharging, buckwheat,containers, fresh fish, bulk rice,general cargo, bulk fertiliser,bulk gypsum, palm oil,kerosene, aviation fuel andpetrol.

PRESENTATION - Deputy President, Lagos Chambers of Commerce and Industry, ChiefMrs. Nike Akande Presenting an award to Mr Taofio Ajibade Tijani, Lagos State Commissionerof Ministry of Energy and Mineral Resources at the major distribution of Eko Gas Cylinderheld at LTV Blue Roof

IEA sees renewed pressure on oil prices as glut worsens

BY MICHAEL EBOH

The Nigerian Institute ofManagement, NIM,has emphasised the

need for the FederalGovernment, as well as otherpolicy makers to focus onincreasing the capacity of theNigerian economy ingenerating employment whilealso repositioning thecountry’s educational systemin line with the demands ofgrowth and development.

In his presentation at theNational Institute of Policy andStrategic Studies, NIPSS,Senior Executive Course, Mr.Nelson Uwaga, President andChairman of Council, NIM,said, “The world around us ischanging, changing fast. Thefundamental shifts in businessand the workplace, and skillrequirements for personalexcellence, all demand that wechange the way the studentsof tomorrow are trained andeducated.”

Uwaga was speaking on apaper titled, ‘FundamentalPrinciples of Management onRepositioning Nigeria’sEducational System for GlobalCompetitiveness.”

He said the country mustensure that its educationalsystem raise a generation ofmen and women that thinkcritically, solve complex multi-disciplinary and open-endedproblems, create and innovate,and communicate andcollaborate.

“The challenge before

Increase Nigeria’s capacity togenerate employment, NIM tells FG

Nigeria’s policy makers is howto increase the employmentgeneration capacity of theeconomy, while repositioningthe educational system toproduce graduates worthyenough to chart the nation’scourse into the future,” headded. Uwaga further statedthat a real search hascommenced for a new mindsetin both education andmanagement, adding that thechallenge is how to developforward-looking options for allstudents, with a view toraising individuals who canwork collaboratively withothers, think critically and

creatively, and solve complexproblems.

He maintained that it is notenough to spot the talent, orinduct him into theorganization, adding thatthere may be a need to fast-track deserving talent, offerchallenging career paths,provide cross-functionalexposure, and arrangesecondments that may drawout the best in them.

According to him, inaddition to a transformededucational system, there isalso a need for a redefinitionof management — attractingtalented people, nurturing

them, developing them andgiving them space.

He said, “In other words, thekey emphasis is onempowerment, rather thanm i c r o - m a n a g i n g .Empowerment is thedevolution of authority toindividuals to decide and act,and effect, thereby a measureof self management.

“Empowerment is a tool fortalent development —improving productivity andenhancing customer service. Itfrees people to innovate in themarketplace and to find moreefficient ways of performingtheir work.

Oil prices might havestabilized onlytemporarily because

the global oil glut isworsening and U.S.production shows no sign ofslowing, the InternationalEnergy Agency said onFriday. The West’s energywatchdog said the UnitedStates may soon run out ofspare capacity to store crude,which would put additionaldownward pressure on prices.That process would last atleast until the second half of2015, when growth in U.S. oilproduction is expected to startabating.Combined with an increase inglobal demand, the expectedU.S. production slowdownwould give some support tooil prices and respite to oilproducers’ group OPEC, theIEA said. “On the face of it,the oil price appears to bestabilizing. What a precarious

balance it is, however,” theParis-based IEA said in itsmonthly report. Behind thefaçade of stability, therebalancing triggered by theprice collapse has yet to runits course, and it might beoverly optimistic to expect it toproceed smoothly.”The IEA said steep drops inthe U.S. rig count have beena key driver of the recent pricerebound, which saw Brentcrude rising to $60 per barrelafter falling as low as $46 inJanuary from last year’s peaksof $115. “Yet U.S. supply sofar shows precious little signof slowing down. Quite to thecontrary, it continues to defyexpectations,” the IEA said.In February, non-OPECproduction is estimated to haverisen by about 270,000 barrelsper day (bpd) on a month-on-month basis to 57.3 millionbpd, led by higher output inNorth America.

Global supply rose by 1.3million bpd year-on-year to anestimated 94 million bpd inFebruary, led by a 1.4-million-bpd gain for non-OPECproducers.U.S. crude inventories soareddue to output growth andplunging crude refinerythroughput, with seasonal andunplanned refinery outages,weak margins and highgasoline stock builds.At last count, U.S. crudestocks stood at a record 468million barrels, the IEA said.“U.S. stocks may soon teststorage capacity limits. Thatwould inevitably lead torenewed price weakness,which in turn could trigger thesupply cuts that have so farremained elusive,” the IEAsaid. While the U.S. supplyresponse to lower prices mighttake longer to kick in thanexpected, it might also provemore abrupt,” it said, adding

that growth would abate inthe second half of 2015.The IEA’s conclusions willdisappoint OPEC, whichkept its output steady at thegroup’s last meeting inNovember to protect marketshare and stifle U.S. oiloutput growth.In the second quarter of2015, when demand is atits weakest due to globalrefinery maintenance, theneed for OPEC crude willbe 28.5 million bpd, theIEA said - compared to thegroup’s current output of30.22 million bpd inFebruary.The IEA raised its demandforecast for the second halfof 2015, which in turn ledto a higher call on OPECcrude of 30.3 million bpd inthe same period - closer tothe group’s real productionlevels and the official targetof 30 million bpd.


Business & Economy

PRESENTATION - Group Head, Strategy & Communications, Sterling Bank Plc, Mr. ShinaAtilola; Principal, Methodist Girls’ High School, Mrs. Elizabeth Nkanta and Head, Retail &Consumer Banking, South South, Sterling Bank Plc, Mrs. Nneka Enang at the presentation ofbooks on Financial Literacy published by the Bank to the School over the weekend

The African Export-Import Bank (Afreximbank) says it has provided lines of

credit amounting to $48 million to African fac-toring companies in the last two years. Thisis contained in a statement credited to DrBenedict Oramah, Afreximbank’s ExecutiveVice President in charge of Business Devel-opment and Corporate Banking, in Lagos.

Factoring is not a loan but a cash-manage-ment tool of choice for many companies, andis one of the oldest forms of business financ-ing. Oramah, who spoke at a symposium onFactoring in Africa in Cairo, was quoted assaying that the support was to give liquidityand payment risk protection in the compa-nies' factoring activities. The two-day sympo-sium was organised by the Egyptian Factor-ing Association, the Financial Services Insti-tute and the International Factors Group.

According to him, the amount comprised $23million granted to factors located in Maurita-nia and $25 million to several others based inSenegal. He announced that Afreximbankcurrently had factoring lines totalling $50million under assessment for institutions inBurkina Faso, Kenya, Egypt, Botswana,Rwanda, and Zimbabwe.

Oramah said that Afreximbank had support-ed the development of factoring in Africathrough educational events and fostering the

Afreximbank supports factoringactivities in African firms with$48 million creation of facilitative infrastructure.

He said that Afreximbank would soon intro-duce a co-branded factoring development prod-uct called AfriFactor, to reduce costs incurredby African factors in setting up factoring busi-ness platforms. "Besides, AfriFactor will addresschallenges around the lack of expertise in back-office and receivables management. It willprovide advisory services to African financial in-stitutions seeking to commence or enhance theirfactoring businesses, and provide support insuch areas as establishing factoring business-es, information technology and operationsplatforms,” he said. Oramah added that Afrex-imbank was also working with the AfricanDevelopment Bank’s Thematic Fund for PrivateSector Assistance (FAPA) to support factoringcompanies in Africa.

According to him, the partnership uses FAPAgrants that target innovative programmes forsmall and micro-scale enterprises. He said thata grant has been pre-approved for technicalcapacity building, drafting of a model law, andfor advocacy, including training, workshops andconferences. Oramah reiterated that Afrex-imbank had organised seminars, trainings andworkshops across Africa, targeting bankofficials, lawmakers and regulators, toencourage interest in factoring as an alternativetrade finance instrument for companies.Afreximbank is a foremost Pan-Africanmultilateral financial institution devoted tofinancing and promoting intra-and extra-African trade.

Quality infrastructurecritical to economicdiversification — UNIDOThe United Nations

Industrial DevelopmentOrganisation (UNIDO) onThursday in Abuja said theNational Quality InfrastructureProject (NQIP) would assistNigeria to diversify itseconomy to non-oil sector. MrCharles Malata, the ProjectCoordinator with UNIDO, toldthe News Agency of Nigeria(NAN) that the project wouldbe useful to Nigeria as it hadseveral commodities across thecountry.

He said the four years NQIPsigned in 2013 had begunoperation in May 2014 andwas being sponsored by EUwith 12 million Euroscommitted to cover its fivecomponents.

Malata said the componentsincluded development offunctional and internationallyrecognised NationalAccreditation Body (NAB).

Others are NationalMetrological Institute (NMI),National Quality Policy (NQP),consumer protection andcreating linkages for privatesector. He said once theavenue for the products to getto international market openedup with all the resources in thecountry, it would enable it tocompete and becomeeconomically viable, compared

BOA grants collateral-free loans to youthsManager, Bank of

Agriculture (BOA),Afolabi Lagos Branch, MrsTokunbo has urged the youthsto take advantage of thecollateral-free fundingopportunities provided by thebank, to empower themselves.She made the call whilespeaking at the NigerianAssociation of Small andMedium Enterprises(NASME) 2015 GeneralMeeting in Lagos. Accordingto her, youths between the agesof 18 and 35 years, who engagein agribusiness, can access upto N1 million loans, withoutcollateral.

“The loan is dedicated solelyto the youths, in partnershipwith the Federal Government’s‘You Win’ programme. “Theloan is granted to youths forstart-ups or expansion ofagribusiness,” Afolabi said.She, however, added thatyouths applying for the loanmust provide two acceptableguarantors, one of which mustbe a civil servant.

Afolabi also said that micro,small and medium enterprises(SMEs) could access up toN250,000 by opening andrunning a Micro Enterprises

BY EMMA UJAH,ABUJA BUREAU CHIEF

The nation’sContributoryPension fund

has hit a N4.7 trillion markwhich have now providedMoney Deposit banks withstable deposits with whichthey can to lend on long-termbasis.

Currently, over 6.5 millionpeople are contributors from180,586 employers that haveregistered with the scheme,the Director-General ofBureau of Public Enterprises,BPE, Mr. Benjamin EzraDikki has revealed. He told adelegation led by theAmbassador of the EuropeanUnion, EU, to Nigeria andEconomic Community of WestAfrican States, ECOWAS, Mr.Michel Arrion in his office inAbuja that the pension reformwas one of the bureau’ssuccess stories.

A statement by the BPEspokesman, Mr. ChigboAnichebe, quoted Mr. Dikkias saying, “the PensionReform initiated andimplemented by the BPE hasimpacted positively on theNigerian economy”. Underthe scheme, he noted, 20Pension Fund Administrators,PFAs, seven Closed PensionFund Administrators, CPFAsand four Pension FundCustodians, PFCs, wereestablished, in the last 11years.

He said the various reformscarried out by the Bureau hadimpacted positively on theNigerian economy and thatthe over-riding objective of

ContributContributContributContributContributororororory pensiony pensiony pensiony pensiony pensionfund hits N4.7 trillionfund hits N4.7 trillionfund hits N4.7 trillionfund hits N4.7 trillionfund hits N4.7 trillion

the reforms was to create anenabling environment forprivate sector investmentsthough: institution of soundsector policies; Liberalizationof the sectors by abrogatingmonopoly laws; Delineation ofthe roles of policy formulation

from regulation andoperations; Establishment ofappropriate legal andregulatory framework; Settingup of independent regulators;and mitigation of risks toencourage private sectorinvestments.

