CMYK

DECEMBER 10, 2012

Continues on page 18

New electricity tariff drainsindustries’ profit as operatingcost soars by 440%

From left, Senior Research Fellow, Korea Deposit Insurance Corporation, Mr. Seungkon Oh, Director, Banking Supervision, CBN, Mrs. Tokunbo Martins,Managing Director, Nigeria Deposit Insurance Corporation (NDIC) Mr. Ibrahim Umaru, former Managing Director, NDIC, Mr. Ganiyu Ogunleye and ChiefExecutive Officer, Deposit Protection Corporation, Zimbabwe and Chairman, Africa Regional Corporation of International Association of Deposit Insurers, Mr.John Chikura during the International Association of Deposit Insurers African Regional Committee Workshop hosted by NDIC held in Lagos.

Photo; Sylvester Okoruwa

BY FRANKLIN ALLI

INDUSTRIES across the countryhave started feeling the negativeimpact of the new electricity tariff

which they say have been erodingtheir profit margin as operating costhave risen by 440 percent since thenew tariff was introduced in June thisyear by Nigeria Electricity RegulatoryCommission (NERC).

A survey of 138 companies from thesix geopolitical zones (Abuja, Bauchi,Calabar, Kaduna, Lagos and Owerri)conducted by NOI Polls Limited forthe Nigerian Association of Small andMedium Enterprises (NASME),showed that the new tariff has beenhaving negative effect on theirbusinesses.

The survey covered companiesoperating in the Micro, Small andMedium Enterprises (MSMEs) withinvarious sectors such as manufacturing,

construction, computer sciences andtechnology, engineering services,hospitality, among others. Sectorssurveyed showed that the newelectricity tariff is hitting them hardas their operating cost have increasedby 440 percent, since the inception ofmulti-year tariff II (MYTO II)

For instance, Alind Nigeria Limitedis a private limited company based inBauchi. The company employs

CURRENCY BUYING CENTRAL SELLING

CBN Exchange rate as at 7/12/20127

106.83 -0.20

85.96 -0.30

140.1 -0.35

2,490.00 -1.00

19.18 -0.18

DOLLAR 154.76 155.26 155.76

STERLING 247.9719 248.7731 249.5742

EURO 200.1047 200.7512 201.3977

FRANC 1165.501 166.0357 166.5704

YEN 1.8791 1.8851 1.8912

CFA 0.2894 0.2994 0.3094

WAUA 237.2954 238.062 238.8287

RENMINBI 24.563 24.6428 24.7226

RIYA 41.266 41.3994 41.5327

KRONA 26.8233 26.91 26.9967

SDR 238.0673 238.8365 239.6056

Cover Story

CMYK

18 — Vanguard, MONDAY, DECEMBER 10, 2012

Continued on page 19

Continued from page 17

Oil Refinery

between 10-49 employees andits annual turnover for the lastfinancial year stood at N10million. The companymanufactures cables andsemi-conductors. Accordingto the Managing Director,before June 2012, thecompany was classified as 03(industrial) for tariffclassification and paid a fixedcharge of N43, 471 and anaverage monthly electricitybill of N110, 000. However,after the introduction of thenew electricity tariff in June,2012, their classificationmoved to D4, and they nowpay a fixed charge of N106,000 and an averageelectricity bill of N212, 231,representing 143 percent and93 percent increases in thefixed charge and averageelectricity bill respectively.

When asked to describe thepower supply situation sinceJune 2012, the MD lamentedthat there has been “NoImprovement” and that thenew tariff has had a “negativeimpact” on their businessresulting in increasedoperating cost. As a result, “Ihave had to lay off severalemployees to keep thecompany afloat.” He alsoadded, “We only pay for thehope of having power, andnot the power itself.”

Similarly, OrfemaPharmaceutical IndustriesNigeria limited, a privatelimited company based inLagos, which manufacturespharmaceutical products andemploys between 10 - 49employees with turnover forthe last financial year betweenN10 million to N100 million.Due to the nature of theproducts it manufactures, theCEO noted that they haverotating, cutting and liftingequipment. The company issupplied power from adedicated transformer fed and

New electricity tariff drains industries’profit as operating cost soars by 440%

,,

operates on a MaximumDemand (MD) Meter.According to the CEO, beforeJune 2012, the company’stariff classification was givenas D2 (industrial) and theypaid an average monthlyelectricity bill of about N30,000.

However, since June 2012,its tariff classification hasmoved to D4 and the averagemonthly electricity bill rose toN160, 000, representing anincrease of 433 percent.

In the words of the CEO,“PHCN has been undulyunfair to us. We do not evenhave the light and they bringoutrageous bills; it’s so sad.”He further stated that thenew tariff has had a “negativeeffect” on his businessbecause he has had to reducehis staff strength since theoperating cost was too highand that they have had toclose down production for oneweek at a point. Hesuggested a review of theMYTO II policy; because it iswrong for his company to begrouped in the same category(D4) as multinationals likeGlaxoSmithKline andCadbury, “when we are justan SME,” he added.

Further, Helicon SpaceConcepts Nigeria Limited, aPrivate Limited Companybased in Owerri, the capitalof Imo state, revealed thatbefore June 2012, thecompany paid an average ofN5, 000 monthly on electricitybills; however, their averagemonthly bill has now gone upto N12, 000 since June 2012,marking a 140 percentincrease in what they used topay.

Abuja based Chair BiDonald Nigeria Limited is aPrivate Limited Companyinvolved in the manufacturingof furniture and householdinterior decoration items. Thecompany employs less than10 poeple and it made lessthan NI0 million in turnoverin the last financial year.Given the nature of their job,they have cutting, weldingand spraying machines thatrequire the use of power.According to the MD, thecompany used to pay N5, 000monthly on electricity billsbefore June 2012. However,after June he was surprisedto notice that his electricity billhas risen to N9, 000,representing 80 percentincrease. He lamented that asa small business, thisincrease in electricity bill cutsinto his profit margin at theend of the month.

AAM Plastics NigeriaLimited located in Kaduna,also a Private LimitedCompany employingbetween 50 - 199 people. Thecompany manufacturespolythene and plasticproducts and is suppliedelectricity from a dedicatedtransformer, with a MaximumDemand (MO) meter which isread monthly by the localPHCN staff.

The technical managerstated they experience powercuts for between 20-30percent of the time and spend

L-R: Director-General, Lagos Chamber of Commerce and Industry Mr. Muda Yusuf, Presi-dent of the Chamber Mr. Goodie Ibru, Deputy President Mr. Remi Bello, and Second DeputyPresident Mr. Knut Ulvmoen, during the Lagos Chamber of Commerce and Industry 124THAnnual General Meeting in Lagos...On Thursday.

As a result, “Ihave had to layoff severalemployees tokeep thecompanyafloat.” He alsoadded, “Weonly pay for thehope of havingpower, and notthe poweritself.”

The term businessdenotes a particulartrade or profession

designed to provide goodsand/or services to consumers.And in like vein, anyorganization which providesthese services is also referredto as a ‘Business’.Businesses play a vital rolein the life and culture ofcountries with capitalist andfree-market economies. Infree-market economies,businesses operate withoutgovernment control in matterssuch as pricing and wagelevels. While in capitalisteconomies, private individualand business firms carry onthe production and exchangeof goods and servicesthrough a complex networkof prices and markets. Theearliest known use of“business” is the state ofbeing busy either as anindividual or society as awhole, doing commerciallyviable and profitable work.

It is of utmost importancethat in starting a business,you need to be guided in yourchoice of bringing thatlifelong dream of yours intofruition. By following thebasic guides or rules, you canwrite a plan adequately thatreflects your goals, yourpersonal skills, needs,knowledge, leadershipabilities, available resources,level of risk, and the natureof your business factor intothe equation (the nature ofyour business). One of themost important aspects ofstarting your own business isthat it gives you anopportunity to do what youenjoy.

When starting a business,certain important points mustcome to mind your businessmust fit into your personality,passion, vision, strengths andother strong character traits.Never base your desire tostart a business on what afriend has done, this isbecause the fact that itworked for another doesn’tnecessarily mean it will workfor you. Bear in mind thatentrepreneurship isindividualistic, andleadership is indivisible.

Let me explain to you, whyI decided to write this book. Iam constantly pained by thealarming rate of unemployedyouths in the society and thepoverty level not only in ourcountry, but also all over theworld. The situation pulls at

The Basic Guide to Startingyour Business Part 1

my heartstrings and I knowand am convinced that wecan change things for thebetter, if only people join inthe entrepreneurialrevolution by becoming theirown boss.

Growing up for me wasn’teasy and I knew I didn’twant to end up that way, sothe moment I discovered anopportunity, I did nothesitate to take advantage ofit. I’m desirous for atransformation, which willcatapult your life to that placeGod has predestined for you.

Every business starts withan idea, so it is important tohave the right kind of idea;this is because the wrongidea can lead to the failureof a business. Don’t forgetthat the first step is alwayscrucial in the start of anyjourney in life.

It is important that youBrace up for the challengesahead, and do not let anyonefool you (don’t be deceived)that you won’t encounter

obstacles. Nevertheless, thedetermination to succeedand go on will guaranteethat you remain on top ofyour game; this is becausethe very existence of an ideain your mind shows that youhave within and aroundyou, the capacity to turn itinto reality.

Generally, the size ofbusiness you want toembark on has to bethoroughly considered; thisis because there is nomaximum or minimumlength for a business plan.

Everybusinessstarts with anidea, so it isimportant tohave theright kind ofidea; this isbecause thewrong ideacan lead tothe failure ofa business

,

,

CMYK

Vanguard, MONDAY, DECEMBER 10, 2012 — 19

Cover Cont.

Continued on page 23

Nigeria is a difficultcountry tounderstand. It is a

country where leaders’ actionsare based on greed andpersonal interest than that ofthe nation at large. ThePetroleum Industry Bill hasbeen in the National Assemblyfor a while now begging forpassage. Legislators arereluctant to pass the billbecause most of the oilcompanies do not favour thelegislation as if laws made inthe country are to bedetermined by those whooperate in the sector for whichthe laws are made.

Two weeks ago, BP Plc (BP/), one of the seven sisters oilcompanies that rule the oilindustry agreed to pay morethan $12 billion in governmentand private party settlementsover the 2010 Gulf of Mexicooil spill, yet still faces claimsseeking billions of dollarsmore for the catastrophe. The$4.5 billionagreement resolving federalcriminal charges and claims bythe Securities and ExchangeCommission left the companyat risk for as much as $17.6billion in potential fines fromalleged violations of the CleanWater Act, as well as demandsby the U.S. and Gulf states forenough money to restore theregion’s coastline and watersto their condition before thespill.

BP is paying for damages itcaused based on existing lawsin the US and the Gulf Stateof Mexico. BP did not makethe laws; still, BP was bannedby the US government fromany government contract untilit is able to show that it can doclean business. Here inNigeria, Shell and others havedone worst spill in the Niger-Delta but go around talkingtough as if they are thelandlords on the land theyoperate.

Shamefully, Nigeria seemsto be begging these oilcompanies to allow it pass thePIB bill. Funny enough,Minister of PetroleumResources, Mrs DiezaniAlison-Madueke, in Abujadescribed the fiscal terms

PIB: FG and oil companies,who holds the ace?

Nigeria Economic Summit.She said that Nigeria stillremained one of the mostattractive countries in terms offiscal regime or “governmenttake’’.

The minister said that thetotal government share of oil

revenues after all taxes androyalties was 73 percent, upfrom 61 percent in currentdeals with oil majors. Alison-Madueke said that Nigeriawas not alone in the tighteningof the fiscal terms. She said thegoal was to achieve a “fair

balance between governmentand contractor share to ensurethat risks do not outweighrewards.”

Hear what she said “We feelthat the fiscal terms are fair butwe will continue discussionswith our partners, looking fora way in which both sides ofthe scale can go forward. Also,all cost based incentives havenow been replaced withproduction based incentives,because government revenuescome from production and notfrom cost.”

Does the government have tobeg for it to pass a law in itsown land and resources? If theoil companies are notcomfortable with the law whichis in line with what ishappening globally, they have

alternative choice. Many ofthem have been indulging insubtle threat of divesting fromthe country. In this day andtime when China and Indiaare looking for where to puttheir money, governmentshould be courageous enoughto call there bluff.

Nigeria is in this state todaybecause the country has failedto diversify its economic base.If the economy was diversifiedand government revenue fromother sources were as much asit gets from oil, it will notsubject the nation to thecurrent ridicule.

The multinationals are wellaware that they have beenfeeding fat on Nigeria for themere fact that current deepwater terms were negotiatedin 1993 when oil prices werejust 20 dollars a barrel. Section16 of the Deep Offshore Actprescribes that changes bemade to this particular fiscalregime to restore benefits tothe governmentcommensurate with increasedoil prices, once oil prices haveexceeded 20 dollars per barrelin real terms. The Act alsoprescribes that changes bemade 15 years after thecommencement of the DeepOffshore Act. This, therefore,imposes stricter discipline oncost escalations and de-incentives gold platting. It isexactly 19 years since thatnegotiation was made. Nigeriamust go ahead with thelegislation and spell outclearly the term ofengagement and totalderegulation of the oil sector.

