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Continues on page 22

UncerUncerUncerUncerUncertttttaintyaintyaintyaintyainty, as 32, as 32, as 32, as 32, as 32mormormormormortgage banks scaletgage banks scaletgage banks scaletgage banks scaletgage banks scalerecapitrecapitrecapitrecapitrecapitalisation huralisation huralisation huralisation huralisation hurdledledledledle

The dust is yet to settle on therecapitalisation exercise in themortgage sector even as the

Central Bank of Nigeria (CBN)confirmed that 32 primary mortgagebanks (PMBs) have met the requiredcriteria and licensed to operate in thecountry, out of 89 that were inexistence before the exercise. 15PMBs were also said to haveconverted to either microfinancebanks or finance companies.

CBN’s Director, CorporateCommunication Department, Mr.Ibrahim Mu’azu, confirmed toVanguard that a total of 32 PMBs,made up of 10 National and 22 StatePMBs, are currently licensed by CBN,adding that the number is likely torise. “Currently, there are 32 PMBslicensed by the CBN, of which 10 areNational and 22 are State. Thenumber may likely increase withtime,” he said.

It will be recalled that under a newguideline, CBN requested the then89 primary mortgage institutions(PMIs) in the country to recapitaliseto N5 billion and N2.5 billion tooperate as National and State PMBs,respectively, with a 13-month deadlinefrom November, 2011 to December,2012. While the National PMBs areallowed to operate in any or all partsof the federation, the State PMBs arerestricted to operate in one state. Thiscaused a lot of ripples in the industry,prompting the apex bank to extendthe deadline for compliance to April30, 2013. But in another circular issuedon March 20, 2013, CBN extended

•15 downscales to MFBs, Finance Housesthe deadline to December 2013, toafford all affected PMBs sufficient timeto exercise the options for capitalraising, business combination ordownscaling. It later extended therecapitalisation deadline to ensureconclusion of on-going transactions toJune 30, 2014.

The apex bank also issued revisedguidelines streamlining areas of

operations for PMBs. The newguidelines restrict the operations ofPMBs to the provision of mortgagefinance and excluded other relatedactivities such as the provision ofestate management duties. They areauthorised to among other services toengage in the business of mortgagefinance, real estate constructionfinance, acceptance of savings and

time/term deposits and acceptance ofmortgage-focused demand deposits.Other approved services includedrawing from mortgage funds,including National Housing Fund,NHF, facility for on-lending, financialadvisory services for mortgagecustomers and other servicesapproved by the CBN.

Previously, mortgage firms wereallowed to grant loans or advancesfor the purchase or building,improvement or extension of adwelling/commercial house,acceptance of savings and deposits,management of pension funds/schemes, performing estatemanagement duties as well asoffering of project consultancyservices for estate development andengaging in estate developmentthrough loan syndication.

Although CBN did not makeavailable the list of the newly licensedPMBs, Vanguard however, gatheredfrom reliable sources that thefollowing attained National PMB

ROUNDTABLE - From left :Yomi Abiola-Olawaiye, Business Development Manager, Centrespread; Bisi Adeyemi,MD, DCSL Corporate Services Ltd; Governor Babatunde Fashola of Lagos State and Prince Yemi Adefulu, President,Nigerian-British Chamber of Commerce during a business roundtable held in Lagos. Photo Lamidi Bamidele

By YINKA KOLAWOLE

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22 — Vanguard, MONDAY, FEBRUARY 9, 2015

Cover Story

Continues from page 21

status, having successfullymet the N5 billion minimumcapital requirements. Theyare: ASO Savings & Loans Plc;Sun Trust Savings & LoansLtd; Mayfresh Savings &Loans Ltd; Abbey BuildingSociety; Infinity Trust Savings& Loans Ltd; PlatinumSavings & Loans Ltd; TrustBond Savings & Loans Ltd,Imperial Homes Savings &Loans, Haggai Savings &Loans and Jubilee LifeSavings and Loans Ltd.

A top official of one of thesuccessful PMBs toldVanguard, on condition ofanonymity, that the OtherFinancial InstitutionsDepartment, OFID of the CBNhad conveyed the approval ina circular to the respectiveManaging Directors of thesuccessful mortgage bankslast year, following the reviewof the submissions of thevarious PMBs. He added thatthe apex bank also noted that26 PMBs met the N2.5 billioncapitalisation for State PMBsbut 4 of them were still in theprocess of disposingproperties to make up thecapital.

According to him, thecircular to the successfulPMBs, dated February 14,2014, and entitled “Re:Compliance With theMinimum CapitalRequirement”, stated: “Ourassessment of the financialposition and records of yourinstitution as at December 31,2013, against therequirements of the revisedGuidelines for PrimaryMortgage Banks (PMBs) inNigeria, show that your PMBhas satisfied the prescribed

minimum capitalrequirements for a NationalPrimary Mortgage Bank.”

It further stated: “26 PMBshave attained the state

PMB status, having made theN2.5 billion minimumcapitalisation. Four out ofthese have properties held forsale, which they were yet tofully dispose off or createmortgages for. 15 PMBsdown scaled and converted tosub-sectors with lower capitalrequirements such asmicrofinance banks andfinance companies, 26 PMBsfailed to meet the prescribedminimum capitalrequirements for either of thetwo categories and do nothave acceptable capitals fordownscaling and, orconversion.”

All efforts made to getfurther information fromCBN’s Other FinancialInstitutions Department,which supervises PMBs,

proved abortive as there wereno responses from both theDirector and Deputy Directorwhen contacted severally onthe matter.

Also when contacted on thematter, the ExecutiveSecretary, Mortgage BankingAssociation of Nigeria(MBAN), Mr. KayodeOmotosho, said that the listof licensed mortgage bankswas still being expected fromthe CBN.

Stakeholders have helddifferent views on theimplication of the prolongedrecapitalisation exercise inthe mortgage sector. Whileoperators with capacity tomeet the requirement faultedthe continuous shift of theconcluding date of theexercise by CBN, those whocould not easily meet upsupported the extension.

Some mortgage bankaccount holders who spokewith Vanguard decried thecontinuous silence of the CBNon the outcome of therecapitalisation exercise,noting that it was creating anatmosphere of uncertainty inthe sector.

Teslim Kolade said hemaintains an account with hisPMB because he knows it hasmet the recapitalisationrequirement, a publicannouncement of the list ofrecapitalised PMBs by CBNwill be more re-assuring.According to him, officialrelease of the list ofsuccessfully recapitalisedPMBs by the CBN will settleall doubts”. Another customer,Ify Chukwuma, said she saveswith a mortgage bank toenable her access theNational Housing Fund

UncerUncerUncerUncerUncertttttaintyaintyaintyaintyainty, as 32 mor, as 32 mor, as 32 mor, as 32 mor, as 32 mortgage bankstgage bankstgage bankstgage bankstgage banksscale recapitalisation hurdlescale recapitalisation hurdlescale recapitalisation hurdlescale recapitalisation hurdlescale recapitalisation hurdle

Continues on page 23

Vocation And TechnicalEducation – A Key To ImprovingNigeria’s Development. Part 4

The focus is on the roles of technology and vocationaleducation in enhancing entrepreneurial skills thatwill equip students for entrepreneurship education

in Information and Communication Technology (ICT.)driven technological environment. The world has becomeglobalized and the future prosperity depends oncomparative advantage. This comparative advantagehinges on people and their technical or technologicalsophistication. Towards this, some crucial entrepreneurialand technical skills needed by the students in colleges ofeducation (technical), polytechnics and universities tomeet the trends in a global economy is analyzed.

Technology education is to be considered as the key agentof technology development, either as a way of developinghuman capacity, increasing the shield work force formodernization, industrialization, environmentaldevelopment or as a matter of personnel freedom,developing capability and empowerment. Technologyeducation is increasingly recognized to be central to boththe origins of technological development and challengesand to the prospects for successfully dealing with them(Alam, 2009). Decision makers at all levels, need timely,reliable access to knowledge generated by technology andtechnical education to introduce rational policies thatreflect a better global understanding of complex technical,economic, social, cultural and article issues concerningthe society, and our environment. Technical decisionmaking and priority setting is an integral part of overalldevelopment planning and formation of technologydevelopment strategies. Above all, technology educationis a human right and, as such, should receive priority inthe allocation of national resources. It has become verynecessary not to only keep technology education boundto the role of manufacturing skilled manpower but also toeconomic development and global economy. In Nigeria,technology education was previously not seen asfundamental for national development, or for the economicdevelopment, but for the school dropouts, and other socialand political development within the nation and forindividuals. Hallak (1990) argues that technologyeducation is also linked to human resources developmentand that this has an impact on more than just economicgrowth, but also an impact on the wider development ofindividuals and societies. According to him, it contributesto:

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

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

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

people’s awareness of their environments).From our analysis so far, it is clear that modernization

and economic development, depends on investment andappreciation of modern trends in technology education.According to Woodhall (1997) investment in technologicaleducation and training produces benefits for the individualand for society as whole.

The roles of technical and vocational education inenhancing entrepreneurial skills using information andcommunication technology is very important in trainingfor self-employment, self-reliance and skills acquisitionnow that government cannot employ every graduate. Thiscould be achieved through the development ofentrepreneurial skills in technology and vocationaleducation through information and communicationtechnology.

Accountholders whospoke withVanguarddecried thecontinuoussilence of theCBN on theoutcome of therecapitalisationexercise

MOU - From left: Anambra State Governor, Chief Willie Obiano Chairman/CEO, RichbonGroup, Chief C. J. Muonagolu Mr Taiwo Olumayowa the Chief finance officer of Richbongroup and Ebere Ikediuwa , Secretary to the Chairman signing the MoU for the establishmentof Automotive assembly plant in Anambra State.

Vanguard, MONDAY, FEBRUARY 9, 2015 — 23

Cover

(NHF), but the uncertaintysurrounding recapitalisationexercise is making herapprehensive. “I maintain anaccount with a mortgage bankbecause I’m interested inobtaining NHF loan, but Idon’t want my savings to gounder if my PMB’s license iseventually not renewed. SoCBN should please come outwith the list of those that havemade it,” she asserted.

It was also gathered thatMBAN, which is the umbrellabody of mortgage banks in thecountry, lobbied the apex bankto soft pedal on theannouncement of PMBs thathave been adjudged to havesuccessfully completed therecapitalisation requirementsin order to limit crisis of

confidence in the sector.Reliable sources furtherdisclosed that series of talkshave taken place betweensome of the recapitalised andnon-recapitalised banks toensure soft landing for mostmortgage firms throughmergers and acquisitions.

About 292 PMBs werelicensed between 1990

and 1998. In July 1997, theFederal Mortgage Bank ofNigeria (FMBN), which wasthen regulating the sector,revoked the licenses of 97 ofthe firms. FMBN handed over195 firms to CBN in 1998. Theinitial minimum share capitalfor PMBs was N5 million,rising first to N20 million andlater N100 million.

CBN recently revoked theoperating licences of 21

Primary Mortgage Banks(PMBS) and directed theNigeria Deposit InsuranceCorporation (NDIC) tocommence the process ofliquidating the affectedinstitutions. The affectedPMBs include: Alliance andGeneral Mortgage Limited;Benhouse Building Society;Consolidated Estate BuildingSociety; Cymon Savings andLoans; Euro-Banc Savingsand Loans; First AmalgamatedBuilding Society; First CapitalSavings and Loans; GlobalBuilding Society; and HarvardTrust Savings and Loans.Others are: Home FoundationSavings and Loans; Homefoundation Savings andLoans; Jubilee BuildingSociety; Lagoon HomesSavings and Loans; LeverageHome Savings and Loans;

Uncertainty, as 32 mortgage banks scale recapitalisation hurdle

In this column last Monday, I said that diesel mafias are milking ordinaryNigerians dry by making undue profit through importation. I said thatprices of crude has long crashed yet these men in unwholesome diesel

trade have refused to let Nigerians get the benefit of falling oil prices by reducingthe pump price of diesel.

Diesel cabal at it again,Diesel cabal at it again,Diesel cabal at it again,Diesel cabal at it again,Diesel cabal at it again,ripping ofripping ofripping ofripping ofripping off Nigerians (2)f Nigerians (2)f Nigerians (2)f Nigerians (2)f Nigerians (2)

A check with the PetroleumProducts Pricing RegulatoryAgency, PPPRA and someindependent marketersconfirmed that the landing costof diesel is about N100 perlitre. If the product lands in theNigeria shore at N100 perlitre, marketers are selling infilling stations at N160 perlitre.

This implies a difference ofN60 per litre. Givingallowance for handling cost atN10 per litre, these men aremaking an average of N50 perlitre on diesel. Nigeria is saidto be consuming about 11million litres of diesel per day.

Simple financial accountingindicates that these Nigeriansare pocketing close toN550million per day. In oneweek, they would have madeN3.85 billion. If the trend iscontinues for a year or so, theywould have made N198 billionfrom the sale of diesel.

The question is what otherbusiness in Nigeria will be thislucrative? This is perhaps whyit is an exclusive club and themore reason governmentagencies are looking the otherway at a great cost toNigerians.

Today, more than 90 per centof petroleum productsconsumed in the domesticmarket are imported, usuallyat costs which naturally reflectinternational crude-oil prices.Diesel is a petroleum-basedfuel that is used to powermany types of vehicles andboats. It’s made of a blend ofcrude oil components calledhydrocarbons. The

components for making thisfuel are refined out of crudeoil, usually by fractionaldistillation.

AGO demand is driven byNigeria’s inadequate supplyof power to business places.Households, offices, eateries,banks, hospitals and

government parastatals arespending millions and willstill spend millions on AGO(diesel) consumption as theelectricity supply situation isnot likely to changesignificantly any soon, hencedependence on generatorsand mini-power plants willsurge. While households,offices, eateries, banks,hospitals and governmentparastatals that depend ondiesel to operate are beingripped off daily by the current

sharp practices in the dieselracketeering, it is theordinary Nigerian that bearsthe burden.

The amount being spent ondiesel if reduced couldinduce companies to expandtheir operations and employmore Nigerians. The cost of

operation in most of thesecompanies is a fiscal drag onemployment. Nigeria iscurrently facing a hugeunemployment problem thatevery hand should be on deckto help solve. But the dieselmerchants are only interestedin their deep pockets.

A drop in the price of dieselwill be a great relief toindustries, household and theordinary citizens. CementManufacturers have saidagain and again that bulk of

their cost input is electricitygeneration. Those who stilldepend on diesel for powersupply will have their costreduced which will bereflected in the cost theyeventually pass on to the finalconsumers. Households andeateries that use generators topower their operations willfeel the impact of a drop indiesel pump price and willpass the benefit to the finalconsumer.

Following the crash of crudeoil prices, the maximumindicative benchmark of openmarket price of the diesel isabout N99.11 per litre as oftoday, going by the PetroleumProducts Pricing andRegulatory Agency.Surprisingly, the price of theproduct in filling stationsacross the country is N165 perlitre with PPPRA not lifting afinger about the price orraising eyebrows about theunwholesome trend.