The DG told the delegationthat to sustain the gains ofreforms; the Bureau hadinitiated eight more Billswhich were recentlytransmitted to the NationalAssembly by the FederalExecutive Council forenactment. They included:Railway Bill, InlandWaterways Bill, Ports andHarbour Bill, Federal RoadsAuthority Bill, National RoadsFund Bill, National TransportCommission Bill, Competitionand Consumer Protection Billand Postal Sector Reform Bill.

Dikki listed Housing,National Parks, PartialPrivatization/Restructuring ofthe two Nigeria’sDevelopment FinanceInstitutions (DFIs)-Bank ofIndustry and Bank ofAgriculture, Privatization ofthe Nigerian CommodityExchange and Restructuring/Commercialization of theFederal Mortgage Bank ofNigeria as some of the otherinitiatives the Bureau iscurrently prosecuting.

In his remarks, Amb. Arrionpledged to partner with theBPE in its reform programmewith a view to facilitatingregional integration. Hepledged that his office wouldadequately sensitiseEuropean investors thatNigeria is safe for businessand indeed Africa’sinvestment destination.


Banking & Finance

FCMB advocatessavings culture amongstudentsFirst City Monument Bank

(FCMB) Limited hasagain demonstrated itscommitment towards youthempowerment anddevelopment by organising afully interactive session onFinancial Literacy for studentsof Government Girls College,Dala and the unbanked inKano state. This, according tothe Bank, is part of itscontributions towards securingthe future of youths, throughthe adoption of savings andinvestment culture, byexpanding their knowledgebase on financial literacy andits principles.

The mentoring session,which was anchored by theExecutive Director, Abuja/Northof the Bank, Mr. Adam Nuru,took place at the school onMarch 12, 2015 as part ofactivities to commemorate the2015 Global Money Week andFinancial Literacy Daycelebration. An initiative of theBankers Committee incollaboration with the CBN, thefinancial literacy programme isfocused on educating theNigeria’s youth on theeconomic environment,impressing upon them theimportance of saving,entrepreneurship and financialcreation with a view toempowering the nextgeneration to be self-reliant andmoney savvy global citizens.

Global Money Week:FirstBank promotesfinancial literacyFirst Bank of Nigeria

Limited, a subsidiary ofFBN Holdings Plc, iscollaborating with the rest ofthe world in celebrating theGlobal Money Week to engagechildren in the rudiments offinancial literacy. The Bankunder its CorporateResponsibility andSustainability scheme initiatedthe Future First Programme toimpart financial independenceinto young people through theacquisition of the right financialknowledge. The Future Firstprogramme is designed toempower secondary schoolstudents between 12 to 17 yearsto build fulfilling careers andbe better equipped with toolsand knowledge for long termfinancial independence. TheBank has to date covered over40 secondary schools acrossthe country, impacting over20,000 students. Incommemoration of the CBNFinancial Literacy Day, and incontinuation of the Bank’sdrive for financial literacy,

John Bull had to wait forsix years before hecould get N50, 000 of

his money trapped in thedefunct Fortune InternationalBank. He had over N300, 000in his current account withthe bank before the CentralBank of Nigeria (CBN)revoked its operating license,with that of 13 other banksthat could not meet theDecember 31st 2005recapitalisation deadline.

As the organisationestablished to insure bankdeposits, the Nigeria DepositInsurance Corporation(NDIC) should haveimmediately paid John Bulland other customers ofFortune Bank N50,000 of theirmoney trapped in the banksbeing the maximum insureddeposit as at then, ortransferred their deposits toother banks as was the casefor the individual customers ofthe defunct Allstates TrustBank, Assurance Bank, LeadBank and Trade Bank.

But this could not happen,as the owners of Fortune Bankas well as two other banksinstituted court actions tochallenge the revocation oftheir operating license. As aresult, John Bull and othercustomers had to wait andsuffer the agony of not havingaccess to their money.

The NDIC however wants toensure that customers ofclosed banks are not subjectedto such suffering again. Toachieve this, the Corporationis seeking a series ofamendment to its enablingAct, which among otherthings would allowed it tominimise the risk of bankfailure, and also to be able topay customers of failed bankspromptly, without legalhindrance.

Learning from the pastSpeaking at the Senate

Hearing on the proposedNDIC Act 2014, which is anamendment of the NDIC Act2006, Managing Director/Chief Executive of theCorporation, Alhaji UmaruIbrahim, stated that theproposed amendments arebased on lessons learnt frompast and recent experiences ofthe Corporation in thesupervision of banks andprotection of bank deposits. “If

NDICNDICNDICNDICNDIC: An amendment: An amendment: An amendment: An amendment: An amendmentin the intin the intin the intin the intin the interest of bankerest of bankerest of bankerest of bankerest of bankdepositdepositdepositdepositdepositorororororsssss

Inability torefunddepositors' fundswas not becausethere was nomoney to pay butbecause ownersof closed bankshad institutedendlesslitigations

By BABAJIDEKOMOLAFE

passed into law, theamendments would addressthe constraints andchallenges facing theCorporation, given theobserved inadequacies in theexisting law. It would alsoenable the Corporation to bemore effective and efficient incarrying out its mandate ofpromoting safe and soundbanking practices, protectingdepositors through effectivesupervision of insuredfinancial institutions, promptpayment of guaranteed sumsand orderly resolution offailed institutions and thusengender public confidencein the banking system”, hesaid.

Minimise occurrences ofbank failures

As part of the mandate ofinsuring bank deposits, theNDIC has the responsibilityto reduce the risk of bankfailures. This is in deferenceto the adage that says,“Prevention is better thancure”. It is better to preventbank failures than allowbanks to fail and subjectdepositors to untoldhardship, and the system tohuge expenses needed tosettle the depositors. Thusfrom inception, the NDIC hadbeen empowered through itsenabling laws to supervisethe activities of banks andmake recommendations toaddress observed lapses thatcould lead to distress. Whilethe Corporation has beendoing this effectively incollaboration with the CBN,it is however seekingamendments to strengthen itssupervision of banks.

For example, theCorporation among otherthings is seeking anamendment that would

empower it to superviserelated entities (holdingcompany or subsidiary) ofinsured institutions namelycommercial banks, mortgagebanks and microfinancebanks. This is to preventbusinesses related to insuredinstitutions from being usedas vehicles through whichdepositors funds aredissipated. It would berecalled that this practice ledto the distress of some of thebanks affected by the recentglobal financial crises, andwhich also resulted to theintroduction of a newbanking model by the CBN.

The amendments alsointroduces additionalmeasures for ensuring thatboard of insured institutionsimplements theC o r p o r a t i o n ’ srecommendations inExamination’s Report. Thisis to prevent such institutionsfrom becoming distressed asa result of the findings of theexamination exercise.

In this regard, theCorporation is seekingamendment to empower it, inconsultation with the CBN,to stop insuring the depositof any institution, whenfound to have grievouslyviolated its obligations underthe NDIC Act

Prompt Payment ofinsured deposits

It is the responsibility ofNDIC to ensure thatdepositors of failed bankshave prompt access to theirmoney (the insured deposit).However the Corporation has

been severally frustrated fromperforming this responsibility.“The greatest significance isthe experience from recentbank closures where theCorporation was unable torefund depositors fundtrapped in some closed banks.The inability to refunddepositors funds was notbecause there was no moneyto pay but because the ownersof the closed banks hadinstituted endless litigationsagainst regulatoryauthorities”, lamentedIbrahim at the SenateHearing.

To address this frustration,the Corporation is seekingamendments that wouldempower it to pay insureddepositors of failed insuredinstitutions even in the face oflitigation challenging therevocation of the operatinglicense of the institutions.This is to ensure depositors donot suffer due to inability toaccess their money trapped insuch institutions.

In addition, NDIC is alsoseeking powers to be able topay insured depositorswhenever an institutionbecomes insolvent and hassuspended payment todepositors. This means thatwhen an insured institutionbecomes distressed andcannot pay depositors theirmoney, but its license is yet tobe revoked by the CBN, theNDIC can step in and pay thedepositors their insureddeposit, thus minimising theirsuffering as a result of theinsolvency of the insuredinstitution.

Umaru Ibrahim, NDIC MD


Banking & Finance

LECTURE - Chief Compliance Officer, Fidelity Bank Plc, Boye Ogunmolade (r) deliveringa lecture at the Day Waterman College, Abeokuta to mark this year’s Financial LiteracyDay

BY JONAH NWOKPOKU

Nigerian banks lost atotal of N199 billionto electronic related

fraud between 2000 and 2014,mostly due to inappropriateand reckless management ofcustomers’ data.

Executive DirectorOperations, First CityMonument Bank, FCMB, Mr.Nath Ude, disclosed thiswhile presenting a keynoteaddress at the NigeriaElectronic Fraud Forum inLagos.

Ude said incidence of fraudhas become very rampant andpresents seriousconsequences for thefinancial industry in Nigeria.

Speaking on ‘e-fraud andinsider abuse’ Ude noted thatthese frauds result most timesfrom inappropriate or recklesshandling of customers’ data.

According to him, “Bankingis built on trust. Customers’data is an asset to banks andto retain the customers’ trust,banks need to protect theseassets. Fraudsters aresucceeding because bankshave not paid enoughattention to strategies thatcould minimise theseincidents.”

He added that mostelectronic fraud is frominsiders even fromunexpected sources

How banks lost N199bnto e-fraud in 13yrsincluding dedicatedemployees.

He said banks could curbinsider abuse by watching outfor warning signs likeemployees living above theirmeans, frequentmanipulation of data by

employees and continuous,excessive use and abuse ofprivileged and systemsaccount. In this way, heexplained, “banks will beable to combat electronicfraud by filtering outpredatory employees,

reviewing upwards, therequired reliability status forall staff who need privilegedroles to work as well asdeploying appropriateprevention and detectiontechnologies like CCTVmonitoring and access cardswith authorisations.”

In his own presentation,Head, Information SystemsSecurity, Nigeria InterbankSettlement Scheme, NIBSS,Olufemi Fadairo presented astatistics revealing theprevalent of electronic relatedfraud in Nigeria’s financialsystem.

Fadairo said financialfraudsters are increasinglyadopting sophisticatedtechniques in the approachand that stakeholders in theindustry have to collaboratemore and think ahead andcreatively if e-fraud must besuccessfully tackled.

He said that a total of 1,461cases of fraud were reportedin 2014. Out of these,attempted fraud estimated atN7 billion was recordedwhich led to actual loss valueof over N6 billion.

He also disclosed thatinternet and ATMs remainthe most popular channels fore-fraud while Point of Sales,PoS terminals has beendiscovered to be the preferredchannel of cash out forfraudsters.

Fadairo also disclosed that outof the reported cases, only 41perpetrators were apprehendedwhile 1, 420 perpetrators eludedthe authorities.

In all, he said, the fraud raterose to 80 per cent in 2014 from3 per cent in 2013.

The ongoing bank verification number(BVN) enrolment will help customers tohave access to bank loans by enhancing

their credit score, said the Group ManagingDirector/Chief Executive Officer of Fidelity BankPlc, Mr. Nnamdi Okonkwo.

The BVN is a number that enables a bankcustomer to have a single identity in the bankingsystem. It basically ensures that a customer’sidentity is not stolen.

A credit score is primarily based on creditreport information typically sourced from creditbureaus. Lenders use credit scores to determinewho qualifies for a loan, among others.