,

,

proposed in the PetroleumIndustry Bill (PIB) as fair.Alison-Madueke said this ata panel discussion on “PIBand the Future of Nigeria’sOil Industry” at the 18th

We feel that the fiscal termsare fair but we will continuediscussions with our partners,looking for a way in whichboth sides of the scale can goforward

between N250, 000 to N500,000 to power their dieselgenerator. The surveyrevealed that before June 2012,the company paid a fixedcharge of N5, 000 and anaverage monthly electricitybill of about N850, 000.However, since June 2012,their fixed charge has risensharply by 2680 percent toN139, 000 and their averageelectricity bill rose by 95percent to N1.66 million.

Also, Flo-Gee Enterprises, aPrivate Limited Company

New electricity tariff drains industries’ profit as operating cost soars by 440%

located in Calabar, the capitalof Cross River State employsbetween 10 - 49 poeple andhas an annual turnover belowNI0 million in the last financialyear. This company is involvedin producing confectioneriessuch as cakes, bread andbiscuits. Its major equipmentis a large electric baking oven,which the company purchasedless than five years ago.

The company is suppliedelectricity from a supply dropfrom an 11KV line, with athree phase meter; yet theysuffer power cuts more than40 percent of the time, and

have to augment their powersource with a diesel poweredgenerator on which they spendbetween N50, 000 -to NI00,

000 monthly. The survey foundthat before June 2012, thecompany paid an average ofN3, 500 monthly on electricitybills. However, after June,their average electricity billwent up to N8, 000,representing a 129 percentincrease in monthly tariff. Tomake things worse, themanager stated that there hasbeen no improvement inelectricity supply since June2012 and that the new tariff hashad a negative impact on theirbusiness because they havespent more on alternative

power supply this year thanthey have ever spent in thealmost five years of operatingthe business.

Eke Ubiji, ExecutiveSecretary of NASME,disclosed that the Associationdecided to carry out the surveyfollowing several complaintsfrom its members about thecost implications of the newMYTOII policy introduced byNERC in June 2012, whichthey claimed constitutes aburden on their businesses.

,

,

The company issupplied electricityfrom a supply dropfrom an 11KV line,with a three phasemeter; yet theysuffer power cutsmore than 40percent of the time

20 — Vanguard, MONDAY, DECEMBER 10, 2012

CMYK

Business & Economy

BRIEFS NAICOM urges MDAs to settledebts to insurance firms

Commissioner forInsurance NationalI n s u r a n c e

Commission (NAICOM), MrFola Daniel, has appealed togovernment agencies to settleunpaid premium to insurancecompanies. Declaring open aone-day workshop on theimplementation of “Nopremium, No cover” policy,Daniel said delayed andunpaid insurance premiumare driving the industry into“extinction.”

He said “The vexed issue ofdelayed or unpaid insurancepremium has now attained analarming crescendo,threatening to drive theindustry into extinction if notcurbed. Most insurancecompanies make hugeprovisions for outstandingpremiums in their books on anannual basis, which invariablyaffects their bottom line andtheir inability to make profit,pay dividends and attractinvestment to enable growth."

The Commissioneridentified governmentMinistries, Department andAgencies (MDAs) as the“biggest debtors” of insurancecompanies. Although he didnot provide the amount owedby the MDAs, he alleged thatmany government agencies,with budgetary provision forinsurance, delay payments ofpremium to insurancecompanies for months. Headded that in some cases thefund was re-deployed to meetother needs of the MDAs,

which is in clear breach of theInsurance Act 2003. Danielalso stressed the need forMDAs to make adequateprovisions in their budget forinsurance of strategicgovernment assets andproperty.

He told participants at the

workshop, mainly insurancedesk officers in governmentestablishments, that the policyof “No premium, No cover”was not a creation of theCommission. “It is indeed astatutory provision in theInsurance Act of 2003 whichis obligatory on NAICOM to

ensure its implementation.”He said desk officers wouldbe culpable if they failed todraw the attention of theirrespective organisations onthe need to ensure adequateinsurance protection forstrategic government assets.

Group photograph of participants at the GTBank's 2012 Annual Course for reporters held atPark Plaza, Riverbank, Albert Embankment, London

LIRS seals sixfirms over non-remittance ofworkers’income tax

The Lagos State InternalRevenue Service (LIRS)

says it has sealed sixcompanies for allegedlydefaulting in remitting taxesto the tune of N17.9 million.Mrs Folasade Coker-Afolayan, the Head of itsEnforcement Unit, told theNews Agency of Nigeria(NAN) in Lagos on Thursdaythat the companies failed toremit the workers’ incometaxes.

She said that the companiesfailed to remit the taxes in thelast six years. Coker-Afolayansaid that the companies hadbeen warned not to reopenuntil they had settled the taxliabilities with the stategovernment. “For now, theseproperties belong to theLagos State Government untilthey pay their tax liabilities tothe government. It is acriminal offence to breakgovernment’s seal,” Coker-Afolayan said.

She said that tax remittancewas not a necessity, but a civicresponsibility of everyone,adding that promptremittance of taxes wouldenable government tofunction effectively.

InfrastructureBank authorises2 companies tooffer 1.5b shares

The Infrastructure Bank(TIB) Plc (TIB) says it

has authorised two companiesto offer 1.5 billion ordinaryshares of one naira each atone naira per share toexisting shareholders. TheChairman of the Board of thebank, Malam Lamis Dikko,told management andmembers of the board that thetwo companies were APTSecurities and Funds Ltd andWSTC Financial Servies Ltd,all based in Lagos.

Dikko said that thecompanies, to be addressedas issuing houses,had agreed to do so. Thechairman also said that thebank had authorised thecompanies to offer 3.1 billionordinary shares at onenaira each. “ The bankcurrently authorised a sharecapital of the company ofN3.1 billion, comprising 3.1billion ordinary shares ofN1.00 each Dikko, howeverdid not disclose the initialshare capital of the bank.

World Bank pledges to assist Nigeria strengthenstatistical system

A Statistician,D e v e l o p m e n tData Group of the

World Bank Mr Alain Gaugris,has said the bank would assistNigeria to strengthen itsstatistical system. At a two-day meeting of the NationalConsultative Committee onStatistics (NCCS) held inCalabar, he said the bankwould position the country’sstatistical system to fullycontribute to thetransformation agendathrough evidenced-basedpolicy formulation.

“The bank is activelyinvolved in statisticaldevelopment in Nigeria,mainly through a grant calledStatistics for Results Facility(SRF). The US$10 milliongrant project focuses oncapacity building at the

federal level for NationalBureau of Statistics (NBS)and National PopulationCommission (NPC),” Gaugrissaid The statistician said theproject would also focus oncapacity building at the sixpilot states in the six geo-political zones of the country.

According to him, the pilotstates are Anambra, Bauchi,Edo, Kaduna, Niger andOndo. Gaugris said that theobjective of the three-yearproject was to initiate theimplementation of theNational Strategy for theDevelopment of Statistics(NSDS) by producing reliablestatistics in participatingstates. Gaugris said theprojects were already yieldingtangible results, as the NPCand Central Bank of Nigeria(CBN) websites had been

revamped as well as theestablishment of a state of theart data portal.

He urged the federal andstate governments, media,civil society and advocacygroups to play their rolestoward the development ofthe National StatisticalSystem (NSS). Governor LiyelImoke of Cross River, whodeclared the meeting opened,urged members of thecommittee to pay attention tothe funding of statisticalproduction at the federal,state and local governmentlevels. Imoke who wasrepresented by his EconomicAdviser, Prof. Nyem Ayara,stressed the need for NCCSto strengthen statisticalsystems at all levels and

urged them to explore howthe private sector would be

more effectively involved instatistical production andutilisation. “I call on thismeeting to examine creativefunding sources for statisticaldevelopment, improvement ofdata quality, standardisationof statistical units ofmeasurement, regularity ofdata and quality of trainedstatistical personnel,” he said.Dr Yemi Kale, the Statistician-General of the Federationcalled on relevantstakeholders to be committedto statistical development.

The statistician-general saidthat the availability ofadequate and qualitystatistics would also ensurethe monitoring and evaluationof government policies andprogrammes to achievedevelopmental goals.

CMYK

Vanguard, MONDAY, DECEMBER 10, 2012 — 21

F/PAdvert

22 — Vanguard, MONDAY, DECEMBER 10, 2012

CMYK

Banking & Finance

Mainstreet bank hasannounced the

promotion of 150 deservingmembers of staff. A statementreleased by the Bank statedthat the promotion exercisewas carried out in line withthe commitment made by themanagement following therecently concludedappraisals.

The promotion exercisewhich is the first by the Banksince it commencedoperations on August 5, 2011is aimed at boosting themorale of its workforce andwill complement the variousinitiatives that the Bank hasembarked on to ensure thecontinued delivery ofexceptional customer serviceto customers.

Announcing thepromotions, Faith Tuedor-Matthews, the GroupManaging Director and ChiefExecutive Officer, noted that,“Our people are the keydrivers of success, thereforeas an organization we willprovide an enablingenvironment for staff to thriveand excel on a continuousbasis. We will also continueto reward superiorperformance.”

“This is yet anotherdemonstration of our resolveto continually reward sterlingperformance and encourageus to achieve exceptionalresults; whilst providing staffwith the opportunity to reachthe peak of their careers.” Sheenjoined all staff to continueputting in their best at alltimes.

The Bank is committed tohaving a cohesive work forceand has kept thecommunications line open forour staff. We are very clear onour next steps and are focusedon ensuring that our people,processes and systems are intune with our growthobjectives. We are raising thequality of our service deliveryto a level that will make everyservice experience with usmemorable one to our existingand prospective customers.Our target is to be a referencepoint in customer servicedelivery. A solid foundation isbeing laid for the attainmentof this overarching goal.

T u e d o r - M a t t h e w semphasized that thetransformation plan of theBank is anchored onproductivity and building afully motivated workforcepositioned for growth.

Mainstreet bank hasachieved significantimprovements largely driven

Cashless policy: LCCI advocateszero account opening balances

BY NAOMI UZOR

BRIEF

Lagos Chamber ofCommerce andIndustry (LCCI) has

advocated for the opening ofaccounts with zero balances,saying it will boost the CentralBank of Nigeria’s financialinclusion strategy.

The LCCI’s President, Mr.

Goodie Ibru, while reviewingthe recommendations madefrom the post field survey ofthe cashless policy from Lagosalso challenged the CentralBank of Nigeria (CBN) topush for more stringent lawsand enforcement againstfinancial crimes as well asintensify awarenesscampaign for theactualization of the new

cashless policy to work inNigeria.

He also called on the apexbank to ensure thatGovernment initiate policythat would reduce the importduty and other charges forimporting machines asincentives to speed up thespread of the (Point of sales)facilities in Nigeria.

”We challenged the CBN

Former Minister of Information, Chief Alex Akinyele (left) presenting the award for‘Outstanding CEO of the Year’ to its winner, Managing Director, Fidson Healthcare Plc, DrFidelis Ayebae (right)during the Pearl Awards ceremony held in Lagos recently.

to push for more stringentlaws and enforcement againstfinancial crimes as well asintensify awarenesscampaign with emphasis onthe usage benefits of thefacility so as to encourageincreased usage for theactualization of the newcashless policy to work inNigeria. We also call on CBNto encourage banks tointroduce opening ofaccounts with zero balancesfor customers to encourage thenon-banked population tohave/use Automated TellerMachine cards which will beused to further theimplementation of the cash-less policy” he said.

According to him, the CBNshould put in place for banks,technicians to be trained onhow to manage/repair theATM, and they should bestationed at differentlocations for easy accessibility.

“The phone numbers ofthese technicians should begiven to the outlets where themachines are installed.Workshop/seminars shouldbe organized by the CBN fortrade/business associations togive them better orientationabout the policy” he stated

He said it is pertinent tonote that as the phenomenonof electronic platformscontinue to gain acceptanceand wider applications in oursocial and economic lives, thee-payment componentbecomes more critical to thesuccess of e-shopping, e-ticketing, e-governance, e-book publishing, and lotsmore.

Global finance to experience reform in2013 - EIU survey

BY PROVIDENCE OBUH

Global finance willcontinue to haul

the heavy weight ofreforms in 2013 andbeyond says theEconomist IntelligentUnit (EIU) surveyreport.

According to thereport titled “Industriesin 2013,” 405 executiveswere surveyed inNovember 2012 on theirexpectations forbusinesses conditions in2013.

The survey samplewas global, with 46 percent of respondentsbased in Europe, 25 percent in Asia, 10 per centfrom the Middle Eastand Africa and 5 percent from Latin America,

also, 37 per cent of therespondents are relativelysenior holders of C-suitepositions while 7 per cent areboard members who work inorganizations of varyingsizes, with 53 per cent earningannual revenue of US$500million or more.

The report revealed that theBasel III standards, launchedin 2013 is to force globalbanks to hold more basecapital, and better forms ofcapital such as equity andretained earnings. “Thisshould make lenders moreresilient the next time a crisishits.

“In the short term, however,raising the extra capital willhurt, few investors want tobuy bank shares these days,so most lenders will hold onto any profits (instead ofsharing them with investors)or sell off assets such as loans,

properties and entirebusiness units and this painwill remain sharpest inEurope, and the US to a lesserextent.

“Banks in emerging marketsare little affected since mostalready hold capital of thetypes and quantities requiredby Basel III.

“Other reforms are lesssweeping but will also bite asmost developed countrieswant to move the lucrativebusiness of over-the-counterderivatives onto less-profitable clearing platformsthat offer greatertransparency,” the reportedstated, noting that a lot of theEuropean nations plan toimpose financial-transactionstaxes and tighten rules aboutthe balance sheets ofinsurance companies whilethe US wants to bar deposit-taking banks from investing

in private equity and hedgefunds.