The price of crude oil, whichconstitutes a major componentin the pricing template, hadplunged by about 60 per centsince June 2014 when itpeaked at $115 per barrel. IfNigeria were a country whereleaders walk the talk, diesel

has been deregulated andordinarily, if Nigeria were tohave an organisedgovernment, since the price ofcrude oil has fallen by morethan 50 per cent, the price ofdiesel is supposed to havefallen a long time ago to aboutN74 per litre.

Unfortunately, Nigerians arenot getting the benefit of theso-called deregulation, and italso shows that thegovernment agencies are notintervening in matters thattouch the welfare of thepopulace except what benefitsthe ruling class.

If a government allows forcertain measures to take placein its economy, it is also theduty of the government tomake sure that it is not beingabused. PPPRA, DPR, NNPCand the Ministry of PetroleumResources are turning theireyes the other way becausepowerful Nigerians areinvolved, milking the peopleand donating to parties forpolitical gains. Ordinarily, ifthere were laws governing thederegulation of diesel, evenbefore the price of petrol wasreduced diesel marketersshould have been the first toreduce their prices.”

There is nowhere in theworld where there is absenceof regulations. You don’t justleave some things to themarket completely. If you wantto do that, then liberaliseeverything and you thenprotect the interest of theconsumers.

Continues from page 22 Mid Land Mortgages;Mortgage PHB; MultiBlancSavings and Loans; MustardSeed Mortgage; Omega

Savings and Loans; PasswordSavings and Loans; PostService Savings and Loans;and TMC Savings and Loans.

BRIEFING - From lef: Kaodi Ugoji, Group Head, Strategyand Corporate Communications; Dipo Odeyemi, DivisionalHead, Operations and Technology; Bola Onadele.Koko, MD/CEO and Atinuke Taiwo, Divisional Head, Legal, Regulatoryand Company Secretary, all of FMDQ OTC PLC, a SEC licensedregulators of trading in fixed income securities, during a mediabriefing on FMDQ 2014 market review and outlook for 2015 inLagos.

The question iswhat other business

in Nigeria will bethis lucrative?

24 — Vanguard, MONDAY, FEBRUARY 9, 2015

CMYK

Business & Economy

By FRANKLIN ALLI

BUSINESS survivalrate in Nigeria is nowless than 50 percent.

This is due to increasingexchange rate of the naira toforeign currencies andinterest rates charge by bankson loanable funds.

Mr. Ekiyor Tope Miriki, theChief Executive Officer ofEkimiks Nigeria Limited,disclosed this when headdressed delegates at atraining programme for youngentrepreneurs in agriculture.

The programme which hasthis theme ‘Empowering

Business surBusiness surBusiness surBusiness surBusiness survivvivvivvivvival ral ral ral ral rate now less than 50%ate now less than 50%ate now less than 50%ate now less than 50%ate now less than 50%— — — — — CEO Ekimiks

Agripreneurs onAgripreneural and BusinessManagement,’ attracted morethan 60 youth from sixcountries across Africa.

“With the business survivalrate being less than 50percent, a business inagriculture is even moredemanding due to theeconomics involved in theprocess,” he stated.

The creation of businessopportunities for unemployedyouth in the agricultural sector

is at the center stage of anAfrican wide initiative led bythe International Institute ofTropical Agriculture.

Dr. Nteranya Sanginga,the Director General of IITA,the organizer of the event,explained that inclusivegrowth of the continent couldbe achieved through the jointimplementation ofmechanisms in agribusinesswhich would work for bothfarmers and consumers.

“A young ‘agripreneur ’coming from a communicationbackground is working withfish now. First, you might

think communication and fishwhere is the link?; but whenyou start understanding howsales figures of fish productscan increase throughout valuechains by involving youngpeople coming from differentsectors, such ascommunication or marketing,it might become an eye-openerfor you in engaging in newpartnership opportunities,” hesaid.

Chief Moji Ladipo, a formerRegistrar of the University ofIbadan, encouraged theparticipants to be passionateabout what they do.

MEETING - From left: Mr. Emeka Akwuaka, Company Secretary, PAC Asset ManagementLimited; Mr. Chris Oshiafi, Chairman and Mr. David Okwuadigbo, Managing Director, duringCompletion Board Meeting on PACAM Balanced Fund’s 1billion unit offer, in Lagos.

21 ships laden withpetroleum products,foods, arrive LagosTwenty one ships laden

with petroleum products,foods and other goods havearrived Lagos ports, waiting toberth. The Nigerian PortsAuthority (NPA) made theannouncement in its dailypublication – ‘ShippingPosition’ released on Friday inLagos. The publicationindicated that 10 of the shipscontained petrol, aviation fuel,bulk gas and diesel. It notedthat 11 other ships waiting toberth were laden with rice,containers, crude palm oil andbulk fertiliser.

The Shipping Positionexplained that 38 other shipswere also expected at theports. The document indicatedthat 17 of the expected shipswould sail in with containers,while 21 others would arrivewith bulk sugar, rice, vehicles,tug boat, aviation fuel, crudepalm oil, kerosene, andgeneral cargo. It noted that 21ships were in the ports,discharging palm oil,containers, bulk wheat, freshfish, general cargo, kerosene,bulk gas and petrol.

Executive Chairman ofRichbon Group ChiefCJ Muonagolu has

assured that about five thousandnew jobs would be created whenthe automobile assembly to belocated in Anambra state fullycomes on stream.

Speaking in an interview afterthe signing ceremony of a$40million memorandum ofunderstanding with theAnambra state government inAwka, Muonagolu said hisgroup will employ between1,000 and 1,500 at 40 per centcapacity but that the number willrise to between 3,500 and 5,000jobs when its production hits apeak in the next few years. Thisis aside from thousands ofindirect jobs that would beavailable to Nigerians as aresult of the project.

The company which will beproducing XGMA brand ofagricultural equipment, Sinotrucks and Cedar commercialbuses said its partnership withthe Chinese firm was based onits track record which has ratedit as the 3rd best in the world inthe area of heavy equipmentmanufacturing.

Meanwhile the FederalGovernment’s agriculturaltransformation agenda isexpected to receive fresh boost

Richbon to create 5000 jobs with $40m auto assembly plantas the plant beginsmanufacturing of agriculturalequipment in the next18months. The Richbon boss,who signed on behalf of thecompany, said the factory oncompletion would facilitate thetransformation of the nation’sagricultural value chain andenhance transportation anddistribution chain. He

With thebusiness survivalrate being lessthan 50 percent,a business inagriculture iseven moredemanding dueto the economicsinvolved

commended the Federal andAnambra state governments fortheir efforts in encouragingNigerian entrepreneurs toachieve their dream of jobcreation and industrialisation,stressing that the task ofdiversifying the Nigerianeconomy was the responsibilityof all the citizenry.

In particular, Muonagolu

commended the Anambra stateadministration led by ChiefWilly Obiano for tackling thesecurity challenges in the stateand improving its investmentclimate, stressing the policy trustof the government will makethe state an investmentdestination of choice.

PushCV unveils Elite Employee Quest to empower job seekers

BY JONAH NWOKPOKU

Online enterprisesolution, PushCV.com,

has announced an initiative,Elite Employee Quest 2015that seeks to connect primeemployees to head-huntersand qualified job seekers.In partnership with topcompanies across Nigeria,the Elite Employee Quest2015 initiative according toPushCV, will give everyonean equal opportunity to bepart of the qualified,deserving people thatPushCV would place ingainful employment in toporganizations in 2015.The programme which will beformally announced on the12th of February, 2015 at a

Cocktail Event in Lagos willhave top CEOs and HumanResources professionalsacross Nigeria in attendance.PuschCV said theprogramme will seek talentsacross five major employmentcategories including:Accounting, Engineering/IT,

Administration, Sales/Marketing, and CustomerService.PushCV and their partnerssaid they believe that theinitiative can bridge the gapbetween qualified candidatesand employers.“Job seekers, even qualifiedones, find it quite difficult tofind the right jobs because ofthe overwhelming competitionand lack of knowledge of how/where to send their CVs; andthe employers say they havejobs available, but most of theapplications they receive arenot up to standard. It takes upa lot of time and money goingthrough the piles ofapplications looking forqualified candidates,” theonline recruiter said.

Job seekersfind it quitedifficult to findthe right jobsbecause ofoverwhelmingcompetition andlack ofknowledge

The amazing success of manyglobal brands that are

household names today ispossible because they masteredthe art of creating highlyattractive partner and customervalue propositions. Brands,through effective communicationhave endeared themselves to theirconsumers and increased theirmarket share.

The publicity and goodwillgenerated around the recentpartnership between Chivita100% and Manchester Unitedfootball club is a testament tohow effective communicationstrategies have not only endearedconsumers to the fruit juice, butalso helped increase sales. Thepartnership has created massiveexposure and visibility for theChivita 100% brand through aneffective online, television, printand outdoor campaign in recenttimes. From positive reviews ofthe partnership in major televisionsports programmes, newspapersand digital platforms to visibleoutdoor presence on prominentbillboards and Rapid transportbuses, the publicity strategy hasbeen effective in creating affinityand sustaining loyalty for thebrand.

Ch i v i t aleveragespartnership,effectivecommunicationto drive loyalty

Vanguard, MONDAY, FEBRUARY 9, 2015 — 25

Business & Economy

NSE, UK strategise to build, expandcapital flows to Nigeria

By PETER EGWUATU

The Nigerian StockExchange, NSE andUnited Kingdom, UK

are strategizing on how tobuild and expand capital flowsinto Nigeria.

The President of NSE, Mr.Aigboje Aig-Imoukhede, whodisclosed this weekendshortly after a closed doormeeting with British HighCommissioner, Mr. AndrewPocock in Lagos, said “Wediscussed on how to expandtrade and capital flowsbetween Nigeria and Uk. Themanagements of LondonStock Exchange Group(LSEG) and the NigerianStock Exchange (NSE), hadalready signed a capitalmarkets agreement thatsupports African companiesseeking dual listings inLondon and Lagos.”

According to him “The deal,which was for an initial periodof two years, was signed byNikhil Rathi, Head ofInternational Development,LSEG, and Oscar Onyema,Chief Executive Officer(CEO), NSE. The signing ofthe deal was witnessed by SirRoger Gifford, UK Co-Chairman of the UKGovernment’s NigeriaEmerging Capital MarketsTask (ECMT) Force, andmyself, Co-Chair. Theagreement follows theimplementation earlier thisyear of a new settlementprocess between the UK andNigeria. This madesignificantly more efficient, thelisting and trading of ordinaryshares of Nigerian companieslisted in London, as well asthose of UK companies on theNigerian market.”

Aig-Imoukhede stated thattheir goal is to ensure that allcompanies that have

substantial operations inNigeria are accessible to bothNigerian and internationalinvestors. “In addition, wewill be ensuring that ourleading companies achievethe global profile andinternational institutionalinvestment they deserve. Thecollaboration will help inbuilding capacity for themarket operators. We are stillan infant in the terms ofdevelopment when youcompare us to UK. It is anopportunity to leverage upon.

Also we don’t have a UKinstitution in Nigeria, so thiscooperation will attractcompanies from UK toestablish in Nigeria” heemphasized.

In his own comment, BritishHigh Commissioner, Pococksaid “The UK will like to helpNigeria in areas likeAgriculture and Education aspart of its support in helpingNigeria diversify theeconomy. We would like toexpand our interest in valueadding businesses.

According to him “Lagos asa mega city should havemultiplier effect in thedevelopment of other states inthe country. There are greatpotentials in this country adthat is what we are looking atdeveloping. If in the next fiveto ten years there is a goodprivate and public sectorcollaboration the better it willbe for the country in terms ofscale production,infrastructure developmentetc.”

Polo inspiresNigerian designersto boost localcontent

Oil rally holds, tradingalmost $2 higher

SESSION - From left: Mr Rasheed Olaoluwa, MD/CEO, Bank of Industry; Mr OladapoOyebanjo, D’Banj, BOI Ambassador; Mr Waheed Olagunju, Executive Director, SME, BOI andGaniyu Muhammed, General Manager, SME at the Bank of Industry Capacity building sessionfor Business Development Service providers held in Lagos.

For the fourth consecutiveyear, First Bank of

Nigeria has been rankednumber one banking brand inNigeria by The Bankermagazine of Financial Timesand Brand Finance, London,United Kingdom in theirannual 2015 The Top 500Banking Brands.

According to a press release

First Bank leading banking brand in Nigeriaby the Country Representativeof The Banker magazine -Nigeria, Mr. KunleOgedengbe, First Bank movesfrom being number 382 in 2014to 336 this year.

Other Nigerian banks thatmade the ranking moved up.They are Zenith Bank, GuarantyTrust Bank and Access Bank.Zenith Bank moves to number

388 from 453 in 2014, GuarantyTrust Bank moves to 417 from422 while Access Bank madefirst entry into the ranking.

Brand value of First Bankincreases to $300 million in2015 from $228 in 2014 andaccording to the Economicseditor of the magazine, SilviaPavoni, the brand value is “thelicensing rate that a third-partywould need to pay to use thatcompany’s brand.”

Commenting on themethodology of the ranking,Pavoni said Brand Financeobtained brand-specificfinancial and revenue data;modeled the market to identifymarket demand and theposition of individual banks inthe context of all other marketcompetitors; established theroyalty rate for each bank;calculated the discount ratespecific to each bank, takingaccount of its size, geographicalpresence, reputation, gearingand brand rating anddiscounted future royaltystream (explicit forecast andperpetuity periods) to a netpresent value which is thebrand value.

The Securities and ExchangeCommission (SEC) is committed to

aligning the pace of growth in the capitalmarket though dematerialisation to boostinvestors’ confidence.

Dematerialisation refers to the conversion ofshare certificates (physical paper form/certificates or documents of title representingownership of securities) to an electronic formwhich is domiciled directly with the CSCS.

Ag. Director General of SEC, Mounir Gwarzogave the assurance when he received themanagement of Central Securities ClearingSystem (CSCS) Plc at the Commission’s head

SEC committed to dematerialisation — Ag. DG

By FAVOUR NNABUGWUoffice in Abuja.

Gwarzo said that CSCS plays a very criticalrole in the capital market and disclosed thatSEC Nigeria is now ready to conclude thedematerialisation process in the market.

“We have already commenced thedematerialisation process, if not for certainthings it would have been concluded by now.We are ready to work with stakeholders toensure that we conclude the process. One ofthe critical parts of this exercise is publicenlightenment and we will be in the market inthe next few weeks to tell people to open theiraccounts, sort out the issues with e-dividendand get ready for dematerialisation. We willmake use of jingles in radio, newspaper advertsamong other enlightenment tools.