Okonkwo, while speaking to journalistsrecently, also said the BVN would enhanceaccess to credit to small and medium scaleenterprises (SMEs).

There are about 17 million registered SMEsin Nigeria today. In most countries, SMEsaccount for up to 70 per cent or more ofbusinesses, yet in developing economies likeNigeria, SMEs suffer from lack of access tofinance.

Thus, the Fidelity Bank boss explained: “Inmore developed parts of the world, they havecredit rating systems and social identificationsystem. For example, if I am Nnamdi Okonkwo,there might be other 1,000 Nnamdi Okonkwos,but each Nnamdi Okonkwo has a unique numberassigned by his country such that whenever youput that number in, everything about that personcomes out. We are gradually getting to that.

“Until we get there, credit scoring system is

HoHoHoHoHow Bw Bw Bw Bw BVN enrVN enrVN enrVN enrVN enrolment will helpolment will helpolment will helpolment will helpolment will helpyyyyyou access bank loansou access bank loansou access bank loansou access bank loansou access bank loans

still a challenge. Therefore, it is possible thatthis same Nnamdi Okonkwo can go to abank, take a loan and default, move toanother bank, still take a loan and defaultand nobody sees that his credit history isbad. But with what the CBN has done withthe BVN, that will be taken care of. That iswhy I am advising everybody to go andregister and get your BVN.

“When each of us have our BVN, which istied to our thumb, if I need to lend money toyou, I can check. If the person is a notoriousdebtor in other banks, then he doesn’t get aloan from me and that protects all of usbecause the bank does not own all themoney. Most of the monies that banks useto do business belong to depositors. So,whatever initiative the CBN is taking, is toprotect depositors and the larger economy.

“The BVN is a unique number that everyaccount holder in Nigeria should have,going forward. So, with your thumbregistered, wherever you go, you can confirmthat it is you. It is for security, it is for KYC.Like you know, for you to borrow from anybank now, you must have your BVN. It helpsour credit scoring system.

“The compliance level has been growing.At Fidelity Bank, we first made sure everystaff member was registered because youcan’t sell what you don’t understand. So thatwhen you are explaining to your customer,you can as well show him or her the BVN.”

Union Bankadopts school tomark GlobalMoney Week

Union Bank ofNigeria Plc hasadopted Uyo

High School, Oron Road,Uyo as part of activitiesmarking this year’s GlobalMoney Week and FinancialLiteracy Day. The adoptionis in furtherance of a widerBankers’ Committeeinitiative to promoteFinancial Inclusion inNigeria by providingfinancial education toschools across the country.

“Union Bank remainsfirmly committed to theachievement of FinancialInclusion in Nigeria and werecognize that FinancialLiteracy is a key step inachieving this,” said EmekaEmuwa, Group ManagingDirector of Union Bank andChairman of the FinancialLiteracy and PublicEnlightenment Sub-Committee of the Bankers’Committee. “In addition, webelieve in makinginvestments that empower,build and support thedevelopment of Nigeria’slarge youth population.Providing our young oneswith a proper financialeducation will enable themto make sound financialdecisions and become goodstewards of resources in thefuture”.

During the visit, Mr.Emuwa taught a number ofthe students a lesson on“Growing Your Money “.The lesson was taken froma special Financial LiteracyCurriculum developed byJunior Achievement Nigeria– a non-profit organizationfocused on educatingchildren about theireconomic environment –and covered topics onsavings, investments andprotecting one’s money.

Global Money Week is aworldwide moneyawareness celebration fromMonday, March 9, toTuesday, March 17, 2015.The initiative is aimed atglobally engaging childrenon aspects of financialeducation. The Bankers’Committee in Nigeriadesignated Thursday 12th

March as Financial LiteracyDay 2015. The day is beingmarked to focus attention onchildren and youth inprimary and secondaryschools nationwide and toempower them byenhancing their financialknowledge and planningskills.


CMYK

Corporate Finance

US stocksnosedives asdollar threatens toerodemultinationalsprofits

U.S. stocks slumped onFriday, putting the

S&P 500 on track for its thirdstraight weekly decline, as arobust dollar threatened toerode the profits ofmultinationals and tumblingcrude oil prices pressuredenergy shares.

Crude oil CLc1 fell 4percent to $45.15 a barrel,extending its lossesthroughout the morning,after the InternationalEnergy Agency said a globaloil glut continued to buildand U.S. oil productionshowed no signs of slowing.The commodity has fallen insix of the past seven sessionsand is down almost 60percent from a peak reachedin June. The S&P energyindex .SPNY fell 1.4 percent,among the biggest declinersof the 10 primary S&P 500sectors. Chevron Corp(CVX.N) fell 1.4 percent to$101.03 while Noble Corp(NE.N) sank 5.3 percent to$13.46.

“It’s a bit of a surprise thatthe U.S. continues to produceat such a high level, and thatamount of oil surpluscontinues to push thecommodity lower,” saidMichael Arone, chiefinvestment strategist forState Street Global Advisors’U.S. Intermediary Businessin Boston.

Weak profitmargins dampenU.S. producerinflation

U.S. producer prices fellin February for a

fourth straight month,pointing to tame inflation thatcould argue against ananticipated June interest ratehike from the FederalReserve.

Other data on Fridayshowed a decline inconsumer sentiment in earlyMarch, as harsh winterweather left households withhigh utility bills anddisrupted shopping andgeneral business activity.

The Labor Department saidits producer price index forfinal demand declined 0.5percent as profit margins inthe services sector, especiallygasoline stations, weresqueezed, and transportationand warehousing costs fell.

Quoted companies pay N1trn in taxes—Aig-Imoukhuede

By PETER EGWUATU

The President of NigerianStock Exchange, NSE

, Mr. Aigboje Aig-Imoukhuede, has disclosedthat quoted companies on theExchange pay not less thanN1 trillion as taxes to thegovernment.

He stated this whenPresident Goodluck EbeleJanathan visited the Lagosfloor of the NSE to commissionthe NSE X-Gen TradingPlatform, saying “As you knowcapital market is the heartbeatof the economy, quotedcompanies pay N1 trillion intaxes.

A i g - I m o u k h u e d e ,commended the President forvisiting the Exchange and

assured that the market willcontinue to play its role ofenhancing transparency ofmarket transactions andproviding liquidity to bothprivate and public sectors.

Meanwhile, Jonathan hadsaid that the federalgovernment will come upwith guidelines andincentives that willencourage major companiesin the oil/gas,telecommunications andpower sectors to list on theNigerian StockExchange(NSE), adding thata substantive DirectorGeneral , DG of theSecurities and ExchangeCommission, SEC will benamed next month

Speaking at a meeting with

the NSE in Lagos, PresidentJonathan said the federalgovernment attaches muchimportance to the capitalmarket as it reflectssignificant performance of thenation’s economy and woulddo everything economicallypossible to make the marketattractive to investors andissuers.

According to the President“As the biggest economy inAfrica, the nation’s capitalmarket ought to equally bethe largest, so the only thingto do to achieve this is toensure that big companiesoperating in the economyand are benefiting make theirshares available forNigerians to invest in andbenefit.”

He said before now he hashad discussions with MTNduring one of his visits to

South Africa on the need tolist their shares. “When I metwith MTN in South Africa, wediscussed the need for themto list. We are working hardto make sure that companiesthat are supposed to list doso. That is the only way theNigerian capital market andeconomy can grow so thatNigerians can participate.Definitely if you take thepower companies, as theygrow bigger they will list”Jonathan said

The President added thatafter a proper study of thesituation, the governmentwould come up with theguidelines for the listing,disclosing that listing ofcompanies would be one ofthe incentives.

“We will certainly come upwith guidelines in thatregard. It is only proper westudy the situation and meetwith technical experts beforecoming out with the finalpronouncement on it . But wewill definitely encouragemost of these companies tolist and make it a conditionfor them to benefit fromgovernment in some areas.You must do certain thingsproperly. So I believe we willgive you what you want” hesaid. Jonathan assured thestockbrokers and executivesof listed companies that thegovernment would continueto partner the private sectorand hands off themanagement of business inorder to solely face theprovision of an enablingenvironment for businesses tothrive.”We will continue topartner the private sector. Weare moving away from wheregovernment used to be thebest manager of companies,best investors, to area wherethe government will createthe enabling environment forthe private sector to managethe economy” he said.

The six winners of the Sterling Bank Gunners Promo whoemerged at the fourth Gunners Promo held at the

weekend will have the opportunity of an all-expense paid tripto watch the home match involving Arsenal Football Club andChelsea on April 26, 2015. Disclosing this to newsmen afterthe fourth draw of the promo held over the weekend at theBank’s corporate head office, Sterling Towers, the Bank’s GroupHead, Strategy & Communications, Mr. Shina Atilola said thiswas in line with the promise made by the Bank at thecommencement of the Promo last year.

According to Mr. Atilola, this brings to 24, the number oflucky winners that have emerged in the four draws held. Thenext draw holding in April will produce another set of sixwinners bringing the total number of winners to 30 addingthat the Bank came up with the promo to reward customers fortheir loyalty, and encourage other football lovers to share theone-customer experience.

The Bank’s spokesperson explained that the promo, whichkicked off in September 2014 would run till May 2015, andwinners would emerge based on monthly draws to be heldduring the duration of the promo. The promo, he said, is

Sterling Bank rewards customers with UK tripdesigned to reward customers for their patronage and loyaltyto the brand over the years in keeping with the Brand’s promiseof putting customers first

The six lucky winners are Kehinde Abdullahi Ademola,Sakariyau Adeleke Mustapha, Ignatius Peace Nnah andAdeleke Zainab Idowu. Others are Chinyere Okechukwu andEludinni Taiwo Kemi.

An elated Kehinde who spoke with the “Femi & The Gang”crew that covered the event live for Nigerian Info commendedthe Bank for keeping to its promise.

Her words: “I’ve heard that Sterling Bank has been takingthe winners of the promo to the Emirates Stadium to watchlive matches between Arsenal and other teams, but I had neverseen myself being a winner because l know the Bank has adata base of customers running into millions to pick from. Butwhen l was called on phone by a staff of the Bank that l waspicked, l was a little bit worried until the caller mentioned mybranch and advised that l go to my branch and confirm onMonday. This was the longest weekend l have ever had in mylife and l thank God that it was eventually confirmed when lvisited the branch today (on Monday)”.

PROMO - From Left:Mr Dapo Akinola, Country Manager Eddington; Mr Abayomi Ajao,Marketing Manager, Brian Munro Ltd; Mr Ifeanyi Ijeotor, Promo winner; Mr Suraj, FloorManager SPAR Mall; and Mr Olugbemi Olajide, Brand Manager, Famous Grouse Whisky,during the presentation of a car to the winner of the Famous Grouse2014 Famous ShoppersPromo in Port Harcourt, On Friday 13-3-2015.


CMYK

C C C C C hief Eurielhief Eurielhief Eurielhief Eurielhief EurielChukwukaChukwukaChukwukaChukwukaChukwuka

Chukwudum is theChukwudum is theChukwudum is theChukwudum is theChukwudum is theChairman/ChiefChairman/ChiefChairman/ChiefChairman/ChiefChairman/ChiefExecutive Officer ofExecutive Officer ofExecutive Officer ofExecutive Officer ofExecutive Officer ofDenis Hotel, Ltd.,Denis Hotel, Ltd.,Denis Hotel, Ltd.,Denis Hotel, Ltd.,Denis Hotel, Ltd.,Abuja. The native ofAbuja. The native ofAbuja. The native ofAbuja. The native ofAbuja. The native ofAzia, Anambra State,Azia, Anambra State,Azia, Anambra State,Azia, Anambra State,Azia, Anambra State,speaks to Financialspeaks to Financialspeaks to Financialspeaks to Financialspeaks to FinancialVVVVVanguard on why heanguard on why heanguard on why heanguard on why heanguard on why hegot into thegot into thegot into thegot into thegot into thehospitality industrhospitality industrhospitality industrhospitality industrhospitality industryyyyy,,,,,the challenges ofthe challenges ofthe challenges ofthe challenges ofthe challenges ofdoing business indoing business indoing business indoing business indoing business inNigeria and appealsNigeria and appealsNigeria and appealsNigeria and appealsNigeria and appealsto government toto government toto government toto government toto government tolook into the issue oflook into the issue oflook into the issue oflook into the issue oflook into the issue ofmultiple taxation.multiple taxation.multiple taxation.multiple taxation.multiple taxation.