Accordingly, the EIU is ofthe view that finance hurt bythe two-track course of theworld economy will remainlargely unchanged in 2013,saying that the challenge offinance is overwhelminglyconcentrated in developedcountries.

“According to our forecasts,rich countries of theOrganisation for EconomicCo-operation andDevelopment (OECD) willgrow by a paltry 1.4 per cent,while non-OECD countrieswill expand by 5.8 per cent,these markets will hold 77 percent of global bank assets in2013, falling only to 76 percent by 2016. These samedeveloped countries take in85 per cent of insurancepremiums and hold over 90per cent of investible assets.

MainstreetBank rewardsexcellence,promotes 150staff

CMYK

Vanguard, MONDAY, DECEMBER 10, 2012 — 23

Corporate Finance

New electricity tariff drains industries’ profit as operating cost soars by 440%

Cover Cont.

He said that against thisbackground, NASME invitedan independent consultant,NOI polls limited, to conductan assessment of the impactof MYTO II from November6th

to 12th

, 2012. A total of 138enterprise owners wereinterviewed and 127interviews were completed.Interviews were spread acrossthe six geo political zone inNigeria.

“MSMEs have a verynegative perception about theMYTO II tariff since itsintroduction. This arises fromthe fact that they areexperiencing declining profitmargins which they attributedto a rise in their total

Continued from page 19

operating costs.” Erraticpower supply is a major issuefaced by MSMEs due to thefact that there are no visiblepower improvements. Thishas led to an increased use ofalternative power supplywhich has again led to

increased operating cost.NASME is willing to partner

with NERC to mutually definea tariff regime that willencourage stakeholderinterest in the Nigeriaelectricity sector as well asease pressure on MSMEs.Operators, he said have alsoproposed that NERC shouldprovide clarity on MYTO IIand that NERC in partnershipwith NASME shouldendeavour to createenlightenment programmesabout the MYTO II priceregime, its implication forbusinesses and its overallobjective.

*We recommend to NERCthat before such policy isimplemented, it should carryout a Regulatory ImpactAssessment (RIA) on all

categories of electricityconsumers to have a feel ofthe impact on such policy.

*There is negativeperception about the tariffsand this has to be addressedto ensure a successful priceregime. *NERC shouldinstruct the electricitydistribution companies toinform/educate customer ontheir customer classificationfor the purpose of billing themfor electricity.

Template of bill should beunified across all DISCOsincluding fixed charge, tariffclassification, name andaddress of customer. Thisshould help tackle the issueof transparency.

*Elimination of fixed chargeand replacement with unit

charge. This will help SMEswho produce seasonally andencourage energyconservation, where an SMEonly pay for what it consumes.

Issue of stability of powersupply though not NERC’score business should also beaddressed in order to forestallfurther resistance to theMYTO II price regime as theperception about power isvery negative given theincreasing cost to business onthe use of alternative powersupply.

,

,

NASME iswilling topartner withNERC tomutuallydefine a tariffregime thatwill encouragestakeholderinterest

By BABAJIDE KOMOLAFE

Securities and ExchangeCommission (SEC) has

recommended to the federalgovernment that theprivatized power companiesbe made to list their shares onthe Nigeria Stock Exchange.

Director-General, SEC, Ms.Arumah Oteh said this at the18th Nigeria EconomicSummit, during the financialregulators forum. She said thelisting of the companies willallow Nigerians to participatein the wealth created by thecompanies and also enhancecorporate governance in themanagement of their affairs.

She stated this whilehighlighting efforts of theCommission to encouraget e l e c o m m u n i c a t i o ncompanies and SMEs to listson the Exchange.

She said, “those in StockExchange and SEC believesthat it makes great businesssense for large companies tolist, it enhances their brandand it creates effrontery fortheir product and the examplethat I like to give is wheneverpeople threatens that they willblow up the base station of atelecoms company, if someoneowns the share of thatcompany, that person couldactually decide to protect it. Sowe believe that there is greatbusiness reason why largecompanies telecoms, oil andgas and others companiesshould list. To us it isunfortunate that as we standtoday the stock marketbasically represent 17 per centof the economy but we feel thatsome of what is been donetoday in agriculture shouldchange that.

“In agriculture we have a few

SEC recommends listing of privatised power companieslisted companies that focus on agriculture, some of themare conglomerates like PZand Nestle and others but twospecialized companies cometo mind Presco and Okomoand they have done very wellthis year in terms of theirperformance. So there are clearly good opportunitiesfor those who are buildingagro based system to come tothe market. When I listenedto the agriculture Ministertalk about what happened incassava, that we are exportingthem for eternal to China,those companies should bequeuing up asking us abouthow to grow their businessbecause I am sure it is not justChina looking for eternal fromNigeria. When he mentionedthat within one year we havethirteen rice mill in Nigeriaand that his plan is that byJanuary 2015 we would have100 rice mill, we expect that

those companies will seekmedium to long term financein the bond market or thecapital market.

“We also have been activelyproposing to the federalgovernment, that as we privatize power, that thosecompanies should list asquickly as possible on thestock exchange for tworeasons; I think some of whatwe have learnt from telecomscompanies not listing earlyenough, should not happened with the powercompanies. Part of financialinclusion is democratizingparticipation in the capitalmarket so that more Nigerianscan create wealth. But wethink even more important isthe issue corporategovernance, there is clearlymore transparent andaccountability whencompanies are listed on theNigerian stock exchange.”

By CHINEDU IBEABUCHI

Equities value on theNigerian Stock

Exchange, NSE, appreciatedby N56 billion last week. Thiswas occasioned by price gainon the shares of highlycapitalised companies.

Specifically, the key marketindices recorded 0.67 per centgain each. The marketcapitalisation gained N56billion to close at N8.522trillion from N8.466 trillion;while the all share indexgained 177.28 points to closeat 26,671.72 points from26,494.44 points.

A review of the equity pricemovements indicated that

NSE value rises by N56bn on blue chip coys’ gainsthirty five equities gainedwhile thirty-one equitiesrecorded price declines andprices of one hundred andthirty-two equities remainedconstant. When comparedwith the preceding week,thirty equities gained whilethirty four equities recordedprice declines and prices ofone hundred and thirty-fourequities remained constant.

Guinness Nigeria Plc led onthe gainers’ tableappreciating by N10.91 toclose at N241.19 per sharefrom N230.19; next was NestleNigeria Plc. which gainedN9.94 to close at N660.05 pershare, while NigerianBreweries Plc rose by N3.27

to close at N143.55 per share,among others.

Meanwhile, Mobil OilNigeria Plc led on the losers’table dipping by N5.75 toclose at N109.25 per sharefrom N115.00 per share; nextwas Total Nigeria Plc losingN3.00 to close at N121.68 pershare, while MRS OilNigeria Plc dropped N1.31 toclose at N25.01 per share,among others.

Trading results show that aturnover of 1.144 billionshares worth N 11.239 billionin 18,947 deals was recordedin the week under review incontrast to a total of 1.216billion shares valued atN8.886 billion that exchanged

hands in 18,902 deals thepenultimate week.

The Financial Servicessector (measured by turnovervolume) accounted for872.712 million shares valuedat N6.803 billion traded in11,398 deals. The ConsumerGoods sector followed with75.609 million shares valuedat N3.117 billion traded in3,812 deals.

The Banking subsector of theFinancial Services sector wasthe most active during theweek (measured by turnovervolume); with 645.733 millionshares worth N5.555 billionexchanged hands by investorsin 8,257 deals.

24 — Vanguard, MONDAY, DECEMBER 10, 2012

CMYK

Housing Finance

BRIEFS

L-r; Mr Adigwe Ifechukwude, head,marketing(land matters),pentagon real estate investment ltd; mr. Ibeziakotony oseloka,a subscriber;& pastor. Emeka Okoye,managing director during the presentation of land titledocuments to the allottees of cedar garden,agbara,ogun state recently.

International purchases ofAmerican homes are

ramping up, and a newSenate bill designed to boostthe ailing real-estate marketwould encourage globe-trotting investors to buy evenmore.

The bill, co-sponsored byCharles Schumer (D-N.Y.)and Mike Lee (R.-Utah)would grant a U.S. visa tointernational investors whoagree to spend at least$500,000 on residential realestate here.

If passed, the legislationcould add to a surge inhomebuying by internationalpurchasers over the past yearor two that’s already givensome local U.S. markets awelcome boost.

Growing internationalinterest

Foreigners spent $82 billionbuying up U.S. homes in the12 months ended in March,up 24% from a year earlier,according to the NationalAssociation of Realtors (NAR).That represents 8% of totalU.S. sales.

The Minister of FederalCapital Territory (FCT),

Senator Bala Mohammed,has insisted that 31 illegallybuilt estates in Abuja wouldbe demolished.

This was disclosed to theSenate Committee on theFCT during the 2013 budgetdefense. He stated that theministry had the backing ofthe nation’s laws to demolishillegal estates.

He said this was aimed atputting a stop to theimpunity of developers in thecapital territory. So far, theFCT authority haddemolished over 500 housingunits since Septemberamidst loud protest by thoseaffected.

“We cannot allow asituation or exercise ofimpunity or lawlessness; weare not going to condone thisfor any reason. You areputting a lot of sentiments asa politician, I am a civilservant; I am workingaccording to the law. Thesepeople have been told not todo it. Nigerians are gullible.

“Coming back to the 31estates unfortunately, whenthe FCT developmentprogramme was put in place,there was no guideline tohave a timeline for delivery-for infrastructure andprototype ,for people to knowthat this is what we are goingto get within certain period”.

He pointed out that theFederal CapitalDevelopment Authority(FCDA) has a law and Abuja

FCT Minister insists on demolshing 31housing estates in AbujaBY MIKE EFFIONG

master plan is not to becompromised.

“I have a law ondemolishing. The law I said Idon’t have is the one theChairman asked on the issueof parking. But for demolitionI have a law and I don’t even

have to interfere withdevelopment control lawunder the land use Act.”

On affordable housing, “weare coming with Americaninvestors as well as our ownAbuja Property DevelopmentCompany. We are going tobuild 1,000 hectares, so that

we will bring housing forNigerians who cannot affordthem in high brow area. Wewant to build structural andaffordable houses. Thosewhose building will bedemolished we will make surethat there are alternatives forthem”. He added that thereis no law on illegal parkingin the FCT, emphasizing thatthe decision was notadministratively.

The Federal Governmenthas said it will build

4,000 housing units at Ushafain Bwari Area Council of theFederal Capital Territory(FCT), stressing that this willprovide accommodation forFederal Capital TerritoryAdministration (FCTA)workers under NationalHousing Fund Scheme.

Minister of State for FCT,Ms. Olujomke Akinjide,disclosed this, whileaddressing journalists,saying that the effort waspart of the government’scommitment to provideaffordable accommodation forthe people.

“The presentadministration is resolutelycommitted to the provision ofhousing to its citizenry. Theimportance of shelter tohuman development cannotbe overemphasized. Inhierarchy of needs, shelter isnext to food. Government iscommitted to bridge thehousing deficit gap in thecountry and this effort is partof the whole package ofgovernment in housingdelivery sector”.

Mr.Gimba Y. Kumo,Managing Director, FederalMortgage Bank of Nigeria(FMBN) stressed that, thehuge housing deficit inNigeria and FCT inparticular.

FG to provide 4,000 housing units in Abuja He said “Given the housing

deficit currently existing inthe country and the fact thatthe FCT and its environs arefacing enormous pressuredue to high demands foraffordable housing, it isapparent that institutions suchas FMBN are heavily reliedupon to provide the levels offinancing required to meetthese demands”.

As part of the moves to fulfillits mandate in housing sector,

Kumo said that within thisyear alone, the bank launchedtwo new products with a viewto expand and improve itsservices through NationalHousing Fund Scheme.

He explained that the twoproducts are FMBN Informalsector Co-operative Loan andNHF eCollection platform.Emphasizing more on theseproducts, he added that inthe past 12 months FMBN haslaunched two new product

geared at expanding andimproving its servicesthrough the NationalHousing Fund Scheme. Thefirst product is FMBNInformal sector Co-operativeSociety Loan Scheme aimedat expanding Mortgageloans to the Informal sectorsuch as farmers, artisans andso on using housing co-operative as mechanism formobilization and integration.

Lagos State governmenthas unveiled new Land

Use Act Title DocumentationRegulations, which permitsprospective applicants whobought land from thecustomary owners, to obtainGovernor’s consent instead ofprivate certificate ofoccupancy (PC of O).

The new law titled: “LandUse Act Title DocumentationRegulations, 2012”, coveredby Section 34 of the Land UseAct was signed by the LagosState Governor, Mr.Babatunde Raji Fashola.

A press statement signed byAlhaji Moshood Adebisi, anofficial in Land Bureau,

Lagos reviews land documentation regulations

explained that applicantsseeking to register theirinterest in respect of landbought from vendors and inpossession of such land beforeMarch 29th 1978, only needGovernor’s Consent and not(PCof O)”.

According to the statement,“Instead of Private Certificateof Occupancy, applicants whobought land from suchvendors only need to obtainGovernor ’s Consent to thetransfers/transaction in linewith the said newregulations”.