Brent crude oil and U.S.crude for March delivery

traded almost two dollarshigher on Friday, promising asteady appreciation in theweeks ahead.Benchmark Brent crude traded$1.90 higher at $58.47 perbarrel, while the U.S. crude forMarch delivery traded at$52.18 per barrel, up by $1.70. The steady appreciationswere attributed to fighting inLibya and stronger economicsignals from the U.S. whichhad helped futures reboundfrom near-six-year lows. InLibya, fighting over control ofpower had highlighted thethreat of a breakup in thecountry, imperiling thecountry’s oil exports.In the U.S., non-farm payrolldata due later on Friday isexpected to show firm jobgrowth in the world’s largestoil consumer in January, apositive signal for demand.“The official selling price toEurope increased quite a lot.They’re reflecting the tighterpicture in theMediterranean,” Olivier Jakobof Petromatrix, a dailyresearch newsletter on the oilmarkets in Zug, Switzerland,said.

In promoting its vision forsustaining the development

of luxury markets withinNigeria and Africa, Nigeria’sleading luxury goods brand,Polo Avenue store, recentlyshowcased to guests thelaudable efforts of trendingNigerian designers Zashaduand Ariaba Beads.Geared towards inspiringbudding luxury designersfrom within the continent,designers Zashadu and AriabaBeads were selected for theirunique and creative approachto their crafts using hand-woven African techniques andperfectly bringing to fruition,African trends fused withglobal ideas. Zashadu andAriaba Beads are fashionbrands who have showcasedtheir unique designs in luxuryhandbags and jeweleriesacross Africa, Europe andAsia. Known for injecting greatpassion, love and care intoevery design, Zashadu andAriaba brands both embody thetrue spirit of luxury from withinAfrica. The driving force andcreative head of both brandsdescribe their designs as“compelling creations withmagnetism appeal."

26 — Vanguard, MONDAY, FEBRUARY 9, 2015

Banking & Finance

BY BABAJIDE KOMOLAFE

Bank customers arei n c r e a s i n gp a t r o n i z i n g

automated teller (ATM)machines for non-cashtransactions like billspayment, airtime purchaseand money transfer. This isreflected by the value of billspayment and airtimepurchase transactionsrecorded by FirstBank NigeriaLimited in 2014.

With over 2,500 ATMsacross the country, the bankhas the largest network ofATM in the banking industry.According to the bank, bankcustomers used its ATM tomake N928.48 million worthof bills payment and also topurchase N3.2 billion worthof airtime in 2014. As a resultthe bank emerged as theleader in bills payment,accounting for 38 percent ofbills payment services in thenation’s banking industry asat December 2014.

The bills payment option isone of the features ofFirstBank’s ATMs, which alsohave other unique functionalfeatures which include cashtransfer, air-time top-up, andcash deposit among others.

The bills payment option isthe non-cash transactionfeature on the ATM thatmakes it easier for customersto pay for bills such as CableTV subscription, post-paidphone bills, and pre- bookedairline tickets. Thesetransactions can be executedthrough the Quicktelleroption on any of the bank’sATMs.

The Transfer feature enablescustomers to transfer moneyfrom their accounts to bothintra (within FirstBank) andinterbank (other banks)accounts, thereby reducingthe queues in the bankinghall, save time as well asprovide a more convenientoption for customers’ moneytransfer needs. In 2014 aloneN251 billion was transferredfrom one account to anotherusing FirstBank ATM.

The bank is also currentlyresponsible for over 40percent of interbanktransactions and 26 percent ofairtime vending. As activemobile network users inNigeria are over 130 millionand the need to recharge ison the increase, the bank’sATMs also provide theplatform for easy top-up.

*Records N928m bills payment

First Bank drives epayment withnon cash ATM transactions

In 2014alone N251billion wastransferredfrom oneaccount toanotherusingFirstBankATM

Emir of Kanocommends UBAleadersh iprole inbankingreforms

The Emir of Kano, HisH i g h n e s s ,

Muhammadu Sanusi II, hascommended the managementof United Bank for Africa(UBA) Plc for the leadershiprole the bank played in thefinancial industry reforms,when he was the Governor ofCentral Bank of Nigeria(CBN).

The Emir, speaking duringthe visit of the executivemanagement of UBA to hispalace in Kano onWednesday, said thatbecause of the UBA’scommitment to the reformsintroduced by the apexregulatory institution, theBank’s Group ManagingDirector, Mr. Phillips Oduozachaired the committee onfinancial inclusion, whichchampioned financialinclusion, the cashless andmobile banking initiatives inthe country.

“The reforms introduced byCBN towards improvingNigeria’s financial landscapewere a collective decisionand responsibility ofeverybody, but I shouldemphasise the contribution ofUBA. UBA’s GroupManaging Director chairedone of the critical committeesthat drove the reform,” theEmir said.

FCMB kicks-offFCMB kicks-offFCMB kicks-offFCMB kicks-offFCMB kicks-offMillionaire promoMillionaire promoMillionaire promoMillionaire promoMillionaire promo First City Monument

Bank (FCMB) Limitedhas commenced anotherpromotion tagged, ‘’FCMBMillionaire Promo”, whichwill run from February to July2015. This follows the hugesuccesses recorded in the firstand second phases of theFCMB 30th AnniversaryPromo held between 2013and 2014 across the country.

In a statement, FCMBannounced that theMillionaire Promo is targetedat all segments of the societyand for existing as well aspotential savings accountcustomers.. The eligibleproducts/accounts for thepromo include FCMB basicsavings, kids account,Nairawise, e-savings,

To further enhancec o n v e n i e n c e ,FirstBank’s ATMsalso operate theCash Depositfunction whichallows customers todeposit fundswithout customarilyhaving to enter abanking hall for thistransaction. This isa direct testament toits value propositionof putting customersfirst.

Folake Ani-Mumuney, theb a n k ’ sspokesperson, saidthis distinctdevelopment wasachieved as a resultof the bank’s desire

to reach out to more peoplein the country and as part ofliving true to puttingcustomers at the heart of ourbusiness. “FirstBank is

positioned to meet the needsof its customers and to reachout to the under banked andunbanked. Our mission is tomake banking as convenientfor our customers as isobtainable globally”, shesaid.

She said that to aid the useof its ATMs nationwide andfor enhanced protection ofcustomers’ funds, the Bankhas, in particular, designedinnovative and tailored-made

financial services products toease banking transactions. Amajor product is the FirstBankVerve Debit card, a Nairadenominated domesticpayment card accepted forpayment throughout Nigeriaon all electronic channels,including the ATMs.

One of the outstanding andunique features of the productis that it is issued in 15minutes at FirstBankbranches. This distinctivefeature stands the product outas it saves time and is veryeasy to obtain. Also, the card,which is accepted nationwide,aside withdrawing of cash,can be used to access valueadded services including billspayment, airtime recharge,flight and hotel bookingamong others.

The card is Chip & PINsecured for greater protectionof customers’ funds, providesextra protection for web basedtransactions with“Safetoken”, is Nairadenominated, andpersonalized, bearing thecustomer ’s name. It isaccepted wherever theInterswitch or Verve logo isdisplayed and can also beused to perform transactionsvia the Quickteller servicesmenu on FirstBank ATMs.

The bank also has a Nairadenominated internationalDebit card issued inpartnership with MasterCardWorldwide, a card whichenables transactions all overthe world wherever theMasterCard logo isdisplayed. The card isaccepted worldwide at over

29.4 million merchantlocations and can be used forcash withdrawals at over 1.8million ATMs, in over 210countries. The card is alsosecured by Chip & PINtechnology and is issued in15 minutes at FirstBankbranches.

The bank has a VISA NairaCredit Card designed forcustomers who operate salaryaccounts in the bank. The cardis accepted worldwide forcash withdrawals andpurchases on ATMs and POSterminals, and for e-commerceon the Internet done either ondesktop computers or mobiledevices. The card allowscustomers a 45-day interest-free period on spent fundsand settlement is done inNaira.

The bank also has a numberof other card products tailoredto addressing the variedneeds of customers – VISADebit (Dual currency –denominated in NGN andUSD), VISA Prepaid(denominated in NGN andUSD), VISA Gold card,Mastercard Platinum, andVISA Infinite.

To cater for as manycustomers as possible, thebank’s ATMs are equippedwith cardless functionalitythat makes it easier for non-bank customers to deposit orwithdraw money from theATMs without a Debit card.At the end of December 2014,FirstBank had deployed atotal of 2,597 active ATMs.The bank’s ATMs havedispensed over N2.1 trillionbetween January andDecember 2014.

Vanguard, MONDAY, FEBRUARY 9, 2015 — 27

Banking & Finance

…………………………………………….BRIEFS………………………………..

DRAW - From left: Senior Manager, KPMG Advisory Services, Mr. Lawrence Amadi;Business Development Manager Enugu 1, FirstBank, Mr. Anthony Uwandu; ZonalCoordinator, National Lottery Regulatory Commission, Mr. Eke Micheal; BusinessDevelopment Manager, Awka, FirstBank, Mr. John Okah; and Team Lead (LiabilityGeneration) Consumer Banking, FirstBank, Mr. Maxwell Ezenwa at the FirstBank SavingsBonanza Draw held in Awka yesterday.

Bureaux De Change (BDC)operators has

commenced moves to resolvethe lingering leadership crisis inthe Association of Bureaux DeChange Operators of Nigeria(ABCON)

Rising from a stakeholdersmeeting of BDCs in the SouthWest zone, the operatorsadopted four resolutions aimedat restoring peace to theAssociation. Since last year,some members of theAssociation’s Board of Trusteesand the Executive council havebeen locked in legal battleswhich have grounded itsoperations.

But on Tuesday, someconcerned BDC operators,under the aegis of BDCStakeholders Committee inSouth West, convened astakeholders meeting of BDCsin the South West zone inLagos.

Addressing the meeting, Mr.Abdul Rasheed Amao, CEO,A&S BDC, and a member ofthe Stakeholders’ Committee, said that the leadership crisishad denied BDC operators of avoice to speak on their behalf ata time such voice is neededmost. He said the meeting wasconvened to allow BDCoperators brainstorm on the wayout of the leadership crisis.

Consequently, BDC operatorsat the meeting considered fourresolutions for adoption.Thereafter, Mrs MojisolaAdesanya of Anchoria BDCmoved the motion, calling thewarring members of the Boardof Trustees and the Executivecouncil to withdraw the courtcase at the Supreme Court andsettle amicably. The motion wasseconded by Mr. Okai Agare ofGreen House BDC. The secondresolution was moved by PrinceA. Ajayi of Double K BD andseconded by Ndubisi of AllSaints BDC. The resolutioncalled for an Emergency Generalmeeting of all stake holdersnationwide.

This was followed by anotherresolution by Benjamin Oje,seconded by Ken Ajurichi of ,mandating the StakeholdersCommittee to develop theagenda of the proposed EGM.The fourth resolution mandatedthe Stakeholders Committee to meet with Mr. BamideleAdiesa,pioneer chairman Boardof incorporatedTrustees ,othermembers of pioneer Board of

By BABAJIDEKOMOLAFE

BDC operators move to resolvelingering crises in ABCON

Trustee and four members ofstakeholders committe toresolve the lingering issue. Themotion for the resolution wasmoved by Mr. Osita andEngineer Nze. The resolutionswere adopted via a voice voteby all BDC operators thatattended the meeting. The stakeholders meeting also resolved tocheckmate the falling fortune of

the naira in support of themonetary policies of the CBN.Further, the operators expandedthe membership of theStakeholders Committee fromseven to 11. Members of theCommittee are: Abdul RasheedAmao of A&S BDC, MosesEbitu of Mat-Arni BDC, Alhaji Ibrahimm Alli Seabril BDC,Nduka Vincent of Agnus Dei

Ecobank Transnational (ETI) has faultedthe report of the International Monetary

Fund (IMF) which indicted the Bank groupof poor corporate governance among otherthings.

A statement issued yesterday by the Groupsaid, “Ecobank Transnational Incorporated(ETI), parent company of the EcobankGroup, wishes to correct misperceptionsconveyed by an International Monetary Fund(IMF) report released on 4 February 2015.The report suggests that ETI’s rapidexpansion, lack of regulation and poorgovernance pose a wider threat to financialstability in Africa.

“The report, which contains someinaccuracies, is roughly 18 months out ofdate as regards some of its references to theEcobank Group. The internal governanceissues that it refers to at Ecobank date backto a period of several months between mid-2013 and early 2014. The Ecobank Groupdealt conclusively with those internalgovernance issues at the time. The matterculminated in the dismissal of its then GroupCEO, Mr. Thierry Tanoh, who was replacedby Mr Albert Essien in March 2014.

“Since that period, a reconstituted newEcobank Group board and senior management

Ecobank faults IMF report on corporate governanceteam has been able to restore stability to the bankand regain the confidence of its stakeholders,including its regulators, shareholders, customersand staff. The board is led by the experiencedand well respected Mr. Emmanuel Ikazoboh asChairman. He is supported by a diverse groupof directors with a rich mix of experience andknowledge of the African banking industry.Senior management is led by Mr. Essien, aveteran professional of Ecobank for almost25 years. Board and management haveprovided strong leadership for the institutionsince their assumption of office at Group’s2014 Annual General Meeting.

“It would be wrong for the report toinadvertently convey the perception that pastgovernance issues still exist at Ecobank. A lothas taken place between the preparation of theaforementioned IMF report and the presenttime.

At the end of 2014, Nedbank and QatarNational Bank became the largest shareholdersof the Ecobank group. The investment by bothof these banks demonstrates their confidencenot only in the Ecobank Group’s future growthprospects, but also in the strength of itsgovernance and its management.

“The Ecobank Group took well calculatedsteps in its expansion over the last eight years.

AfDB issues $1bnglobal benchmarkbond

The African DevelopmentBank last week issued a

$1 billion global benchmarkbond, with oversubscriptionfrom investors includingcentral banks and multilateralinstitutions.

The Bank in a statementannouncing outcome of theissue, said, “On Thursday,February 5, 2015, the AfricanDevelopment Bank (AfDB)successfully launched andpriced a new 1 billion 5-yearUS dollar global benchmarkdue February 12, 2020. Thisis the AfDB’s first US dollarglobal benchmark of the year.The transaction wasannounced on Wednesday,February 4 at 2:15 p.m.London time with initial pricethoughts of midswaps +2basis points area.

“Indications of interestexceeded USD 1.6 billionovernight, which enabled theBank to tighten priceguidance to midswaps plus 1basis points area whenopening books at 8:15 a.m.the following day. Theorderbook grew extremelyquickly, reaching USD 2billion after only 1 hour ofbook-building, with investorsshowing li t t le spreadsensitivity.

“Given AfDB’s strongliquidity position, the deal sizewas capped at a maximum ofUSD 1 billion from the outset.Consequently, the decisionwas taken to close theorderbook at 9:20 a.m.London time, well ahead ofthe originally anticipatedschedule.

The deal recorded thelargest ever level ofoversubscription for an AfDBdebt offering.