Excerpts:Excerpts:Excerpts:Excerpts:Excerpts:

Early YEarly YEarly YEarly YEarly Years:ears:ears:ears:ears:According to

Chukwudum who sharesthe same birthday withNigeria, he attendedSanta Maria PrimarySchool in Port Harcourtand Aba and had hissecondary education atSt. Anthony SecondarySchool, Azia. Thereafter,due to circumstancesbeyond his control, hecould not further hiseducation and so veeredinto business. He did notallow this situation tostop him from being hisbest.

Going into business:Going into business:Going into business:Going into business:Going into business:“On October 1, 1979, I

went into business. Thegrace of God was withme and I was able toachieve so much first asa trader and then in thehospitality industry.That was April 1, 2005. Ichose the hospitalitybusiness because Iwanted to create jobsfor people. As a trader, Idiscovered that mycapital could only giveme an employmentcapacity of not morethan 10 but the sameamount created jobs foralmost 200 people in thehospitality industry. Ican now see thedifference. I found outthat the hospitalitybusiness has a betterfuture than trading. Butwhat interested me mostwas not the money butmy ability to create jobsfor humanity, not justfor Nigerians alone.

People in Business

Government is punishingemployers with taxes -EURIEL CHUKWUDUM

By EBELE ORAKPO Expansion andExpansion andExpansion andExpansion andExpansion and

Challenges:Challenges:Challenges:Challenges:Challenges:“We started with 84

rooms and very soon, weare going to haveadditional 300 roomsand that will createjobs for about 500people or moreand with that, weare helping togrow the economy.

"In any business,there are drawbacks.Definitely, Nigeria isa virgin country foranybody to come anddo business; at thesame time, it hasthe capacity forpatronage due toour population,but like I said, thedrawbacks areenormous becausegovernment is nothelping matters. Thehospitality industry isservice based and it isall about functionality.You need certain thingsto be in place to be ableto do the business.

Electricity:Electricity:Electricity:Electricity:Electricity:"Electricity is essential.

You need to be servicedwith electricity 24hours, seven days aweek, pipe-borne waterand access roads,communications etc.Unfortunately, we suffermost with electricitybecause most of themoney we make isploughed back into thesystem for powergeneration. We generatepower ourselves and itcosts a lot.

In fact, if you don’t doyour calculation verywell, you will losebecause to burn dieselfor 12 or 24 hours everyday is a lot and beforeyou know it, dependingon the capacity of thegenerator, you will bespending nothing lessthan N4 million - N5million monthly ondiesel. But if governmenthas done its duty ofproviding power, at leastwe will be spending lessthan N2 million if wehave regular powersupply, even though weare worse off withprivatisation of power

where we pay almostthrice as before with lesspower.

Exploitation:Exploitation:Exploitation:Exploitation:Exploitation:"In fact, my

understanding of theprivatisation of thepower sector is not whatwe are getting; they areexploiting us and givingus less. The exploitationis so much that peopleare complaining,especially those of us inthe hospitality industry.I have not seen anypositive difference sincethe privatisation. Sogovernment should lookinto it and see if theyshould review the policy.Ours is a serviceindustry and you haveno excuse to give to yourguests for not providing

those services. Also, we generate our

water from boreholesand installed treatmentplants so with all these,there is no way you willget the best out of thebusiness. But with thetransformation going on,we believe that sooneror later, things will beokay and it will create avery good platform forNigerians to do betterbusiness.

Multiple TMultiple TMultiple TMultiple TMultiple Taxation:axation:axation:axation:axation:"I don’t know if it is a

crime for someentrepreneurs to createjobs. Government ispunishing employers oflabour with lots of taxes,rent charges and fees. Alot of exploitation isgoing on in the system.We are not saying wewill not pay tax as goodcitizens but governmentshould provide us withthe services the taxesare meant for. If anyNigerian refuses to paytax, he can be justifiedbecause what the moneyis meant for,government is not givingto us so government is asguilty as tax defaulters.The multiple taxationsuch as localgovernment levies, themunicipal, Environmentcharges, educationaltax, industrial trainingfund, VAT, income tax,over 15 direct andindirect taxes imposed

on businesses, shouldstop and be streamlinedto one or two.

"It seems it is a crimefor employers of labourto create jobs for peoplebecause it reallyexposes them togovernment’sexploitation. With allthese taxes, how do yousurvive? And knowingthe Nigerianenvironment, each ofthem must have itsown complications.So in a situation inwhich you findyourself beinghammered withuncoordinatedtaxation, whatdo you do?

"Governmentshould dosomething toensure they

coordinatetaxation in Nigeriaespecially as itaffects businesses sothat we will not fallprey to taxagencies. Theyshould makepolicies that wouldencourage people tobe in business and

create jobs. When youlook at it, you find outthat you either bend orbreak. The way it is now,we are being taxed foreverything, even thosethings that government issupposed to provide arenot done.

Unique Selling Point:Unique Selling Point:Unique Selling Point:Unique Selling Point:Unique Selling Point:I was a trader for

almost 30 years, and foryou to be a successfultrader, you must be atactician and strategist,otherwise, you will not beable to thrive in thatsector. I know there weremany hotels in Abujabefore our entrance. As atrader, it is thedifference that youcreate that gives you theedge. So when we camein, I looked round to seewhere I could make adifference. I felt wecould make a differencein the area of securitywhich we did becausesecurity is veryparamount to guests. Thesecurity agents were veryimpressed with us andICT was very rare thenand we were the firsthotel to introduce ICT inAbuja in 2005 for ourguests’ premium comfort.

Again, the one thatgave us an award fromAkwaaba is ourinitiative of having a 24-bed drivers’ lodge for ourpremium guests’ driversand aides. We found outthat when most carowners travel, they gowith their drivers.Unfortunately, theycheck into comfortable

•Chief Euriel Chukwuka Chukwudum

It seems it is acrime foremployers oflabour to createjobs for peoplebecause itreally exposesthem togovernment’sexploitation


CMYK

Micro-Finance

Honeywell FlourM i l l s

Plc has said thatyouth entrepreneurshipis a key to its policy,reiterating readiness tocontinue inspiring youthby engaging them inactivities that willexplore and expose theirinert and creativetalents.

Speaking at a meetingto flag off the Child LivePainting and LiteraryArts Competition, titled"The Road to Sambisa"Executive Director,Marketing, Mr. BensonEvbuomwan, said thatthe company willcontinue to supportinitiatives andprogrammes that willimpact positively in thelives of the youth.

Evbuomwan said: "Wegot the proposal tosponsor the competitionand we were excitedabout it. So, everyopportunity to interactwith little children, anyopportunity we alsohave to also encouragechildren to express thegift that is inside of themwe always like to takeadvantage of such

Youth entrepreneurship keyto our policy — Honeywell

Stories byPROVIDENCEOBUH

In order to build capacity,Accenture Nigeria, engaged its female

employees and client executives to help womenexplore their full potential at workplace and theirpersonal lives as part of International Women Daycelebration.

Speaking at a sermina titled: "Listen, Learn, Lead"Managing Director Energy and Utilities, Mrs.Abayomi Olarinmoye said that learning and leadingare complementary skills which are vital for womeninterested in having successful careers.

“If you listen well, chances are that you will be agood learner and when you listen and learn, youhave the right capabilities to be a good leader.Serminars as this will add value to every participantand improve on the way work is done at Accenture.

In her keynote address, Managing Director, ShellNigeria Closed Pension Fund, Mrs. Yemisi Ayeni,said •glistening is an acquired habit whichprovides learning opportunities for individuals. Themodus operandi for any effective leader should be;listen, learn, so you can lead well." A participant atthe event who identified herself as Ms. Bolade,said "I have learnt a lot from this seminar and amnow better equipped to take on a management role."

She added that the theme is a global topic foraccenture as a leading management consultingfirm.

"Surveys show that the most critical skills neededto succeed in the workplace are listening andlearning, as well as the ability to lead,"she added.

Capacity building:Accenture engageswomen

opportunities, because asa company that is whatwe stand for.

"People have talentswhich they don’t evenknow about until yougive them theopportunity to showcasethose talents. Somepeople need to behelped, some need to begiven the opportunity toshowcase their talents, sowe believe that we all areprovided the opportunityto really express ourtalents so that we canmake our world better,”he said.

He explained that thecompany has rewards forthe children who willcome tops in individualscategories, saying, "Sowe believe that thesechildren need to besupported, they need tobe encouraged so as toserve as a motivation formany other children.

He described thechildren as futureleaders, saying "they aregoing to change ourfuture so we need tobegin to develop themtoday, we need to givethem the opportunity tobe able to change thefuture that we desire andthe future we also wantthem to have".


CMYK


Homes & Housing

ResortSavingsbegins housingproject inOgun

Resort Savings andLoans Plc hascommenced a

building project in Ogun State as part of plans to helpmeet the housing needs ofits customers.

The project is locatedalong Papalanto – Sagamu Road, Omu-Penpe, Ofada, andconsists of of 300 units of 3bedroom semi-detachedbungalows and 150 units of2 bedroom terracebungalows. According to astatement by Head ofTreasury Department,Victory Olumuyiwa, theproject lies on 100 acres of land. According to her, theland is to be developedinto site and services plotswith provision ofinfrastructures such as roadnetwork, drainage, centralfor water supply system.

She said the project willalso take into considerationprovision of transformersand electric poles for powerdistribution, wastemanagement and otherneeds of a moderncommunity. “The approvedlayout for the project hasbeen obtained while thebeaconing and erection ofpillars have beencompleted. The provision ofinfrastructural services andconstruction of prototypehousing units are tocommence as soon aspossible,” the statementsaid.

Olumuyiwa added thatthe project is within theproposed Gateway MegaCity project by the Ogun State government and isabout 30 minutes drive from Ikeja, the capital ofLagos State. According toher, a two bedroom bungalow will go for aboutN4.5 million while threebedroom bungalows will besold for about N6.5 millioneach. She said the primarybeneficiaries will be thosewho maintain account withthe bank, noting that theproperty for whoeversubscribes to it would alsobe used as collateral forthose who collect loans fromthe bank to purchase it. “Itis our top priority to drivethe mortgage sub-sector tonew heights and make amark in the delivery ofquality and affordablehousing to Nigerians,” sheadded.

Lagos State Governor,Mr. BabatundeFashola, said home

ownership through mortgagewas the only effective way tobridge housing deficit in thecountry.

Fashola spoke at theinauguration of Chois Estate,a housing estate in Lekki areaof the state. The 420-unitestate of bungalows andduplexes was delivered bythe state government inpartnership with a propertydevelopment company, FirstCommunities Limited.

The governor said that themajor barrier to homeownership was affordability,saying it would extremely bedifficult for people to ownhomes if they were asked topay outright for it. He said thestate government wasbuilding homes and allocatingthem on mortgage toresidents, to ensureconvenient home ownership.