He hinted that applicantsare expected to submitapplication form obtained

from Lands Bureau Registry,Land Information Certificate,Transfer of Interest Documentand should be accompaniedwith the purchase receiptshowing the actual date ofpurchase, survey plan,statutory fees among otherthings,

The new regulation alsofrowned at applicantprocuring a backdatedreceipt, as anyone whoengages in such act shall beprosecuted, the statementadded.

Plateau State signsN4.5bn contract fornew govt house

Plans by the Plateau Stategovernment to add anadditional Government’sHouse has yielded result as ithas entered into a N 4.5 billioncontract with a constructionfirm for a befitting modernGovernment Houseconstruction about fivekilometers from the presentone.

As a result, the current oneuse in Rayfiled will beconverted to a presidentiallodge, the government said.At a brief but colourfulceremony at the RayfieldGovernment House, theSecretary to the StateGovernment, Prof ShedrackBest signed the contract onbehalf of the state GovernorJonah Jang with Mr. NocaGiacofo, Director of Eagleconstruction limited standingin for the company.

The SSG disclosed that thePresidential Lodge wasconverted to the presentgovernment House and theTunde Wada Governmentlodge remains as such, sayingthe decision become necessaryto meet the challenges ofmodernity.

Foreign buyersscooping up U.S.homes- LesChristie

CMYK

Vanguard, MONDAY, DECEMBER 10, 2012 — 25

F/PAdvert

26 — Vanguard, MONDAY, DECEMBER 10, 2012

Insurance

BRIEF

Prime InvestmentBrokers regainsoperationallicense

The National InsuranceCommission, NAICOM,

has lifted the suspensionplaced on the Akure-basedinsurance brokers, PrimeInvestment Insurance BrokersLimited.

In a statement, NAICOMsaid that the move is sequel tothe satisfactory conduct of thebroker during the period of thesuspension and the fact that thecompany has purged itself ofall the infractions thatnecessitated the suspension ofits license.

The company was suspendedfrom doing business asinsurance broker with effectfrom June 14, 2012 followingthe unprofessional manner withwhich the firm handled theOndo State Governmentproperty insurance account.

Ex NAICOPresident BagsCIIN Associate

The immediate pastPresident of the National

Association of InsuranceCorrespondents, NAICO, andInsurance Editor of THISDAYNewspaper, Mr. Nnamdi Duruhas bagged the Associateshipof the Chartered InsuranceInstitute of Nigeria (CIIN).

He is the first servingJournalist in the country to passthe three stages of theInstitute’s professionalexaminations and qualify as achartered insuranceprofessional. Born June 24,1969 in Ehime Mbano LocalGovernment of Imo State, DuruAttended Community School,Umunakanu Ama in Mbano,Imo State and Orile AgegeCommunity High School, inLagos. He holds a 1992Bachelors degree in Banking/Finance from the Abia StateUniversity and bagged anMBA in Management fromImo State University in 2005.He also holds a Diploma inComputer Studies from theLagos City Computer College(LCCI), Ikeja. Duru workedwith Maldesa Foods as Salesand Account Executivebetween 1995 and 1999 beforehe crossed over to THISDAYNewspaper as Reporter andwas assigned to cover theLabour and IndustrialRelations.

He was later elevated to theposition of Correspondent andHead of Insurance andPension Desk in theorganisation in 2003, a positionhe occupies till date. Taxationwas later added into his

L- R, Prof. Ben Oghojafor, Dean Faculty of Business Admin of the University of Lagos; Prof.Babajide Alo, Deputy Vice Chancelor of the University; Mr. Ken Aghoghovbi, Deputy ManagingDirector of Africa Reinsurance Corporation and his wife, Dr Titilayo Aghoghovbia at a dinnerorganised by Unilag in honour of Mr. aghoghovbia for his contributions towards thedevelopment of the Nigerian insurance industry in Lagos

NIA to engage presidency, NASSover insurance sector growth

The Nigerian InsurersAssociation, NIA, said it

will engage the Presidencyand the National Assembly onthe need to put up laws thatwill address the variouschallenges confronting theinsurance industry.

Chairman of NIA, Mr. RemiOlowude, who said this at hisinvestiture ceremony inLagos, said the NIA intendsto initiate interactive sessionswith the appropriatecommittees or organs of thetwo chambers of the NationalAssembly to discuss issuessuch as restrictive laws oninsurance practice, multipletaxation, insurance awarenessand penetration, developmentof oil and gas industry amongother issues.

He said, the NIA willorganise annual or bi-annualinsurance seminars for judgesand the leadership of theNigerian Bar Association soas to strengthen itsrelationships with thedifferent organs of theJudiciary.

According to Olowude, theseminars will focus ondevelopments in insurancelaw in Nigeria, and ensurethat the judiciary, legalprofession, the regulators,and practitioners in theinsurance industry as well asthe media have a mutualunderstanding of insurancelaw and practice.

“The more peopleunderstand the law, the lessthe courts are inundated withavoidable suits,” he stated.

He further stated that it hasbecome aware of the needs totake deliberate steps towardscloser interaction andstrategic partnership with allstakeholders, particularly themajor three arms ofGovernment.

He disclosed that the NIA

BY RITA OBODOECHINA

plans to meet with thepresidency to discuss issuesbordering on the key roles ofthe insurance industry in thetransformation of the Nigerianeconomy.

He said, “The GoverningCouncil will consider seekingan audience with thePresidency to table issuessuch as the key roles ofinsurance to the socio-economic growth and

development of the nation;how the insurance industryand the government cancollaborate in areas of povertyalleviation; the need to givethe industry the opportunityto contribute to theformulation of certaingovernment policies;insurance industryrepresentation in appropriategovernment committees;among others.

“Closely related to this is theneed to restructure andstrengthen the NIA secretariat

for effective public sectorliaison and monitoring of thepolitical and legalenvironment as it affectsinsurance.”

Olowude maintained thatthe NIA will strengthen itspartnership with othermembers of the organisedprivate sector, saying it willincrease its participation andrepresentation in theactivities and deliberations ofthe Nigerian Association ofChambers of Commerce,Industry, Manufacturing andAgriculture, the Chambers ofCommerce and Industry inLagos, Kaduna, Abuja andPort Harcourt, and the NigeriaEmployers ConsultativeAssociation.

To reduce the burden ofmarine insurance claims, hesaid, “The NIA will alsosupport the activities of theCargo Defence Fund, anoffshoot of the NigerianShippers Council (NSC). Weshall collaborate with theNSC to introduce Protectionand Indemnity insuranceclubs, to monitordevelopments in maritime lawon carriage of goods by seaand related internationalconventions.

“It is my conviction that thiskind of collaboration will helpto develop marine insurancegenerally by ensuring fullprotection of maritime risks,backed by authentic andstrong reinsurance cover tolighten the burden of marineinsurance claims.”

By ROSEAMRY ONUOHA

The Chartered InsuranceInstitute of Nigeria,

CIIN, has threatened towithdraw the certificates ofany member who engages inunethical practices.

President of the CIIN, Mr.Wole Adetimehin, whodisclosed this at the Institute’s2012 graduation andfellowship award ceremony inLagos, said the institutereserves the right to withdrawits certificate from any holder,if it discovers any breach ofthe examination process,adding that further reason forsuch withdrawal of certificatesmay emanate from actsunbecoming of a holder of theInstitute’s professionalqualification.

Unethical practices: CIIN threatens withdrawal ofcertificates

He said: “Permit me toreiterate the policy of Councilin regarding all Certificatesissued by the Institute as theInstitute’s property whichcould be withdrawn from theholders if the Institute hasgood reasons to do so.

“Let me state categoricallythat the Institute reserves theright to withdraw its certificatefrom any holder, if it discoversany breach of the examinationprocess. A further reason forsuch withdrawal of certificatesmay emanate from actsunbecoming of a holder of theInstitute’s professionalqualification.”

He noted that the institutewould continually strengthenits examination systemthrough regular review of thesyllabus and examinationstructure, stressing that theinstitute is conscious of the

industry post consolidationchallenges which came withnew and complex humancapital needs.

“The challenges facing theindustry today not only requirea fresh impetus in humancapital development but alsoa renewed vigour andapproach to skills recreationin order to equip practitionersfor the huge tasks ofmanaging the current realitiesin the business landscape,”he said.

He noted that the attainmentof professional qualificationshould not be seen as an endin itself, but as a means to anend. Therefore it behoves allholders of professionalqualifications to be mindful ofthe efficacy of ContinuousProfessional Development(CPD).

Vanguard, MONDAY, DECEMBER 10, 2012 — 27

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F/PAdvert

28 —Vanguard,

Interview

Since Mobile Moneytook centre stage inNigeria with the

licensing of operators byCentral Bank of Nigeria(CBN), the controversy hasbeen whether it would nothave been appropriate forthe apex bank to licensemobile operators who ownthe platform used for thetransactions. But CBN stoodits ground saying that itprefers to license banks.

However, some of theoperators like MTN havefound a way around thesituation, by partnering themajor mobile moneylicensees. This has led tomassive campaigns whichconfuses people on whoactually is the real mobilemoney operator.

Financial Vanguard recentlyengaged the GeneralManager, BusinessDevelopment, Sales andDistribution department ofMTN Nigeria, Mr RichardIweanoge, who cleared theair on MTN’s role in mobilemoney as well as otherdevelopment around mobilemoney in Nigeria.

Excerpts….

A recent newspaper reportrevealed that the mobilemoney market in Nigeria hasthe capacity for N1.17 trillionworth of transactions in sixmonths if the current numberof about 1000 agents can beraised to 250,000 agents.What is your take on this?

Let me use an analogy toanswer that question, if youwant to buy MTN airtimeanywhere in this country, youare likely going to findsomeone within 100 meterswho is offering to sell it, eitheron a street or anywhere. Now,how did that succeed?Because we created a veryrobust channel of distributionwhere people saw thebusiness opportunity andactually keyed into it andinvested into becoming MTNdistributors, sub distributorsand retailers.

The reason I am using thatanalogy is that the team herein sales and distribution forMTN is the team that madethat happen and it is the sameteam that is getting a robustchannel of distribution formobile money. Even if we justpiggy-back on the currentchannel of distribution wehave which is the retailers, theSub distributors, clearly wewill have more than that250,000 distribution pointsand that is our goal. We thinkit’s a matter of time, as peopleunderstand the businessmodel, more and more peoplewill come. Within one year wethink we will surpass the250,000 points of service if wekeep going at the rate wehave been going.

It is really replicating what

,

,

Nigeria may soon out-stin mobile money service

BY PRINCE OSUAGWUwe already have and gettingpeople we already have toparticipate in mobile money.So it does not take much toeducate them and show themthe business model and theopportunities. So if you sellairtime, nothing stops youfrom also participating inmobile money provided youhave the right documentationthat we can register you with.

That also brings us to themillion dollar question. IsMTN a mobile moneyoperator?

We are providing mobilemoney services to customersin partnership with mobilemoney license holders. Likethe name implies mobilemoney clearly means youneed to transact with yourmobile phone. We are theservice providers on mobilephones. We don’t have alicense but we are workingwith partners who havelicense to provide the serviceto the consumers. Even withthe license they still need amobile partner technically toprovide the service. So whatwe have done in this case isto partner with Fortis bankand Stanbic IBTC bank thatare licensed by CBN. We willstill partner with more othersto provide the service tocustomers.

In this partnership whohas the greater stake?

It depends on what youmean by the greater stake. Itis the service we want toprovide to our customers. Thelicensee has a need to reachour customers so we give himaccess to our customers. It isreally not about who has the

greater stake, it is about the customer. It isabout financial inclusion of Nigerians. Peopleneed to be able to transact businesselectronically. It is about empowering andpushing forward the government’s wish for acashless society. So it is all wrapped up inone. Whether it is the government or MTN orthe licensee that has the highest stake, I don’tknow. As for us, we are happy to see ourcustomers enjoy these things.

If something goes wrong with transactionswho will be liable?

Let me explain some of the things we havedone around security because in the end it isreally about people’s money. The first thingis that when you want to participate in mobilemoney services there are some key informationwe must have about you. You know mostsubscribers on the MTN network areregistered now, so there is a record of theirdetails, because NCC requires those things.At least we know your name and address andother vital information and somewhere in thiscountry between NCC and us, we knowexactly every customer we have. When yousubscribe to mobile money, CBN regulationsalso requires that you fill a form and thatform contains other vital information aboutyou.

Secondly, if you do register for mobile moneyservice, part of the registration process alsorequires that you will be given a unique formof identifying yourself like a passport whichis a four digit code and there is no transactionyou can do that you will not be told to put inyour code; and your code which is tied to yournumber is the unique access you have to carry

out transactions.If you actually lose your phone and

someone else wants to use the stolenphone to transact business, becausehe doesn’t have access to that uniquecode it will not go through except youhave divulged it. The way I see this,when the banks came up with ATMcards, it was just a magnetic strip andpeople were hacking those thingsand succeeding. After a while theychanged it to the pin and chip card.Now with your code, chip and pin,the number of successful fraudulentactivities on your ATM card have

Mr Richard Iweanoge...You know most subscribers on the MTN network are registered now, so there isrequires those things

Mr Richard Iweanoge

We are providingmobile moneyservices tocustomers inpartnership withmobile moneylicense holders.Like the nameimplies mobilemoney clearlymeans you need totransact with yourmobile phone

Vanguard, MONDAY,DECEMBER 10, 2012 — 29

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Interview

tage Kenya dominancees

almost come down to zero. The levelof security we have in mobile moneymatches exactly what you have in achip and pin solution.