“The strength of theorderbook allowed the leadmanagers to price AfDB’snew benchmark at midswapsflat (equivalent to USTreasuries plus 17.6 basispoints), at the tight end of theoriginal price guidance. Over30 investors participated inthe transaction, with highquality orders from CentralBanks and OfficialInstitutions (73%) taking thebulk of the transaction. Finaldistribution figures highlightAfDB’s strong penetrationacross different regions, withthe participation from Asianinvestors (55%) setting a newhigh for AfDB.”

BDC, deyiga Samson of Stand-Out BDC, AbubakarMohammed of ForwardMarketing BDC, Eyinla Emiliaof Aexel BDC, Onyema Estherof Coolsworth BDC, KenAjuruchi of Finance Bridge BDCand Osita Agoms of MaroonBDC.

28 — Vanguard, MONDAY, FEBRUARY 9, 2015

Corporate Finance

VISIT - From left : Bamdele Ogunnaike, Chief Financial Officer, Skye Bank; Henry Egbiki,Regional Managing Partner, EY; Timothy Oguntayo, GMD, Skye Bank and Dayo Babatunde,during the official visit of the Skye Bank to EY office at Marina, Lagos.

Operators in theNigerian capital

market have criticized themultiple tax system existingin the market and havecanvassed for a globalcompetitive tax rate for thecountry.

The operators who beartheir minds at a daydiagolue on the “Capitalmarket & the 2015 FederalBudget” organ- ised by thetrio of Chartered Institute ofStockbrokers (CIS),Association of StockbrokingHouses of Nigeria(ASHON) and Association ofIssuing Houses ofNigeria(AIHN) in Lagossaid multiple tax system is adisincentive to companiesoperating in the country.

Speaking as a guestspeaker at the occasion, Mr.Tola Mobolurin, who is alsothe Chairman of NASD Plcsaid “We should have a taxlaw that should beencouraging and nondiscriminating. It is reallyunfair to have multiple taxsystem because it does notencourage people to investin the country. For example,in a situation, where apublicly quoted companypays tax when profit isdeclared and is also madeto pay tax when it makes lossthe following year is not agood tax system. So, thefederal government shoulddesign a tax system that isglobally competitive.”

He further stated thatinsurance companies shouldnot be discriminated. In hiswords “ We should notdiscriminate againstinsurance companies. At themoment, government said

CapitCapitCapitCapitCapital maral maral maral maral markkkkket operet operet operet operet operatatatatatororororors seek globals seek globals seek globals seek globals seek globalcompetitive tax ratecompetitive tax ratecompetitive tax ratecompetitive tax ratecompetitive tax rateinsurance company cannotcarry over loses as done inbanks. Why should it be so?

The rule should be reviewedbecause insurance is a bigbusiness.”

The Chairman ofAssociation of IssuingHouses of Nigeria, Mr. VictorOgiemwonyi, said “Doubletaxation is not good for thecapital market. When acompany is made to paydouble taxes, then it wouldnot attract more companies tothe market. Governmentshould encourage morecompanies to the market bygiving tax waivers. Forinstance, pioneer statusshould be granted tocompanies.”

On the issue of budget, he

sid that the government wasable to reduce six per cent onrecurrent expenditure andover 30 per cent on capitalexpenditure. He advisedgovernment to allow naira tofind its level, saying thatcompanies wouldmanufacture locally to earnthe dollar.

Comenting on the budget,Mobolurin, described thebudget as tentative, sayingthat it does not align with thecurrent situation as oilbenchmark is still dropping.He said, “Frankly, Nigeriansneed to face the reality, wecan’t afford the subsidy. “Until it goes, we can’t findreasonable investment inrefinery and otherpetrochemical industries. Thereal budget and work willcommence after the elections.If we are not careful, in thenext 20 years, the country willremain where it is becausewith the current situation, itcan’t meet up the budgettarget.” According to him,Saudi Arabia will continue todrag down oil price and Shell,a major oil producer, hasstarted laying off staff .

“The government too willretrench its staff , close somedepartments. We are going tohave a situation where civilservants will not collectsalaries for months.” Hefurther stressed that as thenaira depreciates, subsidy onfuel goes up. Naira is overN200 in the black market andit will find its realistic figureafter the election.

On the way forward, heenjoined the government toreduce spending onlegislators, advisers andretrain civil servants ondifferent vocations for twoyears before laying them off.

The Securities and ExchangeCommission, SEC has assured the

management of Nigeria CommodityExchange (NCX) iof its support in its bid toget NCX bill passed at the NationalAssembly.

Ag. Director General of SEC, MounirGwarzo gave this assurance when hereceived the management of the NCX whopaid him a courtesy call in Abuja.

Specifically, he disclosed that thecommission was ready to support NCXwhenever there is public hearing on its billat the NASS, but advised the managementof NCX to do its networking very wellbefore then.

Besides, Gwarzo also advised NCX to bewell positioned for competition as there wereother commodity exchanges, like AFEX thatwill soon be competing with it.

Gwarzo said that SEC was very keen onthe growth and development of theexchange largely because of its importantrole in the economy.

SEC to accelerate speedy passage ofCommodity Exchange bill

“Migrating from being stock exchange tocommodity exchange is a major feat andwe are very excited about it. On our part,we will reach out to the Ministry of Financeso that we can make a case on some of theincentives that can encourage trading onthe floor of the commodity exchange”

“We are very confident of the success ofthe exchange as the prospects are very highbut a lot of things need to happen and youneed to do more in that regard”

NCX is the former Abuja Securities andCommodity Exchange (ASCE) which hastransformed into a commodity trading outfit.

He added that since circulars were issuedto companies to ensure their shares aretraded on the stock exchange, it made a lotof difference in market transactions in thesecondary market. He assured that once thewarehousing receipt system and all otherthings were in place in the commodityexchange, the commission will collaboratein any other area to ensure a very activemarket.

Skye Banki n t e n s i f i e sfocus onr e t a i l ,commerc i a lb a n k i n g

Skye Bank Plc hasstated that as itassumes the status

of a mega bank following theacquisition of MainstreetBank Limited, it will placestrong emphasis and focuson retail and commercialbanking as a way ofbringing about a healthydeposit mix to bring downits cost of funding.

The new business strategywill also allow the bank toreduce the volume of publicsector deposit and termdeposit at its disposal forenhanced profitability andbusiness sustainability.

Group Managing Director/Chief Executive Officer ofthe bank, Mr. TimothyOguntayo, disclosed theseat the weekend at a forumwith stockbrokers which tookplace in Lagos.

Oguntayo disclosed thatthe acquisition of MainstreetBank and the attendantsynergies between the twoinstitutions had given SkyeBank the competitive edgein the industry which itwould leverage to deliverquality customer service andhigh returns to shareholders

The Skye Bank boss saidthe acquisition had alsoprovided the bank theopportunity to optimize cost,assuring that the bankwould leverage its superiorinformation technology toblock leakage as well aspursuing aggressiveexpense control.

Specifically, he said thebank would continue toupgrade its informationtechnology continually,while also promoting theusage of point of salesterminals and automaticteller machines to serve itsteeming customers.

Assuring of seamlessintegration, Oguntayo saidthe bank has put in placemeasures to grow its balancesheet as well as create valuefor its shareholders.

Similarly, the bank’s branch network is now 450compared to 260 branchesbefore the businesscombination withMainstreet Bank.Oguntayo also expalinedthat the increased branchnetwork would make access to the bank’s serviceseasier.

We can’t affordthe subsidy,until it goes, wecan’t findreasonableinvestment inrefinery andotherpetrochemicalindustries

Stories byPETER EGWUATU

Vanguard, MONDAY, FEBRUARY 9, 2015 — 29

CMYK

Corporate Finance

FMDQ OTC Plc hassaid that it target

is to achieve N175trillion market turnovercome 2017 as it pursuesits strategic intent ofbringing aboutrevolutionary changesand fosteringdevelopment of theNigerian Over-the-Counter (OTC) financial

FMDQ targets N175trn market turnover in 2017… to float N100m Investors Protection Fund

Stories by NKIRUKANNOROM

market.The Securities

Exchange also said it isset to float a N100million InvestorsProtection Fund (IPF) toensure that investorsthat commit their moneyin the market do notsuffer any kind of loss.

Speaking during its2014 Review andOutlook for 2015, Mr.Dipo Odeyemi,Divisional Head,

Operations andTechnology, said FMDQis working together withthe Securities andExchange Commission,SEC, to work outmodalities for effectivetake-off of the Fund.

Already, he said therules have beensubmitted to the SEC,and the Fund isexpected to fully takeeffect by the end of thesecond quarter upon a

successful engagementwith the SEC.

According to him, theintroduction of the IPFwould increaseinvestors’ confidence

and also eliminate thefear factor involved incommitting ones moneyin financialinstruments.

Listing some of the

strategic initiates for2015, Odeyemi said thatFMDQ will pursueaggressive educationand capacity buildingfor market participants toincrease investors’confidence and reducemarket failure to ensurethat the market is alwaysup and running.

Access Bank eyes ‘most respectablebank’ status in 2018Access Bank Plc has

said that proceedsfrom its on-going rights

issue will position it asone of the mostrespectable banks in

Africa by 2018The bank is currently

shopping for N52.6billion via a rights issueto its existingshareholders by offering7.628 billion shares of 50kobo each at N6.90 each.

The offer opened onJanuary 26, 2015 and itwill run till March 4,2015.

Speaking at the ‘Factsbehind the offer’ at theNigerian StockExchange (NSE), theGroup ManagingDirector (GMD) HerbertWigwe, said theproceeds would be usedto upgrade the bank’sinformation technologyplatforms to enable itprovide better services,upgrade its branchnetworks and furtherimprove its workingenvironment.

“The funds raisedwould provide AccessBank with additionalcapacity to furtherconsolidate its leadingcorporate bankingbusiness as well asadditional capitalheadroom to support ourincreasing market sharein the SME and retailsegments’” Wigwe said.

He noted that despitethe challengingconditions in the nation’sbanking sector withregulatory changes andincreased competition,Access Bank hascontinued to sharpen itsexecution skills, therebyensuring a solid platformto build on.

Wigwe explained thatthe capital raising is inline with the bank’s five-year corporate strategyplan to be one of the topthree banks in thecountry and the world’smost respected Africanbank.

“In our five-yearbusiness plan, we havecustomers as the centralfocus. We have saidgoing forward into thefuture, our customerswill be taken along astrue partners.

30 — Vanguard, MONDAY, FEBRUARY 9, 2015

Homes & Housing

By YINKA KOLAWOLE

The Federal MortgageBank of Nigeria(FMBN) has taken

steps over the years tonavigate through numerouschallenges in the quest todeliver on its core mandateof promoting the delivery ofaffordable and modernhouses to Nigerians.

One of the challenges is theissue of low capital base. Thebank currently has a sharecapital of N5 billion out ofwhich the FederalGovernment has paid up itsown share of N2.5 billionrepresenting 50 per cent,while the Central Bank ofNigeria (CBN) and theNational Social InsuranceTrust Fund ( NSITF) have notpaid up their 30 and 20percent share respectively.

The bank was established in1956, as the NigerianBuilding Society (NBS), ajoint venture of theCommonwealth DevelopmentCorporation and the Federaland Eastern Governments ofNigeria. It was subsequentlyrenamed Federal MortgageBank of Nigeria after thefederal governmentundertook 100 percentownership acquisition of theNBS via the IndigenisationAct of 1973.

A new management teamwas recently inaugurated forFMBN, headed by Mr.Gimba Ya’u Kumo as theManaging Director, for asecond term in office. At theevent, He promised todevelop pro-active andeffective strategies to attractoffshore funding foraffordable housing toNigerians. He also pledgedto improve service delivery toNational Housing Fund(NHF) contributors across thecountry, and improve welfareof staff members across boardto ensure a well-motivatedworkforce and profitableoperations.

Low capital baseYaú Kumo lamented that

FMBN was grosslyundercapitalized compared tosimilar institutions in othercountries in West Africa,disclosing that there wasneed for government to speedup plans to re-capitalizationthe bank. According to him,an improved capital base willplace FMBN in a betterposition to refinancemortgages, as it cannot meetthe larger part of demands formortgage loans from variousstakeholders at the moment.“For now, the only source offunding the bank has to meetthe teeming demands ofNigerians is the NationalHousing Fund (NHF)collection which is minimal

HOUSING FINHOUSING FINHOUSING FINHOUSING FINHOUSING FINANCE:ANCE:ANCE:ANCE:ANCE: FMBN f FMBN f FMBN f FMBN f FMBN forororororgesgesgesgesgesthrthrthrthrthrough daunting challengesough daunting challengesough daunting challengesough daunting challengesough daunting challenges

•Set to raise share capital to N250bn

Borno buildsN700m housesfor insurgencyvictimsBorno State government

has inaugurated aneight-man committee for thedistribution of 432 freeapartments constructed at thecost N700 million to victimsof insurgency at the YerwaPeace Estate, Maiduguri, forresidents of Bula-BulimNgarnam.

News Agency of Nigeria(NAN) reports that theaffected residents had theirhouses destroyed by the BokoHaram insurgents.

Governor Kashim Shettimasaid the gesture would enablethe affected people to returnto their normal life after losingtheir houses to theinsurgency. He said it wasalso part of government’sresponsibility of providing forthe needy, adding that thehouses were constructed atthe cost of about N700 millionby a committee appointed bythe state government. “Sinceassuming office in 2011, wehave left no one in doubtabout our resolve toproviding housing to ourteeming population as it isone of our cardinal objectives.We have been able toconstruct houses across thestate in spite of the insecurityfacing us,” he said.

US morUS morUS morUS morUS mortgagetgagetgagetgagetgagerates hit 20-rates hit 20-rates hit 20-rates hit 20-rates hit 20-month lowmonth lowmonth lowmonth lowmonth low

U.S. mortgage ratesdeclined, remaining at

the lowest levels in more than20 months.

The average rate for a 30-year fixed mortgage fell to3.59 percent from 3.66percent, Freddie Mac said ina statement. The average 15-year rate slipped to 2.92percent from 2.98 percent,the mortgage-financecompany said. Both were thelowest since May 2013.

Falling borrowing costshave spurred an increase inthe number of Americansapplying for home loans. TheMortgage BankersAssociation’s index ofrefinancing applications roseto an 18-month high inJanuary, and the flow ofhomeowners seeking toreduce their monthly bills isset for a sustained boom,according to Paul Diggle,property economist forCapital Economics Ltd. inLondon.

We have setan agendafor ourselvesand chiefamong themis therecapitalizationof the bank

•A row of houses in FMBN-Elim Estate, Enugu

compared to the housingneeds of Nigerians. Everyworker is expected tocontribute 2.5 per cent of thesalaries to the fund and if youlook at this sum, it is smallcompared to the housingneeds of Nigerians.”