“Mortgages remain the onlyway to reduce housing deficitand ensure convenient homeownership. That is how it isdone all over the world. Thatis what we are doing with ourhomes. We allocate them toour people and ask them to

“Only mortgages canbridge housing deficit”

Stories by YINKAKOLAWOLE, withagency report

pay the equity contributionsand spread the remainingpayments over a minimum of10 years,” he asserted.

Fashola said the delivery ofthe estate was in fulfilment ofhis electoral promise to deliverdemocratic dividends toresidents of the state. He said

a similar estate had beendelivered in Agbowa area ofthe state and10, 000 homeswould be delivered at theconclusion of the project phaseunder the government’spartnership with FirstCommunities.

Also speaking at the

occasion, Mr Bosun Jeje,Lagos State Commissioner forHousing, said the governmentwas irrevocably committed todelivery of quality housing. Hesaid a number of projects wereon-going and their eventualdelivery would reduce thehousing deficit in the state.

Agent fraud has becomea major concern in thereal estate industry.

With the level of reportedfraudulent practices, it isimportant that potentialtenants are educated aboutsuch situations.Lamudi.com.ng has puttogether a couple of do’s anddon’ts for you to considerwhile dealing with a real estateagent.

Background check -Background checks areessential before doingbusiness with a real estateagent. Apart from checkingonline or asking forreferences, Lamudi.com.ng, areal estate portal, has gone an

What to do when dealing with estate agents

Backgroundchecks areessentialbefore doingbusiness witha real estateagent

extra mile to provide propertyseekers with over 309 trustedsellers on its platform. Thiswill ensure that you aredealing with credible,reputable, and honest agents.

Avoid upfront payment - Youare advised not to deposit,transfer or pay any moneyupfront to an agent beforeconfirming that the agent isgenuine and before seeing theproperty that you areinterested in. Top agents donot usually request for aninspection fees before viewinga property.

Do an interview - Interviewthe agent whom you havechosen before making anyfinal decisions. Make sure that

the agent is a licensed agentwith a good amount ofexperience that caters to what

you need. Before you meetthe agent, list down a fewquestions to find out ifthey match yourpreferences. This helpsgive you a clearer pictureof who you are dealingwith.

Meet in a public place -When meeting with anagent, make sure that youare meeting in a safe andpublic place or with acompanion. Never meetan agent that you havenot been acquainted within a quiet or secludedarea. Make sure that afamily member or friendknows about yourappointment.

FG reiterates commitment to affordable housingBy NKIRUKA NNOROM

Minister of Lands, Housing and UrbanDevelopment, Mrs. Akon Eyakenyi, hasreiterated the commitment of the federal

government to the provision of affordable housing in thecountry.

She gave the commendation at the commissioning of the102 units ministerial pilot housing scheme in Suleja NigerState, which was fully funded by the Federal Mortgage Bankof Nigeria (FMBN).

Eyakenyi said the commissioning of the housing is ademonstration of government’s efforts to bring affordablehouses to the doorsteps of the citizens, particularly low incomeearners. “This pilot ministerial housing scheme which isbeing carried out in all six geo political zones of the country

is expected to deliver about 2600 houses when completedand this effort also demonstrates that with prudentmanagement, a great deal can be achieved within the shortestpossible time. This is one way of achieving affordability forthe low income people,” she said.

In his speech, Managing Director, FMBN, Gimba Ya’uKumo, said the collaboration has been successfullyimplemented in the six geo political zones of the country forthe benefit of Nigerians, especially contributors to theNational Housing Scheme. He said under the arrangement,government provides construction financing and in mostcases, unencumbered land for housing development. Hesaid the 102 housing units is made up of 32 units of onebedroom bungalow, 40 units of two bedroom bungalows, and30 units of three bedroom bungalows all delivered ataffordable prices for off-takers.

•Low-cost housing development

CMYK

CMYK

30 —Vanguard, MONDAY, MARCH 16, 2015

Trade & Investment

BY OMOH GABRIEL,BUSINESS EDITOR

The perennial crash ofcrude oil prices andthe exposure of the

Nigerian economy to financialcrisis has pushed stakeholdersand policy makers attention tonon oil revenue generation.One sustainable source offoreign exchange generationis export of manufactures,solid minerals, andagricultural output with valueaddition.

The Nigerian Export ImportBank is fast becoming thecenter of attraction togovernment and exporters topush the non oil foreignexchange earning drivethrough trade financing andproductive efforts of exportableproducts from Nigeria

According to governmentofficial documents, in no othersector is the role of NEXIM indriving the foreign exchangerevenue drive of the presentadministration morepronounced than inencouraging themanufacturing, mining andthe agric sectors in producingnon-oil goods for export. Thisway, the government reasonsthat the volume of externaltrade is being graduallyshifted away from crude oil onwhich the nation largelydepends, to non-oil items thatare abundant and widespreadin the country, but which havelargely suffered neglect due toa multiplicity of factors, chiefof which is funding.

The new focus is intended topermeate a wide spectrum ofthe nation’s everyday life,ranging from housing,industry, energy,entertainment and the wholegamut of every facet of oursocial life with the simplemessage: 'export and earnforeign exchange for Nigeria.'

The Managing Director/CEO, Nigerian Export-Import Bank, Robert Orya,explaining the success so farrecorded in the newgovernment export drive, ofwhich NEXIM Bank hasplayed a pivotal role said, “Itis evident that the importantstory of Nigeria’s advancementfrom where we are would notbe told by earnings from ourhydrocarbon reserves(although we have one of theworld’s largest). Our successwould be driven by a robustmanufacturing industry; self-sufficiency in agriculture forfood and processing so thatexcess yields could tap exportmarkets; world-class servicesector to serve domesticindustries, global outsourcingand export markets, andcommercial access to widerrange of mineral deposits thatdot every nook and cranny ofour country.”

How NEXIM is helping to diversifyNigerian economy from oil

Since the introduction of theStructural AdjustmentProgramme SAP in 1986,Nigeria has been trying todiversify the economy awayfrom oil with little success. Soit is not for lack of ideas thatthe export of non-oil goods hasremained at infancy, theproblem, amongst others, hasto do largely with the will andcommitment to focus andredirect resources to the non-oil sectors and take cognitiveaction to actualise what islargely recognised as a cashcow.

Although NEXIM wasestablished to play this role, thecurrent administration’sdetermination to focus on thesesectors in the bid to improve onthe nation’s revenue profileoutside crude oil sales andcreate employment, played akey role. “What theAdministration of President

Goodluck Jonathan has done,perhaps more than anyprevious regime, is combinecommitment with practicalactions in diversifying theNigerian economy away fromsole reliance on crude oil forexternal revenue,” Orya said.

The inhibition standing in theway of operators in theidentified sectors fromaccessing finance has to beaddressed. NEXIM Bank,having identified thedrawbacks, intervened to setthe ball rolling in a manner thatensured the delivery of theintended benefits.

As the NEXIM Bank bossputs it: “Development FinanceInstitutions are bearers of riskswhich commercial lenderswould term excessive, andtherefore avoid.

“ New industries, newinitiatives, people withoutfinancial collaterals, projects

which cannot pay commercialcost of finance, etc have beenbeneficiaries of funding byDFIs. This way, businessformation can continue, peoplecan continue to innovate, biasagainst social and reputationalcollaterals are reduced, andprojects can be incubated andnurtured to when they canattract lending from commercialbanks,” he said, adding thatNEXIM Bank has assumed thiscritical role in Nigeria wherebanking penetration is lessthan 15 per cent of thepopulation, commercial lendingrates are prohibitive, land titlesare not even available to owneroccupiers, but where innovatorsare born daily, and where wehave to eradicate poverty.

He said as a DFI, NEXIMBank has to assume its naturalfunction in driving theTransformation Agenda of thegovernment, by supporting the

In this regard, providingfinancing, risk-bearingfacilities, market informationand value-added advisoryservices to businesses towardsdeepening export-orientedinvestments in the country’snon-oil sectors ofmanufacturing, agro-processing, solid minerals andservices, for job creation andeconomic growth.

He said the bank hasprovided N12 billion in lendingto Nigerian exportmanufacturers over the four-year period from August 2009to April 2013, adding that it hasfunded agro-processing exportbusinesses, to the tune of N6.6billion over the same period.

Onya speaking to journalistsaid “ From the institutionalviewpoint of Nexim Bank, I amexcited at the prospects ofplaying a role in diversifyingthe Nigerian economy andharnessing the immensepotentials of the sectors whichhad, hitherto, been neglected.Indeed, the role Nexim Bankis playing is unique as adevelopment financeinstitution (DFI)”.

Accordingly, in the solidmineral sector, NEXIM Bankis working in partnership withindustry stakeholders to takeformal mining off the groundagain, Orya said, adding thatNexim Bank has so farprovided over N2 billion inearly funding to help somecommercial miners to developtheir site in order to startoperation and invite furtherfunding from other sourcesapart from the long-termcommitment of Nexim Bank tothe nascent industry.

In pursuit of its drive toimpact on other segments ofthe economy as part of theTransformation Agenda, thebank has taken on themanagement of the NigerianCreative and EntertainmentIndustry Stimulation LoanScheme (NCEILS). The fundwhich is lent at belowcommercial rate is meant tofund businesses across theentertainment value-chain,including filming production,cinema operation, musicrecording, and intellectualproperty development andrecording studios, as arevolving fund with repaymentterms.

He said to date; Nexim Bankhas disbursed over N1.4 billionfor the Fund, adding thatEntertainment industry projectproposals under review exceedN5 billion in value. Overall,disbursements to the creativeand entertainment industry,including the services sector isabout N8.5 billion, coveringsupport to transportation andhospitality industries.

export-prone sectors,increase foreignexchange earningsand createemployment, so as tofree government tofocus on the provisionand delivery ofn e c e s s a r yinfrastructural projectsto aid implementationof programmes underthe plan of structuraltransformation of theNigerian economy thatcannot be delivered bycommercial lending.

Orya, explained thatNEXIM Bank is theofficial and sole TradePolicy Bank of theFederal Government.

*A manufacturing facility financed by NEXIM


CMYK

CMYK

Tax Matters

As a follow up to lastweek’s publication,below is a

continuation of the articlethat highlights therequirements for filingreturns, due dates andpenalties for late filing ofreturns as it pertains tovarious tax types. Last week’sedition focused on CompanyIncome Tax (CIT), EducationTax (EDT), NationalInformation and TechnologyDevelopment Levy (NITDL),Estimated Petroleum ProfitTax (PPT), Final PPT, PersonalIncome Tax (PIT).

This week’s edition wrapsup the article as it centres onAnnual Pay as You Earn(PAYE), Monthly Pay as YouEarn (PAYE), WithholdingTax (WHT) and TransferPricing (TP).

7. Requirements for filingannual returns of Pay-As-You-Earn (PAYE) (by employers)

Section 81 (2) of PITA (asamended) and Regulation 10of the Operation of PAYERegulations provide that anemployer shall render to therelevant tax authority a returnon each employee showingtotal emoluments of eachemployee during the year, thetax relief, if any, and the totaltax deducted from theemployee. This is to be doneon a Form H1 or such otherform as may be approved orprescribed by the relevant taxauthority.

Due DateAnnual PAYE returns

should be filed not later than31st of January in respect ofall employees of the employerin the preceding year.

Penalties for late filing ofannual returns of PAYE (byemployers)

Section 81 (3) of PITAstipulates a penalty ofN500,000.00 for corporatebodies and N50,000.00 forindividuals upon conviction.