However, technology is everchanging. Someone someday mightbe able to discover loop holes but weare always going to be one step aheadin trying to find more securesolutions. Also remember these areall electronic transactions andbecause every single customer wehave is registered, we know them. Ifanyone does any fraudulent activityand moves money we know exactlywhere it is coming from and we knowexactly where it is going to. It can beinvestigated and people can be heldresponsible for it. It is not like cashthat you can disappear with, it mustgo somewhere, and because it isgoing somewhere, we will know whoowns the number. We have theperson’s details and we can track itdown.

If the CBN had adopted a mobileoperator-led mobile money

model, what do you think mobileoperators would have donedifferently?

Different countries haveapproached this in different ways butthe end result has always been thesame thing. In Uganda and Kenyafor example it is the operators thathave the licence. In some other

countries, it is the banks andsome other people that ownthe licence. I really don’t thinkwe might have done thingsdifferently apart from sayingwe own the licence. But interms of the services, thefunctionalities are exactly thesame.

Quality of service is stillflagging. Will it not affectmobile money transactions?

Mobile money at themoment actually runs on whatwe call USSD. USSD is thatchannel you use when youwant to do account balanceenquiries and if you notice,more often it delivers evenwhen SMS fails in most cases.The channel through whichmobile money goes is slightlydifferent because we know itis money we are dealing withso we are constantly trying tooptimize it so we don’t haveissues with hanging network.But even if you do have issuesthe beauty of the electronicmoney transfer is thateverything is traceable. Youcan track it and know exactlywhere it is. If there is anissue, we set up a dedicatedhelp desk. The reason the helpcenter number is not known isbecause only our agents andsuper agents that deal with

mobile money have access tocalling it. So if a customermakes a transaction and it isnot going right, you can callthe mobile money help deskand the guys will look at itfrom the back end and tell youexactly what is going on. Ifyou make a transaction andyou have not receivednotification, the agents will tellyou the state of the transaction.This will take away some ofthe apprehensions aroundmaybe if the network is badyou may not be able tocontinue with your transaction. The frequency at which thiseven happens is quite lowunlike SMS and calls.

Considering the poorliteracy level in Nigeria,

what specific measures willyou take to ensure that mobilemoney is understood andused at the grassroots?

It depends on what youconsider to be illiteracy. Youcan be educated and at thesame time be an illiterate andyou can be uneducated and bevery smart. Mobile money isreally about financialinclusion. People carry outfinancial transactions everyday and all we are trying todo with mobile money is tobring a lot of people within thecountry who currently don’tenjoy formal financial servicesunto the platform where theycan actually carry out financialtransactions and be within thatformal channel. Almosteveryone in this country ownsa mobile phone so in myview mobile phones will bewhat credit cards are forpeople in the Western world.Everybody has access to it.

In terms of illiteracy, if youcan send a text message whichI think the majority of mobilephone owners can do, thenyou can perform mobile moneytransaction. We have made itso simple that the numbers ofsteps you need to take to carry

out the transaction are prettybasic.

Of course we have peoplein channel, we have peoplewho we call super agents andagents with their principalrole being to represent us infront of the customers and theyhave been properly trained byus. The goal is when thecustomer sit in front of themthey can take the customerthrough how these thingswork. We constantly carry outtraining for them and do a lotof above-the-line advertisingjust so we can get theinformation and knowledgeout there for people to transfermoney.

How has the marketresponded to this MobileMoney initiative?

I think quite enthusiastically.I was personally surprised lastmonth when we went roundthe country launching mobilemoney and I was amazed withthe turnout and the eagernesswith which people came outwanting to register. At themoment we have seen close to20,000 people registering ona daily basis for the service. It is astronomical consideringthat we just started and alsoconsidering that not too manypeople know about it andunderstand what it is all about.So to get this high number ofpeople registering every dayis significant. My view is thatpeople are enthusiastic andthey seem to want it and Ithink in the long run, it willbe a success.

In your opinion, wouldyou say that the cashless

policy is succeeding?Mobile money is enhancing

the government’s desire for acashless society because nowI can transfer money to my sonin school, to my mother in thevillage electronically withoutthe need to physically movecash from one location toanother. Now I can actuallybuy things in certain placesusing my mobile money as ameans of payment so I don’tneed to carry cash as long as Ihave my phone which I haveall the time with me. If younotice, your phone is theclosest thing to you now. It isalways with you so just havingmy phone with me means Ihave access to my money,which means I have access to

carrying out financialtransactions.

I want you to emphasizemore on the role MTN isplaying in spreading agentsin Nigeria because yourcustomers may want to knowthose things you intend to putin place to probably ensureyou have a wider spread thanany other network?

First of all, let me say I amnot in competition with othernetworks on this. Our goal isto give customers the ability todo financial transactionswhere ever they are. Peoplewant to be able to send moneyto others anywhere and theycan cash out where ever theyare. So this is not acompetition of any sort. WhatI think we can do is, we needto have a robust distributionchannel, that is, enoughpeople who take mobilemoney as a business they wantto transact in and set up shopto transact mobile moneybusiness and these arebasically retailers. We have acensus that tells us that wehave over a million retailpoints in Nigeria. We currentlyhave in our data base of over300,000 retail points that weinteract with. If we can get justthese retail points on board-because already we have thisnumber - to mobile money. Wedon’t force people to becomeour agents. We try to create avalue proposition that iscompelling which people cansee and get them interested init. In terms of valueproposition we have a veryrobust offer we give to peoplewe call retail agents. Theseretail agents, for everytransaction and everycustomer they register there isa certain commission that theyearn for carrying out theservices on our behalf. So ifyou go to them and you cashout or cash in or transfermoney, there is somethingthey get. We think that thisproposition is compellingenough to propel them to wantto join the business.

Last month we had a tradelaunch where we went toalmost 12 cities in the country.We called retailers, retailagents and super agents, toldthem what we wanted to dowith mobile money and thatthey should register if theywere interested. As we speaknow, I don’t have the exactnumber but the enthusiasm wesaw tells us that in a year’stime almost the number ofpeople we have as retailers(MTN) will be involved inmobile money.

Do you see your retailpoints in another two yearssurpassing the current retailcustomers you have?

The next two years, mobilemoney points of service will beas ubiquitous as we currentlyhave for points where airtimeis sold. It will be as commonas the points where you canbuy airtime.

Do you entertain the fear

s a record of their details, because NCCMr Richard Iweanoge

If you do register for mobilemoney service, part of theregistration process also requiresthat you will be given a uniqueform of identifying yourself like apassport which is a four digit codeand there is no transaction youcan do that you will not be told toput in your code; and your codewhich is tied to your number isthe unique access you have tocarry out transactions

30 — Vanguard, MONDAY,DECEMBER 10, 2012

Vanguard, MONDAY,DECEMBER 10, 2012 — 31

Introduction Tourism is one ofthe world’s fastest growingindustries as well as a majorsource of foreign exchangeand employment for manydeveloping countries. Inrealisation of the enormousbenefits derivable from havinga vibrant tourism industry,governments all over theworld have intensified effortsat promoting the growth oftourism through theapplication of robust taxregimes. Aside from taxationserving as a source ofrevenue for developing thetourism industry, favourabletax incentives have alsoproven to be a potent tool forits development. Taxation istherefore necessary for thedevelopment of the Tourismindustry which in turncontributes to boosting the taxrevenue (in the formadditional payment of ValueAdded Tax, Personal Incometax Companies Income Taxetc) accruing to thegovernment.

In this paper, I will like todwell on the following: Whatis taxation? What is tourism?Classes of tourism; Needs fortourism; The tourismIndustry; Tourismdevelopment; Why tourismdevelopment? Taxation as acatalyst for tourismdevelopment;Incentivesexisting in the Tax laws.

ConclusionWhat is Taxation? Tax is acompulsory payment imposedby the government on itscitizens to meet theexpenditures of thegovernment in the provisionof amenities and generalneeds of its citizens. Whencitizens pay tax, they expectsome benefits in return.Citizens therefore have alegitimate ground to demandfor accountability in theutilisation of money collectedfrom them in the form of taxby the government

What is Tourism?Tourism refers to activities of

persons travelling to andstaying in places outsidetheir usual environment fornot more than one consecutiveyear for leisure, business orother purposes not related tothe exercise of an activityremunerated from within the

place visited. It includesmovement for all purposes aswell as day visits orexcursions. Tourism can beused to describe a system ofinteracting relationships ofpeople, their need to traveloutside their communities,and services that attempt torespond to these needs bysupplying products.

Tourism is conceptually andtechnically different fromleisure travelling andrecreation. Leisure is definedas free time, time at onesdisposal that can be taken toembrace any activity apartfrom work and obligatoryduties. Travelling refers tomovement from one point tothe other. Travelling is a formof spending one’s leisuretime. It is an element oftourism as tourism is abroader concept. Recreationrefers to the act of creatinganew. It is the act of havingdiscretionary spending of ourleisure time. Recreation isabout involving oneself inactivities like sports, hobbies,games, travelling, andtourism in order to re-invigorate or refreshingoneself.

Classes of TourismTourism can be classified asfollows: InternationalTourism: Consists of inboundtourism, visits to a country bynon-residents and outboundtourism, residents of a countryvisiting another country.Internal Tourism: Residents of

a country visiting owncountry. Domestic Tourism:Internal tourism plus inboundtourism (the tourism marketof accommodation facilitiesand attractions within acountry). National Tourism:Internal tourism plusoutbound tourism (theresident tourism market fortravel agents and airlines).Sports Tourism: This refers totravel which involves eitherviewing or participating in asporting event stayingoutside one’s usualenvironment. CulturalTourism: Forms of tourismconcerned with a country orregion’s arts and culture. Itgenerally focuses on

traditional communities whohave diverse customs, uniqueform of arts and socialpractices which distinguishthem from other types ofculture. Film Tourism: Thisinvolves visiting locationswhere films are made, whereTV series are in produced andwhere film festivals are beingheld.

Needs for TourismFor people to experiencetourism, they usually need thefollowing: Disposable incomeLeisure time; Tourisminfrastructure such astransport facilities andaccommodation. Other factorssuch as health and motivationto travel.

The Tourism Industry TheTourism industry refers to agroup of firms involved in thebusiness of identifying theneeds of tourists and strivingto meet those needs with theminimum resource spendingpossible in order to make aprofit. As a service industry,the tourism industry hasnumerous tangible andintangible elements. Majortangible elements includet r a n s p o r t a t i o n ,accommodation and othercomponents for the hospitalityindustry. Major intangibleelements relate to the purposeor motivation for becoming atourist, such as rest,relaxation, the opportunity tomeet new people andexperience other cultures orsimply to do something

different or have anadventure. The touristindustry includes:

Those sectors which enablethe tourist to travel to and fromthe destination (for exampletravel agents, airlines, buscompanies, tour operatorsand car rental companies);Those sectors which are partof the product at thedestination (for exampleaccommodation, facilities andattractions); The humancomponent of tourism (thelabour force); The publicsector or governmentagencies, regional tourismorganisation, professionalassociations and industrytraining organisations.What is TourismDevelopment? TourismDevelopment refers to thetotality of activities of thegovernment and industryoperators aimed at expandingthe operation and enhancingthe quality of servicedelivered to tourists by theindustry. Such activitiesinclude: Provision of land(usually done by governmentdesignating certain landspace as TourismDevelopment Areas i.e. thecoastal area of Lagos);Building of transport facilitiesto allow for easy accessibilityto tourist centres; Buildingaccommodation facilities andparks; Developinggeographical features likebeaches, waterfalls, springs,ranches and mountainranges etc; Introduction offavourable tax regime;Ensuring stable democraticgovernment; Provision ofwater, electricity andtelecommunication facilitiesetc

Why Tourism Development?Tourism is vital to the wellbeing of many countriesbecause of : The incomegenerated by theconsumption of goods andservices by tourists; The taxeslevied on businesses in thetourism industry; Theopportunity for employmentand economic advancementderivable from working in theindustry. The economicbenefits of tourism, howeverreal and significant they maybe, do not constitute the onlycriteria for government toencourage tourism.

Tax Matters

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Imperatives of taxation on tourismdevelopment in Nigeria (1)

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Tourism is conceptually andtechnically different fromleisure travelling andrecreation. Leisure is definedas free time, time at onesdisposal that can be taken toembrace any activity apartfrom work and obligatoryduties. Travelling refers tomovement from one point tothe other. Travelling is a formof spending one’s leisure time.It is an element of tourism astourism is a broader concept

For people to experiencetourism, they usuallyneed the following:Disposable income;Leisure time; Tourisminfrastructure such astransport facilities andaccommodation. Otherfactors such as healthand motivation to travel

32 — Vanguard, MONDAY, DECEMBER 10, 2012

BRIEFS

Appointmentsvicahiyoung@yahoo.com 08033348923

Ogbeifun now President of Instituteof Chartered Mediators, Conciliators

FORMER President ofPetroleum and Natural

Gas Senior Staff Association ofNigeria, PENGASSAN, andcurrent Deputy Manager,Employee Relations, NigerianNational PetroleumCorporation, NNPC, Dr. LouisBrown Ogbeifun, has beenelected President of theInstitute of CharteredMediators and Conciliators,ICMC, Nigeria.

ICMC is a body of mediatorsthat has well over 6,000members.