He however said theFederal Government is

exploring ways of raising theshare capital of the bank toN250 billion within the nextfew months. He assured thatdiscussions to raise the sharecapital had reachedadvanced stages by allstakeholders. “We have setan agenda for ourselves andchief among them is therecapitalization of the bank.We have made substantialprogress on that, in the nextfew weeks we will see resultson the table,” he said. The lastthree years has seenimprovement in housingfinance in Nigeria. A housingretreat hosted by PresidentGoodluck Jonathan for keyplayers in the housing sector,including FMBN, resulted inthe launching of the NigeriaMortgage Finance Company

(NMRC). This signaled thebeginning of a process thatis today increasingopportunities for Nigeriansto own their homes at anaffordable price.

Before now, the lack ofhealthy mortgage financingsystem in Nigeria had madethe rate of home ownershipin the country one of thelowest in Africa. Nigeria’shomeownership rate was putat about 25 per cent which ismuch lower thancontemporary countries.

To address thisdevelopment, the Kumo-ledFMBN management hasembarked on drasticmeasures to ensure that thehousing deficit is bridgedand this has led to theintroduction of mass housingschemes in various parts ofthe country. Some of the masshousing schemes are doneon a rent-and-own model thatallows low incomeparticipants to rent a homefor 15 to 20 years and own theproperty at the end of thatperiod.

InnovationsNotwithstanding its

limitation, particularly thehousing deficit, the apexmortgage bank initiatedprojects, which havedelivered about 53,000houses through the NHF, aswell as launching of thehousing scheme for theinformal sector, and theEstate DevelopmentGuarantee (EDG) scheme,amongst others. Theseinitiatives, coupled with itsplan to recapitalize, are setto place the industry on anew pedestal.

For instance, with theinformal sector’s CooperativeSociety Loan Scheme, YaúKumo explained that

operators such as farmers,traders and artisans would beable to tap into the benefitfrom the National HousingScheme, like those in theformal sector. He said thescheme to extend the bank’sservices to people who can bedeemed as “disadvantaged”in the society because of theirlow income level, which maybe irregular and difficult toaccess under the NHF loanwindow.

The FMBN, under thescheme, he added, is nowusing cooperative societies tobenefit a certain group ofpeople operating in theinformal sector category,especially because of thenature and structure of theirincome, which is not definiteor regular. “The loan enablesa cooperative society that hasacquired a plot of land todevelop houses for allocationto its members. The parcel ofland would have title in thename of the society whichwould act as facilitator onbehalf of its members in theloan transaction and facilitateconstruction of the housingunits. The root of the title ofthe estate land would besublease to the beneficiaries,”he said. Managing Director ofTrans-Atlantic Mortgages,Preye Ogriki, said the Kumo-led management has donewell in the face of dauntingchallenges confronting thecountry ’s housing financeand delivery. According tohim, “FMBN has done well inthe last three years or so. Ithas increased NHF collectionsthrough the e-paymentplatform and this hascontributed to funds availableto the bank.” Ogriki also notedthat the bank has attractedmany states to the NHFscheme.

Vanguard, MONDAY, FEBRUARY 9, 2015 — 31

32 — Vanguard, MONDAY, FEBRUARY 9, 2015

CMYK

Interview

The singular mostattention-grabbing event

in the nation’s banking sectorin 2014 came in the lastquarter of the year. Theannouncement by the AssetsManagement Corporation ofNigeria (AMCON) of HeritageBank as the winner of the bidfor the acquisition of EnterpriseBank jolted the entire bankingindustry, as many operatorsdid not give them the chanceto be the one that will win thebid. It would have beenconsidered an impossible taskfor a bank that entered themarket less than two years agoto beat other well establishedto acquire Enterprise Bank thatwas up for sale.

In this interview, theManaging Director/CEO,Heritage Bank, Mr.Ifie Sekibospoke about how the bankemerged as the preferredbidder for the Enterprise Bank,Agent Banking services andother issues in the bankingsector.

Excerpts:

What is Heritage Bank doingin the area of Agent Banking?

The bank’s management saidAgent Banking is aboutbringing banking services tothe people, so that they do notneed to go far away to do theirbanking services. Bankingservices is not for the privilegedfew, it is for everybody, andwith the small bank we haveopened, we are offeringbanking services to everybodyin this market, irrespective oftheir educational backgroundand what they do.

What is the contribution ofHeritage Bank in the financialinclusion strategy of the CBN? As part of our support for thefinancial inclusion strategy ofthe CBN, Heritage Bank didset a standard when itlaunched its pilot ‘Corner Shop’to cater for the need of tradersand artisans of the Gbagadaplank market, located atGbagada Estate of Lagos Stateas a foretaste of its AgentBanking Scheme. The shop isaimed at giving traders theopportunity to enjoy financialservices without the risk andstress of walking kilometers inorder to visit a bank branch.

What is the bank doing in thearea of SMEs development?

Agent Banking: Bankingservices not forfew people — Sekibo

Bankingservice isnot onlyfor somepeople, itis foreverybody

By PETER EGWUATU

HeritageB a n k ’ ssponsorshipcommitment inthe areas of Small andMedium Enterprises (SMEs)development, sports,entertainment, charity andadvocacy also stands out.

Through its unique SMEsSupport Platform, the Bank, in2014, raised the bar in theefforts to deepen the SMECulture in the country. ItsMicro Small and MediumEnterprises (MSME) Clinicradically emerged as a uniqueplatform set up to offer a holisticbailout strategy for SMEs in thecountry through an amalgam ofservices such as businessdiagnostics, advisory services,financial literacy ande n t r e p r e n e u r s h i pdevelopment, customizedproduct development for eachcustomer and marketknowledge development. Thisscheme is backed up by theinnovative Heritage BankMicro Small and MediumEnterprises (MSME)Investment Protection Fund; anon-collateralized fundingoption with embeddedinsurance for the default riskinherent in the SME schemeto assist the growth andrejuvenation of the sector. Thisremains a strongdifferentiating indicator of theHeritage Bank approach toSME funding in the country.

For example, under thisscheme, Heritage Bank,through a groundbreakingpartnership with Dbanj, theKoko Master, offered supportfor KOKO AGROPRENEUR,Dbanj’s initiative under thebanner of the nationalagricultural renewal projectbeing championed by theMinistry of Agriculture. Thenational agricultural renewalproject initiative is aimed, onthe one hand, at providingpractical leadership andencouragement to the massiveyouth population to embracethe agricultural revolutionbeing championed by theMinister of Agriculture, Dr.Akinwunmi Adeshina, as partof the national socio-economictransformation agenda. It isalso an initiative designed tostress the significance of smalland medium enterprises as averitable platform for futureeconomic well-being of the

country.

How did Heritage Bankemerge as the preferredbidder for Enterprise Bank?

At inception we did state theway the bank wanted to go. Were-capitalized to the tune ofN12 billion, took up allliabilities and assets of thedefunct Societe GeneralleBank of Nigeria ,SGBN andfound some form ofaccommodation for depositorswhose money has been trappedfor over 10 years. Our vision issimple and clear; today, wemight look quite new in themarket, but our idea of what thisbank should be is clear fromday one. We want to be a bankthat people will believe and wewant to lead in the knowledgethat generation banking is theway to go.

Heritage Bank’s thirst forunique customer satisfaction,not only financially but in otherways, started shortly after itsoperations began. This becameevident as it commenced a zeroCOT offering to its numerousclients from April 15, 2013. TheBank’s offering of zero COTimplies there shall be no

hidden charges in transactions.Consequently, this huge sellingpoint would boost the bank’sgoodwill, customer trust andconsequently, deposit base in2014 as it warmed up to serveits customers more goodies.

The Heritage BankingCompany Investment ServicesLimited (HISL), a specialpurpose vehicle sponsored byHeritage Bank to bid forEnterprise Bank, not only cametops in the bid process but,against all industrypredictions, paid the total N65billion purchase price withinthe timeframe specified byAMCON.

What would be the benefit of

the acquisition of EnterpriseBank?

The Enterprise Bankacquisition served a clearsignal that Heritage Bank,which entered the market in2013 with a regional bankstatus, was focused ontransforming into a strongnational bank. The acquisitionof Enterprise Bank whichcurrently boasts of over 160branches, over 177 ATMs, 57Cash Centres and 2000 POSTerminals spread across majormarkets and commercialcentres in the country willincrease Heritage Bank’spoints of presence from thecurrent 15 Experience Centersto nearly 200 branches spreadall over the country. Thisautomatically transforms thebank from a tier-2 player to astrong tier-1 player. However,the acquisition of EnterpriseBank, earth-shaking andrecord-breaking as it was,happened to be just one of themany strategic, industry-redefining moves HeritageBank has made, since coming

on stream, to justify its fastgrowing image as an industrygame-changer.

How did Heritage Bank

surmount the challenges in thebanking sector to now becameone of the major players in thesector?

When Heritage BankingCompany Limited rose fromthe ashes of the defunct SocieteGenerale Bank of Nigeria(SGBN) in early 2013, thethinking of some industrywatchers then was that of abank whose soul lies inuncertainty. They were notsure if the new bankingexperiment would turn-out asuccess story or not. But thenew management wasoptimistic and determined toignite heritage of bankingsuccess. Immediately they gota regional banking license fromthe Central Bank of Nigeria(CBN) in 2013 to start HeritageBank, they hit the groundrunning with a uniquephilosophy to Create, Preserveand Transfer Wealth to itsteeming Customers.

Guided by passion and abrand architecture that exudesquality service, performance,respect, integrity, innovation,tenacity and excellence as corevalues, the promoters of thenew quintessential bank weredriven by African world viewof wealth creation. This reflectsin the naming protocol of thebank’s strategic divisions;Ivory, Manila, Cowry andCoral Banking. The uniquenaming of its branches asExperience Centres to theminutest simplification ofbanking Service offering alsogave a strong hint that thebank’s brand differentiationwas well thought-out.

Vanguard, MONDAY, FEBRUARY 9, 2015 — 33

EN months after its historic initial public

Se-plat Petroleumshareholders cause to cheer

on by the sharp decline in oil

--

-

down on its bets about oil prices’ prospects.

The company announced on Thursday that it had completed the acquisition of

OML53 and OML55 Chevron and Belema Oil

--

siduously behind the scenes

-

the shallow waters of the --

plat will pay $259.4m for a 40

-

-

a 40 per cent interest in the Ildar Davletshin and

sector analysts at Renais-

sance Capital -liminary assessment of the

enable the company to dou-ble oil production as soon as they reach capacity with-

should help Seplat increase

add about 20 per cent to its

There is also a sense of re-lief that Seplat’s acquisition

its report for the half year

it explained that its bids for OML 29 and OML24which were put up for sale by Shell had been unsuccessful

-cipline’ and did not put for-

The news of its latest ac-

of announcements in Janu---

cilities and had commenced Afren

250 listed independent oil exploration and production company.

$1 billion from two consor-

were to be used to repay $552

-ness opportunities. ;

Vanguard Markets | Monday, February 09, 2015 | Issue 028

FIXED INCOME & FOREX

Seplat’s counterintuitive acquisitions win market applause

Source: FMDQ

T

Currency Central Rate

SWISS FRANC 181.7097

YEN 1.4276

WAUA 237.1180

RIYAL 44.6286

DANISH KRONE 25.7585

SDR 237.3978

FOREX RATES

AGAINST THE GRAIN

FGN Bonds & TBillsFGN BondsTreasury Bills

23/01

300B

240B

180B

120B

60B

028/01 02/02 05/02

NITTY

23/01

17.00

15.80

14.60

13.40

12.20

11.0028/01 02/02 05/02

1M2M

3M6M

9M12M

NIBOR

23/01

17.00

15.40

13.80

12.20

10.60

9.0028/01 02/02 05/02

O/N1M

3M6M

FX ($/N)

23/01

193.0

191.8

190.6

189.4

188.2

187.028/01 02/02 05/02

BidAsk

Seplat drill technicians working on a rig

MoFr167.3

167.4

167.6

167.5

167.7167.50

Tu We Th Fr

$/N

MoFr251.0

252.5

255.5

254.0

257.0256.9785

Tu We Th Fr

£/N

MoFr189.0

189.8

191.4

190.6

192.2191.8043

Tu We Th Fr

Euro/N

MoFr26.20

26.40

26.80

26.60

27.00

Tu We Th Fr

CNY/N 26.8232

MoFr0.27

0.28

0.30

0.29

0.31

Tu We Th Fr

CFA/N 0.2822

Source: Thomson Reuters

CMYK

34 —Vanguard, MONDAY, FEBRUARY 9, 2015

OULD Ecobank T r a n s n a t i o n a l Incorporated be

dealing with a case of bad news goose-stepping in pairs on its manicured front lawn? On Tuesday, a labour court sitting in Lomé, the Togolese capital, awarded $11.6 mil-lion to Thierry Tanoh, its ousted chief executive, for wrongful dismissal. Tanoh was removed under a cloud in

governance failures at the pan African bank.

The following day, Febru-ary 4, the International Monetary Fund released a report, Pan-African Banks - Opportunities and Challeng-es for Cross-Border Over-sightinstitution on critical points.

-rywhere in the IMF report: rapid expansion was not been matched by commensurate strengthening of governance standards, enjoyment of the status of a bank holding com-pany registered in Togo, ETI is not formally regulated but is supervised by the Commis-

sion Bancaire (Banking Com-mission) of the West African

regions, its cross-border risk transfer mechanism is opaque, and although the Ni-gerian subsidiary reported a decent improvement in capi-

in H1 2014, its ‘true position may be less positive based on several risk factors’.

The report goes on to list

the risk factors shadowing the Nigerian subsidiary, the biggest in the group. It reads like a parade of the usual sus-pects. Weak capital position, reckless lending practices, high operating costs, unsta-ble deposit base, and lack of

-ment team. No one will fault the authors of mincing words.

The verdict in Lomé comes on the heels of another one delivered by a court in Abid-

jan court in January order-ing ETI and Public Invest-ment Corporation, the quasi-public South African investment entity and a ma-jor shareholder in the bank, to pay the ex-CEO $15m for defamation of character.

In strongly worded rebut-tals, Ecobank rejected the two judgments.

‘ETI does not accept the legitimacy of the Togolese court’s ruling because the

court does not have legal ju-risdiction over Mr Tanoh’s employment contract. Mr. Tanoh signed this contract before assumption of his post as Ecobank Group CEO in July 2012 in the full knowl-edge that it was governed by English law. The contract expressly provides that all disputes shall be settled by international arbitration in London by an arbitrator ap-pointed by the President of the International Chamber of Commerce in Paris. The con-tract grants exclusive juris-diction to the English courts in relevant matters. Mr. Tanoh, an Ivorian national with permanent residence in the United States during his tenure as ETI Group CEO, rejected these express provi-sions of his contract, prefer-ring instead to pursue litiga-tion in a Togolese court for reasons best known to him.’

was quoted in London’s Fi-nancial Times saying that ETI would call ‘a special board meeting next week to review these issues and to make a decision over what is best for

the institution and whether we should move to a jurisdic-tion where there is a secure legal environment.’ Such threats are not made lightly.