8. Requirements for filingmonthly PAYE returns (byemployers)

The schedule to be attachedto the payment and evidenceof remittance should containthe following information:

a) Taxpayer information(employer):

Taxpayer/agent name andaddress

Taxpayer/agent TINTransaction amountTransaction dateb) Employees’ information:Staff TINStaff nameBasic salaryAllowancesTransaction date (DD/MM/

YY)Tax amountPeriod coveredDue DateEvidence of remittance

should be filed not later than10th of every month

Penalties for late filing of

Penalties for late filers,ABC of tax returns (2)

monthly PAYE returns (byemployers)

Penalty for non-deductionand failure/late remittanceunder Section 40 of theFederal Inland RevenueService (Establishment) Act2007 applies.

Upon conviction, thepenalty is at 10% per annumof the tax not remitted andinterest at the prevailingCentral Bank of Nigeria re-discount rate andimprisonment for period ofnot more than three (3) years.

9. Requirements for filingWithholding Tax (WHT)returns

Regulation 4 of theCompanies Income Tax (rates,etc. of tax deducted at source(WHT)) regulations as well asRegulation 3 of PIT (rates,etc. of tax deducted at source(WHT)) regulations providethat a person who deducts taxfrom a payment shall, whenthe payment is credited orpaid, whichever is earlier,submit, to the relevant officeof FIRS, the evidence ofremittance made to thedesignated bank of the taxdeducted. The submissionshall be accompanied with astatement containing thefollowing information:

The name and address aswell as the TIN of the personfrom whom the tax wasdeducted.

The nature of activity orservice in respect of which thepayment was made.

The gross amount paid orpayable.

The amount of tax deducted.The period to which the

payment relates.Similar provisions can be

found in Sections 78, 79 & 80of CITA as well as Sections69, 70, 71 & 73 of PITA.

Due DateEvidence of remittance

should be filed not later thanthirty (30) days from the datethe tax was deducted or thetime the duty to deduct the taxarose.

Penalty for late filing ofWithholding Tax (WHT)returns

WHT only has penalties fornon-deduction and failure/late remittance of deduction.

Upon conviction, the

returnsSection 15 of the VAT Act

(VATA) Cap. V1 LFN 2004 (asamended) requires taxablepersons to render returns ofall taxable goods and servicespurchased or supplied by himduring the preceding monthto FIRS.

The Service has prescribedthe use of VAT Form 002 forfiling the monthly VATreturns.

Due DateReturns should be filed not

later than 21st day of themonth following that in whichthe purchase or supply wasmade.

Penalty for late filing ofValue Added Tax (VAT)returns

Section 35 of VATAstipulates a penalty ofN5,000.00 for every month inwhich the failure to makereturns continues.

11. Requirements for filingTransfer Pricing returns

Regulation 6 of the IncomeTax (Transfer Pricing)Regulations No.1, 2012provide for the filing ofTransfer Pricing returns andthe documents required to befiled. The provisions underthe regulations refer tocompanies which haverelationship with any othercompany (i.e.) throughcontrol, management orownership.

The following are thecontent of Transfer Pricingreturns:

TP Declaration Form(required only in the firstyear but must be updatedshould there be materialchanges in the informationprovided)

penalty is 10% per annum ofthe tax not remitted andinterest at the prevailingCentral Bank of Nigeria re-discount rate andimprisonment for period ofnot more than three (3) years(Section 40 of the FederalInland Revenue Service(Establishment) Act 2007).

10. Requirements for filingValue Added Tax (VAT)

Economic cost offlooding could hit$500b by 2030Research suggests that

flooding poses a threatto roughly 21 million peopleacross the world every year,costing the global economyroughly $90.65 billion, withthe potential for an estimatedsix-fold increase over the next15 years.

Data provided in connectionwith the launch of a new floodmitigation platform, theAqueduct Global FloodAnalyzer tool, co-developedby the World ResourceInstitute (WRI), Deltares, theInstitute for EnvironmentalStudies of the VU UniversityAmsterdam, UtrechtUniversity and PBLNetherlands EnvironmentalAssessment Agency,highlights the economicseverity of global flooding andits potential rise.

The research, conducted bythe co-developers of the toolfound that by the year 2030 astartling 54 million peoplewill be exposed to flooding,causing the annual globaleconomic cost to hikesignificantly, from the $90billion seen today to around$513 billion per-year.

With this in mind, AonBenfield’s catastrophemodelling division, ImpactForecasting states that globalinsured losses from floodingover the last ten years averageapproximately $9 billion per-year. So a near six-foldincrease could take averageannual global insured lossesfrom flooding to a staggering$54 billion, or greater, by2030.

Hessel Winsemius, aresearcher at Deltares andPhilip Ward, a seniorresearcher at the Institute forEnvironmental Studies of theVU University Amsterdam,discussed the new tool andglobal flood resilience in arecent blog.

Part of which read; “It will takedecades and many billions ofdollars to protect the tens ofmillions of people at risk fromriver floods and coastal stormsurges. But starting now andfollowing the direction of toolslike the Global Flood Analyzerwill help decision makers ininternational relieforganisations, reinsurancecompanies, multinationalcompany and many othersbuild advanced protectionsystems to protect people andinfrastructure.”

The WRI describes the newtool as aiming to “raise theawareness of flood risks andclimate change impacts byproviding open access to globalflood risk data free of charge.”

Globalinsuredlosses fromflooding overthe last tenyearsaverageapproximately$9 billion peryear


E-Commerce

Evangeline Wiles is theManaging Director of

Nigeria’s pioneer onlinemarketplace, Kaymu.com.ng.By January, 2015, themarketplace marked two yearsanniversary in Nigeria,celebrating their successes inpulling over 20, 000 SMEs totheir platform and expandingto five other cities across thecountry. In this Interview withJONAH NWOKPOKU, sheargues that efficient deliverysystem remains the backboneof e-commerce. She also speakson how the marketplacenavigated successfullyNigeria’s SME sector and howsmall businesses can explorethe fledgling e-commercesector and become moresuccessful. Excerpts

Kaymu has just marked twoyears anniversary, how haveyou fared in your quest tobring SMEs in Nigeria online?

Since inception in January2013, Kaymu has been at theforefront of drivingentrepreneurship in Nigeria byproviding a safe platform forSMEs to conduct businessonline. The growth in our sellerbase didn’t happen overnight,it’s been a journey that hasseen us grow from 50, to 1,000and now over 20,000 sellers allover Nigeria. Our goal is tomake it simple and easy foranyone to have an online storeand join in the e-commercerevolution.

Most SME operators inNigeria are people, whosebusinesses belong to theinformal sector, what strategyhas helped you navigatesuccessfully in this sector?

Across Nigeria, we have fieldagents that go to majorinformal markets as well asmajor malls to tell sellers aboutthe benefits of selling online.We believe this is an incredibleopportunity to move thesemarkets online and providesellers with a platform tomarket their goods to anyoneacross Nigeria. Our success isbased on the simple fact – allbusiness people are looking forways to grow their businessand an online shop is an easy,convenient and cost effectiveway to do that.

Fast, timelydeliveries arebackbone ofe-commerce -Wiles

Over the past two years, youhave expanded to variouscities, from your experience,what has been the rate ofuptake?

Our expansion has beendriven by demand from oursellers. We had sellers in Abuja,Port Harcourt and several othercities before we opened officesthere. For us, this was anindication of the significantopportunity across Nigeria,which resulted in theexpansion of Kaymu to Abuja,Port Harcourt, Ibadan, Beninand Warri in the past sixmonths. The uptake andreception to online shoppinghas been very encouraging,especially since we haven’tdone a lot of above-the-lineadvertising efforts in thesestates yet.

What can you say have beenthe major challenges facingSMEs and how can platformlike yours help address thesechallenges?

Research has shown that mostSMEs fail within their first fiveyears of existence with only afew surviving to grow intomaturity in developingcountries like Nigeria. Some ofthe factors responsible are;inadequate market research,irregular power supply,infrastructure inadequacies,and limited capital, amongstothers. E-commerce canaddress some of thesechallenges for SMEs. Thebeauty of a platform like Kaymuis that sellers can open andoperate a business withminimal upfront investment –all you need is a smartphoneand small amount of capital tobuy or make your products.

What makes Kaymu stand outfrom other e-commerceplatforms is our dedication toSMEs. We have a dedicatedteam to help our sellersmanage and grow theirbusinesses.

Logistics is one of thechallenges impeding thegrowth of e-commerce inNigeria, what ideal logisticsstrategy can help SMEsintegrate successfully into e-commerce?

Logistics is a field that stillrequires improvement inNigeria and it is interesting tosee that with the advent of e-commerce, more logisticscompanies are expanding theircapacities to adequately attendto the enormous demand. Fastand timely delivery is one ofthe most important aspects ofe-commerce. Unfortunately,many SMEs do not have thecapabilities to achieve this ontheir own. To help our sellerswith logistics, Kaymu hasrelationships with top logisticscompanies, such as Fedex andAIG Express.

Over the last two years,Kaymu introduced someinitiatives, like Kaymu Varsity,SME Saturdays, aimed atencouraging SME growth inNigeria, what is yourassessment of the response sofar? And how can suchinitiatives help drive SMEgrowth in Nigeria?

Initiatives like KaymuVarsityand Kaymu EntrepreneurialWorkshop are focused ontraining SMEs how tomaximise their sales onlinethrough excellent productplacement, efficient customerrelations and new mediamarketing strategies. SMESaturdays is an initiative tointegrate both the online andoffline experience for buyersand sellers. Here, buyers canshop from the Kaymu platformand get their productsimmediately. All theseinitiatives are importantbecause they help

The importanceof sellersmigrating frombrick-and-mortarretail to click-and-mortarcannot beoveremphasized

entrepreneurs develop theskills and capabilities that areneeded to succeed. We’vegotten great feedback on theseprograms and we intend tocontinue to help Nigerianentrepreneurs reach theirpotential.

Listing on Kaymu hasremained free over the lasttwo years, what has informedthis decision and whatdirection do you intend to takein terms of monetisation in thefuture?

Our focus in the past twoyears has been on building agood foundation. We have acommission structure in placeand we intend to start applyingit once a seller reaches avolume threshold. At themoment, our focus is ongrowing the community.

How imperative is it forSMEs to migrate online vis-a-vis your vision to be theleading marketplace inAfrica?

Our vision is to be theforemost online shoppingcommunity for buyers andsellers in Africa. The reason issimple, gone are the dayswhere you had to spend hoursgoing to the market, hagglewith sellers for the best pricebefore getting a product. Nowcustomers want to be able toshop from the comfort of theirhomes, at the most competitiveprices and have it delivered tothem when they need it. Allthis can be achieved throughe-commerce. The importance ofsellers migrating from brick-and-mortar retail to click-and-mortar cannot beoveremphasized. They savemoney which would have beenused for rent, staff salary andrunning of their store and thuscan afford to fix competitiveprices on their products. Withoffline stores, sellers only makesales when a buyer walks intotheir shops, but with onlineshopping, buyers all overAfrica can make purchases atthe click of a button.

Nigeria’s onlineshopping mall,

Shotpomydoor has announcedfree ingternational shippingservices for customersshopping from the UnitedStates of America.

The free shipping promo,according to Shoptomydoor,will apply to customers whopurchase virtually anythingfrom the USA with theexclusion of cars, heavyindustrial machineries and afew other items, and will runfor purchases made from the12th to 30th of March, 2015.The promo is open to bothindividuals and companieswho make purchases onlineusing their Visa, MasterCardor PayPal on any US store anddelivers it straight to their freeUSA warehouse.