Ogbeifun emerged Presidentof ICMC at its AnnualGeneral Meeting, AGM, heldin Abuja,the Federal CapitalTerritory, FCT.

A team player/builder, amotivational speaker, amediator and an industrialrelations expert, he holds theBachelor of PublicAdministration and Masters inPlanning and HealthManagement degrees of theUniversity of Benin, BeninCity.

In recognition of hisleadership qualities he was

President of ICMC, Dr. Brown Ogbeifun with the first MilitaryAdministrator of Rivers, His Royal Majesty Alfred Diette Spiffand Chief Paddy Njoku, immediate past President of ICMC.

conferred with a HonoraryDoctor of Philosophy inLeadership, Social andCommunity DevelopmentHONORIS CAUSA byEvangel Christian University,2003 (Lagos Nigeria),

Ogbeifun was elected the10th President ofPENGASSAN, the White

Collar employees’ bodyof the oil and gas industry in2003.

In 2004 he was elected the1st Deputy President Generalof the Trade Union Congressof Nigeria, TUC, umbrellabody for senior staffassociations in Nigeria.

A Deputy Manager,

Employee Relations, NNPC,he had carried out severalmediations with positiveresults in the Oil and Gasindustry thereby helping topromote industrial peace andharmony in that sector.

Ogbeifun has served thenation in several Committeesamong which are: Committeeon Socio-Economic Impact ofDownstream Deregulation inNigeria, 2003; Committee onthe Privatization of NNPCDownstream Sector, 2003/2004; Nigeria StakeholdersWork Group of the NigerianExtractive IndustryTransparency Initiative(NEITI) 2004/2005;Independent Consolidatedand Cushioning MeasuresCommittee, 2004/2005.

Also, the new President ofICMC has been honouredwith several awards such asPatriotic Achiever’s Award(2003), Diamond Award ofprofessional Excellence(2003), Outstanding UnionLeader Award (2003), RoleModel Gold Award (2003).

He is an author of severalarticles in various newspapersin Nigeria and the book “TheRole of labour unions in theOil and gas Industry inNigeria: A Practitioner’sPerspective”

THE Rivers Stategovernment has

announced the appointmentof Mr. ChristopherOlisa as Sole Administratoroverseeing the operationsof the recently establishedRivers State Signage Agency.

Prior to his appointment,Olisa was an Associate Directorat Mindshare Media Agency,a leading generalist Mediaconsulting firm, part of the WPPGlobal network.

His responsibility was to growthe Out Of Home arm of thebusiness, cutting across severalblue chip clients. Olisabrings on board to this newr e s p o n s i b i l i t y o v e rtwo decades experience inadvertising and outdoor mediapractice in leading agencies.

Olisa heads Rivers Signage AgencyA thorough-bred marketing

communications and brandbuilding expert, Olisa hadduring his years ofp r a c t i c e i n t o prated advertising and outdoormedia agencies suchas Ogilvy Benson and Mather,Prima Garnet Ogilvy andM e d i a s h a r eNigeria, distinguished himselfas a rare brand building

expert and marketingcommunications strategist.

Industry watchers are excitedat the prospects of his immenseproficiency, ability andgoodwill in regulating andbringing sanity to outdoor andsignage practice in Riversstate.

One of the rare stock of welltrained and versatile mediaspecialists, his profile and

pedigree reveals thatOlisa had at different times inhis years of practice beeninvolved in the building ofleading iconic brands indiverse sectors of the nation’seconomy including, Financialservices, Telecommunications,Health, Oil andGas, Insurance, SatelliteTelevision, FMCG andPharmaceuticals.

CABLE News Network,CNN, has named Jeff

Zucker, as its PresidentHe will assume office in

January 2013, to oversee aportfolio of 23 branded newsand information businessesthat includes CNN/U.S, CNNInternational, CNN.com andHLN and reaches more than2 billion people in some 200countries around the world.

Zucker will report to Kentand will be based at CNN inNew York.

The announcement of theappointment Zucker as thePresident of CNN Worldwide,was made by Phil Kent,Chairman/Chief ExecutiveOfficer, CEO of CNN parentcompany Turner BroadcastingSystem, Inc.

Zucker started his 25-year

Zucker named President of CNN

career with NBC as aresearcher for NBC Sports’coverage of the 1988 SummerOlympic Games and rose topresident and chief executiveofficer of NBC Universal.

He was named executiveproducer of Today January1992; under his eight-yearleadership, the program wasthe most-watched morningnews show and the mostprofitable program ontelevision.

Zucker went on toexecutive-produce NBCNightly News with TomBrokaw the network’scoverage of the Persian GulfWar, the 1993 and 1997presidential inaugurationsand the 2000 elections.

He was promoted topresident of NBCEntertainment, president of

the NBC Entertainment,News & Cable group andpresident and CEO of theNBC Universal TelevisionGroup. Currently, Zucker isexecutive producer of thesyndicated daytime showKatie.

“Jeff ’s experience as a newsexecutive is unmatched for itsbreadth and success,” saidKent. “He built and sustainedthe number-one brand inmorning news, and under hiswatch NBC’s signature newsprogramming set a standardfor quality andprofessionalism. As aprogrammer, a brand-builderand a leader, he will bringenergy and new thinking toCNN. I couldn’t be happierto welcome him or moreexcited about what he’llaccomplish here.”

Director ofCommunicationAnglicanCommunion bagsaward

HE A D o fCommunication,

Church of Nigeria (AnglicanCommunion), Foluso Taiwo,has been honoured for hiscontribution to thedevelopment of Journalism inNigeria.

The award of excellence wasbestowed on him at the officialinauguration of Freelanceand IndependentBroadcasters’ Association ofNigeria’s (FIBAN) newlyelected executives led by Mr.Olu Akindele in Abuja.

Taiwo, popularly known as‘Okookan La’ ji oo’, a Yourbaslogan to end his 8 pm Yorubanews broadcast on Osun StateBroadcast Corporation(OSBC) Television, toldVanguard after the ceremonythat good governance was theonly antidote to the country’sproblems.

A Season Broadcaster whodedicated the award to hisFamily, urged mediapractitioners to imbibe what hecalled ‘developmentaljournalism’ withoutsacrificing objectivity, fairnessand balancing to ensurenational development.

Earlier, Chairman, FIBANAbuja Chapter, Olu Akindele,promised that they would notrelent their efforts “torepresent Nigerians interestin all our programming bothin electronic and print.”

FG, NDE verifySURE-P graduateinterns

FEDERAL Ministry ofFinance in collaboration

with National Directorate ofEmployment, NDE, hasconducted a verification ofgraduate interns, for SubsidyReinvestment andEmpowerment (SURE-P) inNDE Lagos State Office.

A statement by SURE-P ,State ImplementationCommittee, said theverification exercise whichcommenced on 3

rd December,

2012 and lapsed on 5th

December 2012.The statement said officials

from the Ministry of Financeled by Mr. Felix Ovedje, theteam leader verified about 41graduates who did theirregistration online and hadbeen successfully shortlistedas beneficiaries of the SURE-P, provided they meet up withthe necessary requirementsfor verification.

•Christopher Olisa

Vanguard, MONDAY, DECEMBER 10, 2012 — 33

Business & Economy

NIGERIA: CONDEMNED TO PERPETUAL UNDER-DEVELOPMENT

“When those in office regardthe power vested in them aspersonal prerogative, theyinevitably enrich themselves,promote their families, favourtheir friends. Thefundamental structures of themodern state are eroded likesupporting beams of a houseafter termites have attackedthem. Then the people haveto pay dearly and long for thesins and crimes of theirleaders”. Lee Kuan Yew,Singapore’s Prime Minister.

(VANGUARD BOOK OFQUOTATIONS, p 2). The man who led Singaporefrom the Third World to theFirst in one generation hashad no equal in Nigeria andcertainly doesn’t have now.All our living Heads of Stateput together have done lessthan one tenth of what Yewdid for the tiny nation ofSingapore despite the gallingpretences of the most sell-righteous one among them; bythat I mean Obasanjo. Thereis no single living Head ofState and almost none amongthe dead who would not beindicted on charges ofregarding “the power vested”in him “as personalprerogative”. And that cultureis getting worse by the day.That “they enrich themselves,promote their families, favourtheir friends” is legendary –even by Africa’s lowstandards for accountabilityand transparency ingovernance. The rest of theworld had for long acceptedthat we in the Dark continentare still living in the Dark Agesgiven the leadership we havehad since the “Wind ofChange” (courtesy HaroldMacMillan, British Prime

Minister) which broughtdisorder called independenceinto previously well-organised colonies. Truth is,there is no single part of thiscontinent, certainly notNigeria, which was not bettergoverned in 1952 than now.

However, never in ourdisgraceful history, sinceindependence has impunity,the arrogance of power andtotal disregard for thedevelopment of Nigeria, beenso glaringly exhibited as wehave experienced since 1999under all governments – withfew exceptions. Never has thewelfare of the majorityglaringly taken such lowpriority to the prerogatives ofleaders.

In the last three weeks,Nigerians have read how thePresidency intends to spendN2.3 billion on food, drinksand welfare of visitors to AsoRock; last year the sumbudgeted was N1.3 billion.But, since only Unijankarapeople protested, thecollective silence was taken asconsent. One blockhead eveninvited me to join them at AsoRock if I want to eat. Now, thebudget for food and drinks, in2013, has risen by 80%, fromthis year ’s estimates, whilethe entire budget by less thanfive percent.

Meanwhile another N2.2billion project has been slatedfor 2013 – the construction ofnew Vice President’s House.This will make it the thirdVice-President’s house thatthe Federal government ofNigeria under the PDP willbuild since 1999. The UnitedStates of America and Britainhad retained the samestructures for their leaders forcenturies; only making

renovations andimprovements as technologyand security will suggest.But, not Nigeria; where thecomfort of Nigerians is moreimportant than the welfare ofthe people they govern.

This government must be inlove with N2 billion projectsbecause there is a third one –a N2.2 billion contract to builda conference hall in thePresidency. The excuse thistime is that it willaccommodate 150 people at atime. Meanwhile, Abuja issaturated with halls of thatsize.

To PUNCH, we owe a debtof gratitude for drawing our

attention to the fact that theFederal government ofNigeria spend N9 billionannually on the I0-aircraftPresidential fleet. The samepaper went on to point outthat the leaders of nations, farmore developed and richerthan Nigeria, have smallerfleets; some don’t have any.The abridged list of countriesis presented below:

COUNTRYPRESIDENTIAL FLEET

Nigeria 10Japan 2Netherlands 2United Kingdom 0Ghana 1Algeria 1South Africa 1

Japan has the third largesteconomy in the world; SouthAfrica is the largest economyin Africa. Their leaders keeponly two aircraft idle most ofthe time. The NigerianPresident keeps ten aircraftgrounded and maintained atgreat expense by Nigerians –virtually all the time. So, in2013 we can expect to spendanother N9 billion on wastingassets instead of activeinvestments. It is clear to evento the ordinary man that ifhalf the cost of maintaining thePresidential jet is spent onroads or fertilizer every yearNigerians will benefit morethan they do with so muchgoing into the “prerogatives”of our leaders.

However, all those are smallpotatoes compared to thecorruption, lack oftransparency andaccountability in the oil andgas sectors – where moremoney that should be paid

into the Federation Accountfor sharing between the threetiers of government simplyvanish into private pockets.Few Nigerians are aware thatDeep Water oil operations onwhich the International OilCompanies have investedabout $46 billion (that is ninetimes the 2013 budget) hadbeen generating funds for thecountry. How much wasgenerated last year, this yearand years before remain asecret. The 2013 budget hasfollowed the same pattern ofcover-up because it makes noreference to this importantsource of revenue. By thesame token, there has been noaccount of the disposition ofthe funds for the PetroleumDevelopment Trust Fund,PDTF, which is first chargeagainst oil proceeds andmandatorily to be given to thePDTF Secretariat for specifieddevelopment projects. ThePDTF was much abused underObasanjo and there is everyreason to believe that it is stillbeing looted at the moment.PDTF is another agencyunder the Ministry ofPetroleum whose activitieshave been placed under a veilof darkness – for obviousreasons.

While Japan has beendescribed as nation whichcannot afford to wasteanything, and that explains itsrise to economic power.Nigeria wastes everything,our leaders encourageprofligacy and corruption.That explains why with ourvast resource advantage overJapan, we are poorer and willremain so for a long time tocome. We simply lack theleaders to take us to help usdevelop.

However, neverin ourdisgracefulhistory, sinceindependencehas impunity, thearrogance ofpower and totaldisregard for thedevelopment ofNigeria, been soglaringlyexhibited as wehaveexperiencedsince 1999 underall governments– with fewexceptions

damages against thecompany for his inability toget his luggages as at whendue.

N16.8M suit filed against Ethiopian AirlinesBy ABDULWAHAB

ABDULAH

An Abuja based legalpractitioner, Aikhunegbe

Anthony Malik, has filed aN16.8 million suit before aFederal High Court, Abujaagainst the Ethiopian Airlinesover alleged breach ofcontract and missing ofluggage.

In a motion on notice withNo. ABJ/CS/664/2012 filed bythe lawyer, AikhunegbeAnthony Malik, who claimedto have travelled with theAirline from United ArabEmirates, UAE ,to Nigeria onSeptember 10, 2012, is askingfor the payment of N16, 882,500 million as general,aggravated and exemplary

According to him, hetravelled with the Airlinesfrom UAE with two differentluggages weighing 20 kg

each, which were properlytagged, but on his arrival inAbuja, his last destination, hecouldn’t lay his hands on oneof the luggages as it gotmissing, until after 11 daysafter he had suffered so much

discomfort, pain, and alsomade repayment for severalgoods, he bought for hisfriends who were gettingmarried.