One sentence in the re-lease hints obliquely that an out of court settlement

-bank rejects the excessive sums of money that he is demanding in local courts in Togo and Cote d’Ivoire.’ Does this suggest that ETI may be prepared to pay a reasonable severance package to end the matter?

Ecobank also dismissed the IMF report as obsolete. ‘The report, which contains some inaccuracies, is roughly 18 months out of date as regards some of its references to the Ecobank Group… It would be wrong for the report to inad-vertently convey the percep-tion that past governance is-sues still exist at Ecobank. A lot has taken place between the preparation of the afore-mentioned IMF report and the present time.’

Some say that there is no ;

HE i-word is on eve--

tion has a directly inverse relationship with belt

rises, the tighter belt holes are hooked. In the January edition of its report, analysts at FSDH Merchant Bank, point out

that international food prices as measured by the Food and Agriculture Organization’s Food Price Index (FFPI) de-clined 1.9 per cent in January 2015, compared with Decem-ber 2014, and 10.1 per cent

-ure. The report forecasts that

Nigerian Bu-

reau of Statistics’rate for January will be 8 per cent, unchanged over the De-

So far, so good. But with the see-saw in exchange rates, this could turn out to be the calm before the storm. ;

BUSINESSVM2

REWIND

VM | Monday, February 09, 2015 | Issue 028

Inflation vigilance

Ecobank in the crosshairsC

T

EDITOR: MIDENO BAYAGBON

GROUP BUSINESS EDITOR: OMOH GABRIEL

CONTENT DIRECTION: OBIORA TABANSI ONYEASO

DESIGN & ILLUSTRATION: PUBLICAN MEDIA

Vanguard Markets features unbiased, in-depth coverage of corporate and market developments across a wide range of business sectors.Every week, Vanguard Markets delivers essential business analysis and commentary on Nigerian companies, regional economies, and global markets. Vanguard Markets is published by Vanguard Media Limited in associa-tion with Customs Street Advisors Limited, a specialist communications consultancy.

Vanguard Media Limited, Vanguard Avenue, Kirikiri Canal, P.M.B.1007, Apapa.

Website: www.vanguardngr.com

ISSN 0794-652X

Published by

In Association With

HE Mauritius-domi-ciled Synergy Part-ners Equity Fund

is wasting little time to deploy its war chest. Last week, Syn-ergy Capital Managers, the fund manager announced that it had made an undisclosed

NetPlus Strategic Sales and Advisory Limited. The two-year old startup has established itself as a serious player in the e-commerce, and e-infrastructure space under Wole Faroun, its resource-ful founder. NetPlus’ technol-ogy underpins the company’s own WebMallNG.com storefront, and is considered the most robust indigenously developed e-commerce plat-form in the sub-Saharan re-gion excluding South Africa. WebMallNG.com’s competi-tors in the B2B arena include Kaymu and Konga. The company counts Diamond Bank, FCMB, Fidelity Bank, and UBA among its clients. NetPlus is also ag-gressively building out its presence in e-payments to go head-on against PayPal, which entered the Nigerian

market in 2014 in partner-ship with First Bank. Faroun expressed his delight at attracting institutional capital interest within its rela-tively short operating history. SPEF’s capital injection would help NetPlus to ‘grow its brand and strengthen partnerships with key players the in the e-commerce and e-payments space as well as providing value from a governance and management perspective.’Akintoye Akindele, a part-

ner in Synergy Capital Managers, the fund man-ager, said that NetPlus ‘solves a critical need in the market-place, and is strategically posi-tioned to unlock the enormous potential of e-commerce in

-ly across the region.’Fundraising for SPEF is scheduled for its second close in the second quarter of the year. The fund is targeting

investment.;

Synergy Capital Managers bets on e-commerce with Netplus investment

T

Ecobank branch

Source: FSDH Merchant Bank and National Bureau of Statistics

Vanguard, MONDAY, FEBRUARY 9, 2015 — 35

CMYK

CMYK

36 — Vanguard, MONDAY, FEBRUARY 9, 2015

CMYK

Vanguard, MONDAY, FEBRUARY 9, 2015 — 37

CMYK

38 — Vanguard, MONDAY, FEBRUARY 9, 2015

Micro-Finance

Bank lending to Smalland Medium Enterprises

(SMEs) and the retail sectorwill increase in 2015, Director,Heritage Bank, Mr TonyMadojemu, has said.

He statedd this at a forumorganized by the BusinessNetworking International(BNI) to mark its InternationalNetworking Week, saying “Theretail sector was booming andsome of the ‘big firms’ arebeginning to dictateunnecessarily to the banks so

HB projects increase in bank lending to SMEs in 2015Stories byPROVIDENCE OBUH

attention is shifting from themto these sectors.

“Even though the bankingsector outlook for 2015,according to Fitch, tells us thatbanking may not fair

favourably this year, smallbusiness owners wouldfavoured.

“Banks are beginning to seeknew opportunities to increaseprofitability and guard against

collapse, by seeking ways todeal with only well-structuredSMEs, so I see this as goodnews. “The only challenge ishow small businesses canmanage operational risks in

order to keep a well structuredbusiness that would attractbanks to lend them money,business owners should braceup their competence if theymust access loans.” Alsospeaking, National Director,BNI Nigeria, Mr. ChimaobiAgwu, said that smallbusinesses needed networkingand referrals to cushion the costof advertising their businesses.

Agwu explained that BNI ismeant to supply networkmarketing services andreferrals that could help smallbusinesses grow and increasetheir market share.

Between October andDecember 2014, Rotary

International, District 9110,Nigeria, empowered about 400youths, even as it announcesplan to hold its “Annual DinnerDance Ball.”

Speaking at a pressconference in Lagos, DistrictGovernor, Mr. Dele Balogun,said that a notice was issuedand youths who areunderemployed andunemployed were asked toapply and about 400 personswere picked and trained intheir various areas of interest.

Balogun listed some of theprojects funded in Nigeria toinclude: Microcredit schemeinitiative; Provision of artificial

Rotary District 9110 empowers 400 youths, announcesdinner dance ball

limbs by various clubs throughcentre in Lagos and OgunState; Provision of water andimprovement of sanitation andpersonal hygiene troughbuilding toilets; youthexchange by sending young

Adults abroad to study and liveabroad for a period of time,among others, while fundingaround the globe include: $76million spent in fighting polioin Afghanistan, Pakistan andNigeria, among other funding.

Banks arebeginning to seeknew opportunitiesto increaseprofitability andguard againstcollapse

Aquarian Consult Limited has made itsdebut in Lagos even as it announces

plans to hold training on photography, inpartnership with Paul Ukonu, Africa’sinfluential photographer. The trainingscheduled to hold on April 13 to 16, 2015will empower a number of Nigerians whoare willing to advance the art of photography.

Aquarian Consult Limited is a BusinessDevelopment Consultancy with a structure

Aquarian Consult debuts in Lagos, announces photography trainingin fields of Business Development Services,Recruitment, Human Resource Consultancyand Training. Speaking at a press brief inLagos, Manager, Business Development andMarketing, Mr. Ademola Balogun, said thatthe company plan to launch a new additionto its training programmes: The new Pitman,Etisalat learning platforms, DPSSConsultants-UK and Ocalm-US forenterprise and career development.

“Nasarawa to spendN107.9bn in 2015”, PUNCH,January 1, 2015.

The report by UmarM u h a m m e ddisclosed that “The

budget which was christenedthe budget of “sustainability”would be funded withresources from theFederation Account,internally generated revenue[IGR] Value Added Tax, andSURE-P.” CommissionerDanazumi, for LocalGovernment and ChieftaincyAffairs, who delivered thebudget on behalf of ailingGovernor Al-Makura, couldbe forgiven for not realizingthat he had delivered the mostunrealistic and unsustainablebudget in the state’s history.But, Danazumi need not feelbad. Nasarawa state is merelyfollowing in the foot-steps ofother states which hadpresented budgets to theirStates’ Houses of Assembly.

Simple arithmetic tells usthat a state budgeting to spendN107.9 bn (N108 roundedup) would need to generateN9bn per month from allsources in 2015. The questionis how realistic is this forNasarawa?

Nasarawa State Budget as metaphor for unrealistic state budgets To start with, SURE-P as a

source of revenue has closedshop in reality. Dr NgoziOkonjo-Iweala will soonreveal that truth toeverybody. But, when theFederal budget is based oncrude oil selling at $65 perbarrel and the current price isunder $57 per barrel, therewill be no subsidy anymore.So out goes an entire revenuesource from the estimates.

Value Added Tax, VAT,could be up or down from lastyear’s actual revenuecollected depending on howmuch VAT rate is increasedand how much is actuallycollected in 2015. But, withcrude prices goingdownwards, there is everychance that the Nigerianeconomy might contract andVAT collection might drop.

However, SURE-P and VATare minor variables in thebudget estimates. Togetherthey cannot account for morethan fifteen per cent of thebudget estimate. The bulk ofthe revenue expected to fundthe budget of “sustainability”will come from the FederationAccount, FA, and IGR. Thequestion is: how well hasNasarawa performed inderiving revenue from IGR?

The answer is: very poorly. In an excellent report titled

“States struggling to paysalaries”, DAILY TRUSTreporter, Nurudeen Abdallah,on December 15, 2014, page5, disclosed that, with theexception of Lagos, Rivers,Delta and Kano States, whichgenerated N384.5bn,N87.9bn, N50bn and N24bnrespectively, no other stategot close to N25bn. Nasarawaactually achieved IGR N4.1bnin 2013. The 2014 result mightnot be different.

That leaves us with therevenue from FA to providethe bulk of the funds for 2015.And it is precisely on thisaccount that the Nasarawastate budget, as well as thoseof other states fall apart. Asthings stand right now, theNasarawa state House ofAssembly will be wastingeverybody’s time, raising falsehopes among the people if itexpects the state to raiseN108bn this year. Here is theevidence.

The October 2014allocation to states from theFederation Account, shouldhave served as a warning to thestates. All the states collectedfar less than they hadcollected in a month in more

than two years. Nasarawacollected only N5bn fromAbuja. That sum included FA,VAT, and SURE-P allocations.And it also included the state’sshare of the Excess Crudeaccount which will not longerbe disbursed as long as crudeprices remain low.Furthermore, the FA wasmade from crude selling atwell over $80 per barrel. TheFA allocations for 2015 will bemade from crude selling at$60 or less and without ECAand SURE-P funds. CertainlyN9bn revenue per month canat best be regarded as a grosserror, at best; or anunwarranted joke at worst.

Again, it needs to berepeated that Nasarawa is notalone in making thismonumental mistake at a timewhen every state needs adviceon how to put together a reallysustainable budget. Readilyavailable information on otherState budgets which representthe prevalent flight fromreality include the following:Benue N8.5bn per monthbudget versus N5.2bnexpected; Borno N14.8bnbudget versus N7.7bnexpected and Gombe N7.5bnversus N3.8bn. One cannothelp wondering if ALL the state

governors intend to printtheir own currencies to makeup the shortfalls they willexperience in 2015.

The Speakers of the StateHouses of Assemblies and theHonourable members, if theylove their people would be well-advised to put the interest ofthe people above partisan andselfish considerations. Ifbudgets which cannot beimplemented are passed, thepeople will sufferimmeasurably. Civil societygroups in every state shouldalso rise to the occasion. Thestates that will be destroyedthrough a bogus budget belongto all of us. Politicians,irrespective of political partyshould not be allowed to bringunprecedented civil unrestnationwide on all of us.

NEXT: FOR HOW LONG WILLTHE COUNCIL OF STATESREMAIN SILENT?

The Council of Statesincludes all former Heads ofState alive – Obasanjo, Shagari,Buhari, Babangida, Shonekan,Abubakar and Obasanjo again.For how long will they keepquiet while the nation sinks?For once silence is not gold; itis either acquiescence orcowardice. Both areunbecoming of ElderStatesmen….

Vanguard, MONDAY, FEBRUARY 9, 2015 — 39

Tax Matters

As is the case with several taxtypes, the PersonalIncome Tax (PIT)

which is made up of direct assessmentfor self-employed enterprises and Pay-As-You-Earn (PAYE) for salary earnershas attracted various questions fromtaxpayers across the nation. In a Q&Asession with the Director, Medium TaxDepartment of the FIRS, PeterAdemola Olayemi explains in clearterms issues regarding PIT and PAYE.P. A. Olayemi is a chartered accountantand a seasoned tax administrator withvast years of experience in taxpractice. He is a Fellow of the Instituteof Chartered Accountants of Nigeria,the Chartered Institute of Taxation ofNigeria and the Institute of DebtRecovery Practitioners of Nigeria.

Taxpayer What is PAYE?

P. A. Olayemi: PAYE is an acronym for “Pay as You

Earn”. It is a method of collectingpersonal income tax from employees’salaries and wages through deductionat source by an employer as providedby the relevant sections of thePersonal Income Tax Act (PITA). (S.81of Personal Income Tax Act Cap P8LFN 2011)

Taxpayer What is the due date for remitting

PAYE?

P. A. Olayemi The due date for remitting PAYE is

the 10th day of every month followingthe month of deduction.

TaxpayerDoes PAYE charges on income vary

from ministry to ministry for the samelevel of income/salary?

P. A. Olayemi PAYE does not differ because the

rates used for computation are thesame. The current rates applicable tothe chargeable income are as follows:

1st N300,000 @7%

Next N300,000 @11%

Next N500,000 @15%

Next N500,000 @19%

Next N1,600,000 @21%

Above N3,200,000 @ 24%

Taxpayer Is the submission of comprehensive

list of staff with monthly PAYEdeductions/remittance different from

submission of annual returns?

P. A. Olayemi Yes, the two submissions, though

made at different times, should beaccompanied with a comprehensivelist of staff that suffered the PAYEdeductions. Comprehensive list ofemployees from whom PAYEdeductions were made is continuouslysubmitted on monthly basis each timePAYE is deducted and remitted toFIRS for residents of FCT, police,members of the armed forces, officersof the Nigerian Foreign Service andnon-residents that derive income/profitin Nigeria and to the States Boards ofInternal Revenue, residents of therespective states. The Annual returns(form H1) on the other hand is to besubmitted by 31st day of January ofevery year by every employer to enablethe tax authority ascertain whether thecorrect deductions and payments oftax have been made for the previousyear (period of twelve months) for allits employees and for incomes fromall sources earned during the year.

Taxpayer What is Benefit-In-Kind?

P. A. Olayemi

Benefit-In-Kind (B.I.K) may bedefined as those benefits orperquisites that accrue to a person byreason of the office and/or position he/she occupies. Benefits in kind includesuch benefits as official car, officialaccommodation, cooks, gardeners,security etc. The amount treated asB-I-K in the hand of the officer thatenjoys the benefit is added to hisincome in arriving at his/her gross/consolidated income that is assessedto tax.

TaxpayerWhere should PAYE deductions from

the salaries of a staff working in Abujabut residing in Suleja or Mararaba beremitted to?