Speaking on what motivatedthe promo, the President/CEO,Nduka Udeh said: “The recenteconomic trends that hasresulted in a close to 30 per centloss in the value of the Nairahas seriously hit the averagehard working Nigerian withpeople now finding it hard tomeet daily needs. SomeNigerians are now resulting tothe use of poor andsubstandard products inmeeting everyday needs."

Shoptomydoor bringsfree internationalshipping to Nigeria

Stories byJONAH NWOKPOKU

Etisalat begins huntfor 20 millionaires

Etisalat Nigeria haslaunched the second

edition of its Easybusinessmillionaire hunt targeted atempowering Small andMedium Enterprises, SMEs inNigeria.

Recall that in the first editionof the millionaire challengeheld in 2014, tenentrepreneurs with the bestbusiness ideas were given N20million grant, N2 million each,to grow their businesses. At theunveiling in Lagos, Thursday,Head of Business Segment,Etisalat Nigeria, Mr. LucasDada told journalists that “thescheme is the flagship productfor SMEs in the country,”adding that “it’s aboutencouraging entrepreneursand empowering SMEs.”

Speaking on the criteria forparticipating in the challenge,Head of Marketing, EtisalatNigeria, Bidemi Oladipo, said,to participate: “Subscribersmust be on an easybusinessline package.

Evangeline Wiles

CMYK


Aviation

RECEPTION - From right: Minister of Aviation, Chief Osita Chidoka receiving the report ofAutomation of Revenue Generation from the Committee Chairperson, Mrs. Janet Adepegbawith them is Secretary of the Committee, Dr. Ibrahimm Idris held at Nigerian Civil AviationAuthority (NCAA) Annex, Murtala Mohammed International Airport, Ikeja, Lagos. Photo byLamidi Bamidele

Aviation stakeholderswho many feared willnot be prepared to

embrace the technologicalchange and passenger-centred policies the newAviation Minister, Chief OsitaChidoka introduced to theaviation sector since assumingoffice last year, have surprised everybody.Stakeholders, especiallypassengers and airlineoperators have keyed into theAviation Passenger’s ServicePortal for improvedinformation betweenpassengers, agencies andairlines.Passengers have been able tokeep the airlines on their toesby promptly reporting anyerring airline to the aviationagencies for appropriatesanctions. It will be recalledthat at the launching of theAviation Passenger ServicesPortal, APS, on December 6,2014 and the AviationCommits Initiative (ACI) on3rd February 2015, theminister emphasized the needfor automation in theoperations of all the AviationAgencies. The establishment of theAPS portal for booking flights,monitoring airline flightperformances, obtaininginformation on localdestinations, etc, has in smallway assisted passengers to bethe “centre” of the concern ofall aviation stakeholders. OnMonday, last week, at

Stakeholders commend Chidoka,welcome new aviation order

By LAWANI MIKAIRU Nnnamdi AzikiweInternational Airport, Abuja,passengers aboard Lagosbound Arik Air flight had theirflight delayed for hours.Passengers were able to getacross to the management ofthe airline and relevantaviation authorities and theywere immediatelycompensated and served alight meal while they werewaiting. One of thepassengers affected, Alhaji IsaShehu who spoke withVanguard commended theAviation Minister for the newaviation policies introduced byhim which have madepassengers “king” in the newera. Passengers are protectedunder the new Advocacy andenforcement of Customers Billof Rights Policy initiatives.This Customers Bill of RightsPolicy has further beenstrengthen by Chidoka withhis introduction ofperformance managementsystems for monitoring andimproving performance ofaviation workers. He alsolaunched a sector- wideinitiative Aviation Commitswhere all stakeholders in theindustry commit to improveservice delivery to the public. At the launch, ChiefExecutives of all the aviationparastatals and agencies weremade to publicly commit torender prompt and reliableservices to the public.Speaking about the AviationCommit initiative, a licensed maintenance engineer withthe default Nigeria Airways

Engineer Tunde Ojo said thisinitiative is one of the bestpolices so far formulated in theNigerian aviation sector. Headded that if Nigeria Airwaysmanagement and governmenthad been forced to commit tothis kind of policy, the airlinewould not have been defaulttoday.Only last week, the Ministerwarned that any aviationagency chief executive whofails to comply with theimplementation of theAviation Revenue AutomationProject (ARAP) project within 60 days would be sanctioned.This is coming after theminister approved the report. The report is aimed atautomating all aviation relatedactivities at the nation’sairports. The ministerapproved the report and

recommendations of thecommittee after thesubmission of the report bythe committee chairperson,Mrs. Janet Adepegba, lastMonday in Lagos.Chidoka had inauguratedthe ARAP committee to “decide, recommend andconduct analysis meant tomake the aviation sector morecompetitive by reversing thecurrent negative trends in theindustry in order to put it in afavourable light in the globalworld.”The minister said that theministry has also approved areview in the cost and chargesof the automation system. Andhe has given all agencies oneweek for the implementationof the project cost and theirtargets.He said “The project isstructured and empowered tobring to reality the vision andmission of the aviationindustry, which is to make theindustry a world Classprovider of safe, secured andcomfortable transportindustry.”The minister expressedoptimism that theimplementation of the projectwill increase the efficiency ofNigerians and other workersin the aviation industry.He added that it will enableagencies in the sector deliverhigher quality services toNigerians “that is self-sustaining and pivotal tosocial economic growth, andto transform the sector into anefficient, profitable andpreferred mode oftransportation”.On how far some of thesepolices have helped in makingthe aviation sector moreefficient, the minister said : “Ilooked at the performance ofArik on the aviation servicepassengers portal and foundthat in January, they only have20 per cent on-time departures.By February, they have inchedup to 42 per cent. I also sawthat First Nation Airline isnumber one in February with56 per cent coming up from37per cent in January.“So it gives me some hope thatwhat we are talking about asregards commitment,performance measurement andmonitoring is beginning toprovide dividends.” To check the high levelcorruption in the aviationindustry, especially the airportsacross the country, the ministerdirected the Federal AirportsAuthority of Nigeria, FAAN, topartner the Economic andFinancial Crime Commission,EFCC, to check malpractices inFAAN and enhance the deliveryof efficient services.Chief Osita Chidoka gave thedirectives during his address atthe EFCC anti-corruptioninteractive session, organised formanagement staff of FAAN atSheraton Hotel and Towers, Ikeja.

The automationproject isstructured andempowered tobring to reality thevision and missionof the aviationindustry, which isto make theindustry a worldClass provider ofsafe, secure andcomfortabletransport industry

The World MeteorologicalOrganization, ,WMO, has

okayed the NigerianMeteorological Agency(NiMET)’s Seasonal RainfallPredictions (SRP) as asuccessful product that couldbe adopted by countriesaround the worldThis is also as NiMETpredicted late rainfall andearly cessation for this year’sweather forecast while itforetold that most part of thecountry will experiencew a r m e r - t h a n - n o r m a ltemperature.WMO’s representative forNorth and West Africa, MrBenard Gomez at 2015 SRPin Abuja on Thursday,acknowledged that countriesin the world are adopting thesuccess product put forth byNiMET which has recordedhuge success.Gomez said that it has alwaysbeen accepted in mostcountries of the world thatwhatever product thatsucceeds in Nigeria willdefinitely succeed in anyother countries of the world. According to him, “Anythingthat works in Nigeria alwayswork anywhere in the worldand SRP is one product thathas been very successful inNigeria which other countriestrust and develop because ofits success”.In his speech, the Minister ofAviation, Mr Osita Chidokasaid that the importance ofNiMet’s predictions can beseen from the damage causedby the 2012 floods that hit mostparts of Nigeria.Chidoka represented by theMinistry’s Permanent Secretary,Alhaji Mohammed Abbas,disclosed that the 2012 SRP floodprediction which happened sixmonths after, affected 33 out ofthe 36 states which caused thefederal government to releaseN17.6 billion to those states whilethe National EmergencyManagement Agency (NEMA)released N1.34billion for materialrelief.He said government took far-reaching steps to mitigate theplight of those affected by the2012 floods including setting upof national Committee on FloodRelief and Rehabilitation andalso constitute a TechnicalCommittee to assess the impactand proffer immediate, mediumand long-term solutions.

By FAVOURNNABUGWU

WMO okaysNigeria’s SRPsuccess foradoption


CMYK

46— Vanguard, MONDAY, MARCH 16, 2015

CMYK

Advertising & Promotions

Beer brewers in Nigeriahave deployed new

marketing tactics that havedelineated consumers alongbrand line as a way of edgingout competing brand (s).

A report by the brewerycompanies indicated that theindustry recorded a markeddecline in growth in the thirdquarter of 2014, this wasattributed to pressures onhousehold income andheightened security concernswhich affected consumptionpattern.

Invariably, the new marketingtactics according to one of thebrewers is the recruitment ofnew consumers due to declinein the number of adultconsumers as a result of thecurrent economic realitieswhich has saddled them withadditional responsibilities.

Another was the decline inbeer market consumptionwhich was attributed to theinflux of spirit and brandyproducts into the Nigerianmarket.

In a recent investigation byVanguard, it was discoveredthat adult consumers only drinkwhen they feel it is necessary,after settling major familyresponsibilities, and that beenthe reason brewers have shiftedattention to younger at heartconsumers who have no orlesser responsibilities to attendto. That was why also a majorplayer in the industry relied onwhat it called ‘value products’to record a marginal marketshare in 2014.

Interestingly, all these havecome together to thickencompetition in the sector, whichthus has led to the partitioningof the market by the three majormarket leaders; SAB Miller,Guinness Nigeria andNigerian Breweries, NB Plc.

The trio have deployed new

Beer brewers dividemarket with new tacticsStories byPRINCEWILL EKWUJURU

strategies to maintain a healthybalance sheet to satisfy theirshareholders. For example,“SABMiller, before its entrantinto the market, competitionwas limited to NB andGuinness Nigeria, its entry hasnot reduced the rivalry betweenboth; rather it has heightenedit. Today NB is no longer seeingGuinness as its rival, butSABMiller.

Before now the competition

appeared to be restricted toabove the table tactics. Asidecommitting huge resources toadvertising spend, NB andGuinness Nigeria have alsotaken to sponsorship ofheadline properties in some ofthe consumers’ identifiedpassion points includingsports, entertainment andsponsorship of festivals.

Today new dimension hasbeen introduced. Guinness

Nigeria is seen in everyhotel, relaxation spot inNigeeria, giving out raffletickets to consumers, courtesyof its “Guinness Refreepromo,” to dish out raffletickets.

However, in 2014 Guinnessfull year revenue dropped 11percent, and profit by 19percent. This it attributed toa couple of things; pricingdisadvantage. A mistake thatdepleted market share.

Wilmar Africa, producersof Frytol vegetable oil

has entered the Nigerian marketwith a fully integrated consumeractivation. The campaign was tofurther establish the Frytolproduct to resonate amongstconsumers.

The last quarter of 2014 sawproducers of the product deliver

Frytol hits market, engages consumers via activation

an unforgettable experience tomarket women, with their worldclass Edwomhemaa activation.

To further build on thissuccess additional experientialconcepts have been introducedto reach a wider audience.

Wilmar’s first activation shallcommence this week with a 10week - 3 part Dumsor campaign.

The first activation within thiscampaign shall be Tales fromAnanse where a brandedFrytol truck will drive throughlocal communities engagingcitizens with folktales whilstthey enjoy kelewele around afire.

The second phase is titledAnopa, Awia ne Enyumre(Morning, Afternoon andEvening) where we shallentertain members of thepublic via engaging them inan Oware tournament andviewing of one of theirfavourite Ghanaian movies.