By LAWANI MIKAIRU

Secretary General of the

Airlines Operators ofNigeria ,AON, CaptainMohammed Joji has said thatairlines should not begrounded because of air crash.

This is coming on the heelsof the recent SenateCommittee on Aviationindictment of Dana Airlinethat it was negligence that

You can’t ground airline because of crash — Jojicaused the crash of June 3rdat Iju-Shaga area of LagosState.

Addressing a pressconference in Lagos , CaptainJoji who spoke on behalf ofAON said they felt compelled“to clear the distortion fed tothe general public by theSenate Committee on Aviationby its Chairman Senator HopeUzodimma that it wasnegligence on the part of the

airline that caused the Danacrash”.

The AON further allegedthat the Senate Committeeaccused Dana Air ofexcessively declaring airreturns and also that theSenate investigative panel onDana crash ignorantlyinsinuated that Dana aircraftMD 83 was too old to beallowed to fly and that DanaAir is the only airline in Africa

that flies MD 83 aircraft.The AON believes that Dana

Air pilots, if ever they actuallydeclare air return, should becommended “as any pilot thatdeclares an air returndeserves a medal”. Theyfurther said no pilot will liketo fly to the limit of‘’discrepancies’’ therebyrisking the lives ofpassengers.

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34 — Vanguard, MONDAY, DECEMBER 10, 2012

FPA

Vanguard, MONDAY, DECEMBER 10, 2012 — 35

“

FPA

36 — Vanguard, MONDAY, DECEMBER 10, 2012

ICT

BRIEFStories by PRINCEOSUAGWU

The FederalGovernment’s drive for

Foreign Direct Investment(FDI) seems to be yieldingpositive result. Both old andnew foreign investors arecurrently indicating positiveinterest in strengthening orexpanding their existingbusiness concerns in thecountry.

For instance, last week, oneof the world’s leading retailforeign exchange companies,Travelex, renewed itscommitment to seeingNigeria’s economy stabilizewith the visit of top executivesof its UK outfit.

Although the company saidit has committed to theeconomic growth of thecountry for 33 years running,it also promised to providecutting edge technology thatcan help the governmentactualise the cashless Nigeriainitiative, much as it wouldrenew investment drive tohelp in stabilizing thecountry’s economy.

The company said this visionand strive to match words withaction have seen its UK topexecutives embarking onbusiness visits to the countrytwice in less than six months.

First was in May this yearwhen the global ChiefExecutive Officer (CEO), ofTravelex Group UK Ltd, PeterJackson visited with a firmcommitment to contribute tothe Nigerian economythrough foreign currencytrade and partnership withauthorities to fightcounterfeiting.

Jackson was bold to say thatthough the security situationin the country waschallenging to investors, itwas not peculiar to Nigeria aseven London and otherbusiness hubs in the worldhave their own cross to carry.

For him, “Travelex has been

Travelex promises tech supportfor cashless Nigeria…Commits to huge investment for Nigeria’s economic growth

operating in Nigeria for33years. I think we’ve got agreat opportunity to expandour business in the countryand to further explore theopportunity to expand ourfrontiers. We are trying to dosome other things that we doin other parts of the world.

“I don’t want to pretend thatthere are no security issues inNigeria, but it is not peculiarto Nigeria. In Indonesia,Malaysia, New York andLondon, in all of these places,they all have securitychallenges. I think what isimportant is to think seriouslyabout how to deal with them.It is not a unique issue”,Jackson added.

Less than six months afterthis statement of confidence inNigeria’s business climate,Chairman and Founder ofTravelex, Lloyd Dorfman,came to see things for himselfand going by hispronouncements, it could only

be better for Travelex andNigeria.

Dorfman’s courtesy visits tobusiness interests and placesin the country came up with abold statement that Travelexwas interested in expandingits business operations in thecountry.

The first beneficiary of theexpansion programme is thenation’s aviation sector whereair travellers and airport userswould be provided withseamless retail foreignexchange servicescomparable to what obtains inother international anddomestic airports worldwide.

The implication is that airtravellers in the country willhave access to a basket ofmore than 80 currenciesthereby solving their travelmoney needs in a stress freeenvironment. This will beachieved through setting upbureaux and installation ofworld-class equipment and

technologies in all the majorairports around the country byTravelex.

Mr. Dorfman believes thatwith the company’s cutting-edge technology in theprovision of foreign exchangeATMs, Travelex valueaddition presence in thecountry’s airports would helpto boost the country’s cashlessinitiative.

While at the Ministry ofAviation, Princess StellaOduah, Aviation Ministerexpressed optimism at theprospects of partnering withTravelex to enhanceNigerians’ travel experience.

“We are looking for foreigninvestors, so we are extremelyexcited about this opportunityto work with you. We areembarking on very ambitiousexpansion programme of ourairports, with therehabilitation, reconstructionand remodelling of the oldterminals”.

TD captures iDirect to deepen broadband culture in West Africa

Global satellite and hubi n f r a s t r u c t u r e

providers, iDirect, last week,joined other internationalbrands like Lenovo, Samsung,Canon and HP among othersto scramble for the WestAfrican IT market, after tyingup a business deal withNigeria’s ICT distributionexpert, TechnologyDistribution, TD.

iDirect said its move was toaddress the growingcomplexity of deploying andmanaging global IP networksin Nigeria. TD, through itsreseller network spanningacross West Africa, would nowstock and distribute iDirect

portfolio of hubs, routers andnetwork managementsoftware and consolidate itspositioning as the foremostone-stop-shop for ICTproducts.

Giving insights on the deal,TD’s Executive Director,Marketing, Mrs. ChiomaChimere, said her companygrabbed the juicy deal due tothe pedigree it hasmaintained over the years,adding that TD has alreadytrained Resellers for themarketing of the iDirectproducts. Also, Sales DirectorAfrica, iDirect, Mr CheikhDla, said that the TDpartnership would offer

products for the groundinfrastructure required toshatter the myth surroundingthe Internet. It will enablecommercial and socialenterprises, militaryestablishments, governmentsand grassroots organizers tobuild satellite based networksthat yield higher bandwidthefficiency with lower budgets.

He explained that iDirect’sproduct lines integrate a widevariety of hardware, softwareand services seamlessly intoa complete satellitecommunications platform.iDirect’s hardware includepowerful universal satellitehubs and versatile routers to

meet all requirements forscalability and durability; acomprehensive range ofapplications-specific productssuch as network acceleratorsand optimizers that enhancenetwork performance.

For him, iDirect producestriple solutions VoIP, data andvideo internet experience forbroadband applications thatcatalyze an efficient andsuperior bandwidth throughoutNigeria.

Dla revealed that the choiceof TD followed a painstakingeffort to find a Distributor inWest Africa that had thecapacities to deliver the iDirectcorporate objectives in theregion.

L-R: Abdulwaheed Omar, President of Nigeria Labour Congress, Chief Emeka Ihedioha,Deputy Speaker of the House of Representatives, Comrade Adams Oshiomhole, ExecutiveGovernor of Edo State, Mrs. Omobola Johnson, Minister of Communications and Technology,and Leo Stan Ekeh, Chairman, Buyright Africa unveiling the symbol of the Nigerian EmployeesDigital Welfare Scheme, NEDWS, at the launch of the product in Abuja, at the weekend

VConnectunveilsnew 2.0website

A local searchengine, andi n f o r m a t i o n

service providerVConnect by GlobalServices Limited is set tochange the game onceagain in the informationservice and searchengine business inNigeria with theunveiling of its new look2.0 websitew w w . v c o n n e c t . c o mbased on users feedback,services and coverage.

The new VConnect 2.0make over provides afresh look and userfriendly website thatenables users to searchfor information fasterand more accurate thanever before. The 2.0Website also allows formore in-depth searchresults.

According to theGeneral Manager,VConnect GlobalServices Limited, Mr.Deepankar Rustagi, thenew website willenhance quality servicedelivery to the esteemedusers of the service forbetter and faster searchresult.

Rustagi said “ the newlook VConnect 2.0 givesa better resolution, it isfaster both on laptop anddesktops with morefriendly interface for theusers and there has beena drastic increase in thenumber of usersconnecting due to theseimprovements”

He further revealedthat the company hasachieved two remarkablemilestones by growingthe database from zeroto Five HundredThousand listed andverified businessesmainly of Small andMedium Enterprises(SME’s) within twoyears and also offering aservice that is moreoptimized for mobileapplication to helpsearch faster and better.

“We have taken thefeedback from the userson mobile applicationand have improvedbased on local needs andhave optimized it tosmart phones andandroid phones.

CMYK

Vanguard, MONDAY, DECEMBER 10, 2012 — 37

Agric

Alliance for GreenRevolution in Africa(AGRA)’s President

Jane Karuku has revealed

Agriculture Minister, Dr. Akinwumi Adesina in a chat with AGRA President Jane Karuku at the AGRA forum in Arusha,Tanzania recently. pix by Jimoh Babatunde

How Africa can grow capacity to feed itself- AGRA President By JIMOH BABATUNDEwith agency reports

that for Africa to feed itself andhelp feed the world that threedecisive actions in core areasmust be addressed. PresidentJane Karuku said we mustbuild new, innovative public-private partnerships; ensure

international donors andAfrican policymakers keepand fund their commitmentsand listen to what farmersreally want and need.Speaking at the World FoodPrize Symposium in theUnited States to discuss theneed for public-privatepartnerships and newcommitments to fundagricultural development,she said AGRA believes thatin order to rapidly expandAfrican agricultural yieldsand improve global economicgrowth that there is need towork creatively across sectors.

“AGRA has been working toestablish small risk-sharingloans with several commercial2banks in order to leveragemore affordable credit forfarmers and agribusinesses.“Together with our financialpartners, we have made atotal of $17 million US dollarsavailable to three commercialbanks, which leveragedaccess to about $160 millionUS dollars in credit to farmersand African businesspeopleon the ground. She said theirefforts demonstrated theeffectiveness of this approach,which is now being taken up

on a much larger scale byseveral African governments.

“The most successfulpartnerships are those inwhich everyone has putmoney on the table and istangibly invested in a sharedoutcome. “Whether we areworking with private-sectoragribusinesses, smallfarmers, governments, orinternational NGOs, we knowthat in order to succeed, wemust share skills andresources to move Africanagriculture forward. Whileasking that Africangovernments andinternational donors be heldaccountable to keep and fundtheir commitments, she saidAfrica’s smallholder farmersdeserve nothing less thanconcrete action. “For far toolong we have seen leaderspledge without paying. I amhere today to call for the fundsthat have been committed inAfrica and abroad to reach thefarmers who need it most.“When the funds reach ourfields, we must ensure theyare invested across the fullagricultural value chain –from better seeds and soils, toimproved markets, more

affordable financing andsmarter policies.

We need to ensurebalanced growth to transformsubsistence farming into aviable commercial enterprisethat will drive economicgrowth.” AGRA firmlybelieves that African farmerscan lead the way to a strongerglobal economy. If we keepour commitments today, Africawill make a substantialcontribution to global foodsecurity tomorrow. JaneKaruku said most importantly,that there is need to continueto listen to the voices ofAfrican farmers, just as sheasked that there is need todeliver solutions that addressthe challenges andopportunities farmers faceevery day in the fields andmarketplace. “Farmers alsoare looking to us for moreoptions to grow Africa’s staplecrops. We need to providemore robust varieties that canbetter withstand shiftingweather patterns. But I don’tneed to tell a room full offarmers from Iowa about theimportance of growingdrought-tolerant crops!”

38 — Vanguard, MONDAY, DECEMBER 10, 2012

FPA

CMYK

Vanguard, MONDAY, DECEMBER 10, 2012 — 39

Advertising, Media & Marketing

BRIEFS

Stories byPRINCEWILL EKWUJURU

Ikeja City Mallto add newsections

With 95 percentoccupation, Ikeja City

Mall (ICM), home tointernational and local brandsis set to add new sections tothe mall. The new sectionsaccording to the CentreManager Mrs. DebolaMajekodunmi, said that willinclude the children sectionand a cinema hall.

Speaking to the media,Majekodunmi, in a chat atthe centre’s managementoffice, said that the newsections are being added tothe mall that will includepopular food court, “this is tomake it a destination pointthat caters for all members ofthe family. There’s somethingfor everyone.”

With these additions, shesaid the mall guaranteescompetitive prices and abovethe par customer service, thatwill longer be any need forNigerians to go to dubai andother places for shopping,majekodunmi opined.

There are a number ofinternational brands availablehere, the shoppingexperience is great and therange of brands ,-local andinternational is vast.Nigerians are thereforeadvised to look inward. Whygo abroad to buy the brandsthat are available here?. Shequeried.

Cofi-cofienters market

Joennec MarketingCompany Limited has

secured the franchise tomarket Cofi -Cofi in Nigeria.

The registration of Cofi Cofiby the National Agency forFood Drug Administrationand Control (NAFDAC) hasbrought new innovation intothe coffee market in Nigeria,a market that is graduallygrowing as coffee drinking isincreasing by the day.