P. A. Olayemi By residency rule, an employee’s

PAYE is payable to the tax authorityof the state of his/her residence. It istherefore the duty of the employer todeduct and remit it to the tax authoritywhere the employee is resident. If theemployee is resident in Suleja, the taxauthority that is entitled to his PAYEis the Niger State Board of InternalRevenue. If he is however resident inMararaba, the tax authority will be theNasarawa State Board of InternalRevenue.

TaxpayerWhat is the minimum tax rate for

Personal Income Tax?

P. A. Olayemi

The minimum tax rate is 1% of grossincome. It is applicable if the taxableincome is below N300, 000.

TaxpayerIs it possible to apply for a refund

for excess Personal Income Taxdeductions/payments?

P.A Olayemi Yes; the law provides that excess

tax paid by any employee shall be

refunded on application by theemployee to the relevant tax authority.He could however elect to have theexcess tax payment be used to off-setfuture tax liability.

TaxpayerWhen there is under deduction of

tax from the employee’s income, whobears the burden of the underdeduction?

P. A. Olayemi Section 82 of Personal Income Tax

Act, Cap P8, LFN 2004 states “thatwhere an employer is required undera provision of this Act to makedeductions from emoluments oramounts on account of emolumentspaid by him to an employee shallaccount to the relevant tax authorityin such manner as the relevant taxauthority may prescribe for thedeductions so made, and in the eventof failure by the employer to make thededuction, or properly to accounttherefore, the amount thereof togetherwith a penalty of 10% per annum ofthe amount plus interest at theprevailing commercial rate shall berecoverable as a debt due by theemployer to the relevant tax authority”

Based on this provision of the law,when there is an under deduction oftax from a staff salary, the employerwhose duty it is to deduct correctly andremit to the relevant tax authoritybears the burden.

Taxpayer What is gross emolument/salary?

P. A. Olayemi

Personal Income Tax Act (PITA, 2011)as amended defines gross emolumentas the aggregate of wages, salaries,allowances (including benefits-in-kind), gratuities, pension,superannuation and any other incomederived solely by reason ofemployment.

Taxpayer What are non-taxable deductions

under the PIT Act? P. A. Olayemi

The sixth schedule of PersonalIncome Tax (Amendment) Act, 2011listed the following as tax exempt:

a) National Housing Fundcontributions

b) National Health InsuranceScheme contributions

c) Life Assurance Premium

d) National Pension Scheme

e) Gratuities

Taxpayer Is it within the law for a State Board

of Internal Revenue to chargeinterest, penalty and threatendistraint for a shortfall between thePAYE remitted by a company and thePAYE deducted as stated on thecompany’s tax deduction cards.

PPPPPaaaaay As Yy As Yy As Yy As Yy As You Earn (Pou Earn (Pou Earn (Pou Earn (Pou Earn (PAAAAAYE) and PerYE) and PerYE) and PerYE) and PerYE) and Personal Income Tsonal Income Tsonal Income Tsonal Income Tsonal Income Tax (PIT) Explained…ax (PIT) Explained…ax (PIT) Explained…ax (PIT) Explained…ax (PIT) Explained…

By residencyrule, anemployee’sPAYE ispayable to thetax authorityof the state ofhis/herresidence

Kabir Mashi, Chairman, FIRS

40 — Vanguard, MONDAY, FEBRUARY 9, 2015

CMYK

Vanguard, MONDAY, FEBRUARY 9, 2015 — 41

CMYK

E-commerce: Exploring Unified TotalCommerce to meet shoppers’ expectations

Jovago.com partnersAntrak, Starbow Airline

Online retailshopping brand,

PayPorte, has started astrategic reposition thatwill strengthen itspresence in the Nigeriane-commerce space. In thisregard, the online retailersigned its first ever brandambassadors; mediapersonality and popularblogger, Toke Makinwaand Big Brother Africaseason 9 housemate fromNigeria, Tayo Faniran.

Speaking at the formalmedia unveiling andannouncement which heldin Lagos, the ManagingDirector/Chief ExecutiveOfficer, Payporte GlobalSystems Limited, Mr. EyoBassey, said: “Payporte isvery happy with its choiceof ambassadors and veryexcited about this newjourney. We are a fastgrowing online businesswith the young, urbanprofessionals and matureadults as our targetaudience and our brand isstrongly committed to

In the spirit of love,Nigeria’s leading gift

voucher company,Suregifts.com.ng isgiving away free moviegift cards, ice creamyoghurt gift cards and fullspa session gift cards tolovers this Valentineseason. To win the giftcards, customers have topurchase N20, 000 worthof gift cards onSureGifts.com.ng and usethem to shop online oroffline at Suregifts’partnering merchantsthen notify the gifting

Suregifts marks Valentine withfree gift cards

E-Commerce

Stories byJONAH NWOKPOKU

Merchants havelong treated

their businesses as thesum of essentiallydifferent parts. Therecent focus on mobiledevices and social mediahas further fragmentedbrands’ strategies, withmerchants continuing tofocus on linearexperiences, althoughon these new platforms.

But consumers have adifferent view of brands.While they appreciate theconvenience of beingable to shop via a varietyof touchpoints, researchshows they also craveconsistency when itcomes to products,pricing and promotions.When asked whichaspects of the shoppingexperience should beconsistent, participantsin a Consumer ShoppingSurvey by MarketLiveranked product pricing,free shipping policies,and other promotions asthe three key areas wherethey sought astandardized approach

The survey showed thatmerchants must respondto this expectation bytaking a new approach:The Unified TotalCommerce. This impliesthat rather thandesigning experiencesby device, browser orsocial network, theyshould approach

Payporte repositions, signs brand ambassadorsdelivering best services ;we are very confident Tokeand Tayo will do anexemplary job in not justretaining our brand valuesbut in also promotingthose values”.

Talking about their newendorsements, the twoambassadors expressed

shopping tasks from theconsumers’ point of viewof the brand as a singleentity, and strive tounderstand at whatpoints different researchtools come into play andwhat spurs purchasedecisions, whether in-store or browsing a tablet.Then, by offeringcontextually-relevantproducts, content andoffers that matchshoppers’ needs in themoment, merchants cancreate a truly meaningfulbrand experience, one

that has the potential tocreate a lastingconnection.

The study suggest thatfor merchants to createmore concretely in thedays ahead, merchantsshould strive to create aunified commerceexperience by focusingon five key areas,including: Physical storeexperiences by breakingdown the “online/offline”mentality and creating aseamless flow ofinformation from storeshelves to online.

Jovago.com, onlinehotel booking

platform has signed whitelabel partnerships withtwo of Ghana’s domesticcarriers, Antrak Air andStarbow Airline to providemore accessible hotelbooking services totravelling Ghanaians.

As the official hotelpartners of Antrak Air andStarbow Airline,Jovago.com makes iteasier for travelersvisiting the Antrak Airwebsite or the StarbowAirline website to find andbook from over 200,000hotels around the world,available on Jovago.comin a few simple clicks.Antrak Air has expressedpartnership with theJovago partnership.

According to theMarketing Manager ofAntrak, Richard Kyereh,“this white label hotelbooking solution willensure that everyonevisiting the Antrak Airwebsite to book domesticflights in Ghana can alsobook their trips easily fromthe wide selection of hotelsavailable onJovago.com.” On its part,Starbow Airline whichlaunched in 2011 with aninaugural flight toKumasi, Ghana said thepartnership reinforcestheir commitment to theircustomers. Starbow ChiefExecutive Officer, JamesEric Antwi in a statementsaid: “Our commitment isto provide travelingGhanaians with an

company to receive theirwinnings.

Speaking on the promo,the Chief ExecutiveOfficer of Surgifts,Adeoyo Ojo said, “Giftcards are an innovativeway of giving. Customerswho don’t know what tobuy their recipientspurchase our gift cardsand give them to therecipients to use to buywhatever they want.Companies also use it toreward their employeesinstead of handing themcash.

their enthusiasm and theirrequired participation inhelping to grow thebrand.

“We are very excited andlook forward to anamazing business yetfriendly partnership withPayporte,” they said.

42 — Vanguard, MONDAY, FEBRUARY 9, 2015

Agric

Aviation

Multiple charges plague aviationindustry — Unuigbe

Chairman, MinisterialCommittee on

Aeronautical , Non-Aeronautical and PassengerCharges, Mr Ahonsi Unuigbehas revealed that the NigerianAviation industry is plaguedby multiple charges whichhave put unnecessary burdenon the travelling public. Thisis one of the highlights of thefindings of the Committee.

Making the Committee'spresentation at the launchingof the “Aviation CommitsInitiatives” in Lagos, Unuigbesaid some key highlights ofthe Committee's findingsincluded “the fact that theaviation industry is plaguedwith multiple charges. Forexample, there are over 50different charges imposed bythe three main AviationMinistry parastatals which insome instances, are chargedby the different agencies for

By LAWANI MIKAIRU the same services (a quickexample is the imposition ofboth Port charges, as well asCargo charges by FAAN on thesame cargo).”

He also said with respect topassenger ticket charges, thebasis of some of these charges,is not known and is quitearbitrary. “For example, the

committee analysed the basisof computation of passengertickets for four domesticairlines (namely, Arik, Dana,Medview and First Nation).The analysis shows that anamount ranging from 40% to65% of the airfare is hidden asfuel surcharge (also known asYQ).”

FG to groundprivate jets withforeignregistration

The Minister of Aviation,Chief Osita Chidoka, on

Tuesday said the FederalGovernment is to ground privatejets registered in foreignnumbers, but engage incommercial operations in thecountry. Also to be affected by thisnew policy are Nigerianregistered private jets that engagein “hire and reward”. This newpolicy will come into effect as fromThursday, February 5, 2015.Thisis coming as the government hasmandated all airlines operating

By LAWANI MIKAIRU

in the country to henceforth haveNigerian pilots in their cockpits

Chidoka revealed thisdirective in Lagos at thelaunching of the “AviationCommits Initiative”, which hesaid would help to close somegaps in the system.

He said that at the moment,there are 90 foreign registeredaircraft in the country withadditional 111 Nigerianregistered carriers currently inuse in the system, stressing thatsome of them have diverted fromtheir operational certificates.

He decried that their diversionfrom their operational certificateshas led to loss of massiverevenues to the federalgovernment and urged them toregularise their papers before theThursday deadline. He said “ ifby February 5, 2015, the affectedairlines failed to regularize theirpapers as expected, the federalgovernment through theNigerian Civil Aviation Authority,NCAA, would ground theiroperations and revoke theirlicences.”

FAAN partners Air Force on airport security

Ahead of the fourth-coming electionin February 2015, the Federal

Airports Authority of Nigeria, FAAN, hascalled for partnership with the NigerianAir Force to ensure that security isenhanced at the airport. Disclosing thisdevelopment, Managing Director of FAAN,Engr. Saleh Dunoma said the collaborationis necessary between the Airforce AirportCommand and the Aviation Security(AVSEC) especially at this period ofelectioneering campaigns and the general

elections.Engr. Dunoma made the call during a

courtesy call by the Air OfficerCommanding of the Nigerian Airforce. Hefurther assured the team of the Authority’ssupport and assistance as both institutionsare pursuing a common goal.

Earlier, the Air Officer Commanding,AOC, pledged the support of the Air forcein the area of security and other sundryissues. The AOC who was represented byAir Commodore A.L Osayintolu furtherrequested for collaboration in other areasto enable the command serve the Authorityeffectively.

By LAWANI MIKAIRU &DANIEL ETEGHE

The festivity took on acarnival air with troupes

of traditional dancers from allover the country displayingcultural costumes, as well as,crops and livestock from theirethnic groups. The farmerswho gathered at EagleSquare in Abuja for the recentAGRIFEST did not justcelebrate the newfoundrespect for farming andfarmers, they also saluted thecourage and creativity of theMinister of Agriculture, Dr.Akinwunmi Adesina, who hasled the AgriculturalTransformation Agenda of thePresident, writes GabrielEwepu.

The demand for High

Quality Cassava Flour(HQCF) for cassava bread isdriving a 520% expansion incassava processing in thecountry in the last threeyears. From just onemedium-sized factory andthree functional small HighQuality Cassava Flour(HQCF) Mills, in 2011, thereare today nine medium-sizedmills, either fully functional orat advanced stages ofplanning, and 40 small HQCFmills.

AGRIFEST’15: Nigerian Farmers celebrate new dawnThe wheat milling industry

has also embraced the cassavainclusion in bread program. Two of Nigeria’s largest wheatmillers, Flour Mills of Nigeriaand Honey Well, that togetheraccount for 70% of wheatmilling capacity, launched10% cassava composite flourfor bread in November 2014.

Installed capacity of HQCFwill rise from below36,000MTs to over 222,000MTonce all the new processingplants are functional. TheseHQCF mills are expected toprocess over one million MTof cassava from farmers.

The partial substitution ofcassava flour for wheat inbread and confectionaries isestimated by the wheatmilling industry to save thecountry about N224billion inforeign exchange savings,lowering our food import bill.Bakers today find that there isa commercial benefit - asavings of N2, 400 to over N4,000 on every 50Kg of flour,from the inclusion of cassavaflour in wheat flour - due tothe additional loaves.

Such astronomical growth incassava processing capacitywould not have been possibleif the Agriculture

Transformation Agenda (ATA),had not taken active steps toencourage the wheat millingand bread baking communitiesto include cassava flour intheir products, and workedwith cassava processors toproduce HQCF.

So it was not surprising atthe recently held AgriculturalFestival (AGRIFEST 2015) inAbuja that over 40 industrialand master bakers came fromall over the country to exhibittheir commercial brand ofcassava bread.

The President of the 450,000

strong Master Bakers ofNigeria, Sir Simon Abanulor,stood on the podium and said‘never in Nigeria’s history hasany government recognizedMaster Bakers and never inthe country’s history has anygovernment supportedMaster Bakers withN1.6billion worth of bakingequipment and training of ourmembers”.

To ensure that the countryproduces enough cassava forthe new industrial products aswell as traditional foods, 130million stems of improvedcassava have been distributedto farmers. The 2013NAERLS west season surveyrevealed the huge impact ofreaching farmers withimproved stems; the studyestimated that cassavaproduction in the country iscurrently at 65million MT,much higher than FAOestimates of 55million MT. Inaddition, 29,500 Ha of small-sized (1-10Ha) mechanizedcassava

A truly revolutionary trendthat is changing the face ofNigeria’s new agriculture isthe story of young Nigeriansbeing attracted to agriculture.In December 2014, President

Goodluck Ebele Jonathanlaunched the YouthEmployment in AgricultureProgram (YEAP), to develop anew generation of 750,000young commercial farmersand agribusiness leaders forNigeria.