Finally, Wilmar Africa shallhost ‘Dinner in the Dark’where 50 members of thepublic and press shall havethe chance to win tickets todine in the dark at Ghana’spremier 5 star Labadi Beachhotel. ‘Frytol is a brand that isintertwined with our heritage.It reminds us of where wecame from and the values thatwere and continue to beinstilled in us to take usforward to the future.

PEP Stores Nigeria, a retail companyspecialized in clothing, footwear, as well

as other fast moving consumer goods hasentered into a strategic business partnershipwith MTN Nigeria that will see it providingcustomers opportunity to buy airtime from itsstore. According to PEP Stores Nigeria, thestrategic business partnership deal will addvalue to the in-store shopping experience ofPEP esteemed customers by offering them theunique opportunity to buy MTN Airtime withease and convenience.

Speaking at the official launch of thepartnership which was held at the AllenAvenue branch of PEP Stores Nigeria onThursday March 5, 2015, the General

PEP store, MTN in strategic partnership on airtime sale

Manager, PEP Stores Nigeria, Mr. DeonConradie described the partnership betweenPEP and MTN as a symbiotic relationship thatwill create new exciting experience for thecustomers of the two brands in Nigeria.

“We are very proud to sign this very uniquepartnership with MTN and we are very excitedat the value added that this partnership willoffer our valued customers by enabling themto buy MTN Airtime at all our existing 27outlets” he said. Also speaking at the event,the Finance Manager, PEP Stores Nigeria,Mrs. Kofo Awonuga disclosed that the PEP/MTN relationship started in July 2014 whenMTN Airtime was sold at PEP Stores usingstandalone devices and now with deal,

CHINI names Judges forYoung Lions competition

CHINI Productions,organizers of the Young

Lions Competition haveannounced the jurors for thevarious categories of thecompetition.

Speaking on his role as 2015Young Lions Creative JuryPresident, Babatunde Sulesaid: “New kids on the block!Our industry has alwaysbelonged to the young at heart.Therefore my expectation asjury chief at this year’s YoungLions Competition is to find abreadth of daring, exciting butrelevant ideas that would joltand perhaps even scare someveteran ad men off their cushychairs. The revolution startshere – young lions, you can doit!”

The Young Lions Competitionis part of the Cannes LionsInternational Festival ofCreativity and is open toprofessionals under 28 years.The first leg of the competitionis the national event whichtakes place in the homecountries of the competitors.Winners of the nationalcompetitions in each categorycompete internationally as theircountries’ flag bearers in Juneduring the Festival.

Nnamdi Ndu, managingdirector or CHINI Productionssaid: “we are quite confidentthat this is going to be alandmark event, more teams

Servair Nigeria winsinternational cateringawardPan African Catering

Services FZE- ServairNigeria has been named oneof the winners of the Quality& Safety Alliance InflightServices Programme, QSAIaward of Excellence inCatering Quality. Thecompany was named the 2014Bronze Winner for Europe,Middle East and AfricaEMEA region, in the awarddesigned to recognise theworld’s best airline caterers.

This will be the first time aWest African company will bewinning the award. And alsothe first time any unit of ServairInternational, the third largestairline catering company inthe world, will win the award.

Speaking on thedevelopment, PatriceLarapidie, General Manager,Servair Nigeria said: “We arethrilled to have won thisaward. It’s a real boost toServair Nigeria at a time whenwe’ve re-focussed our effortsto put the customer at theheart of every meal andcuisine.”

CELEBRATION - From left: Mr. Tam Tamunokonbia,Head Lagos Office ConsumerProtection Council; Steve Nwosu,Executive Director,Corporate Service, The SunNewspaper; Mrs. Bunmi Oke, Chief Executive Officer , 141 Worldwide; Mr. Lanre Adisa,Managing Director, NOAH’S ARK and; Mr. Kayode Olagesin, President, EXMAN at the2015 Brand Journalist Association of Nigeria World Consumer Day celebration held inIkeja Lagos. Photo by AKEEM SALAU.


CMYK

Business & Economy

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

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

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

The 2015 election isbarely two weeks awayand yet, not even close

followers of events in thepolitical space cansatisfactorily articulatedistinctive differences in theideology of the two majorcontestants. Instead,Nigerians have been fêted toa reality edition of an otherwiseNollywood dramatization of a“rofo rofo fight” between twowives in a polygamous setting.Ironically, the protagonistsexpect the favoured husbandto make the louder and lesscivil combatant his favorite!However, since both wives alsocarry the same excess baggageof an uncomplimentaryheritage, the choice of afavorite wife, who wouldjudiciously manage the familyresources for the next 4 years,for the greater good, hasbecome a monumentalchallenge for the poorelectorate.

Similarly, judiciousmanagement of resourcespositively transformseconomies, whenever suchnations adopt economic andpolitical systems, which inducecompetitive entrepreneurialspirit and also encourage self-reliance. For example, theimposition of ‘unitaryfederalism’ which predicatesour association as a nation, hasobviously failed to serve as anengine of inclusive economicgrowth; sadly, despite theavailable lean resources beforethe advent of dictatorship in1966, the strident economicprogress and keenlycompetitive enterprise ofexisting RegionalGovernments, has clearlybecome unachievable despitethe huge leap in revenue underthe present arrangement of‘unitary federalism’.

Our stunted federalism will

Will PDP or APC rescue the economy?ultimately sink the liberallypatched ship of state to bringuntold anguish to millions ofour countrymen. Nonetheless,any movement towards thepolitical equity in traditionalfederalism would clearlyreduce the fatal attraction tocontrol the resource richcentre and will ultimately alsoenthrone an enduringpolitical structure that wouldbring out the best in us, as inthe glorious years of Regionalautonomy. However, suchpositive transformation willnot serve the interest of thepolitical class who derivestupendous benefits from theprevailing skewed socialcontract.

Furthermore, the 36/7-statepolitical structure is clearly agreat disservice to Nigerians.This selfish contraption hassupported incredibleduplication of functions andwastage of scarce resources,such that there is a need toborrow to supplement, evenconsumption expenses, thatnow account for over 80% ofprojected total federalspending in 2015.

Regrettably, none of themajor parties is in any hurryto tell us how they intend toredress expenditure in favorof infrastructure and humancapacity building, and no oneis demanding to know thosespecific areas which wouldsuffer revenue cuts from anysuch fiscal discipline; sadly,in spite of over 100 millionNigerians living in abjectpoverty, the salaries of ourlawmakers is reported toprobably be the highestanywhere in the world andover 100 times the nationalminimum wage. Nonetheless,politicians of all hues whetherPDP or APC will certainlyreject any attempt to realigntheir gross emoluments with

reality, even if such alignmentwill provide economic succourto those impoverishedelectorates who voted theminto office.

Furthermore, theaccumulated debts politiciansincurred during the extendedcampaign trail have to berepaid, with a handsomeprofit while successfulpolitical officeholders havebarely 4 years to acquireenough wealth to last alifetime.

Clearly, neither the ruling

supportive outcomes.Invariably, the success or

failure of any economy clearlyrests on the best practicemanagement of moneysupply, such that inflationwould remain below 3% toprotect mass social welfareand consumer demand whichdrives industrial growth.Similarly, discipline in themanagement of money supplywill modulate interest rates inline with the aspirations of theneeds of an economy, but,clearly no economy canachieve distinctive growth oreconomic diversification if, inaddition to the burden ofoppressive energy costs as anabiding albatross againsttheir survival, industrialists,commercialists and otherstakeholders in the small andmedium Enterprise subsectorhave to borrow at over 20% tofund their operations.

So it is necessary that theAPC and PDP should educatethe electorate on how, in theface of, systemic excessmoney supply, they wouldbring down inflation to below3% or how, they expectinterest rates to fall below 7%across the board to liberalizecheap funding (as opposed toselective preferential sectorialpackages) for serious businesspeople to increase productionand create more jobs.

It is foolhardy to continue toaccumulate national debt inthe belief that the current debtto GDP ratio is withintolerable limits. Inexplicably,the high cost of fundsinstigated by CBN’s 13% MPR(in place of less than 2% insuccessful economies) makesit inevitable that government’sdomestic borrowings will alsoattract abnormally highinterest rates, which areclearly inappropriate for suchsovereign risk free loans.

Total domestic debts arecurrently reported to be about$40bn, while external debts isabout $10bn; ‘it is not clear ifPDP or APC leaders actuallyunderstand how theseescalating debts come about,nonetheless, futuregenerations will continue tobear the burden of debt servicewith over 20% of currentannual budget (about $5bn)for several decades to come.Conversely, if governmentreduces the cost of its debtsand the rate of debtaccumulation, it would mostlikely work against theinterest of the cabal andoligarchs that currentlycontrol the commandingheights of our economy. Boththe PDP and APC certainlyenjoy support from thebeneficiaries of suchgovernment profligacy and itmay be self-destructive,therefore, to promote anytransformation that wouldultimately jeopardize theinterest of major financiers ofany ruling party.

Similarly, political partyfinances are handsomelysupplemented from thesubstantial fiscal leakagesthat fund corruption from thedeliberate mismanagement ofpublic funds with slap on thewrist sanctions on discovery.The fraudulent opportunitiesfor corrupt enrichment in thefuel/kerosene subsidy schemecurrently cost the federaltreasury about N1000bnannually and also falls intothe category of leakages thatreinforce party strength andsolidarity, and so any attemptat fiscal discipline maybe akinto the parties’ cutting theirnose to spite their face.Similarly, despite thedistortion caused by Nairadepreciation, the attendantopportunity for rent seekingwill prevent any seriousattempt to save the Naira.

SAVE THE NAIRA, SAVE

NIGERIANS

nor the main opposition partyhas a clear grasp of how aneconomy works;consequently, they do notquite understand the criticalsignificance of the impact ofexcessive money supply in aneconomy. Indeed, with theexisting systemic bloateddisequilibrium in moneysupply, any hope or talk ofindustrial growth, increasingemployment opportunities,increasing consumerdemand, reduced debtburden, fuel subsidy abolitionand new refineries or indeedany promise to diversify theeconomy would remain justhot air, as already faithfullydemonstrated by failed serialattempts by successiveadministrations to bring aboutsocially and economically

It is foolhardyto continue toaccumulatenational debt inthe belief thatthe current debtto GDP ratio iswithin tolerablelimits

Nigeria bonds to rise on election jitters


The yields on Nigerianbonds are seen risingnext week on

uncertainty over a delayedpresidential election, whileKenyan Treasury bill yieldswill ease further on increasedliquidity.

Nigerian bonds yields willrise as Africa’s biggesteconomy prepares to holdpresidential elections onMarch 28, while a plannedMonetary Policy Committee(MPC) meeting to set rateson March 24 would alsounnerve investors, tradersadded. The continent’slargest oil producer is facing

a faltering economy afterglobal oil prices plunged,weakening the naira. Nigeriaraised 91 billion naira ($455million) in bonds this week,with maturities rangingbetween 5-year and 20-year athigher returns across theboard.

“Trading is expected to bemixed next week but themarket would likely stayabove the 16 percentresistance level,” one dealersaid. Yields on the 2016 debtclosed flat at 16.15 percentcompared with 16.16 percentlast week, while the 2022 debtnote dropped to 16.03 percent

from 16.07 percent previously.The benchmark 2024 debt notehowever rose sharply to 16.63percent from 16.13 percentlast week.

The yields on KenyanTreasury bills are expected tocontinue edging lower nextweek on the back of increasedshilling liquidity, traders said.The central bank will auction91-day, 182-day and 364-dayTreasury bills worth a total 8billion shillings ($87 million).

“The general trenddownwards should persist ...but not as aggressively,”Mathangani Kariuki, a bondtrader at Kestrel Capital, said.

CMYK

financial vanguard

Documents