At a media launch of theproduct recently in Lagos, theManaging Director ofJoennec MarketingCompany, Azu Anyanso, said:“The manufacturer of CofiCofi product has also takeninto consideration theimportance of retail shelfmerchandising and thereforepackaged the product inspecial stand-up bags, inbright and attractive coloursthat make it to have ‘eyecatching’ effect on theconsumers.”

Pay TV Licence: Knocks for Gotvoperations in Nigeria

The entry of Gotv intoNigeria’s pay TV market

was without doubt celebratedwith enthusiasm fromNigerians. This could beattributed to the fact thatNigerians wantedcompetition, because only anegligible few could actuallyafford the cost of acquisitionand subscription.

It’s a common knowledgethat the pay Tv market in thispart of the world was beingdominated by Digital SatelliteTelevision, DSTV, from thestable of Multichoice, with anegligible few having accessto the services of the pay TVbecause of its cost ofacquisition and subscription,which were beyond the reachof an average Nigerians.

Interestingly, with the June17, 2015 deadline given by theI n t e r n a t i o n a lTelecommunications Union forthe transition from analogueto digital television fastapproaching, the pay Tvmarket seems to bewitnessing a radical change.More operators are signifyingtheir intentions to participatein that market, while some areincreasingly becomingentrenched in the market,thereby giving DSTV, thedominant operator in thesegment a run for its money.

Conversely, the advent ofGotv into the nation’s pay Tvmarket has generatedcontroversies in the market,where others MyTv, Infinity

Tv, Hitv though dead, havenot succeeded may be due totheir inability to stand thefinancial power of the leader;Multichoice.

There are insinuations thatGotv do not possess thelicence to operate or Is itriding on the back ofMultichoice to do business inNigeria, this questions andmore are being asked byconcerned Nigerians.

According to them, Gotv wasnever, at any time, licensed tooperate a digital terrestrialtelevision (DTT) services as itis presently doing, addingthat what it is licensed to dois the digital videobroadcasting handheld, a

licence that restricts it toprovide service directly tohandheld devices.

They have argued that sincethe federal government’spronouncement, through theHonourable Minister ofInformation, Mr. LabaranMaku, in April this year, thatthe government would belicensing at least two signaldistributors, out of which onewould be public signaldistributor that wouldcomprise of the broadcastingaccess of NTA, FRCN andVON, another private signaldistributor to steer away themarket from beingmonopolistic, and to enablesubscribers get values fortheir money.

“We would be licensing atleast two signal distributors;

one will be public signaldistributor that will compriseof the broadcasting access ofNTA, FRCN and VON. Wealso will be licensing anotherprivate signal distributor toprovide the necessarycompetition that will givevalues to consumers ofbroadcasting content.”

Though seen as a welcomedevelopment by many,especially those who wouldhave loved to participate asprivate signal distributors,unfortunately their zeal wasdampened with the suddendebut of Gotv without abidding process. Questionsare if the company biddedwho competed with it?.

Gotv started operation inIbadan, Oyo State, PortHarcourt, River State andthen Lagos, bringing cheaperpay TV services to subscribersin those states, it has becomea pain in the neck ofindigenous stakeholders.

The world is changingand the game has to

change. What has served uswell now is not enough to takeus to the future. We need totransform a lot of thingsincluding how we think andhow we do things.

These were the words of Mr.Seni Adetu, ManagingDirector of Guinness Nigeriawhen he spoke on whatadvertising will look like by2013, at the 20

th anniversary

of the Advertising Associationof Nigeria (ADVAN) in Lagosrecently. He advisedmarketers to increase theirorganisation’s return oninvestment (RoI)by thinkingabout their brands using a‘Fish’ model.

Using the concept of thebody of a fish as the brand,Adetu said for advertising to

ADVAN Forum: Marketers need to transform their thinking—Guinness MD

work, it must have the eye ofa fish which is direction andconsumer insight. “Don’tcreate any advertisementwithout having insight. Ifyour client is rushing you,calm him and let him realizethat without yourunderstanding of theconsumers' insight you arelike a fish without an eye. Thetail of the fish gives fishpower and propels the fish, asthis relates to brandmanagement and strategy.

The Guinness boss called fora change in the way marketersperceive advertising. “Whatmatters in Ad creation is thatit should elicit reactions thatwill impact on brand growth”,he said, maintaining thatCEOs will continue to cut Adbudgets in times ofoperational difficulties if

adverts don’t deliver top andbottom lines.

He further told thegathering comprisingADVAN members,advertising agenciesmembers and journalists thatmarketers advertise to win thehearts and minds ofconsumers, buildingconsumer connection andgrowing brand equity,clarifying that anyadvertisement that does notdeliver these goals is notacceptable, but warned thatmarketers must be very clearon the key performanceindicators they set forthemselves.

He said operationalmarketing is the type ofmarketing that works andsupports top line. If youcannot prove that your

marketing will makeorganizations like Guinnessgrow their top line, then wewill not embark on it.

Explaining why someorganizations like Coke andGuinness have survivedyears, he said it is becausethey have standards whichthey maintain irrespective ofcountries they operate, sayingno body will lower standardfor anybody and said perhapsthat is why adverts are shotabroad.

Also speaking, the presidentof ADVAN, Kola Oyeyemisaid the objectives of theassociation is to buildcapacity, adding that the bodywill in due course sign MoUwith credible organizations oncapacity building. He said thebody will pursue global beststandards and industryharmony.

From Left: Big Brother All Stars Winner, Uti Nwachukwu (Far right) and Tinsel actor, GideonOkeke (far right) posing with Richard Obieche (second from left) and Mike Chinedu (secondfrom right) both car winners in the Star Time To Shine Promo during the car presentationceremony held at the corporate Headquarters of Nigerian Breweries Plc in Lagos.

CMYK

40 — Vanguard, MONDAY, DECEMBER 10, 2012

CMYK

Omoh Gabriel - Group Business EditorBabajide Komolafe - Acting Finance EditorClara Nwachukwu - Energy EditorPeter Egwuatu - Head, Capital MarketYinka Kolawole - Snr Bus. CorrespondentFavour Nnabugwu - Insurance CorrespondentGodwin Oritse - Maritime CorrespondentGodfrey Bivbere - Maritime CorrespondentMichael Eboh - Capital Market ReporterYemi Adeoye - Capital Market ReporterOscarline Onwuemenyi - Energy ReporterFranklin Alli - Industry/Agric. ReporterAmaka Abayomi - Money market ReporterEbele Orakpo - Energy ReporterIfeyinwa Obi - Maritime Reporter

CONTRIBUTORSPrincewill Ekwujuru - Media/MarketingNaomi Uzor - IndustryProvidence Obuh - Micro FinanceLAYOUT - Graphics Department

Email:lesleba@lesleba.com, lesleba@gmail.comBlog page:www.lesleba.com/blog2Website: www.lesleba.com

Tel:0817 002 3569

Business Economy

By PETER EGWUATU

The Chairman,S u b s i d yReinvestment and

Empowerment Programme(SURE-P), Dr. ChristopherKolade, weekend, debunkedclaims that its committee hasspent N2.2 billion onsecretariat services in its 10months of operation asreported by some media,saying it was not true.

He also disclosed that outof the N180 billion accruedfrom the subsidy, only 42 percent goes to the federalgovernment, while 54 percent goes to the states andlocal governments.

The SURE-P chairmandisclosed this during aninteractive session witheditors in both print andelectronic media, saying thecommittee has only spend N1billion. So where is the N2.2

SURE-P Chairman refutes allegation of financial improprietybillion coming from. We didnot receive any money fromthe government to carry outour responsibility until July,2012. The money from thesubsidy does not come to thecommittee directly but arelodged with the Central Bankof Nigeria (CBN). So beforewe withdraw any money forany particular project thebudget office must approve ofit.” “Government hasdetermined the areas itwanted to intervene before wecame on board. Our ownresponsibility is to ensurethat money allocated for anyproject is used where it wasmapped out for. We did notdetermine what project weare carrying out. Our role isto make sure we get value forthe money spent. It is thefederal government that hasresponsibility to determinewhat to spend the money for.We want to do a job that has

quality. The NationalAssembly approved all theprojects and money allocatedfor them. Before we took thejob, we agreed amongourselves as a committee thatwhatever we are going to dowe should do it with probity,accountability andtransparency. That has beenmy words any where I work.I brought in my integrity,experience and God to servethis country, none of mycommittee member is out ofjob, they are people who aredoing well financially andotherwise in their variousfields. So the NationalAssembly don’t just come onpeople and rubbish themsimply because they come toserve their country.”

When asked whether he willcontinue to serve the country,he said, “Of course I don’thave any other country tocontribute my quota. I will, no

matter the pressure , providedthe committee is doing thingsthat will benefit the ordinaryNigerians. If the NationalAssembly attack me, I willdefend myself with every fact

and wont be intimidated.Nobody has monopoly ofattack, but because of thewisdom I have gathered overthe years I will continue to dothe job with wisdom.

The primaryunderlying principlein a social contract in

a modern democraticdispensation is that ofequality of all persons.

Instructively, the higherthe degree of social inequity,the greater also will be thelevel of national instability,and the more restrained willbe that nation’s economicgrowth trajectory. Consequently, it becomesinexplicable that somegovernment policies andinitiatives facilitate theprosperity of a favoured sub-group at the expense of thevast majority.

Curiously, projects andpolicies overtly intended toimprove mass social welfarehave often become a bonanzafor a select few, while themasses remain victims of suchexploitation. Presidentialimport waivers are goodexamples of such misguidedgovernment interventions. In spite of the gross abuseassociated with importwaivers, no recipient ofwaivers has ever beenformally reprimanded forimproper conduct!

The damning revelationfrom partial waiver on fuelprices is another example ofhow a handful of Nigerianscan collude with collaboratorsin government to stealhundreds of billions of nairafrom the treasury, against theapparent intention of policy!

Regrettably, those whofacilitated or approved false

WAIVERS FOR THE RICH, HARD LABOUR FOR THE POOR!

applications for subsidypayments have not sufferedany overt sanction, andprobably never will.

The plea bargain is also aperfection of a waiver system,which protects the rich andpowerful at the expense of themasses; several politicaloffice holders liberally abusedtheir offices and ultimatelywent scot-free after refundingpeanuts, to avoid prosecutionor the need to repay billionsof naira stolen while in publicoffice!

The interventions of theCentral Bank and AMCONin the banking sector servethe same purpose as waivers;the promise that injection oftrillions of naira public fundswould reposition banks toactively support and energisethe real sector has remainedlargely unfulfilled.

The waiver ‘racket’ hasnow found fertile grounds inthe capital market. Theunfettered opportunities forinvestors to borrow at over20% in order to acquire theprice-manipulated shares oflending banks was primarilyresponsible for stock market failure in 2008. Worse still,it has become evident thatmost of these margin loanswere grossly under-collateralised, a practice,which apparentlycontravenes the provisions ofthe Investments andSecurities Act (ISA).

Although AMCON mayhave purchased the toxicassets at a discounted price

of about N42bn, in reality, thecurrent value of theunderlying assets orcollaterals is only aboutN19.6bn according to theMinister! Consequently,AMCON’s over N2 trillionincursion in the moneymarket may, in reality, also beworth less than N1 trillion atcurrent valuation, a wastefulloss of public funds and threatto AMCON’s survival!!

Inexplicably, none of the84 stockbrokers identified byboth AMCON and SEC as

guilty of this infraction will beprosecuted! Curiously, theseoffenders are now adjudgedworthy of debt waivers!

This particular debtforgiveness is moreunpalatable because thebeneficiaries are privatebusinesses and speculators,who willfully engaged in thecasino of the stock market,with the full knowledge thatthe equity they purchased

lacked the fundamentals tojustify their inordinately highprices!

Since the public did notparticipate in the profits ofthese stockbrokers when thegoing was good, one wonderswhy AMCON should foregoN22.6bn of its asset base asdebt forgiveness to thesegamblers. There isundoubtedly the moralhazard that this type of waiverwill send the wrong signal tooperators in the stock marketand elsewhere, that

government would cover theirbacks even if they broke thelaws and operated recklessly.

It is not yet clear how thesecurities market will becomereenergised by the reentry ofthe 84 stockbrokers, becausewith a zero liquidity base, asthings stand, they cannotbring fresh capital into themarket; besides, the N22.6bnwaiver and the attendantslap-on-the-wrist sanctions

announced by Dr. Okonjo-Iweala cannot truly deterfurther malfeasance in thesecurities market.

In addition to the debtwaiver, the Minister alsoannounced the elimination ofstamp duties and VAT onstock market transactionfees. In other words, whileoperators in the real sectorhave ceaselessly decried themultiple taxes on theirdepleting incomes withoutany sympathetic responsefrom government, theMinister has, with thismeasure, exemptedcommissions earned ontraded value of shares (stockmarket gambling) and stampduties on transaction feesfrom VAT payments.

Indeed, other than theremoval of partial fuelsubsidy, it is difficult toidentify any waiver that hasbrought succour directly tothe masses.

In conclusion, reduction inrate of inflation and astronger naira remain themost potent waivers forsustaining enduringimproved economic growthand social welfare;instructively, however, suchwaivers cannot be availablewith our recurrent burden ofa cash surfeit economycaused by CBN’s substitutionof naira allocations for dollardenominated revenue.

SAVE THE NAIRA, SAVE

NIGERIANS!

Since the public did notparticipate in the profits ofthese stockbrokers whenthe going was good, onewonders why AMCONshould forego N22.6bn ofits asset base as debtforgiveness to thesegamblers. ,

,