Positive changes are alsohappening in themechanization of agriculturein the country as AGRIFEST 2015 also revealedthat a N50 billion fund hasbeen provided to support theestablishment of 1,200Agricultural EquipmentHiring Enterprises across thecountry, to remove thedrudgery out of agriculture

This is a total of 6,000 unitsof tractors and implements,15,000 power tillers, 20,000planting and post-harvestequipment that will bedeployed to mechanize anadditional 4million Ha of land. As the ATA slogan goes, ‘itis time to commit the hoes andcutlass to the museum wherethey rightfully belong’.

Other farmers at AgricultureFestival 2015 celebrated theamazing advances made inNigeria’s agricultural sector. In testimonials, young andold farmers who produce rice,maize, sorghum among otherseulogized the new dawn ofagriculture in the country.

A trulyrevolutionarytrend that ischanging theface of Nigeria’snew agricultureis the story ofyoung Nigeriansbeing attractedto agriculture

Vanguard, MONDAY, FEBRUARY 9, 2015 — 43

CMYK

Advertising

Stories by PRINCEWILLEKWUJURU

In a renewed effort toreinvent the spirit ofcivic responsibility,

citizenship, neighborlinessand social justice, the Lagosstate government hasembarked on a campaigntagged; the ‘Spirit of Lagos.’

For some months now,billboards in the state havebeen awash with messages ofright thinking; ‘Do the rightthing,’ ‘Change yourthinking’ all in a bid to drivehome the state government’seffort to preserving lives ofLagos citizenry withconstruction of pedestrianbridges, road markings,erecting traffic light wherenecessary, campaigningagainst indiscriminatedumping of refuse intogutters as a measure to fightflooding

According to the state, thefour cardinal points of thecampaign rests on socialjustice where all rights ofLagosians are respected andpreserved by holdinggovernments responsible forthe protection of the rights ofthe people to free and fairelections and to the freedoms

Billboards preach civil responsiblityBillboards preach civil responsiblityBillboards preach civil responsiblityBillboards preach civil responsiblityBillboards preach civil responsiblitywith ‘Spirit of Lagos’ campaignwith ‘Spirit of Lagos’ campaignwith ‘Spirit of Lagos’ campaignwith ‘Spirit of Lagos’ campaignwith ‘Spirit of Lagos’ campaign

of speech, religion, assembly,communications media, andpetition for redress ofgrievances without fear ofreprisal; to the right toprivacy; and to the guaranteeof the rights to adequate food,

clothing, shelter, education,and health care, etc.

Civic responsibility whereall have a part to play indeveloping and sustainingthe community and publicservices: It is about citizens

wanting to contribute to thesociety. It is comprised ofactions and attitudesassociated with democraticgovernance and socialparticipation. Civicresponsibility can includeparticipation in government,church, volunteers andmemberships of voluntaryassociations for the purpose ofservice to other people.Actions of civic responsibilitycan be displayed in

Citizenship the state’scitizenry voluntarycommitment to knowing andmaintaining law and order:The status of a personrecognized under the custom or law of a state that bestows on that person(called a citizen) the rightsand the duties of citizenship.That may include the right tovote, work and live in thecountry, the right to return tothe country, the right to ownreal estate, legal protectionsagainst the country ’sgovernment, and protectionthrough the military ordiplomacy. A citizen may alsobe subject to certain duties,such as a duty to follow thecountry’s law, to pay taxes, orto serve in the military.

Neighborliness Doing untoothers as we would have doneunto us: Concern and/care forother the people around,regardless of theirrelationship, be theystrangers, acquaintances orfriends.

In this respect, thegovernment has gone a stepfurther to create an online,radio and television of thecampaigns to endear tocitizenry to principles oftaking a right step at the righttime.

Rev. David Abayomi,is a retired civil servant,

a Kogi state indigene, winnerof one of the cars in the justended ‘StarTimes ExtraTimepromo’. In this chat, he spokeof how the promo has changehis life and that of his family.

Economic impartSince the time I won the

StarTimes car, my status hasimproved and many peoplewho did not know me came toknow me. My family has alsobenefited immensely since Igot the car. It has enhanced theeconomic status of thefamily.What the lord has donehas really impacted on my lifeand that of my family. It hasimproved our status, andeverywhere we go, people saywe are favoured by God and

How StarTimes promo changed my life —Winner

this manifested throughStarTimes.

Perception aboutpromotions

Just like I mentioned, manyorganisations make promisesthat they don’t keep just topromote their business. I wasthinking this was one of suchpromos, until StarTimesredeemed its promise. And theway StarTimes managed thewhole process made me tobelieve that the promo was nota fluke.It has improved myperception about the brand andhas changed the perception ofpeople around me. Not everyorganisation is faithful to theirpromises, not every

organisation. Even thoughthere are some organisationsthat don’t keep to theirpromises, StarTimes hasbeen able to distinguisheditself from the rest by fulfillingits promise. Although we stillhave a good number oforganisation with credibleintegrity just like StarTimes.They have fulfilled theirpromise and people haveseen it and are beginning tohave confidence in themknowing that whateverStarTimes say, they do.

ChallengesThe challenge I face is that

the local and stategovernment revenue officersin all states i visited arealways on me to pay foradvertising StarTimes intheir area. This is tasking mea lot. Feelings: Prior to mywinning the StarTimespromo I had the impressionthat most promotions are notreal but fake. But when itcame to reality that it wastrue. In fact I felt very elated,very happy, and also I givecredit to StarTimes formaking this happen. Forkeeping to their promisesbecause many organisationshave started this kind ofpromo and they didn’taccomplish their promises.

Winneremerges inCussons Babycompetition

The daughter of Mr &Mrs Oluyinka

Davids, MorireoluwaModesire Davids hasemerged the overall winner ofthis year ’s Cussons BabyMoments competition.

Little Miss Davids came topsto beat close contestantsCaleb Adedeji and OlajideAlufa to second and thirdplace respectively.Morireoluwa alongside threemembers of her family willenjoy an all-expense paid tripwhile second place winner,Caleb Adedeji and OlajideAlufa got a cash prize ofN200,000 and N100,000respectively.

Speaking after the awardceremony, Mrs. FunmiDavids expressed her delightfor the recognition given toher daughter and the family.She noted that the victoryrecorded in the competitionremained a significantmilestone that cannot beforgotten in a long time tocome. According to her,winning the grand prize wasthe surest way to celebrateher birthday since she justclocked one few days ago.

Commenting further onwhat inspired herparticipation in thecompetition, Davids said herbelief in the brand coupledwith the fact that the supportshe got from family, friends

Coca-ColaNigeria winstax awards

Coca-Cola Nigeria Limitedfor the sixth year running haswon the Lagos State TaxCompliance Award inrecognition of the company’sexemplary compliance withits Pay as you earn, PAYE taxobligations, Access Bank aswell.

Speaking at the 2015 editionof the Lagos State AnnualTaxation StakeholdersConference held in Ikejarecently, where the awardwas presented to Coca-Colaas well as a few othercompanies including AccessBank, Governor BabatundeFashola of Lagos Statelauded the awardees forfulfilling their civic duty andthereby enabling thegovernment to fund itsdevelopment programmes inthe state.

•Rev. David Abayomi

They havefulfilled theirpromise andpeople haveseen it and arebeginning tohaveconfidence inthem

Business & Economy

Email:lesleba@lesleba.com, lesleba@gmail.comBlog page:www.lesleba.com/blog2Website: www.lesleba.comTel:0805 220 1997

44 — Vanguard, MONDAY, FEBRUARY 9, 2015

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

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

CMYK

What you are about toread is a true report of

the gross impunity that haslargely characterised decisionmaking on those matterswhich affect our nation’streasury; ironically, such grossmismanagement has latelybeen extolled as best practice.Please read on.

”Media reports at the endof July 2007 confirmed thatthe Presidential Committeewhich probed the $480 millionwhich the CBN invested in theAfrican Finance Corporation(AFC), has completed itsinvestigations. After whatappeared to be a painstakingaudit exercise, over threemonths, and spanning threecontinents, the CommitteeChairman, TundeOgunshakin, disclosed thatCBN’s equity contributionwas actually $462.923million. However, theCommittee noted that adecision for such investmentshould have requiredapproval of the FederalExecutive Council andconsequently “frowned at theenormous powers of the CBNBoard and recommended thatthe CBN Act be amended toreduce them”DailyIndependent 23/7/08.

The above notwithstanding,the Committee condemned thesourcing and use of funds bythe AFC and revealed that theCBN funded the AFCinvestment with loans from thesale of government treasurybills! The Committee furthernoted that all funds wereinvested in money marketinstruments in Nigeria butdescribed the style ofoperation “as round-trippingat best and money launderingif viewed from a criminalperspective”

Ins t ructively, theubiquitous instruments oftreasury bills and federalgovernment bonds are theCBN’s favourite tools forcontrolling the omnipresent

Economic mismanagementin retrospectscourge of excess liquiditywhen distributable dollarrevenue are substituted withNaira allocations everymonth. Now, it is no more asecret that banks’ profitsbecome bloated by theenormous profits theycontinue to make from theshenanigans of collectinggovernment’s deposits for freewhile lending back togovernment at atrociousinterest rates. This practice ofidle loans cost Nigeria closeto N400bn in 2007 andindications are that debtservice charges may approachN800bn in 2008 (it is almostN1000bn in 2015). Clearly,banks are the primebeneficiaries of the juicyrewards from such risk-freeinvestments which make nocontribution to economicdevelopment; no wonder thebanks pay little attention tosupporting the real sector withcredit.

Until the bubble of AFCscam burst, the CBN hadalways maintained that thefunds accumulated from suchreckless governmentborrowings were simplysterilized or in layman’slanguage stored in CBNvaults as idle funds to restrainthe public and the real sectorfrom accessing these funds tofuel inflation.

We now know better, as thePresidential Committeeconfirmed that part of these‘idle’ funds was actuallydiverted into funding theAFC. However, since theAFC equity was denominatedin dollars, the CBN obviouslywent into the forex market withover N50bn (enough capitalbase for two banks) to source

for the dollar equivalent frombanks and Bureau De Change(BDC)! It is inexplicable thatthe CBN which currently sitson an idle pile of foreignreserves of almost $60bnwould resort to the lowly BDCto source dollars, at highercost, even when the primesource of BDC’s dollars is alsothe same CBN “What is goingon here?” You might ask! Wemay wonder also that the CBNagainst national interest also,sold over $5bn to BDCs fromJanuary to June this year! Has anyone ever heard of theBank of England or the USFederal Reserve allocatingforex directly to BDCs on theirhigh streets?

Nevertheless, what benefitsaccrued to Nigerians fromthese CBN’s escapades? Well,in an open letter published inthe media, Austin Ometoruwa,the recently suspended ChiefOperating Officer of AFC,confirmed that the “AFC …sought to optimize earnings …by investing part of its shortterm naira instruments,

thereby taking advantage ofhigher naira interest ratesversus those for US dollardeposits”. ( Vanguard pg. A34/8/2008)! In simpleEnglish, this implies that theAFC dollars found its wayback into the Nigeria moneymarket, where it wasreconverted to naira,presumably through banksand BDCs so that the resultantnaira sums were used topurchase government’streasury bills which had yieldsof over 10% compared withless than 1% for such risk-freeinstruments abroad!Ultimately, the AFCrepatriated profits in excess ofUS$30m from this sleight ofhand within its first year ofoperations.

Thus, the AFC with Soludo,the CBN Governor, as lifeChairman became a majorbeneficiary of the high interestrate regime in Nigeria! Ironically, the real sector andpatriotic Nigerianmanufacturers meanwhilecontinued to decry theexcruciating burden of highinterest rates and the adverseeffects on production andemployment. Ironically, anyattempt to reduce the costlyburden of excess liquiditywould be against the interestof the AFC in which our ownCBN Governor is the LifePresident! I havemaintained that the paymentof dollar allocations to thethree-tiers of government willtame the rampaging ghost ofexcess liquidity andstrengthen the naira with lowrates of interest in tow, butagain, such salutary resultswould not favour the parochialinterests of any rentier

venture such as the AFC!Some analysts have suggestedthat the demand for immediaterefund of the $460m equity tothe Nigerian governmentprobably contributed to theinstability that ultimatelybrought the Nigerian StockMarket to its knees between2008-9. Reports alreadyconfirm that one of theNigerian banks involved inthis scam had been indictedin the US for moneylaundering, and made to paya fine of about US$15m. In aworst-case scenario, the AFCshould have equally beenmade to refund the over $30mprofit it made from purchasingCBN Treasury bills withgovernment’s funds as readilyimplied by the erstwhile AFCCEO.

It would be necessary andrevealing for the PresidentialCommittee to be given a freshbrief to also investigate CBN’sacclaimed largesse of $7billionto 14 Nigerian banks ascompensation for beefing uptheir capital bases,notwithstanding that it hasbecome apparent, lately, thatthese acclaimed feats weremade possible by the insidiousopportunities provided by thesame CBN for banks to lendtheir deposits to customerswho will invest the funds inthe same lending banks! Instructively, not long after thereceipt of the $7bn, thefortunes of banks crashed andnothing has since beenreported on the integrity of thisloan or how much the bankshave so far paid as interest toCBN.

If the EFCC finds nothingcriminally wrong in all this, itwould have done disserve toits image as a serious fighterof economic and financialcrimes.

The above is an excerpt ofan article first published on /08/2008.

Save the Naira, SaveNigerians

Until the bubbleof AFC scamburst, the CBNhad alwaysmaintained thatthe fundsaccumulatedfrom suchrecklessgovernmentborrowings weresimply sterilized

Saudi Arabia, the world’slargest crude exporter, cut

pricing for March oil sales toAsia, a sign that the desertkingdom is continuing to fightfor market share. Saudi Arabi-an Oil Co. lowered its officialselling price for Arab Lightcrude by 90 cents to $2.30 a bar-rel less than Middle Eastbenchmarks, the company saidin an e-mailed statement.That’s the lowest in at least the14 years.

“This is further evidence thatthey are hell bent on protectingtheir market share in China,”Bill O’Grady, chief market strat-

Saudi Arabia deepens Asia oil discount to record lowegist at Confluence InvestmentManagement in St. Louis,which oversees $2.4 billion,said. “They are trying to staycompetitive in what is the big-gest area of growth.” MiddleEastern producers are increas-ingly competing with cargoesfrom Latin America, Africa andRussia for buyers in Asia. Chi-na was the world’s second-big-gest crude consumer after theU.S. in 2014, according to In-ternational Energy Agency data.

Oil prices have collapsed sincethe Organization of PetroleumExporting Countries decided tomaintain its output target on

Nov. 27, fanning speculationthat Saudi Arabia and othermembers were determined to letNorth American shale drillersand other producers share theburden of reducing an oversup-ply.

Brent crude, the benchmarkfor more than half of the world’soil, rose as much as $2.31 a bar-rel, or 4.1 per cent, to $58.88 onthe London-based ICE FuturesEurope exchange and traded at$58. West Texas Intermediate,the U.S. benchmark, advancedas much as $2.18 to $52.66 abarrel on the New York Mercan-tile Exchange.